Wednesday, December 31, 2008

Sales During Online Holiday Shopping Season Decline By 3 Percent

Despite Weak Season Apple, Amazon, Wal-Mart and Sears Post Traffic Increases

RESTON, Va., Dec. 30 /PRNewswire-FirstCall/ -- comScore (Nasdaq: SCOR), a leader in measuring the digital world, today reported its tracking of holiday season retail e-commerce spending for the holiday shopping season, beginning November 1 and ending December 23, the last day to purchase online with the possibility of delivery by Christmas Eve. Online spending reached $25.5 billion during that period, down 3 percent versus the corresponding shopping days in 2007.

"The 2008 online holiday shopping season has declined 3 percent versus year ago, falling behind our expectation of flat sales this year," said comScore chairman Gian Fulgoni. "This marks the first time we've seen negative growth rates for the holiday season since we began tracking e-commerce in 2001. The combination of having five fewer shopping days between Thanksgiving and Christmas and the severe economic headwinds faced by consumers has made this a really tough season for retailers, both offline and online.". . . more

Bank Loans Help Keep Macy’s Afloat


BROOKLYN — Macy’s, Inc., has ended a gloomy holiday shopping season on a cheerful note by amending a $2 billion credit arrangement with JPMorgan Chase and Bank of America.

The giant chain’s department stores are the major anchors in Brooklyn’s Fulton Street Mall and Kings Plaza Shopping Center. The Fulton Mall store is well-known to longtime Brooklynites as the former Abraham & Straus, or A&S, store.

The agreement is expected to remove any questions about the retailer’s financial strength, “including our ability to retire $950 million in debt that is maturing in 2009,” Macy’s said. . . . more

Tuesday, December 30, 2008

Harris Teeter to Open in Tysons Corner

Harris Teeter of will open its newest D.C.-area store in Tysons Corner on Jan. 13.

The 65,000-square-foot store will be open 24 hours and is located at 8200 Crestwood Heights Drive at the Lofts at Park Crest.

There are approximately 20 stores of the rapidly expanding Matthews, N.C.-based grocery chain, which is a subsidiary of Ruddick Corp. (NYSE: RDK), in the D.C. area. There are 177 nationwide.

Saks, Macy’s Discounts Spark Vendor Spat After Holiday Slump

Dec. 30 (Bloomberg) -- Clothing makers, balking at the deep holiday discounts offered by retailers such as Macy’s Inc., may force department stores to eat more of the markdowns.

Liz Claiborne Inc., HMS Productions Inc. and a raft of apparel companies plan to push back at the retailers who have slashed some prices by 70 percent amid what’s shaping up as the worst holiday shopping season in four decades.

“We’re asking department stores for concessions,” said Lou Breuning, president of New York-based HMS, which sells Spence blouses at Dillard’s Inc. and Cable & Gauge knits through Macy’s. “I don’t want to take the stores’ margin from A to Z but certainly from B to C.” . . . more

No Apple Store for D.C. Anytime Soon

Attention local urban sophisticates! You will not be able to visit an Apple Store in the District of Columbia anytime soon!

That scoop comes courtesy of the underappreciated, under-Webbed Current newspapers, which explained in last week’s editions [PDF, see pp. 1 and 19] that plans for the District’s first Apple Store are held up in a thicket of regulatory approvals, from the Georgetown advisory neighborhood commission and the Old Georgetown Board.

Earlier this month, both bodies rejected Apple’s design—the third the company had submitted for the property at 1229 Wisconsin Ave. NW, a Georgetown storefront the company has owned for more than a year—because, as the Current’s Carol Buckley puts it, it “would not fit into Georgetown.”. . . more

Consumers Spend Gas Savings on Groceries: Survey

TORONTO — Nearly half of U.S. consumers in a recent survey said they are using the money they are saving on gas to buy groceries, according to analytics firm Precima, based here.

