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Michael Kors is going high end.

The handbag maker is acquiring the Gianni Versace fashion house for $2.1 billion, including debt, providing Kors a launching pad into the exclusive European luxury market.

Shares of Michael Kors were down slightly near midday Tuesday, after closing down more than 8 percent Monday when news of the deal leaked. Shares of rival Tapestry, the parent of Coach and Kate Spade, were down fractionally.

After deal closes, Michael Kors will change its name to Capri Holdings, inspired by an "iconic, glamorous and luxury destination" island, the company said. It will retain the Michael Kors brand name.

It plans to grow Versace to $2 billion in revenue globally and increase its retail footprint from roughly 200 to 300 stores. It also expects to expand accessories and footwear from 35 percent to 60 percent of revenue.

The deal marks one of the first times an American company has cracked the code of super high-end luxury fashion, typically controlled by LVMH, the owner of Guerlain and Givenchy, and Kering, the owner of Balenciaga and Yves Saint Laurent. Michael Kors had already dipped into European fashion last year by buying shoe brand Jimmy Choo for $1.2 billion.

As part of the deal, Donatella Versace, who has helped run the company since her brother Gianni was murdered in 1997, will stay on to oversee the label. Donatella, her brother Santo and daughter Allegra will also stay on as shareholders in the company. Versace's management team will continue to be led by its CEO, Jonathan Akeroyd.

That retention will be crucial to Kors as it looks to validate itself to other premium European brands and their visionaries.

Versace is profitable, says Michael Kors CEO Versace is profitable, says Michael Kors CEO
2 Hours Ago | 02:57
"We are all very excited to join a group led by [Michael Kors CEO] John Idol, whom I have always admired as a visionary as well as a strong and passionate leader. We believe that being part of this group is essential to Versace's long-term success," Donatella said in a statement Tuesday.

While the number of sizable U.S. brands to acquire has dwindled, the European luxury market has become rife with opportunity. As founders and owners of European luxury brands put an eye toward retirement, a number of businesses, like Prada and Giorgio Armani, have been turning up on wish lists for luxury retailers.

Michael Kors said Tuesday that following the deal, the company hopes to reduce its proportion of business in the Americas from 66 percent to 57 percent, while increasing its European business from 23 percent to 24 percent and Asian business from 11 percent to 19 percent.

The global market for personal luxury goods was estimated to be worth $307 billion in 2017, according to recently filed registration documents for luxury marketplace Farfetch, which went public last week. The luxury market is expected to reach $446 billion by 2025, according to the data.

The push further into luxury serves also as a defense for the next economic downturn, more than a decade after the last one in the U.S. Those who can afford a Versace dress are among the most likely to continue to spend during a recession than those who shop more affordably, industry experts say.

"Where Michael Kors has traditionally sat has been hit harder than true luxury [in recessions], so diversifying across traditional luxury may give them some insulation," said Kathy Gersch, executive vice president of strategy and change at management firm Kotter.

Still, Michael Kors has some challenges with the Italian brand known for its bold prints in the U.S., where Versace has been under-invested, industry bankers tell CNBC.

Michael Kors has been eyeing the luxury space for quite some time. Both it and competitor Tapestry suffered the repercussions of expanding their affordable luxury brands too widely, thereby diluting their stature in the process. Meantime, the malls in which shoppers often pick up their affordable luxury brands have become increasingly desolate as shoppers head online.

Private-equity firm Blackstone, which owns 20 percent of Versace, will cash out as part of its deal.

Sydney rag trader Michael Gazal could be heading for a $80 million payday after the company he runs confirmed it was in sale talks with the fashion giant behind Tommy Hilfiger and Calvin Klein.

But not everyone in the high-profile Gazal family will be cashing in if the sale of Gazal Corporation goes ahead, after Michael's brother David sold his 24 per cent stake in the company for $35 million late last year.

Fairfax Media reported on Tuesday that Gazal Corporation was in talks with American clothing group PVH Corp to privatise the company.

Most of Gazal's business comes through its 50/50 joint venture with PVH called PVH Brands Australia - which wholesales the Tommy Hilfiger, Calvin Klein, Van Heusen, Pierre Cardin, Trent Nathan and Fred Bracks brands.

