What: Political instability in South Korea triggers a 0.6% retail sales decline, whilst industrial output shows unexpected resilience with 4.6% growth.

Why it is important: The retail decline despite strong industrial output underscores the immediate impact of political instability on consumer behaviour, particularly significant in a market already experiencing structural changes in shopping patterns.

South Korea's retail sector experienced a notable downturn in December 2024, marking the fourth consecutive month without growth as sales declined by 0.6%. This deterioration coincided with President Yoon Suk Yeol's unprecedented martial law declaration, which significantly disrupted the traditionally busy year-end shopping season. The impact was particularly evident in specific sectors, with car and home appliance sales dropping 4.1% and entertainment spending falling 0.6%. The political upheaval's effect on consumer confidence was further emphasised by the won's descent to a 15-year low, culminating in the historic arrest of the sitting president. However, the industrial sector demonstrated remarkable resilience, with factory output surging 4.6% month-on-month, primarily driven by strong performance in semiconductor and automotive production. This stark contrast between consumer spending and industrial output highlights the complex economic implications of political instability, particularly in a market already navigating significant structural changes in retail patterns.

IADS Notes: The current political upheaval's impact on South Korean retail sales should be viewed within the context of broader market transformations. While major department stores demonstrated resilience in May 2024 with a 3.8% combined sales growth, the sector was already showing signs of strain by January 2025, with growth falling below 1% and increasing polarisation between metropolitan and regional stores. The martial law declaration's negative effect on consumer spending comes at a particularly challenging time, as February 2024 marked a historic shift with online shopping surpassing in-store sales for the first time, capturing 50.5% of the market. This political disruption could accelerate the divergent performance patterns already observed in February 2024 between different retail formats, as evidenced by the contrasting fortunes of Emart's losses versus Shinsegae's department store gains. The current situation adds another layer of complexity to an already evolving retail landscape, potentially deepening the divide between high-performing metropolitan stores and struggling regional outlets.

Political upheaval dents South Korea retail sales

What: Saint Laurent brings exclusive LA dining experience to Paris through permanent Sushi Park installation, enhancing multidisciplinary retail concept.

Why it is important: This partnership reveals how luxury brands are reimagining retail spaces as multidisciplinary destinations that blend shopping, dining, and cultural experiences.

Saint Laurent is expanding its retail concept by bringing Los Angeles' celebrity-favored Sushi Park to its Rive Droite Paris location, marking the restaurant's first permanent international outpost. The collaboration builds on a previous partnership during Paris Fashion Week 2022, which included celebrity-focused promotional campaigns. The restaurant will offer its signature omakase concept for both lunch and dinner, maintaining the exclusive dining experience that has made it a Hollywood destination since 2006. This initiative coincides with the reopening of Saint Laurent Rive Droite, conceived as a multidisciplinary retail space designed to host artistic collaborations and cultural initiatives that enhance the brand's universe. The partnership reflects Creative Director Anthony Vaccarello's personal connection to the restaurant and its chef Peter Park.

IADS Notes: Saint Laurent's partnership with LA's celebrity hotspot Sushi Park represents a significant evolution in luxury retail experience. The luxury sector's increased focus on experiential offerings and high-value customer engagement. The installation of Sushi Park's first permanent international location within Saint Laurent Rive Droite, following successful fashion week collaborations, reflects other retailers exploring innovative partnerships to enhance customer experience. This strategic blend of high-end dining with luxury retail, particularly bringing a Los Angeles cultural institution to Paris, demonstrates how luxury brands are creating more immersive and exclusive experiences within their retail environments.

Saint Laurent opens a Japanese restaurant in Paris store

What: Dutch consumers embrace mobile and social commerce with 61% preferring smartphone shopping, while retailers face challenges in maintaining trust and service quality.

Why it is important: This trend highlights the critical balance retailers must strike between digital innovation and operational excellence, as consumer adoption of mobile commerce outpaces traditional retail infrastructure.

Social commerce is gaining significant traction in the Netherlands, with 61% of consumers considering smartphone shopping the most efficient method and 49% relying on social media for trend awareness. The generational divide is notable, with 70% of Gen Z favouring mobile purchasing compared to 36% of baby boomers. While 56% of consumers prefer personalised shopping experiences, making social commerce an ideal platform for targeted recommendations, retailers face substantial challenges in maintaining consumer trust and loyalty. Key issues include delayed deliveries (36% of social media shoppers), lack of product availability updates (30%), product discrepancies (24%), and technical platform issues (18%). These challenges are particularly critical as 77% of Dutch consumers prioritise delivery speed and options in their online shopping decisions.

IADS Notes: The Netherlands' social commerce trends reflect broader retail transformation patterns. January 2025 data shows payment methods evolving with AI-driven personalisation and enhanced security, while October 2023's future shopper report predicts 64% of spending will be online within 10 years. December 2024's holiday season demonstrated strong mobile commerce growth, with 55% of online spending via mobile devices, and January 2024's e-commerce sector outlook shows optimistic growth projections. These developments highlight how retailers are adapting to changing consumer preferences through enhanced digital capabilities while addressing security concerns and generational differences in adoption rates.

Rise of social commerce brings new challenges

What: M&S cuts prices by up to 20% on over 100 kidswear essentials while maintaining quality standards, as part of its broader strategy to attract family shoppers.

Why it is important: This move shows how traditional retailers are adapting their pricing strategies to meet changing consumer demands while protecting their brand equity through quality commitments, especially as kidswear is a challenged category in department stores.

Marks & Spencer has announced significant price reductions across its 'everyday essentials' Kidswear range, cutting prices by up to 20% on over 100 products. Key items affected include Cotton Rich Hoodies, Joggers, Sweatshirts, Leggings, and T-Shirts, with prices now starting from £5.50. The retailer emphasizes that these price reductions will not compromise its established quality standards or sourcing practices. This initiative comes as part of M&S's broader commitment to delivering trusted value across its product range for its 32 million customers. The timing is particularly significant given the company's recent trading performance, which showed total group sales increasing by 5.6% to £4.064 billion, though Clothing, Home & Beauty saw more modest growth at 1%, with like-for-like sales rising 1.9%.

IADS Notes: M&S's decision to reduce kidswear prices by up to 20% on over 100 everyday essentials products represents part of a comprehensive value strategy that has evolved throughout the year. This approach was evidenced in August 2024 with the launch of "The Parent Hood," a baby club for Sparks loyalty members that offered personalized savings across multiple categories. The strategy has proven successful, as demonstrated by November 2024 data showing increased customer spending, particularly when value initiatives were combined with strategic brand positioning. This was further reinforced in January 2024 when M&S extended its price lock campaign on essential items, demonstrating a consistent commitment to delivering value while maintaining quality standards across different product categories.

M&S cuts kidswear prices to attract more family shoppers

What: French fashion retail sales decline 1.5% in January 2025, with divergent performance across channels as department stores grow while hypermarkets struggle.

Why it is important: These results highlight how different retail formats are navigating post-pandemic market conditions, with some channels showing resilience while others struggle to adapt.

French fashion retail sales declined 1.5% in January 2025 compared to the previous year, remaining 14% below pre-pandemic January 2019 levels. Channel performance showed significant variation, with department stores growing 1.7%, while hypermarkets experienced a sharp 10.6% decline. Specialised chains remained relatively stable at -0.2%, and multi-brand independents fell 1.7%. The digital transformation continues to impact the sector, with online sales growing 2.4% while physical stores declined 2.6%. Looking ahead, the French Fashion Institute (IFM) presents three scenarios for 2025, ranging from 2% growth to a 2% decline, following a flat 2024 (+0.1%) and recent positive momentum of 2.4% from September 2024 to January 2025.

IADS Notes: The 1.5% decline in French fashion retail sales for January 2025 reveals continuing market challenges, though with notable channel variations. This aligns with December 2024's observations about retail transformation and increased consumer price sensitivity. The contrasting performance between channels is particularly significant, with department stores achieving 1.7% growth while hypermarkets declined 10.6%. The 2.4% growth in online sales versus 2.6% decline in physical stores mirrors August 2024's analysis of how department stores are successfully balancing traditional retail with digital capabilities. The fact that overall sales remain 14% below pre-pandemic levels suggests a fundamental shift in consumer behavior rather than just cyclical changes.

French department store sales rose 1.7% amid a slowdown in January 2025

What: Luxury retail consolidation continues as Saks Global closes historic locations while pursuing USD 500 million cost reduction goal and international expansion strategy.

Why it is important: These changes reveal how luxury retailers are reimagining their store networks, closing historic locations while investing in high-performing stores and new markets.

Saks Global has announced the closure of Neiman Marcus's historic downtown Dallas flagship effective March 31, 2025, while simultaneously investing USD 100 million in the NorthPark Center location. The company is also considering closing its Saks Fifth Avenue Toronto flagship, opened in 2016. These moves are part of a broader strategy to reduce annual costs by USD 500 million following the December acquisition of Neiman Marcus. The restructuring includes potential conversion of some locations to Barneys New York through the Authentic Luxury Group joint venture, while expanding internationally through a new partnership with Reliance Industries for Indian market entry. The strategy demonstrates a shift toward optimising store networks while maintaining strategic market presence through targeted investments and international growth.

IADS Notes: Saks Global's announcement of store closures, including Neiman Marcus's historic downtown Dallas location and potentially Saks Toronto, represents a significant shift in luxury retail optimisation. This aligns with December 2024's observations about the luxury sector's focus on operational efficiency and market consolidation. The simultaneous USD 100 million investment in the NorthPark Center location reflects retailers balancing network optimisation with strategic market presence. The broader transformation, part of a USD 500 million cost reduction goal following the Neiman Marcus acquisition, while expanding in India through Reliance partnership, demonstrates August 2024's findings about department stores' need to optimise locations while maintaining strategic market presence.

Neiman Marcus closing in downtown Dallas, Saks seen closing in Toronto

What: Dillard's Q4 sales fall 1% to USD 1.9 billion with contracting margins, despite higher store traffic, as department store sector faces continued challenges.

Why it is important: The performance reveals how regional department stores must navigate changing consumer behaviours while competing with value-focused retailers.

Dillard's reported Q4 retail sales of USD 1.9 billion, down 1% year-over-year, with store comps also declining 1% despite a 2.3% increase in foot traffic. Retail gross margin contracted to 36.1% from 37.7%, particularly impacted by weak performance in home, furniture, and ladies' apparel categories. While the company maintained better store traffic than competitors like Macy's, Belk, and J.C. Penney, declining online visits and search trends since 2022 suggest diminishing consumer relevance. Annual performance showed similar pressures, with total retail sales reaching USD 6.2 billion (down 2%) and net income falling nearly 20% to USD 593.5 million, despite the company's traditionally strong merchandising and customer service reputation.

IADS Notes: Dillard's Q4 2024 results reveal ongoing challenges in the department store sector despite its traditionally strong positioning. The contrasting performance between physical stores (2.3% traffic increase) and declining online visits reflects November 2024's analysis of retailers struggling to balance omnichannel operations. The gross margin contraction to 36.1% from 37.7%, despite expense controls, mirrors August 2024's observations about department stores facing profitability challenges while maintaining market position.

Dillard’s holiday margins shrink despite expense controls

What: Dubai Mall launches House of Hype, a 100,000-square-foot social media-driven theme park combining immersive technology, retail, and dining to target digital-native generations.

Why it is important: This development demonstrates how retail spaces are evolving to meet Gen Z and Millennial preferences by creating immersive, social media-friendly environments that blend entertainment with commerce.

House of Hype transforms Dubai Mall retail space into an experiential playground designed for content creation and social media engagement. The venture, created by HyperSpace founders, features interactive digital installations, augmented reality games, and Instagram-worthy settings throughout its 100,000-square-foot space. The USD 40 two-hour experience integrates retail through a streetwear line and artist collaborations, while food offerings from chef Reif Othman emphasise visual appeal. The concept targets the 73% of Gen Z and Millennial consumers who value experiences over physical goods, while leveraging the UAE's high social media consumption. As Dubai Mall's second-largest tenant, occupying 23 retail units, House of Hype demonstrates how traditional retail spaces can evolve to meet changing consumer preferences.

IADS Notes: House of Hype's launch in Dubai Mall represents a significant evolution in experiential retail, transforming 100,000 square feet into a social media-driven entertainment destination. This aligns with November 2024's analysis of retailers exploring innovative formats to engage digital-native audiences. The concept's focus on Gen Z and Millennial consumers, who value experiences over physical goods, reflects December 2024's observations about retail's increased emphasis on blending physical and digital experiences. By creating a space that functions as a "living, breathing social media feed" with integrated retail and dining offerings, House of Hype demonstrates how traditional retail spaces can evolve to meet the content creation and experiential demands of younger generations.

Dubai Mall has a new social media-driven theme park, House of Hype

What: John Lewis partners with Rough Trade to introduce curated vinyl collections across its department stores, responding to a 17% increase in turntable sales.

Why it is important: This strategic partnership capitalises on the vinyl revival trend while demonstrating John Lewis's commitment to expert collaborations, following their GBP 800 million investment in retail transformation.

John Lewis's partnership with Rough Trade marks a significant expansion into the resurgent vinyl market, bringing carefully curated collections of classic and contemporary albums to its department stores. The collaboration comes in response to growing customer demand, evidenced by a 17% increase in turntable sales over the past five years. Rough Trade's expertise ensures a sophisticated selection ranging from timeless artists like Marvin Gaye and Nirvana to contemporary performers such as Chappell Roan and Fontaines DC. This strategic move aligns with broader industry trends, as demonstrated by WHSmith's recent reentry into vinyl sales across 80 stores and HMV's successful pivot to record-focused retail. The partnership exemplifies how traditional department stores can adapt to changing consumer preferences while maintaining their commitment to quality and expert curation.

IADS Notes: The Rough Trade partnership in February 2025 exemplifies John Lewis's strategic transformation under Peter Ruis's leadership. This initiative builds upon the retailer's March 2024 decision to focus on core retail operations and strategic partnerships, while aligning with findings from their December 2024 trend report showing customers' increasing desire for integrated shopping experiences. The collaboration demonstrates how John Lewis is utilising its GBP 800 million retail transformation investment announced in October 2024 to create compelling in-store experiences, similar to successful partnerships with Waterstones and Jamie Oliver's Cookery School. This approach to category expansion through expert partnerships mirrors the success of their September 2024 digital integration initiatives, showing how the retailer is effectively combining physical and digital retail experiences to remain 'radically relevant' in a changing market.

John Lewis teams up with Rough Trade for vinyl records launch

What: Gen Z's USD 13 trillion spending power by 2030 demands urgent retail strategy transformation.

Why it is important: Retailers must shift from criticism to strategic adaptation to capture Gen Z's growing economic influence and distinctive consumer behaviour.

The retail industry's approach to Gen Z requires a fundamental shift from criticism to strategic adaptation, argues Retail Week's editor-in-chief Charlotte Hardie. Despite widespread media negativity towards this generation, their projected spending power of USD 13 trillion by 2030 demands serious attention from businesses. Snap UK's managing director Bridget Lea, whose platform reaches 90% of 13-to-24-year-olds in the UK, emphasises the critical importance of understanding Gen Z beyond superficial headlines. The article challenges businesses to embrace rather than resist Gen Z's characteristics, from their demand for workplace flexibility to their appetite for technology and social commerce. Retailers must integrate Gen Z behavioural insights into their long-term planning across all business aspects, including store operations, ecommerce, sustainability, and marketing. Instead of dismissing traits like influencer engagement and user-generated content preferences, businesses should recognise these as opportunities for innovation and growth. The message is clear: retailers must accelerate their evolution to remain relevant and competitive in the Gen Z-influenced market.

The Gen Z effect: how young consumers are rewriting business rules

What: Seven & I Holdings' founding family fails to secure financing for a USD 58 billion management buyout, paving the way for Couche-Tard's USD 47 billion takeover bid of the Japanese retail giant.

Why it is important: The failed family buyout and potential foreign acquisition exemplifies the broader transformation of Japanese retail, where traditional ownership structures are giving way to international consolidation amid challenging domestic market conditions.

The attempted management buyout of Seven & I Holdings by its founding Ito family has reached a decisive end, with the company announcing the family's inability to secure the necessary financing for their USD 58 billion proposal. This development has cleared the path for Canadian retailer Alimentation Couche-Tard's USD 47 billion takeover bid, which could become the largest-ever foreign acquisition of a Japanese company. The situation emerged after Couche-Tard's initial offer of USD 38.5 billion was raised to USD 47 billion following Seven & I's rejection.

The collapse of the family's buyout attempt, which had involved discussions with various potential partners including Itochu, marks a significant shift in the ownership landscape of one of Japan's most beloved retailers. The company, which owns the global 7-Eleven convenience store chain, now stands at a crossroads that reflects broader changes in Japanese corporate governance and international retail consolidation. Seven & I's statement confirms their commitment to exploring all opportunities for shareholder value, including serious consideration of Couche-Tard's proposal.

IADS Notes: The collapse of Seven & I's founding family buyout bid in February 2025 marks a pivotal moment in Japanese retail transformation. This development follows an intense period of negotiations, including the family's ambitious USD 58 billion management buyout attempt with CP Group in February 2025 and their earlier USD 51.7 billion privatisation proposal in November 2024. The situation reflects broader challenges in Japan's retail sector, where consumer confidence has reached concerning lows as of February 2025, though the market remains attractive to international investors, as evidenced by the strong performance of high-end retail stocks in July 2024. Couche-Tard's potential acquisition now represents one of the most significant examples of international interest in Japanese assets, highlighting how corporate governance reforms and market conditions are making Japanese retail more accessible to foreign investment.

Seven & I deal off as founding family fall short on funds

What: Singapore's December retail performance shows divergent sector trends, with overall sales dropping 4% year-on-year and online channels accounting for 15.4% of the SG USD 4 billion total sales value.

Why it is important: The divergent sector performance highlights the increasing polarisation between essential and discretionary retail categories, while the substantial online share demonstrates the acceleration of digital adoption in Singapore's retail market.

Singapore's retail sector experienced a notable downturn in December 2024, with sales declining 4% year-on-year, extending November's negative trend. The total retail sales value reached SG USD 4 billion, with digital commerce representing a significant 15.4% share, indicating the growing importance of online channels. The performance varied significantly across sectors, with computer and telecommunications equipment experiencing the steepest decline at 13.1%, followed by minimarts and convenience stores at 9.3%, and wearing apparel and footwear at 6.7%. In contrast, food and alcohol categories showed resilience with a 9.4% growth, while cosmetics, toiletries, and medical goods increased by 2.2%. The food and beverage services sector maintained positive momentum with a 1% growth, though this marked a slowdown from November's 4% increase. The sector's total sales value of SG USD 1 billion included a substantial 24.8% contribution from online channels, further emphasising the shift toward digital consumption.

IADS Notes: Singapore's December retail decline reflects broader regional challenges identified throughout 2024. As noted in September 2024, retailers were already struggling with rising operational costs against stagnant sales, particularly affecting brick-and-mortar operations. The current 4% decline in retail sales, despite 15.4% online penetration, aligns with findings from May 2024 that highlighted Singapore's potential as a regional retail hub, albeit one facing significant cross-border competition for local shoppers. January 2025 research on Asia-Pacific consumer sentiment further contextualises these challenges, emphasising how market-specific trends and omnichannel adoption are reshaping shopping behaviours across the region. The contrasting performance between sectors - with food and alcohol showing growth while electronics and fashion decline - demonstrates the ongoing transformation of retail dynamics in Singapore's market.

Singapore retail sales decline extends in December

What: London's West End suffers GBP 640m revenue loss due to tax-free shopping abolition, with international visitor spending failing to offset domestic decline despite higher tourist numbers.

Why it is important: The divergence between visitor numbers and spending reveals a critical shift in London's luxury retail landscape, challenging its position as a global shopping destination.