Of 3,013 survey respondents, 48% said they are spending their gas savings on groceries, followed by putting the money into savings (42%), holiday gift buying (37%), paying off credit cards (30%), entertainment (10%) and other uses (14%). The price of gas has fallen by more than 50% from its peak in July. . . . more

Tanger founder passes CEO title to son

The founder of a North Carolina-based outlet chain is passing the title of chief executive to his son this week.

The News & Record of Greensboro reported Monday that Stanley Tanger will hand over the CEO position to son Steven Tanger on Thursday.

Stanley Tanger had trouble getting a loan from many bankers when he wanted to build a shopping center for outlet stores in the early 1980s. The Tangers already had an outlet store for their menswear company.

Today the company stock is traded on the New York Stock Exchange and the Greensboro-based Tanger Factory Outlet Centers have 33 locations nationwide.

Stanley Tanger will remain as board chairman after his son takes over.

Retail stores on the brink

The shelves are picked over, some almost are bare, and the holiday rush has left KB Toys’ Cambridge store littered with refuse. Overhead signs announce that the bankrupt Pittsfield-based chain is going out of business and “everything must go.”

The 86-year-old company had operating troubles long before this year, including increased competition that landed it in Chapter 11 bankruptcy protection in 2004. But KB officials said it was plummeting sales since October - fallout from the year-long recession - that forced their decision to liquidate the nation’s second-largest toy chain’s 460 stores just two weeks before Christmas.

And other struggling retailers are expected to follow KB, Tweeter, Steve & Barry’s, Whitehall Jewelers, Linens ’n Things and Circuit City into bankruptcy beginning in January, after sales are reconciled for the worst holiday shopping season in decades. . . . more

Monday, December 29, 2008

Amazon boasts 'best ever' holiday season

SEATTLE — Amazon.com Inc. said Friday that the 2008 holiday season was the online retailer's "best ever," with more than 6.3 million items ordered and 5.6 million units shipped during its peak day on Dec. 15.

Amazon's upbeat take on the holiday season bucked the drumbeat of generally dismal news from retailers. Holiday sales typically account for 30 percent to 50 percent of a retailer's annual total, but rising unemployment, home foreclosures, the stock market decline and other economic worries led many shoppers to slash their shopping budgets this year.

SpendingPulse — a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash — said its preliminary data indicates that retail sales dropped between 5.5 percent and 8 percent this holiday season compared with last year. SpendingPulse said the decline was slightly less steep — between 2 percent and 4 percent — when auto and gas sales were excluded. . . . more

Dismal Outlook for Mall Owners

If you thought shopping malls were a nightmare in the run-up to the holidays, just try owning one now that there is nothing left to do but take down the tinsel.

As retailers count their takings, it is becoming clear that consumers took a holiday away from retail land. And broad trends, such as free-falling house prices and rising unemployment, point to a dismal 2009 for anyone in the business of flogging stuff on shelves.

The same goes for the companies that rent them floor space. Real-estate investment trusts operating U.S. malls are especially exposed. Tighter credit has turned the screws on a sector with almost $23 billion of debt maturing over the next two years, according to real-estate consultancy Green Street Advisors, and an aggregate market value of just $17 billion. No wonder that, on average, mall REIT stocks look set to close 2008 down almost 60%. . . . more

Holiday Sales Slump to Force U.S. Store Closings, Bankruptcies

Dec. 29 (Bloomberg) -- U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.

Retailers will close 12,000 stores in 2009, according to Howard Davidowitz, chairman of retail consulting and investment- banking firm Davidowitz & Associates Inc. in New York. AnnTaylor Stores Corp., Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. The holiday results indicate possible consolidation and further bankruptcy filings, according to Gilbert Harrison, chief executive officer of retail advisory firm Financo Inc. "You’re going to see deals that you never thought you were going to see before because of the necessity of both parties," Harrison said in a Bloomberg Television interview Dec. 26. . . . more

Wednesday, December 24, 2008

Wall St gains on economic data, Wal-Mart

NEW YORK (Reuters) - Stocks rose on Wednesday in thin volume after a flurry of data showed the economy was weak, but not as bad as feared, and Wal-Mart's shares advanced after it said it had settled 63 class-action wage lawsuits.