Gazal confirmed talks were underway with PVH - which already owns 22 per cent of Gazal's shares - but stressed that they were in "the very earliest stages".

"Gazal is in preliminary discussions with PVH around the potential for a proposal by PVH for a privatisation of Gazal," the company said in a statement released to the ASX.

"The discussions may not continue and, if they do, might not result in a proposal. If a proposal is made, it may not result in a transaction."

PVH was not “about to make a move”, Gazal said.

The prospect of a takeover saw the stock shoot up 13 per cent to close at $4.75.

Gazal confirms sale talks with Tommy Hilfiger, Calvin Klein owner
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Gazal confirms sale talks with Tommy Hilfiger, Calvin Klein owner
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Gazal's tightly held shares have been on a run off the back of improved sales and earnings, with the stock more than doubling in value since January when they were worth $1.95.

Executive director Michael Gazal owns almost 40 per cent of the company, PVH owns 22 per cent, Anton Tagliaferro's Investors Mutual owns 10 per cent, while big box retailer Harvey Norman owns 9.3 per cent.

David Gazal, Michael’s brother, was until recently a major owner of shares in what was once the family business.

However he sold his 24 per cent stake in December, at $2.50 a share as part of a deal that saw him buy the company's Bisley Workwear business.

The deal included him selling 9.8 million shares back to the company and 4.2 million to PVH Corporation. That parcel of sold for $35 million would be worth $66.5 million at Tuesday's close price.

Gazal's adjusted net profit grew 23 per cent to $5.7 million for the seven-month period to March 21.

Excluding the write-off of its 7 per cent stake in the collapsed handbag chain Oroton, profit would have jumped 91 per cent to $8.8 million.

The PVH joint-venture brands including Calvin Klein and Tommy Hilfiger were its standout performers, with sales jumping 22 per cent to $144 million.

Of all the bets Michael Kors Holdings could have made on its quest to become an American house of luxury labels, Versace, and its distinct rococo style, stands out as particularly bold.

Kors is nearing an agreement to acquire Gianni Versace in a deal that would value the Italian fashion house at about $US2 billion ($2.8 billion). Investors are skittish about the proposition, sending Michael Kors shares down the most since May.

Chief executive officer John Idol has used the words "heritage," "size" and "scale" to describe the type of luxury brands he's looking to add to the Kors stable. Versace has those three prerequisites covered. It's a 40-year-old Italian house with an international presence and widespread pop-culture relevance. Last year, Versace had revenue of €686 million ($1.1 billion) and returned to profit, according to figures provided by the company. Yet Kors would inherit a business with several issues.

"Despite its profile, Versace has struggled to grow sales," said Neil Saunders, managing director of GlobalData Retail. Michael Kors wouldn't be buying "a perfectly performing brand", but one that "needs work and some repositioning", he said. That work includes "toning down some of the brasher elements of the brand which are now out of step with the more subtle tone preferred by modern consumers".

While Saunders called the deal "additive", he said it may cause disruption in the short term and take several years to reveal the benefits.

Kors shares fell 7.7 per cent on word a deal was close. The stock had been up 15 per cent this year through Friday's close.

Versace, with its Medusa-head logo, is one of the more outlandish major Italian fashion labels. Artistic Director Donatella Versace's flashy designs celebrate extravagance and excess. Her runway show this month integrated the vivacious colour and dazzling patterns the label has become known for - a psychedelic amalgam of soft florals layered on stripes, checks or more florals. The bashful should look elsewhere for their clothes.

Though it's not for everybody, it's certainly for somebody. In recent years, Versace has grown to become a wealth symbol for the nouveau-riche. It's often mentioned in pop music as a label to aspire to - or brag about. Founder Gianni Versace was a fashion icon who dressed rock stars and princesses, and that flashiness remains aspirational today.

So if managed correctly, the payoff could be sizable. Versace would give Michael Kors a foothold in high-fashion. Its namesake label is known for "affordable luxury" and mass appeal, selling leather handbags that cost a few hundred dollars that can be found at Macy's or the discount rack at TJ Maxx. Its purchase of shoemaker Jimmy Choo last year added to its couture credibility, giving it $US600 sandals and $US1000 pumps. Versace's clothing ranges from $US350 T-shirts to $US10,000 skirts worthy of red carpets at the Oscars or Met Gala.

