Roulston Research June 19th Retail Roundtable with Former Tommy Hilfiger and Macy’s Executives

June 22, 2012

Roulston’s Retail Roundtable on June 19th was fortunate to host Bob Rosenblatt, former COO of Tommy Hilfiger, and Steven Packles, former CFO and SVP of Operations for Macy’s Home Store Division. At the roundtable, both partners weighed in on a variety of topics including JC Penney’s new EDLP strategy, the delicate balance between vendors and discount stores needs, and what “fast fashion” is doing to retailers and supply chains.

 The conversation first started with Bob and Steven giving incite on JC Penney’s operations and how their new company strategy will play out. Both agreed that the departure of Michael Francis was not good and could not be spun off in any positive way. Next, has JC Penney’s tactics undermined their strategy? As Steven said, “It’s always easy to play Monday morning quarterback and say there seems to be some missteps on the tactics.” Steven went on to note that better results may have been achieved had JC Penney made the transition at a more controlled pace. “No one would have complained if they would have taken things a little slower.” This would included informing the public more on what’s going on as well as small test group stores. Both partners also agreed the recent hiring of new senior execs after adopting an EDLP strategy months earlier made it difficult for the team to embrace the evolution of what they are to become rather then being told what they will be doing. The conversation on JC Penney finished with the battle of implementing cost effective strategies while dealing with resistance from legacy vendors. “You’re our partner, you’re part of the transition,” as Bob passionately put it.

The roundtable next turned towards discount retailers. Bob started off by stating that it was a mixed bet for some retailers and then going into more detail. Stores such as TJ Maxx and Ross are doing well unlike Kohl’s who continues to free fall with no rip cord to tug. Bob talked about his previous experiences at Tommy Hilfiger. He clarified the balance needed between brand management and meeting investor cash flow demands. Brands, such as Tommy Hilfiger, sell merchandise created specifically for a store such as TJ Maxx at very low prices (high single digits in some cases). This alternative distribution point (versus Macy’s or Nordstrom’s) creates great margins but can also diminish the brand’s reputation if not closely monitored. Some companies, however, become used to this money source. “Having this is like a drug. A company gets used to having that cash flow, making it harder to turn off the valve later on.” Steven carried on, stating that “off-prices” were here to stay. Consumers will always love brands but are now starting to love bargains just as much.

The conversation made a final transition towards supply chain outlook and where “fast fashion” is making an impact. Bob started out by saying where fast fashion is on rise and how the market is reacting to it. Supply chains are becoming more cost effective as the world becomes more global. “As the world matures, countries are going to become less important, in that, factories and skill sets can be transferred more easily. There will be a learning curve of course but nonetheless, it will be an international market place.” Poster child Forever 21 is currently dominating the fast fashion industry but as their sales and inventories grow, their supporting vendor community has not kept up. This may force them to travel overseas more, creating an overall slowdown of the fast fashion concept.

Other topics covered included the importance of the buyer’s age and comfort level with buying merchandise through Ipads or laptops, and what that means for an online retail giant like Amazon. Also discussed were the distinguishing factors (IT vs. vendor issues) that may explain the increased merchandising margins experienced by stores such as Ross and TJ Maxx. If you are interested in listening to a podcast of the event please email

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: