Retail CEOs Breathe Sigh of Relief as Vote Distraction EndsBy
Barnes & Noble expects rebound as shoppers turn off TVs
Macy’s CEO waiting to see how Trump’s policies unfold
Barnes & Noble Inc. Chief Executive Officer Len Riggio is happy with the U.S. presidential election -- happy it’s over.
Riggio complained along with other retailers that the volatile campaign was a massive distraction that kept Americans from shopping. Barnes & Noble, the world’s biggest bookstore chain, said it saw the biggest impact on weeknights, when the three major cable TV networks provided a steady diet of talking heads weighing the strengths and weaknesses of Donald Trump and Hillary Clinton.
“We expect a bounce-back,” Riggio said in an interview after Trump’s unexpected victory. “The preoccupation with the election was hurting sales.”
Retail executives are notorious for coming up with excuses for weak sales, from the weather to a fluctuating holiday calendar, and analysts were skeptical of their claims. But in the months leading up to Election Day, Riggio was joined by a chorus of fellow CEOs that included Gap Inc.’s Art Peck, Signet Jewelers Ltd.’s Mark Light, Yum! Brands Inc.’s Greg Creed and Todd Penegor from Wendy’s Co.
On Thursday, Kohl’s Corp. CEO Kevin Mansell joined the fray, saying on an earnings call that the election had been a distraction and that the “certainty” of the outcome would be good for the all-important holiday season.
Niccolo Ricci, CEO of Stefano Ricci, a closely held Italian luxury-menswear company, said wealthy people often turn cautious during an election year. That proved to be true in New York, where sales fell during the past few months, according to the company. Ricci said he expects consumer sentiment to improve in the next few weeks.
Ricci’s comments were echoed by William Lauder, chairman of the beauty company Estee Lauder Cos., who said consumers will accept the election results.
“There’s nothing that will scare them off their traditional holiday shopping pattern,” he said in an interview.
Companies are eager to get their marketing plans back on track. Target, for instance, had been hesitant to run as many holiday ads on network TV during the campaign. The retailer focused on lifestyle channels like HGTV and the Food Network, where they were less likely to appear alongside negative campaign commercials, along with some network ads on entertainment shows. With the election over, Target, Wal-Mart Stores Inc. and Best Buy Co. on Thursday announced their store hours for the Black Friday shopping weekend. They will open on Thanksgiving day again, as will department stores like Macy’s Inc. and J.C. Penney Co.
As the election fades, the question of what a Trump presidency might mean for retailers, brands and restaurants remains. The president-elect campaigned on limiting international trade, including by slapping tariffs on goods from China and Mexico. That could increase costs for retailers because they mostly sell foreign-made products, according to Bloomberg Intelligence.
“We have to wait and see how these policies unfold,” Macy’s CEO Terry Lundgren said in an interview. “There’s a lot of things that are said in the election process, and then you actually get into office.”
On the campaign trail, Trump also talked about cutting regulations and corporate taxes, platforms now more likely to pass after Republicans maintained control of both chambers of Congress.
“These could be very positive for business and our consumer, and ultimately very positive for Macy’s,” Lundgren said.
Riggio, who founded Barnes & Noble, declined to say for whom he voted, but the 75-year-old entrepreneur said he’s seen a lot of presidents come and go and that none has had a profound long-term effect on the bookseller’s financial performance. He does, however, expect sales to pick up as the election moves further into the background.
“You won’t turn a switch and see the whole retail business coming back, but it hit a bottom and it’s starting to turn up,” Riggio said. “People are going to get on with their lives.”
— With assistance by Shannon Pettypiece, Stephanie Hoi-Nga Wong, Leslie Patton, and Lindsey Rupp