Kors is plotting a different course than that of longtime rival Tapestry, formerly known as Coach. Tapestry, which is also building a stable of brands, has stayed both near its own price point and its New York headquarters. The two labels it has acquired, Kate Spade and Stuart Weitzman, are US brands and play in about the same price range.

Italian newspaper Corriere della Sera reported earlier that Versace could be sold this week for about $US2 billion, with several groups interested including Kors and Tiffany & Co.

Tommy Hilfiger has launched tommy.com, the online flagship for the brand in Australia and New Zealand.
The site, which launched on September 19, offers the widest assortment of products across all categories, free returns, online package tracking and a dedicated customer service.

This is the latest addition to the growing Tommy Hilfiger eCommerce portfolio worldwide, building on the strategy to drive digitisation across the business.

The mobile-first built website will lead a broader digital strategy for Australia, which includes online and offline activities.

These include influencers, paid social, OOH, media and brand partnerships with Mercedes, After Pay and Pay Pal.

The new tommy.com flagship currently offers the first TommyXLewis collaborative collection, designed in partnership with British racing driver Lewis Hamilton.

The Tommy Icons capsule collection is also available, which is fronted by global brand ambassadors model Hailey Baldwin, model and activist Winnie Harlow, and actress Maggie Jiang.

Additionally, consumers can shop the summer/pre-fall 2018 and fall 2018 collections including menswear, womenswear, denim, swim, underwear, kids and accessories.

The site will exclusively supply Hilfiger Collection across the region, the pinnacle of the brand's product offering.

Followers of the brand have been invited to join the conversation on social media using #TommyHilfiger, #TommyAustralia and @TommyHilfiger.

Youth fashion chain Universal Store is ramping up plans for new stores and online retailing following a $100 million management buyout backed by three of Australia's most successful private equity investors – Brett Blundy's BB Retail Capital, Trent Peterson's Catalyst Direct Capital Management and Adrian MacKenzie's Five V Capital.

BB Retail Capital, Catalyst and Five V reached agreement over the weekend to buy the Brisbane-based business, which has annual sales of more than $100 million and 53 stand-alone stores across Australia, from founders Michael and Greg Josephson.

Universal Store's senior management, led by chief executive Alice Barbery and chief financial officer Stephen Harris, will emerge with a one-third stake alongside BB Retail Capital, which has built successful retail chains including Bras N Things, Adairs and Lovisa, Catalyst, which owns a major stake in Adairs and which floated Just Group (now owned by Solomon Lew's Premier Investments) and Pacific Brands, and Five V, which has investments in RateSetter, Canva and ParcelPoint.

Confidence vote
The deal is a major vote of confidence in Universal Store's management team, which has delivered several consecutive years of double-digit same-store sales growth and maintained EBIT margins above 10 per cent despite massive structural change in the clothing sector, including the shift online and the arrival of global fast-fashion retailers Zara and H&M.

"This is a long way from a turnaround story – it's a very well-run business, so we're very pleased to partner with the team," Catalyst managing director Trent Peterson told The Australian Financial Review on Monday.

Mr Peterson said there would be no major change in strategy following the acquisition, which is expected to be completed at the end of October – "it's one of keep doing what you're doing."

"We believe service is a really important differentiator in the retail environment and this is a business that delivers that in the stores every day," Mr Peterson said.

"A lot of the retailers who are struggling are often retailers who have dialled back service and they're retailers who haven't lent forward to bring what the customer wants as far as the omnichannel retail offer is concerned."

Target market
Universal Store targets fashion-forward 15-to-34-year-olds and differentiates itself from rivals by stocking exclusive products – a combination of private label brands such as Perfect Stranger, Luck & Trouble, Common Need and Token and exclusive ranges sourced from third-party brands such as Herschel, Abrand, Wrangler,Converse and Kiss Chacey.

It emulates fast-fashion chains by delivering stock to stores in four to six weeks and using short-run buying cycles to encourage shoppers to buy quickly or risk missing out. However, customer service is more akin to that in a upmarket boutique.

"Our market is competitive but we focus on our customer so much we've been able to deliver them what they want," said Ms Barbery, who joined Universal Store nine years ago after careers with GAP Inc, Colorado Group and Virgin Blue.

