Major retailers report strong sales and that bodes well for the holiday season, while several major licensed brands in hardware, food, apparel, entertainment and sports are poised for strong growth.
Licensing, marketing and retail expert/opinion leader Tony Lisanti, provides insight and perspective for the top headlines of the week. “Licensing and Merchandising Report” is a must read for top execs who want objective, straightforward and authoritative analysis.
Retailers Report Strong Q2 Results
Following Walmart’s best sales performance in more than decade for Q2, Target and other retailers this week reported a strong second quarter as well.
This overall strength of retail sales among the largest retailers in the U.S. is a solid indicator that it will be a strong holiday season. Both Walmart and Target are among the major retailers poised to benefit from the liquidation of Toys R Us and Babies R Us, along with Amazon, which previously reported it would produce a holiday catalog.
Walmart stated that its 4.5% comp sales increase was the “strongest growth in more than ten years led by the performance of grocery, apparel and seasonal.”
Target’s chairman and chief executive officer Brian Cornell said: “We are extremely pleased with second quarter results, which demonstrate our guests’ excitement for the enhanced and differentiated shopping experience we’re building. For the second consecutive quarter, traffic growth is better than we’ve seen in well over 10 years, driving 6.5% comp growth–Target’s best in 13 years.”
More importantly, the strong second quarter is a clear indication that consumers are confident and willing to spend. And it all seems to be a result of tax cuts, low unemployment, and a strong economy.
Here’s a Q2 summary for key retailers:
- Walmart: Total revenue, $128 billion, an increase of $4.7 billion, or 3.8%.
- Target: Total revenue, $17.8 billion, an increase 6.9% from $16.6 billion
- Kohl’s: Total revenue, $4.6 billion, up 4%, from $4.4 billion
- Home Depot: Revenue, $30.5 billion, an 8.4% increase
- Lowes: Revenue, $20.9 billion, an increase of 7.1%.
- Amazon: Net sales increased 39% to $52.9 billion up from $38 billion
- JCP: Total net sales decreased 7.5% to $2.76 billion compared to $2.99 billion
- Macy’s: Net sales, $5.6 billion, a decrease of 1.1%
The most negative news in the second quarter comes from Sears, as the iconic retailer continues to struggle announcing 46 additional store closings after announcing 100 store closings earlier this year. Sears stock hit an all-time low of $1.07 and as a result of its performance, the company faces possible delisting.
In addition, ESL, the hedge fund company run by Sears’ CEO Eddie Lampert, offered to buy the Kenmore Band, which is—other than its real estate—one of the company’s most valuable assets. See the story below about the Craftsman brand and it provides a clear and realistic strategy of what may be possible to achieve with the Kenmore brand.
Kohl’s Adds Nine West to its Brand Offerings
Kohl’s announced a strategic partnership with Authentic Brands Group (ABG), to develop and expand the Nine West brand, which ABG acquired in June for $340 million.
The deal includes Nine West footwear, handbags, outerwear and a new women’s apparel collection, which will launch in July 2019.
This is a well-respected brand that just seems like a perfect addition to Kohl’s assortment and a solid fit with its core shoppers.
“We’re excited to bring Nine West, a brand synonymous with fashion and sophistication, to Kohl’s customers nationwide,” said Doug Howe, Kohl’s chief merchandising officer. “We admire the role Nine West has played in shaping the footwear industry and its success in becoming one of the most recognized and desired brands among female consumers, particularly millennial customers. The addition of the Nine West brand to our women’s portfolio further illustrates our commitment to delivering relevant, sought-after brands that will continue to drive new customers to Kohl’s.”
Nick Woodhouse, president and CMO of ABG, said, “We are excited to collaborate with Kohl’s on a Nine West collection of apparel and accessories and introduce Nine West to Kohl’s customers,” owner of Nine West. “Nine West strives to offer women a head to toe wardrobe that makes a statement about who she is and what she aspires to be, and we are confident that Kohl’s is the right destination to deliver on the Nine West brand promise.”
Kohl’s brands include LC Lauren Conrad, Simply Vera Vera Wang, Apt. 9, POPSUGAR, Circus by Sam Edelman, a:Glow maternity, Nike, Under Armour, adidas, Levi’s and New Balance.
Stanley Black & Decker Eyes $1B for Craftsman Brand
Since acquiring the well-known “tool” brand from Sears last year for $900 million, Stanley Black & Decker has been supper busy developing new products. The company held a three-day event this week at its “Craftsman Garage” HQ in Baltimore previewing a remarkable 1,200 products.
There’s no doubt the company has big plans for the brand and believes it has huge growth potential.
