1) Athleta partners with its first professional athlete, attempting to redefine athletic sponsorships to compete with activewear giants.

WHAT HAPPENED: Athleta announced its partnership with runner Allyson Felix who will star in the brand’s advertising campaigns and compete in its apparel through 2020.

WHY IT MATTERS

  • On track to reach $1 billion this year, Gap-owned Athleta has been able to build a loyal audience, growing through traditional marketing outlets—specifically mail-order product catalogues. With this partnership, as well as a heavier focus on paid social marketing, Athleta is now attempting to broaden its customer base.
  • The decision to sponsor Felix—known for her highly publicized dispute with Nike after it failed to renegotiate her contract when she became pregnant—also puts Athleta in direct competition with her former employer. Both Felix and Athleta have announced that their contract fully supports maternity leave coverage, which promotes Athleta as an empowering brand for the everyday woman.
  • Collaborating with Felix will not only help to grow Athleta’s business but could lead to steal share from Nike, repositioning Athleta from an athleisure brand to a more prominent activewear player. This will be increasingly important for Athleta to keep growing as new brands continue to emerge in the athleisure space.

2) Westfield looks to virtual reality to direct shoppers back to malls, but success will depend on the ability to integrate experience-based opportunities with its preexisting retail.

WHAT HAPPENED: Westfield will install virtual reality experience “The Void” in 25 malls worldwide to boost mall traffic. The Void pop-ups are Star Wars-themed and are set to open in New York, San Francisco, Los Angeles and San Diego next month with permanent locations planned for Paris, London and Stockholm by 2022.

WHY IT MATTERS

  • Amid a push for relevancy, Westfield’s introduction of “The Void” reinforces its plan to use VR-fueled experiences to offer activities that cater to how people want to spend their weekends or date nights. This plan, however, is only a temporary solution. With fashion-based stores accounting for only 35% leased space in malls this year due to record store closures, entertainment options may seem like the obvious choice, but “The Void” presents itself as a gimmicky and transitory way of directing traffic back to malls as the VR experience is isolated from existing tenants and has a single-use case.
  • Co-working and office spaces have also been introduced to fill the growing vacancies, but the Westfield group has not attempted to launch initiatives that would help to revive the apparel business. Instead of relying on entertainment that may increase traffic in the short term, but fail to establish return shoppers in the long term, Westfield should look to integrate these different elements in a way that can combine co-working spaces, apparel stores and experiences like “The Void,” in order to create a symbiotic blueprint for its properties—otherwise, it may become a “void” itself.

3) Urban Outfitters ventures into apparel rental for a younger, more price-conscious audience, but ability to compete will depend on how well it indoctrinates lessons from predecessors like Rent the Runway.

WHAT HAPPENED: Urban Outfitters launched Nuuly, an online clothing rental service featuring products from more than 100 different brands, including its own. The subscription allows users to rent six items per month for $88.

WHY IT MATTERS

  • Nuuly could become Rent The Runway Unlimited’s most viable competitor thanks to Urban Outfitters’ brand power and its ability to cater to a younger demographic than Rent the Runway. With a wide assortment of brands, such as Levi’s, AYR and Universal Standard, the company has the potential to attract Gen X, Y and Z shoppers through its rental program, allowing it to introduce rental options to a younger demographic than RTR.
  • At $150 per month, Rent the Runway Unlimited mainly services women looking for work and eventwear clothing options while Nuuly offers a less expensive alternative at $88 per month. This allows Urban Outfitters to further democratize the rental space, though it’s not clear whether consumers will take to its more casual product selection.
  • While Urban Outfitters comes to the table with its own brand power, product market insight, strong financial backing, existing relationships with shipping carriers and sophisticated inventory system, the rental space requires a very different infrastructure and set of expertise. The company’s potential in this market will depend on its ability to forecast and solve Rent the Runway’s shortcomings surrounding customer service, inventory availability and shipping lead times.

4) Despite Barneys bankruptcy filing and planned store closures, the luxury retailer continues to look to store expansion for revival.

WHAT HAPPENED: Barneys is still on track to open a standalone store at New Jersey’s American Dream retail complex in October.

WHY IT MATTERS

  • Sky-high New York City rent costs and decreased customer traffic have led Barneys to file for bankruptcy, but the iconic retailer will stick to its plan and expand its footprint to New Jersey this fall.
  • The American Dream retail complex may be positioned in an affluent area of New Jersey, serving as a convenient resource for Barneys clientele, but if Barneys New York location—a destination in its own right—is suffering, the novelty of the American Dream will only carry its business so far.
  • Barneys might be bound to an expensive lease, making it hard for the retailer to exit the American Dream deal. But even if it does reemerge from bankruptcy, the American Dream lacks a proof of concept. Barneys shouldn’t have signed this deal in the first place from a financial or branding perspective; department stores anchoring shopping malls is an archaic concept that holds little weight in a fast-changing consumer landscape. There is little reason for us to expect that Barneys will revive at American Dream, just as Neiman Marcus is not primed for newfound success at the sparkly new Hudson Yards development.