"Retail is not hard, it's just hard work and it's constantly paying attention to every store every day, every decision and every choice and not getting too comfortable."

Universal Store was also fortunate to operate in a part of the market immune from the housing and interest rate cycles.

No stress
"There's no mortgage stress for my customers ... they want flexibility, they want convenience, they want an outfit for the weekend or for that special occasion," she said.

The private equity consortium is expected to stay on board for the usual three to five years before considering exit options, which are likely to include an initial public offering and a trade sale.

Terms of the sale, which was handled by KPMG, were not disclosed but it is understood the deal valued Universal Store at about $100 million, representing about seven times earnings before interest and tax.

The founders of activewear business Lorna Jane are preparing to set up their first physical stores in China to capitalise on rising demand as more than 10 parties, including global private equity and trade buyers, eye a majority stake in the operations.

Asian trade buyers are also among the potential buyers as the Lorna Jane brand, which began in 1989, assesses its options amid a fast-changing sector where fitness and leisure wear is embraced by people in a broader setting and is no longer confined to just sports and fitness activities.

Industry players say Lorna Jane generates annual revenues of more than $200 million. This financial year it will make about 30 per cent of its total sales from online channels including Alibaba's big Tmall e-commerce site in China where the Lorna Jane sports bra is the No.1 selling item in its category, two years after being launched into China.

Founders Lorna and Bill Clarkson own 60 per cent of the company, and private equity firm CHAMP Ventures owns 40 per cent after acquiring that stake in 2010. The founders tested the appetite of buyers in a different sale process in 2014 but the ownership structure stayed intact at that point. Lorna Jane announced on August 20 that KPMG had been hired to undertake a strategic review of the business.

Sports and fitness participation in China is growing at 25 per cent per annum, as people embrace the same health and wellbeing lifestyle as those in Western countries.

"Activewear has now become ready-to-wear. There's now a blurred line between fashion and sports apparel," Lorna Clarkson said. The Lorna Jane brand was seen as highly authentic in China in a market where other Australian wellness brands such as Swisse and Blackmores in the vitamins sector had made large inroads.

Online followers
Chief executive Bill Clarkson, who is Lorna's husband, said the business now had 2.5 million followers on social media. This had helped drive online sales. "One of the things we've done is push hard to build our social and online presence, to the point that around 30 per cent of sales this year will come from online," Mr Clarkson said.

He said the company had a team based in Beijing and Shanghai and a showroom in Beijing. "Our aim is to eventually open stores in China and Hong Kong," he said. That was likely to happen in the next 12 months, but timing would depend on the identity of any strategic partner.

Mr Clarkson said Lorna Jane had 125 bricks and mortar stores in Australia and 32 in the United States. But the company is reducing its physical store footprint to shield the business from stubbornly high Australian rents and better take advantage of online sales that are gathering pace.

KPMG corporate finance partner Luke Lawrentschuk said on Monday there had been robust interest over the past few weeks from both offshore and local players. They included private equity firms and trade buyers.

"The interest has been very strong and has exceeded our expectations," he said.

KPMG declined to comment on the value of the business. "The business is performing extremely well and we'd expect the value to reflect this," he said.

Retail industry analysts said on Monday that businesses like Lorna Jane were generally valued at between 1 to 2 times annual revenues, depending on the growth trajectory.

Pressure on margins
IBISWorld analyst Kim Do said there had been an increasing shift to people wearing activewear as streetwear as fitness clothing made its way out of being specifically worn for sport or fitness activities, and into wider society.

But Ms Do said increasing competition from online-only sportswear retailers and fashionable gymwear brands like Gymshark, along with the arrival of big overseas players such as Decathlon in both the bricks and mortar segment and online in Australia, had put pressure on margins and intensified competitive pressure for all players, although the long-term growth rates of the entire category were solid.

"Over the next five years, health consciousness and fitness will continue to be on the rise. But the rise of new players who've built businesses using social media like Gymshark is adding to the competition," Ms Do said.

British sports fashion retailer JD Sports has also expanded into the Australian market, while online behemoth Amazon has been steadily building its local presence. Rebel Sport, owned by ASX-listed Super Retail Group, has expanded its footprint as stablemate Amart stores were all converted to the Rebel Sport brand.