London's West End experienced muted growth of just 0.25% year-on-year during the crucial November and December shopping period, highlighting significant challenges in the prime retail district. Domestic spending declined by 2.2%, partially offset by a 3.5% increase in international visitor spending. However, the absence of tax-free shopping for international visitors resulted in an estimated GBP 640m loss in potential revenue, marking a substantial increase from the previous year's GBP 400m shortfall. Despite visitor numbers exceeding pre-pandemic levels, international spending remains suppressed, indicating a structural shift in shopping patterns. The New West End Company, representing 600 retail, restaurant, hotel and property owners, emphasises this disconnect between footfall and spending power. Visitors from the US, Saudi Arabia and Germany emerged as the top international shoppers, though their contribution hasn't fully compensated for the policy-driven limitations on tax-free shopping.

IADS Notes: The GBP 640m revenue loss reported in London's West End due to the absence of tax-free shopping reflects a broader challenge facing British luxury retail. In September 2024, even as Harrods achieved an 8% turnover increase, their management emphasized how the "tourist tax" was benefiting competing destinations like Paris. This impact was further evidenced in May 2024 when Selfridges announced job cuts, directly citing the tax-free shopping freeze as a key factor. Despite these challenges, London's retail sector has shown resilience, with Oxford Street's vacancy rates dropping below 5% by December 2024. However, the adaptation strategy has shifted towards targeting ultra-wealthy customers, as demonstrated by Harrods' approach in February 2024, suggesting that while London's retail sector remains robust, it may be missing opportunities to capture broader international spending.

West End lost GBP 640m last year due to no tax-free shopping with muted growth in festive trading

What: Prague's iconic Kotva department store begins comprehensive renovation on 50th anniversary, aiming to preserve Brutalist architecture while creating modern retail space.

Why it is important: This transformation shows how cities are reinventing iconic retail properties to maintain their cultural significance while creating economically viable commercial spaces.

Generali Real Estate has initiated renovation work on Prague's Kotva department store, exactly 50 years after its original opening. The Brutalist landmark, designed by architects Vladimír and Věra Machonin, features a distinctive hexagonal layout and was constructed with Swedish firm SIAB's involvement, making it a unique example of Western-influenced architecture under communist rule. The project, set for completion in late 2027, aims to modernize the five-floor building while preserving its architectural integrity. Plans include refurbishing interiors, expanding retail and office spaces, and restoring the original façade, with the signature hexagonal design and concrete towers remaining intact. The development, overseen in cooperation with heritage authorities, seeks to balance the building's historical identity with evolving commercial needs.

IADS Notes: Kotva's renovation reflects broader trends in retail property transformation. May 2024 data shows department stores rebuilding strategies for a new retail world, while November 2024's Galeries Lafayette facade renovation demonstrates successful heritage preservation. The project aligns with March 2024's Máj department store transformation, showing how Prague is revitalizing its retail landmarks. The November 2024 Harrods renovation provides a benchmark for balancing architectural heritage with modern retail needs. These developments highlight how historic retail properties are being reimagined to create mixed-use destinations that preserve architectural significance while meeting contemporary market demands.

Renovation of iconic Kotva Czech department store begins on its 50th anniversary

What: Saks Global announces 5% reduction in US corporate workforce as part of post-Neiman Marcus acquisition integration and organisational restructuring.

Why it is important: The workforce reduction shows how merged luxury retailers must balance integration efficiency with maintaining operational capabilities.

Saks Global is implementing a 5% reduction in its US corporate workforce, primarily affecting finance, legal, and operations departments, while preserving Bergdorf Goodman's staffing. The restructuring is part of the company's integration process following the Neiman Marcus acquisition, focusing on consolidating functional leadership and simplifying organisational structure. CEO Marc Metrick indicated further team changes are expected as integration continues. This move comes as the newly formed entity faces multiple challenges, including potential market share shifts to competitors like Bloomingdale's and Nordstrom, ongoing vendor payment issues, and selective store closure decisions. The restructuring represents a critical phase in creating the combined entity while maintaining operational effectiveness.

IADS Notes: Saks Global's 5% reduction in US corporate workforce represents a significant step in post-merger integration. The consolidation of functional leadership and organisational simplification, while preserving Bergdorf Goodman's independence, reflects retailers balancing integration with brand preservation. This restructuring comes amid broader challenges for the newly merged entity, including vendor payment issues and store network optimisation, demonstrating the complexities of large-scale luxury retail consolidation.

Saks Global is laying off 5% of US corporate workers

What: Following a major leadership reshuffle and mounting concerns over its financial stability, Lotte Group convenes 80 executives to discuss cost-cutting measures and strategic initiatives, including the potential sale of non-core assets and overseas duty-free operations.

Why it is important: The restructuring effort highlights the challenges facing diversified retail groups as they balance ambitious growth plans with financial stability amid changing consumer behaviors and economic uncertainties.

