Happy Wednesday and welcome back to The Spin! New York’s empty store fronts, the contradicting forces shaping the footwear market, and Amazon’s fight against a flood of biased reviews are some of today’s themes. We also take a closer look at the proliferation of sweatshops in Italy’s Prato region. Enjoy the read and feel free to share! Cheers, Ulrike


Ghost town. As empty store fronts have turned parts of New York City's concrete jungle into ghost areas, some additional 1.2 million sq. ft. of fresh retail space are entering the market via the Hudson Yards, Manhattan West and Essex Crossing developments. Still, most developers are not fazed yet. While some are still holding out for high-paying tenants, others are starting to adapt, hoping a correction will soon fill up stores again.


Teen temptations. According to a study by Piper Jaffray, US teens prefer streetwear-inspired labels like Adidas, Supreme, Gucci and Vans over performance-led names like Nike. Cool collaborations are also strongly favored (paywall), as are brands with strong logos. The report examines (press release) the habits of 6,000 US teens, whose overall spending increased two percent to $2,600 last year.


Perfect measure. US sports giant Nike Inc has bought the Tel Aviv-based mass customization specialist Invertex. Based on mobile apps that analyze body shapes in 3-D, Invertex allows brands to tailor their product lines to their customers' specific needs. With personalized recommendations for style and size, the technology aims to facilitate the buying process and create a compelling consumer experience at every touch point.

Stepping off. Footwear is one of the fastest growing categories, but due to high debt levels and a rapidly changing retail scene, three shoe companies have already gone bankrupt this year. In January, British shoe label Charlotte Olympia announced it would close its US retail operation. In March, The Walking Co declared bankruptcy for the second time in ten years, and in April, Nine West followed suit, selling its Nine West and Bandolino labels to Authentic Brands Group.


Cranking up... Amazon spent $22.6 billion on R&D last year, more than any other US company. Most of the online giant's resources went to its AWS web services, Alexa and computer vision. Google-owner Alphabet is next on the list with a $16.6 billion R&D investment, followed by Intel, Microsoft and Apple.

...and cracking down. Amazon has started to clamp down on biased reviews, which have continued popping up although the company has barred users from being compensated or otherwise rewarded for positive reviews since 2016. Last week, hundreds of accounts of suspected manipulators were deactivated and can only be reopened after re-consideration.


Under siege. As Amazon and Alibaba fight for retail dominance, three sectors are at particular risk. Department stores like Target, Walmart, Kohl's, Macy's and JC Penney are most vulnerable, as they suffer (paywall) from slowing traffic and now see their fashion competency attacked by online giants. Since bargain hunters have begun to check prices online first, off-price merchants like TJX, Burlington and Ross Stores have also been affected, as have big box stores in the sports, beauty and electronics segments, including Dick's Sporting Goods and Radio Shack.


Sweatshops in Prato. In his 2006 bestseller Gomorrah, author Roberto Saviano famously shed light onto some of the mafia-style workings within Italy's high fashion industry. A dozen years later, Chinese entrepreneurs have taken over a chunk of that market, turning former Italian "garmentos" into landlords. About 20 percent of Prato’s 200,000 residents are Chinese, often resented by locals as cheap counterfeiters with no sense of aesthetics, nonetheless turning out product that's labeled "made in Italy".


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