Lorna Jane's first store was opened in 1990, in what was "the nosebleed section" of an upper floor of Broadway on the Mall, in Brisbane's CBD.

Michael Hill, the Brisbane-based jeweller with some 300 branches worldwide, has appointed Daniel Bracken as its new chief executive officer after its chief, Phil Taylor, resigned for health reasons.

Bracken, a former deputy CEO at Myer, where he'd been 3 1/2 years, had joined Specialty Fashion Group less than eight months ago, taking over from Gary Perlstein in February. He previously ran The Apparel Group, which owns Australian brands including Sportscraft, Saba, Willow and Jag.

In a statement to the ASX, Michael Hill said Bracken has "more than 25 years of extensive experience in retail and fashion across many iconic brands". He earlier spent 13 years with British luxury retailer Burberry's.

It said that in his stint at Specialty Fashion, he "led the company's restructure and successful divestment of the Millers, Katies, Crossroads, Autograph and Rivers brands, resulting in a significant improvement in shareholder value". Specialty Fashion's shares jumped fivefold over the past eight months, last trading at $1.25.

The company's shares jumped fivefold under Bracken's leadership.
The company's shares jumped fivefold under Bracken's leadership.
Bracken will take up his new job on November 15 and will get an annual base salary of $950,000, plus short-term incentives of up to 70 per cent of that pay if performance targets are met.

Despite posting a $486 million statutory net loss earlier in the week, Myer’s stock price, at 57 cents per share at close of trade on Thursday, reached a six-month high.

This is compared to 42 cents per share at close of trade on Wednesday, after the company unveiled “disappointing” full-year results a month after management shake-ups and calls to refocus on the consumer.

Myer chief executive John King’s level-headed approach to reinvent the Myer brand seems to have gone over well with shareholders.

“It’s been 100 days since I started at Myer, which was just before the end of the financial year,” King said during the company’s investor call on Wednesday.

“I’m as positive about the future of Myer today as I was on my first day, when I spoke to team members in Doncaster.”

King’s whirlwind, ground-floor tour across Myer stores, of which he has 18 left to visit, has left a sizeable impact on the company’s direction moving forward – attuning King to the needs and wants of the Myer shopper.

“The customer’s message is simple: we want great brands, at good prices, with leading service whether that be in store or online,” King said. “We are acting on it.”

Having spent time listening to and speaking with customers, team members, suppliers, brand partners and landlords, Myer’s turnaround plan involves a three-pronged approach to better serving its customers.

Firstly, the department store looks to transform the customer experience across the business. This involves re-positioning Myer within the retail space, refurbishing and in some cases re-sizing stores, and focusing on resetting service standards.

One of the main issues vocalised by Myer customers to King is that there is never enough staff, and it’s hard to find a till that is open.

The group is experimenting with giving certain store more money to invest in staff to see what effect this has on customer satisfaction, and hopes in future to consolidate the stores till system to allow easier access for customers.

Secondly, the department store is going to focus more heavily on its ‘Only at Myer’ branded category.

“We will invest to grow Myer exclusive brands, with broader assortments and extensions to additional categories. We will build destination categories such as accessories, and exit selected categories where Myer is less profitable,” King said.

“We will add new brands that are exclusive to not only Myer, but to Australia where appropriate.”

One of the ‘categories’ Myer looks to exit from during 2019 is it’s clearance zones, which King notes he “hates”.

“I want to be clear: our focus is on profitability and we will not chase unprofitable sales just to hit a top line sales number,” King said, adding that the company didn’t want to sell a $10 note for $5.

Finally, Myer looks to refocus its online presence around a mobile-optimised store, giving customers an easier way to filter and search for Myer products, with King adding that the company is looking to make it the “number-one store” within two years.

“We will be leveraging our Myer One data in a much more efficient way to drive multi-channel customer engagement and growth, and we will enhance our efficiency and fulfilment operations through our DCs to improve profitability,” King said.

The new Myer website will be launched in the coming weeks.

According to King, a department store is only a winning format if it’s relevant to the customer, which is tied intrinsically to a strong online business.

“I think the opportunity for us is to actually grow the top line via online, stabilise the store portfolio, reduce the cost of operating those stores, reduce the space in those stores because we don’t need as much space, and then we’ll improve the profitability of the business, both in-store and online,” King said.