Said James Loree, president and CEO: “Craftsman is one compelling organic growth initiative. Originally expected to be—to reach $1 billion in sales in year 10, we are now confident that this time frame will be shorter. And while the ultimate size is indeterminable at this time, the potential for this program to exceed $1 billion is very real, given the retail placements we have achieved, which include a major home center, one of the world’s largest e-commerce players, a major U.S. co-op and several other important channels.
Jeffery Ansell, EVP and president of Tools & Storage, said: “We remain on track to execute the initial wave of product and store conversions in the second half of this year. Consistent with our prior communications, Lowe’s and Ace will begin to transition to the new Craftsman offerings across the back half of 2018 with completion in 2019. Lowe’s and Ace expect to have promotional products at all stores by the end of the year. We also expect to begin to provide Craftsman metal storage to Amazon in Q4 with a broader rollout to continue in 2019.”
The Craftsman line includes power tools, hand tools, outdoor equipment and storage.
New York Jets Plan a Marvel Season
In a deal that exemplifies how licensing has evolved into a multi-faceted strategy, the New York Jets announced a partnership with Marvel Entertainment that will include various themed features for fans at MetLife Stadium throughout the football season.
“Marvel is thrilled to be working with a partner like the New York Jets to provide fans new and unique ways to connect with the Marvel Universe,” said Marvel publisher John Nee. “This multi-faceted partnership—including comics, game day collectibles, and more—will bring some of our most popular characters like the Hulk and Thor directly to thousands of Marvel and New York Jets fans this season.”
As part of the new partnership, the Jets will host a “Green Out” against the Minnesota Vikings on October 21. Presented by Toyota, the “Green Out” will highlight the partnership with a Hulk vs. Thor theme. It will feature a 16-page Hulk vs. Thor comic book produced by Marvel and distributed by the Jets. The comic will be written by long-time Marvel Comics contributor Fabian Nicieza, a long-time Jets fan and New Jersey native.
The “Green Out” will also include:
- A limited-edition Hulk-themed bobble head courtesy of Toyota to the first 15,000 fans;
- 55,000 limited-edition posters of the comic book cover will be distributed to fans as they exit the stadium;
- A Toyota vehicle wrapped with Hulk-themed imagery will be on display in the stadium;
- Hulk vs. Thor game theme and video board elements.
Additionally, the Jets and Marvel will release an eight-page, digital-only comic book to celebrate the 50th anniversary of Super Bowl III in advance of their October 14 game against the Indianapolis Colts.
Kraft and Oprah Expand Food Line
Oprah Winfrey and Kraft Heinz are expanding the O, That’s Good! brand with a new line of premium frozen pizzas.
It represents the third product category from Mealtime Stories, LLC, the joint venture between Kraft Heinz and Oprah Winfrey, which released refrigerated soups and side dishes in 2017.
The brand not only has significant potential to expand into other categories, but also has the inherent celebrity power of Winfrey and the marketing clout of Kraft Heinz to drive sales and presence at retail.
Said Christopher Urban, head of Mealtime Stories at Kraft Heinz: “After the success of O, That’s Good! Refrigerated Soups and Sides, we wanted to bring excitement to the pizza category and give families even more delicious options to please everyone at the dinner table.”
Mealtime Stories plans a 360-marketing campaign including a new national TV ad featuring Winfrey. O, That’s Good! Frozen pizza is being offered in four varieties: pepperoni, five cheese, supreme, and fire roasted veggie.
JCPenney Goes Big with Shaq
While JCPenney posted less than stellar results in Q2, it continues to improve its merchandise offerings. The retailer will expand its partnership with Shaquille “Shaq” O’Neal, with the launch of a new big and tall collection in September.
Shaquille O’Neal XLG will offer over 60 styles of men’s suit separates, dress shirts, ties and belts.
“With the launch of Shaquille O’Neal XLG, we continue to strengthen our special size business by delivering the stylish, high quality apparel and accessories our customers want at the value they seek,” said James Starke, senior vice president and head of merchandising for JCPenney. “Shaquille is a trusted and charismatic brand advocate who resonates with our core male customer, and we cannot wait to share his collection with big & tall men, giving them another compelling reason to visit JCPenney.”
Shaq, who is part of the Authentic Brands Group portfolio, began his partnership with JCPenney in March.
Licensor Changes Name
American Greetings Entertainment, the licensing arm of parent American Greetings, has changed its name to Cloudco Entertainment. The company holds the rights to Care Bears, Holly Hobbie, Madballs, Buddy Thunderstruck and Tinpo. The Weiss family retains ownership and Sean Gorman remains as president of Cloudco.