Lotte Group's first-half "value creation meeting" will bring together 80 executives, including Chairman Shin Dong-bin, to address growing market uncertainty and financial concerns. This follows November's sweeping leadership changes, which saw 21 CEO replacements across affiliates and subsidiaries. The company's financial stability has been questioned due to poor performance in its chemical and retail divisions. In response, Lotte has announced plans to use its flagship Lotte World Tower, valued at 6 trillion won ($4.3 billion), as collateral for corporate bonds issued by Lotte Chemical. The group's strategy includes divesting non-core assets and withdrawing from overseas duty-free operations. Chairman Shin's New Year's message emphasised the need for preemptive financial strategies and new business models to achieve "meaningful results" in 2025.

IADS Notes: Following accelerated asset sales and revised growth targets, the company faces challenges in both its retail and chemical subsidiaries. While the group announced ambitious expansion plans earlier, including a $5 billion investment in new malls, recent market conditions have forced a strategic recalibration focused on financial stability.

Lotte Group to discuss cutting costs at upcoming executive meeting

What: Lotte and Shinsegae deploy multi-format international growth strategy, targeting Vietnam and Mongolia to offset declining domestic consumption.

Why it is important: This development highlights the evolution of Korean retail groups from domestic powerhouses to regional players, using format diversification as a key tool for sustainable growth in challenging market conditions.

South Korea's leading retailers are aggressively expanding their international presence amid the country's worst domestic retail downturn since 2008. Lotte Department Store is advancing its overseas growth through its next-generation Time Villas shopping complex concept, focusing on Southeast Asian markets, particularly Vietnam. The company's successful track record includes Lotte Mall West Lake Hanoi, which has contributed to a 4.7% increase in overseas sales during the first three quarters of 2024. Similarly, Shinsegae Group is pursuing expansion through its E-mart and No Brand store formats in Southeast Asia and Mongolia, whilst establishing Laos as a strategic base following its Vietnamese operations. The convenience store sector is also showing remarkable international growth, with GS25 achieving a sixty-fold increase in exports since 2017 and planning significant store expansions in Vietnam and Mongolia. CU is following suit with ambitious expansion plans across Mongolia, Malaysia, and Kazakhstan. This international push comes as a strategic response to domestic challenges, including population decline, economic slowdown, and weakening consumer sentiment.

IADS Notes: The current international expansion plans of Lotte and Shinsegae reflect a crucial pivot in their business strategy amid domestic challenges. As reported in October 2024, Lotte had already committed to a substantial USD 5.06 billion investment plan for domestic mall expansion, but the current economic downturn has forced a strategic recalibration. While Korean department stores showed resilience in May 2024 with a combined 3.8% sales growth, November 2024 reports revealed Lotte's acceleration of asset sales and restructuring efforts, highlighting the increasing pressure on traditional retail formats. This context explains the intensified focus on international markets, particularly Southeast Asia, where both Lotte and Shinsegae see opportunities for their diverse retail formats. The expansion of Time Villas and E-mart stores aligns with the broader industry trend observed in February 2024, where Korean retailers began transforming their spaces to emphasise experiential retail and entertainment, suggesting that these companies are not just seeking new markets but are also exporting evolved retail concepts that have proven successful domestically.

Lotte, Shinsegae, seek new markets as domestic consumption slumps

What: Walmart US expands its luxury offerings by partnering with Rebag to sell certified pre-owned accessories from Chanel, Prada, and Fendi through its online marketplace.

Why it is important: This move represents a crucial step in Walmart's marketplace evolution, combining its e-commerce capabilities with certified luxury offerings to compete more effectively against Amazon whilst tapping into the growing resale market.

Walmart US has made a strategic move into the luxury resale market by incorporating pre-owned designer accessories into its online marketplace through a partnership with Rebag. The collaboration brings certified pre-owned items from prestigious brands including Chanel, Prada, and Fendi to Walmart's digital platform. This initiative is part of the retailer's broader marketplace strategy, with Rebag-certified products ranging from hundreds to thousands of US dollars. Michael Mosser, Walmart Marketplace VP, emphasised the company's focus on expanding its offerings with hard-to-find items, while Rebag CEO Charles Gorra highlighted how the partnership would help expand his company's footprint. This development follows Walmart's recent retail innovations, including drone delivery service and AI-powered shopping assistance, demonstrating the company's commitment to adapting to evolving customer demands and expanding its market reach.

IADS Notes: Walmart's partnership with Rebag for luxury accessories marks a significant evolution in its upmarket strategy that began taking shape in 2024. In May 2024, the retailer first tested luxury offerings through its marketplace, which led to considerable discussion about the democratization of luxury retail. This latest expansion aligns with Walmart's remarkable success in attracting affluent consumers, as evidenced by November 2024 data showing 75% of its market share gains coming from households earning over USD 100,000. The company's digital transformation has been equally impressive, surpassing USD 100 billion in e-commerce sales and implementing AI-powered innovations. This strategic move into certified pre-loved luxury accessories through Rebag builds upon Walmart's successful year of marketplace evolution, which saw an 82% surge in share value, demonstrating the retailer's growing confidence in premium market segments.

Walmart US adds Chanel, Prada, Fendi to online offerings

What: Global holiday retail sales exceed expectations with 3% growth to USD 1.2 trillion, driven by AI adoption, mobile commerce, and strategic discounting.

