Retailers will likely continue to search for new ways to connect with their customer bases, providing services that add to the shopping experience at brick-and-mortar stores—touches such as valet parking, concierge or personal shopping services.
A similar scenario is bound to play out online.
The model of the “bland, transactional e-commerce retailer that was the industry disruptor originally” may continue to work for retailers “in a race to the bottom,” but consumers considering premium prices are also “putting greater demands around the experience of purchasing online,” according to Lex Pederson, president of upscale surfwear etailer Swell Inc. in Irvine.
The new efforts taking shape at stores or online will come amid moderate gains for retailers overall in Orange County.
Retail sales here will reach $45.1 billion next year, according to the Regional Economic Outlook for Orange County by the University of California-Los Angeles. That’s up from the $42.7 billion it projects for OC this year and the $41.2 billion it reported in 2014.
The county has several retail projects in the development pipeline, including the Zelman Retail Partners Inc.’s Town Center in Yorba Linda, scheduled to break ground in 2016, and The Source at Beach in Buena Park, which remains in the works. Pacific City in Huntington Beach and Outlets at San Clemente recently opened, and each is still looking to round out its retail lineup.
Company to Watch: Pacific Sunwear of California Inc.
The Anaheim-based apparel and accessories retailer began the year with a market value of about $207 million and its shares at $3. It has since received a delisting warning from Nasdaq, with its stock trading at 25 cents a share in recent weeks and a market value of about $16 million—a 92% yearly decline.
It had $568 million in sales for the first nine months of its current fiscal year, down 4.5% from the $595.2 million it posted during the same period in fiscal 2014. Its same-store sales decreased 4%, while e-commerce sales increased 2%.
The retailer, which operates about 600 stores, is working on “eliminating $15 million of expenses” by 2016, its Chief Executive Gary Schoenfeld said during a Dec. 2 earnings call.
It has also “focused on elevating and differentiating PacSun from any other retailer in the mall or online” to make sure it is a “17- to 20-year-olds’ destination for the most relevant and coveted brands,” Schoenfeld said.
It added Huf, Primitive, Obey, Me to We apparel, F.O.G., and the Adidas Yeezy Boost to its roster, which includes Hurley, Vans, Brixton, Nike, Diamond, Kendall & Kylie, Volcom, Y&R and Adidas Skate.
Meanwhile, PacSun has put its headquarters building up for sale (see related story, page 1), and bankruptcy rumors loom—24/7 Wall St. listed PacSun among 10 brands that will likely disappear next year, citing its “penny stock range” as one of the telltale signs.
Person to Watch: David Zuchowski
Fountain Valley-based Hyundai Motor America Inc. added oversight of its new stand-alone Genesis line to Chief Executive David Zuchowski’s list of duties.
The luxury brand—set to launch with its G90 in January at the North American International Auto Show in Detroit—will operate side by side with Hyundai’s existing offering of economy sedans and CUVs, and offer six new models by 2021.
“When we started Genesis (in 2008), people sort of said, ‘Is this the beginning of a separate brand?’ and we said, ‘We’ll see,’ ” Zuchowski said during the Los Angeles Auto Show in November. “So this isn’t new for us—we’ve been selling cars to premier customers for seven years now, and I think it’s a fairly natural evolution.”
His five-year plan for Genesis is focused on “organic” growth built on a concierge and “showroom-within-a-showroom” strategy that the automaker has deployed for its Equus sedan sales.
“We don’t see us forcing dealers for separate facilities right now,” Zuchowski said. “We want the products to come out, the products to be well received, products to generate good volume and margin, and dealers to come to us and say, ‘Hey, I got so much potential here I don’t think I can manage all these nameplates under one showroom; I’d like to expand.’ It’s not going to happen right away, it’s going to happen as a result of new product and as a result of their success and acceptance in the marketplace. I think it’s a good approach.”