The struggling Australian retail sector is emerging as a private equity hotspot and deal makers expect activity to remain strong, led by firms keen to turn around major brands.

Retail sales in Australia have remained sluggish in the past few months and the most recent figures for March showed zero growth for that month.

Spending on clothing and ac­cessories, household goods and department stores all slowed during the month and economists have warned that a sudden jump in sales is unlikely.

However, private equity funds have poured more than $1.5 billion into the retail sector in just a few months and are expected to remain active buyers.

Figures compiled by The Australian showed that in the past six months at least six major retail deals involved private equity funds buying out companies.

The largest transaction, involving skin and hair care manufacturer BWX, emerged last week when Bain Capital teamed with the company’s management to offer $860 million for the firm. The offer was made at a 50 per cent premium to the company’s last price on the ASX.

The deal came a fortnight after Noni B and its major shareholder Alceon paid $31m for a portfolio of five brands from the embattled Specialty Fashion Group.

The Australian Private Equity and Venture Capital Association (AVCAL) estimates that last year funds invested $720m in consumer good and retail businesses, which accounted for 19 per cent of total spending.

KPMG mergers and acquisition partner Luke Lawrentschuk said the demand from private funds for Australian retail was expected to remain strong, even though the sales forecast in the sector were weak.

He said funds would be keen to buy Australian business that could be easily expanded and in sectors favoured by consumers.

“There’s been a track record in Australia of successful retail deals being carried out. I think the business models of companies or brands which are being bought is very important,” he said.

“They need to be relatable, they need to be easy to understand, the business model should not be complex and they should be able to be scaled up.

“That’s the play book of private equity.”

Mr Lawrentschuk said he believed that most retail-focused private equity investment in the future would be in lifestyle, entertainment, and food and nutritional product firms.

In New Zealand, Comvita, which manufactures manuka honey, last week revealed it had received a takeover offer from a mystery bidder but it had fallen through after the parties could not agree on price.

Mr Lawrentschuk said the number of funds active in Australia was higher now, as the local private investment industry had matured.

“There is a lot of dry powder in Australia in private equity because there is a lot of money that has been raised,” he said.

“The private equity industry has gone through a number of stages. There were a large number of very big funds that had developed five to 10 years ago.

“Now there are a lot of smaller funds which have been set up by people who have left those bigger organisations.”

Allens partner Tom Story said Australian fashion labels were also increasingly likely to be on the radar of private buyers keen to expand the businesses overseas.

In the past two years, Collette, Tigerlily and swimwear designer Zimmermann stakes were sold to private equity buyers.

Mr Story said he thought it unlikely that private equity buyouts of “bricks and mortar” retailers like Myer or David Jones would be on the cards, primarily because of the high property leasing costs involved.

However, he said future investment would be targeted.

“I think a big buyout fund would find it very challenging buying into traditional retail,” he said.

“There’s a range of retailers that have found it very tough but there are aspects of retail that are very attractive to turnaround-type or distressed-asset investors.

“There has been success in buying high-end fashion brands ... the buyers have looked to expand into Asia and the US and that has worked where there’s been a very successful brand.”

While Maison Simons offers customers the latest trends in clothing, accessories, and home décor, it’s another trend that is gaining the brand attention and accolades. Improving its sustainability, the company recently opened the first zero net energy store in Quebec City, Canada.

Using industry-leading technologies to eliminate its carbon footprint, the store is designed to generate as much energy on-site as it annually consumes. The 80,000-square-foot space, which was formerly a Target, is powered by solar energy, and heated and cooled using a geothermal system that regulates temperature by tapping into the energy of the earth, improving its energy efficiency by 60%.

Maison Simons Quebec City | Shopify Retail blogSustainability has been a hot topic in the past few years. And Maison Simons may be setting a high bar, but retailers of all sizes can take steps to become more sustainable by focusing on practices and products.

Why should retailers pay attention to sustainability? Other than the ethical reasons (you know, conserving this great planet we live on), going green offers a wealth of benefits for both retailers and their customers. Customers are paying attention: 93% of global consumers expect more of the brands they use to support social and environmental issues, according to a report by the Retail Industry Leaders Association (RILA).