Why it is important: The results highlight the growing importance of AI and mobile commerce in retail success, while revealing evolving consumer preferences for technology-enhanced shopping experiences.

The 2024 holiday shopping season demonstrated remarkable resilience, with global sales reaching USD 1.2 trillion, surpassing earlier forecasts. U.S. retail sales showed particular strength, growing 4% year-over-year, while online sales increased 8.7% to USD 241.4 billion. Mobile commerce played a crucial role, with 54.5% of transactions occurring on smartphones. AI technology significantly influenced shopping behaviors, with tools and digital agents affecting USD 229 billion in global online sales. However, consumers remained value-conscious, concentrating e-commerce spending during major promotional periods and increasing their use of credit options. The season also saw a 28% rise in returns to USD 122 billion, suggesting potential challenges for retailer profitability despite strong top-line growth.

IADS Notes: The strong 2024 holiday retail performance reflects broader transformation in consumer behavior and retail technology. December 2024 data shows record-breaking results across both digital and physical channels, culminating in Salesforce's January 2025 report of USD 1.2 trillion in online shopping. This success was significantly driven by technology adoption, with December 2024 projections of U.S. retail sales reaching USD 1 trillion supported by widespread AI integration. The growth was geographically diverse, as evidenced by Visa's December 2024 report of increased spending across multiple markets. A key factor in this success was consumer adoption of AI shopping tools, with November 2024 data showing 38% of shoppers using AI for deal-hunting.

US Consumers splurged during the holidays…with some caveats

What: Google DeepMind establishes a specialised team to develop AI models capable of simulating interactive, real-world environments, led by former OpenAI Sora co-lead Tim Brooks.

Why it is important: This initiative could bridge the gap between current e-commerce capabilities and fully immersive retail environments, offering retailers new ways to create and test interactive shopping experiences before physical implementation.

Google's strategic expansion into world simulation AI marks a significant development in the technology sector, with the formation of a new team under the leadership of Tim Brooks, former co-lead of OpenAI's Sora video generator. This initiative, positioned within Google DeepMind, aims to develop sophisticated AI models capable of simulating physical world environments in real-time. The team will collaborate with Google's existing Gemini, Veo, and Genie teams, focusing on scaling models to maximise computational capabilities. Their mission extends beyond basic simulation, encompassing visual reasoning, planning for embodied agents, and real-time interactive entertainment. The project builds upon Google's latest Genie model, which has already demonstrated the ability to generate diverse playable 3D worlds. However, this advancement raises important considerations regarding copyright and creative industry impact, particularly in gaming and animation sectors where AI's role continues to evolve. Google's approach to these challenges, including its stance on YouTube video training data, will be crucial in shaping the technology's implementation and industry reception.

IADS Notes: Google's formation of a new world simulation AI team under Tim Brooks comes at a pivotal moment in retail's technological evolution. In October 2024, Google demonstrated its commitment to immersive retail experiences by revamping its Shopping platform with AR and AI features , laying the groundwork for more sophisticated virtual environments. This development aligns with growing consumer acceptance of AI in retail, as evidenced by a December 2024 BCG survey showing 38% of shoppers embracing GenAI tools . The potential impact of world simulation AI is particularly significant given Walmart's successful implementation of immersive shopping environments through "Walmart Realm" in June 2024 , and its impressive use of AI to enhance 850 million product catalog data points in August 2024 . These advancements suggest that Google's new team could revolutionise how retailers create and manage virtual shopping experiences, potentially bridging the gap between traditional e-commerce and fully immersive retail environments.

Google forms AI team for real-world simulations

What: Macy's confirms the closure of 66 stores as part of its Bold New Chapter strategy, which aims to shutter approximately 150 underperforming locations over three years while investing in 350 go-forward stores through fiscal 2026.

Why it is important: The implementation of this store closure plan, alongside investments in go-forward locations, reflects Macy's commitment to transforming its retail model while maintaining strong customer relationships in key markets.

Macy's announcement of 66 store closures represents a significant step in executing its Bold New Chapter strategy announced in February 2024. The company emphasises that these closures will enable focused investment in its go-forward locations, where customers have responded positively to enhanced product offerings and service improvements. CEO Tony Spring notes that while closing stores is challenging, it's necessary to prioritise resources effectively. The strategy's early success is evident in the First 50 pilot stores, which have shown sales growth for three consecutive quarters and achieved record customer satisfaction scores. Looking ahead to 2025, Macy's aims to leverage its strengthened store fleet to expand this enhanced customer experience across both physical and digital channels nationwide.

IADS Notes: Macy's store closure announcement marks a significant phase in its Bold New Chapter strategy. While the company has shown early success with its First 50 pilot stores, the decision to close 66 locations reflects a broader transformation plan. The initiative aims to optimize the company's footprint while investing in its 350 go-forward locations, demonstrating CEO Tony Spring's commitment to sustainable, profitable growth.

Macy's Inc. confirms planned store closures

What: French fashion retailers achieved a modest 0.7% growth in December 2024, with department stores leading the sector at 5.8% growth despite having one less Saturday than the previous year, while online sales surged by 31.6%.

