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Wrapping Up 2007


It’s almost that time of the year again, when all those “best of” lists make their annual appearance. Here’s my spin on retailing’s hits and misses:

Biggest disappointment (for the third year in a row): Gap Inc. The chain spent the better part of the year cleaning house—the Disney folks are gone—and searching for a CEO. Anticipation was high that this time around the Gap would get it right, and select an apparel veteran. But no such luck. Five months into the job, Gap’s new chief executive, Glen Murphy, former CEO of Canada’s Shoppers Drug Mart, has assumed a low profile—so low that some industry cynics are wondering whether he is already plotting his way back north.

“What was he thinking” award: John Mackey. The Whole Foods CEO’s weird online life included writing under an alias on Internet financial forums to bash rival Wild Oats as a bad business not worth its stock price. The postings came to light as part of a lawsuit by the Federal Trade Commission to block Whole Foods from buying Wild Oats on antitrust grounds. The acquisition went through. But Mackey’s days of opining online are over (see next item).

Quickest recovery: The board of directors at Whole Foods has tightened the company’s online posting policy, barring top execs and directors from posting messages about the chain, its competitors or vendors on Internet forums or chat rooms.

Most over-analyzed and least-understood consumer segment: Middle-aged women. The 40 million women born between 1946 and 1964 remain a coveted and elusive target for retailers. Gap’s Forth & Towne abandoned the game, but Ann Taylor Stores is now gearing up for action.

Cleverest retail promotion: All the hype about digital promotions and text-messaging campaigns aside, the most clever promotion this year was the month-long cross promotion between 7-Eleven and “The Simpsons Movie.” The decision to temporarily rebrand and transform 12 7-Eleven stores in the United States and Canada into the Kwik-E-Marts of “Simpsons” fame generated enormous publicity. Thousands of stories were produced within four days of the stores’ transformation. Kudos to 7-Eleven for going along with the joke and not taking its brand too seriously.

Most welcome import: MUJI. The Japanese minimalist-design giant known for its “no-brand, quality goods” has finally opened its first U.S. store, in New York City’s SoHo. It’s the first of some 30 U.S. stores it plans to open during the next few years.

Most talked-about import: Tesco’s Fresh & Easy Neighborhood Market. With its no-coupon policy, no loyalty program and non-union workforce, it’s certainly not your average American supermarket. It will take a while to see whether shoppers buy into Fresh & Easy’s convenience store plus strategy. See pages 18 and 19.

Most exciting retailer/designer collaboration: H&M and Roberto Cavalli. Starting with Karl Lagerfeld, H&M has proved itself a master when it comes to limited, exclusive designer collections. Its November launch of a line by Roberto Cavalli sparked mayhem in its stores. More than 250 people were waiting to enter the Fifth Avenue flagship when it opened its doors, ready to pounce on the designer’s signature animal-print goods.

Missing in action: Vanessa Castanga. Since leaving her post last February as executive chairwoman of the board of Mervyns, Castanga has kept a low profile.

Biggest industry challenge: A dearth of top talent.

Most unlikely landing: Bob Nardelli. Ousted as chairman of The Home Depot last January, Nardelli was appointed chairman and CEO of Chrysler in August.

Most welcome trend: The growing momentum for sustainability, which, at least for some retailers, has evolved into a standard way of doing business.

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