Le Tote Buys Lord & Taylor — A Most Peculiar Way To Buy Growth
Fashion subscription company Le Tote agreed to acquire the storied (if tired) department store Lord & Taylor. We have several questions. For starters, the price. Le Tote, a popular yet relatively nascent rental company, has raised $62.5 million in venture capital to date — far less than the purchase price for this deal of $100 million in cash. Le Tote is “securing financing,” but it’s unclear exactly where it is coming from. Second: How will this relatively small company (250 employees) manage the operations of the far larger Lord & Taylor? And finally, what’s in it for Le Tote, really? Le Tote’s CEO noted robust inventory expansion and the opportunity to bring advanced personalization experiences to stores. But since fashion changes so often, the inventory increase will be a short-term gain. Personalization will likely drive sales, but will it be enough to drive the ROI for this purchase? For those selling to department stores, consolidation is never a good thing. But some struggling retailers may be in a prime (if short-term) position to sell themselves to a digitally native competitor. For leaders beyond retail, this deal hints at potential irrationality in the direct-to-consumer space. They can’t fix everything they touch: Business sense is still in fashion here.
QSRs: A Case Study On Evolving Brand Personalities In The Face Of Commoditization
Did you get your chicken sandwich fix before Popeyes ran out? We’ve now witnessed the power of social media to bring on a sandwich war of epic proportions, but once the dust settles on our wanton excesses of gluttony, a bigger brand maneuver becomes clear. A chicken sandwich (and most fast food) is about as much of a commodity as it gets, so brands in this space have been seeking differentiation by building out a personality dripping with irreverent fun. Along with an overall sprucing up of their real estate, the brands in this segment are seeking ways to gain relevance with a younger audience that is being wooed by kale and quinoa. KFC gave away fried-chicken-scented sunscreen. Arby’s is testing meat that looks like carrots (impossible, you say?). Wendy’s Twitter banter will have you rolling on the ground holding your tummy (and it’s not from the spicy nuggets). And now Popeyes enters the fray with the oh-so-exquisitely biting, sarcasm-laced jab at Chick-fil-A: “… y’all good?”
Collective Bargaining In The Age Of The Customer: Employee Edition
Social media has created customer groups that coalesce around a brand — in effect, like a union. It can be great (Peloton), or it can be tough (Lululemon). Customers use social channels to work collectively to make their desires known, even to try to change your corporate policy. This new form of “collective bargaining” has the potential to change customer-to-company relationships, increasing customer power. Since employees are also customers, they are taking this newly learned form of power to work. After Walmart experienced a mass shooting in El Paso, company leaders decided they would not change their sales policies when it came to firearms or ammunition. The employees of Walmart did not agree with this decision. A few employees in Bentonville started a Change.org petition to change the corporate policy, asking their CEO to cease firearm and ammunition sales and other demands. By their own account, their ask was met with resistance, to the point that they even feared for their jobs. In the end, Walmart decided to ask customers to stop openly carrying weapons. As the lines between customer and employee blur, company leaders must consider how they handle internal dissent while acknowledging the criticality of employee experience in their business success.