Why it is important: Despite challenging calendar effects, the success of department stores amid overall market stability demonstrates their effective positioning in the luxury and fashion sectors, while highlighting the continued transformation of retail formats.

According to the French Fashion Institute (IFM), the textile-apparel market showed resilience in December 2024, with department stores and popular retailers like Printemps, Galeries Lafayette, BHV, Le Bon Marché, and Monoprix achieving 5.8% growth compared to December 2023. Specialised chains (+1.2%) and mass-market chains (+0.1%) saw modest gains, while independent multi-brand retailers declined (-1.8%). Hypermarkets and supermarkets experienced the steepest decline at -7.6%. Online sales demonstrated exceptional growth at 31.6%, contrasting with a 1.7% decline in physical store sales. For the full year 2024, the sector achieved 0.5% growth, with IFM projecting 2025 performance between -2% and +2% growth.

IADS Notes: French department stores' December performance reflects broader market evolution. While achieving 5.8% growth compared to December 2023, major players like Galeries Lafayette have invested in modernisation and store improvements. This success contrasts with hypermarkets' 7.6% decline, suggesting department stores' strategic focus on luxury and experience is resonating with consumers.

French department stores performed in December 2024

What: Shein expands sustainable denim production by implementing water-saving Cool Transfer Denim Printing technology across 90% of its operations, reducing water consumption by 10,000 metric tonnes.

Why it is important: The initiative marks a change in fast fashion's approach to sustainability, showing how water-intensive processes can be transformed through technology adoption.

Shein is significantly expanding its adoption of Cool Transfer Denim Printing technology, implementing the sustainable manufacturing process across 90% of its denim production. This innovative technology, developed in partnership with NTX and first implemented in 2021, has already demonstrated substantial environmental benefits, with approximately 380,000 pieces of denim apparel produced using this method last year. The technology's impact is particularly significant in water conservation, saving more than 10,000 metric tonnes of water compared to traditional production methods. Unlike conventional denim manufacturing, which requires extensive water usage for dyeing, bleaching, and washing, the Cool Transfer process eliminates these resource-intensive steps by transferring designs directly from paper to fabric without heat, while maintaining fabric quality with a soft-hand feel. Beyond environmental benefits, the technology enhances worker safety by reducing exposure to harmful chemicals commonly used in traditional denim production, such as chlorine and caustic soda.

IADS Notes: Shein's significant scaling of Cool Transfer Denim Printing technology aligns with broader industry transformations observed throughout 2024. As reported in October 2024, major fashion brands have been shifting from proof-of-concept sustainable innovations to mainstream implementation, with next-gen materials gaining significant traction. This transition is particularly noteworthy given December 2024 findings about Technip Energies' $2 billion investment in textile recycling infrastructure, demonstrating the industry's move toward industrial-scale sustainable solutions. Shein's initiative is especially timely considering the May 2024 legislative changes requiring greater supply chain transparency and environmental impact reduction in the fashion industry. The measurable impact of saving 10,000 metric tonnes of water resonates with July 2024 observations of retailers increasingly focusing on quantifiable sustainability metrics, as seen with Target's denim recycling programme. This development represents a significant step for fast fashion, traditionally criticized for its environmental impact, toward more sustainable production methods.

Shein scales up eco-friendly denim production

What: Saks Global announces radical organizational transformation, eliminating traditional roles and embracing AI-driven operations under new leadership structure.

Why it is important: This transformation signals a fundamental shift in luxury retail management, where traditional department store hierarchies are being replaced by technology-driven, flexible organizational structures to meet evolving market demands.

Under Marc Metrick's leadership, Saks Global is implementing a revolutionary organizational change that eliminates traditional roles like chief merchant in favor of a more integrated, technology-driven approach. The transformation includes strategic partnerships with Amazon and Salesforce to enhance AI capabilities for greater personalization and customer experience optimization. The restructuring encompasses significant leadership changes, with Saks and Neiman Marcus being managed by one team while Bergdorf Goodman maintains separate management. This reorganization, affecting approximately USD 10 billion in total volume, aims to create operational efficiencies while maintaining brand distinctiveness. The company's approach to vendor relationships is also evolving, with plans to begin addressing delayed payments in January, supported by new financing structures including a USD 2.2 billion bond and strategic technology investments.

IADS Notes: Marc Metrick's announcement of radical organizational changes at Saks Global reflects broader transformation trends in luxury retail. The implementation of Salesforce's AI solutions in September 2024 laid the groundwork for the technology-driven approach now being emphasized . This transformation gained momentum with strong financial backing in November 2024, evidenced by positive bond market reception and Apollo's USD 1.15 billion commitment .  The July 2024 organizational restructuring, which included approximately 100 layoffs and significant leadership changes , demonstrates the scope of this transformation. The strategy appears to build on Neiman Marcus's successful relationship-driven business model, which generated USD 1 billion in remote selling . However, as noted in July 2024 analyses, the challenge lies in balancing operational consolidation with maintaining distinct brand identities . This comprehensive transformation, combining organizational restructuring, technological integration, and brand management, represents a new model for luxury retail adaptation in the digital age.

How Saks Global Aims to Shake Up Retailing