The short answer is their stock prices are down more than 20% so far this year. How's that in an economy where consumer confidence just hit record highs and the stock and bond markets hover near their tops?
Sure there's that ugly revised 1Q number of -2.9% and one excuse retailers used was inclement weather that most who went through it hope doesn't return anytime soon. Given all the carnage, as John Authers reports in today's Financial Times, "the sector is is still only about 6 percent below its high."
With Coach (COH) it's more a case of Michael Kors. But what about the others? Of course there's the Internet with all of its online selling. In yesterday's WSJ, Darrell Craves, the CEO of Zulily, the fast growing Seattle online retailer, is hiring and ramping up its product line with thousands of new products daily for limited-time discounts.
Once primarily a kid's apparel shop, the firm is taking what sounds like an old-fashioned kitchen sink approach, selling everything from antique outdoor furniture to men's loafers to ukeleles.This might all sound weird, but Cravens, the co-founder and chief executive, is not without a focus.
It's a simple four letter word and one of the most common in any language, moms. Zulily targets moms. Founded in 2010 the company, according to Cravens, expects to book $1.1 billion in sale this year. In case you're wondering this is known around the industry as flash sales. Now we don't know which came first or who stole what from whom, flash trading or flash sales. But apparently both are alive and doing well..
Cravens has taken in our book a page right out of behavioral science.You can divided shoppers into two groups, those who know what they're looking for and those who don't. Craven's firm is looking for the latter. It's counter-intuitive to be sure, but so is the size of Zulily's product line of 6,000 items.
Initially they started with 2,000 but worried that would be too many for consumers to browse. Ophs! Hello something called relevancy technology. Simply stated, people who come to the site "see different versions based on what they've previously looked at."
All of this from a company that has long shipping times. When asked what customers least like about the firm, it's those long shipping times. So goes the next logical question, when asked why they keep coming back, according to the company's surveys, the answer is about as block and tackle simple as it gets: "unique products paired with value."
And of course that brings up another question the company had the insight to ask: "If we can get it to you faster but we may have to charge you a little more, most say please don't."
There's probably enough lessons in here, not that government officials will ever pay any attention, to teach a basic class in entrepreneurship.
And for those of you who want to know, Zulily is a NASDAQ-traded company with a 52 week H-L of $73.50-$28.75 currently changing hands around $40.66. The p/e ratio is higher that the new Trump Tower in Chicago and its owner's ego stacked on top of each other. Revenue per employee is $726,647 with earnings per share of $0.02.
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