Lost in transition

The dog days of summer promise to be anything but humdrum this year. Wholesale change is under way across a range of companies that continues to transform the structure of the buyer/seller equation.

JCPenney is well into its transition. The question of the moment is how its big bet on the new Chris Madden home program will play out.

Kmart has a big stake in personality merchandising itself, with Martha Stewart's sentencing set for June 17. In the meantime, the fruits of its newest merchandising team's efforts will soon appear at retail for back-to-school. And now that it has a New York-based product development team, Kmart will probably look to shake up the home department further.

Target's burgeoning product development group and new prototype are spearheading its merchandising transition. Its recent deal to become the exclusive outlet for Fieldcrest bed and bath raises the question of whether it will shoehorn the label in among its existing house brands, or toss something out of the mix.

Target's Marshall Field's and Mervyn's nameplates, now on the block, are in transition as well. Problem is, nobody knows quite where they're headed. Target execs said last month that announcements would be coming soon.

Sears is still very much in transition. Its recent pledge to overhaul 70 percent of its fashion bedding will spell new opportunity for some suppliers, and the closing of a chapter for others.

Kohl's finds itself rather unexpectedly in transition and is moving aggressively to add more brands, including Royal Velvet in home, Chaps in menswear and an Estee Lauder-backed cosmetics program. Will new labels do the trick, or will a more fundamental rethinking of its merchandising proposition prove to be in order?

Macy's home department, now under consolidation, will probably remain in transition for a good 18 months, according to the most generous estimates coming out of the market.

Across the spectrum of retail channels, the structure of selection is in transition. The move to step up self-sourcing is everywhere: Dollar General, Anna's Linens, Target, Linens 'n Things, Sears, Federated and Wal-Mart, to name just a few.

While it is likely these changes will force out some traditional suppliers, it doesn't guarantee wholesale carnage. The increase in retail direct sourcing will generate a need for greater flexibility among suppliers. Mistakes will be made — some of them colossal — and retailers will be looking to traditional suppliers who can move in quickly to help pick up the pieces.

A few suppliers are moving to dovetail with the retail-direct model by investing in their own overseas facilities. In this arrangement, the retailer deals with a known entity (one that will eat mistakes) while earning its direct-sourcing stripes; meanwhile, the suppliers keep the account.

Along the road of the current evolution, some retailers are likely to get lost in transition. Suppliers that set themselves up to provide solutions when calamity strikes will have the edge.