What We’re Reading This Week: Has the 2014 Holiday Season Begun?

Has the holiday shopping season already begun? It depends who you ask. “Christmas creep,” as the early autumnal advance of festive products and feisty consumers has ruefully come to be known, has already stolen headlines this fall. In fact, PayPal, which claims to handle $1 in every $6 of total e-commerce transactions, reported a spike in holiday-related sales as early as September 30. Initial indications also point to healthy activity and momentum in October sales.  Continue reading

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The Millennial Lowdown: How this Up-and-Coming Consumer Group Is Changing the Game for Retailers

As Millennials emerge as the next consumer generation, retailers are recognizing that this large, connected and tech-savvy demographic will continue to grow as a driving force in the economy during the decade ahead. In fact, they have already put an impressive stake in the ground. As my colleague Ted Vaughan noted in his recent blog post, retailers embraced a clear strategy  to help drive growth during the 2014 back-to-school season: Home in on Millennials—an age group with its own burgeoning buying power and a propensity for big-ticket purchases such as electronics and furniture. To put it into perspective, the 80 million Millennials in the U.S. spend approximately $600 billion annually, a number expected to rise to an estimated $1.4 trillion—or about 30 percent of all retail sales—by 2020, according to Time. By that point, they will account for one-third of the adult population, as well. Continue reading

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Texas A&M Retailing Summit: Opportunities for Strategic Growth

Last week, our BDO team attended the 2014 Texas A&M Retailing Summit, where we enjoyed a fantastic few days connecting with industry colleagues and attending several insightful sessions on the most impactful trends currently shaping the industry.

While at the event, my colleague Bob Snape, President of BDO Capital Advisors, and I presented on the topic of strategic growth opportunities and M&A activity in the retail sector. Not surprisingly, strategic growth was one of the most popular topics that surfaced again and again during breakout sessions, presentations and conversations that we were having with fellow attendees. While Al Ferrara and Rick Schreiber wrote a post last month on M&A activity and projections for the months ahead, our presentation from the TAMU Retailing Summit provides a supplemental, in-depth overview of top-line trends and financial market conditions. We invite you to view the presentation below, and encourage you to reach out with any questions in the comments section or via email. You can also reach me at tvaughan@bdo.com. Continue reading

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With Cyber Threats on the Rise, Retailers Require Robust Data Breach Response Methodologies to Mitigate Risk

Retailers have woken up. Over the past 12 months, a surge in large-scale data breaches and new threats targeting web-based platforms and point-of-sale systems have thrust the issue of cybersecurity into center stage. From Target, to Neiman Marcus, to eBay—and most recently, Supervalu—major corporations have been left reeling from the aftershocks of pervasive and costly breaches that have compromised their operations, their customers’ trust and their bottom lines. Continue reading

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Top Posts of Q3 2014

As the third quarter comes to a close and we look ahead to the final stretch of 2014, we wanted to provide a quick recap of the past three months. Since July, we’ve focused on the ways in which retailers are adapting to shifts in consumer preferences and strategies companies are employing to keep pace with the rapidly evolving retail landscape. Stay tuned in the weeks and months ahead for posts on millennial shopping habits and retail executive pay trends. Also, stay tuned in the coming weeks for insights into this year’s holiday shopping season as we release preliminary findings from our 2014 Retail Compass Survey of CMOs.    Continue reading

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Flash Sale Sites Face New Challenges as the Model Braces for Post-Recession Realities

Flash sale sites, which feature discounted luxury items from high-end retailers for hours or days at a time, peaked during the recession, when price-conscious consumers curtailed their spending, and designers and manufacturers were left with surpluses. During these difficult times, flash sale sites provided an elegant solution to connect deal-hungry buyers with the glut of luxury inventory. However, as the economy has continued to improve, consumer spending is again on the rise, and the flash sale market is primed for considerable change.  Continue reading

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BDO’s Fall 2014 Consumer Business Compass Newsletter

Our Fall 2014 Consumer Business Compass newsletter has just been released! In this edition, BDO Consulting’s Karen Schuler discusses the surge of cybersecurity threats in the industry and best practices for retailers to mitigate their risks with robust data breach response methodologies. Additionally, Al Ferrara and Rick Schreiber discuss industry M&A activity in 2014, while Natalie Kotlyar analyzes the spike in competition around online delivery services. For a review and analysis of recent bankruptcy trends, David Berliner and David Shim of BDO Consulting provide an in-depth look into the top financial pressures that retailers are currently up against. Finally, not to be missed in this issue, BDO’s Spotlight Q&A sits down with Rick Schreiber to discuss the scope and impact of his work in the Retail & Consumer Products and Manufacturing & Distributing practices.

To download and read the full newsletter, click here.

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Update on Retail Bankruptcies in 2014

The first half of 2014 has seen a number of regional apparel and other retail bankruptcy filings, starting with the January filing of Dots. While initially planning to reorganize, the 27-year old retailer was forced to liquidate its 400 locations after a viable sale of the chain failed to materialize. Ecko and Brookstone filed in April and ended up conducting 363 asset sales, while Coldwater Creek moved quickly to liquidate its 365 stores. More recently, Love Culture filed for bankruptcy, the victim of unprofitable leases and severe cash drain due in part to investments it made in its online business. Continue reading

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What’s Left for Retail M&A in 2014?

The first half of 2014 may have been slow from a sales perspective, but retail and consumer products executives are not pulling the brakes on deal flow.

In fact, Dealogic reported in July that the value of announced deals in the global consumer products industry had reached $69.7 billion during the first half of 2014, almost four times the $18.8 billion seen in the same period last year and the highest since 2008. Dealogic data also indicates that retail is having the best year since 2005, with $31 billion in deals so far in 2014.  Continue reading

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Three Tips for Franchising Success

Earlier this month, we had the pleasure of attending and sponsoring the annual FaegreBD Franchising Summit. While slowed consumer spending and a lively national debate around minimum wage rates and unionization have made for a challenging climate, franchising leaders are resilient and committed to the business model. Continue reading

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