In addition, the report found that an estimated 68 million adult Americans base purchasing decisions on their values — personal, social, and environmental — and say they will spend up to 20% more on environmentally sound products.

So, many customers are happy to invest in sustainable retailers. But going green is about much than just conserving energy or using longer-lasting light bulbs. Sustainability gives you an opportunity to better connect with your customers, and while having a zero net energy store might not be within grasp just yet, there are smaller steps you can take. Here are five ways to participate in the growing trend of sustainability in the retail industry.

How to Make Your Retail Business More Sustainable
1. Go Paperless
Paperless in retail | Shopify Retail blogYour business might consume a lot of paper, and one of the easiest ways to cut back is by emailing receipts. Not only will you save resources; your customers will likely one less piece of paper to handle, too. According to research, 250 million gallons of oil, 10 million trees, and 1 billion gallons of water are used to create receipts just in the U.S. each year. Eliminating paper receipts not only considerably reduces a business’s carbon footprint, but it ensures that receipts aren’t later discarded as waste.

Going paperless can create efficiencies, help you automate more of your business processes, and offer your customers better security. Transitioning to digital receipts is a great first step toward going paper-free, and they allow you to leverage that valuable real estate on those digital receipts to make more sales. Include links to your website as well as your social media platforms on your receipts, as well as news about upcoming events and promotions.

Rather than using paper calendars, try using a digital calendar tool like Calendly or 10to8 to book appointments with clients and maintain employee schedules. Also, sign up for paper-free statements for your banking and financial needs, and send invoices via email to your customers. You’ll be surprised how little effort it takes to reduce your paper consumption.

2. Cut Waste Out of Your Manufacturing Process
Customers care about how their products are made and they want to know that you care, too.

Manufacturing can produce a lot of waste, and you can make a move toward sustainability by monitoring your supply chain.

If you make any of your own goods, audit your waste and look for ways to substitute recyclable or reusable products into the manufacturing process. If you purchase and resell premade goods, ask for transparency from your vendors in relation to issues such as labor practices, safety conditions, pollution, and waste. Currently, there are no industry standards on disclosure, and it’s up to you to be proactive when obtaining this information.

3. Look for Clean Energy Options
In addition to reducing physical consumption, consider switching to energy methods that consume and emit less waste. This is an area where going green helps you save serious money; energy is the fourth-largest in-store operating cost for retailers after labor, rent, and marketing, according to a report by McKinsey.

Contact your utility suppliers and ask that they conduct energy audits on your store, suggesting ways you can lower usage. A quick update is to switch to LED light bulbs, which use less power. And you can also look into solar options for powering lights and other electronics.

Lowering your thermostat seven to 10 degrees Fahrenheit for eight hours a day reduces consumption by 10%, according to the U.S. Department of Energy.

Turn off your computer, copier and printers when you leave for the day. And be sure to get your employees on board with your energy mission, appointing a “green team” or energy advocate to monitor usage. Simple behavioral changes are no- or low-cost energy savings opportunities, according to RILA.

4. Recycle Old Goods
In addition to selling customers new items, look into ways you can help them recycle old or worn-out goods.

For example, Eileen Fisher stores feature a Green Eileen project which collects, repairs, and resells used company-brand clothing and donates the proceeds to nonprofit organizations that benefit women and children.

Outdoor brand North Face has created a Clothes the Loop program, which collects used clothing and gives customers a $10 off a purchase of $100 or more. Items are repurposed into products like insulation, carpet padding, stuffing for toys, and fibers for new clothing.

And Nike’s Reuse-A-Shoe collects used shoes that are recycled into material used to create running tracks, playgrounds, and courts.

If your business sells items that replace old goods, consider offering to collect unwanted items that can be repurposed or donated to someone who can use them.

5. Be Transparent
Sustainability is of growing importance to consumers, so be sure to share your mission and work with your customers. Transparency and authenticity are key when it comes to putting sustainability at the forefront of your business.

In this case, you’re not just tooting your own horn: you’re giving customers an opportunity to further their own sustainability efforts by supporting a business (that’s you) that cares about the environment, community, and future.

Moving Forward With a More Sustainable Retail Business
A sustainable business not only will bring you respect from customers; it can save you money and resources in the long run.