A government report showed U.S. consumers cut spending for the fifth straight month in November and their incomes shrank, pointing to deeper recessionary pressures. Spending fell 0.6 percent and personal incomes slipped 0.2 percent, the Commerce Department said.

Economists polled by Reuters had expected spending to drop 0.7 percent and forecast flat incomes.

Durable goods orders fell 1 percent in November -- less than the decline of 3 percent forecast in a Reuters poll. . . . more

Tuesday, December 23, 2008

Retailers want their bailout too

National Retail Federation pushes for stimulus legislation to also include three tax-free shopping periods in '09.

NEW YORK (CNNMoney.com) -- Facing a disastrous holiday shopping season, the retail industry on Tuesday urged President-elect Barack Obama to incorporate three national tax-free shopping holidays in 2009.

The group wants the measure to be included in Obama's stimulus efforts. . . . more

Economy Crimps Retail Spending in Last Weekend Before Christmas

Dec. 23 (Bloomberg) -- Purchases at U.S. retailers fell last week as recession fears deterred shoppers from spending in the closing days of what may be the worst holiday sales season in four decades.

Sales at stores open at least a year declined 0.6 percent in the seven days through Dec. 20 from a year earlier, the International Council of Shopping Centers and Goldman Sachs Group Inc., said today in a joint statement.

The council cut its forecast for December, saying sales may fall 1 percent “or slightly more” from a year earlier. Previously, it had projected same-store sales for the month to rise as much as 1 percent or remain unchanged. . . . more

Borders gets extension on Paperchase conditions & Financing

Bookseller Borders Group Inc. said it has received an extension on some conditions related to the potential sale of its Paperchase Products Ltd. stationery business to Pershing Square Capital Management LP.

The company has struggled with liquidity and balance sheet concerns, but decided last month that it was no longer looking to sell itself, an option that had been considered for more than a year as part of a financial turnaround plan.

Last month Borders said it was in talks with Pershing on alternative financing for the Paperchase transaction. Late Monday Borders said Pershing agreed to extend the expiration date on the put option for the proposed $65 million sale to Feb. 16, 2009. The deal was set to expire on Jan. 15, 2009. . . . more

Walgreen Has A Cold

Drug store chain reports 10.5% drop in first-quarter profit.

Despite feeling pinched by the economic downturn, Walgreen can take consolation in a rise in prescription sales.

Walgreen reported a 3.7% uptick in prescriptions during its first quarter, more than its competitors and good news considering 66.0% of its revenues come from the drugs. The company made three strategic new hires for the sector as well, appointing former Tesco USA's Fresh & Easy Neighborhood Markets executive Bryan Pugh as vice president of format development; former head of Johnson & Johnson's McNeil Consumer Healthcare Worldwide business Colin Watt to the office of president for the Health and Wellness disease management business; and UnitedHealth Group's Jeffrey Zavada to the position of chief sales officer. . . . more

Large Pharmacy Chains Aggressively Promote Generic Prescription Drug Discount Programs

Retail pharmacies "are waging what some consider a generic-drug price war that is threatening margins in a typically high-profit area and reflects the intense competition that drug store chains face in attracting and keeping customers," the Wall Street Journal reports. According to the Journal, generic drug programs have "proliferated" since Wal-Mart in 2006 began selling a month's supply of many generic prescriptions for $4. Now, large pharmacy chains such as Walgreen, CVS Caremark and Rite Aid have begun to "aggressively promote their discount drug programs ... as the economy declined and competition increased," the Journal reports. According to the Journal, "These moves are among the latest in a market battle that has helped lead to lower prices and greater use of generic drugs.". . . more

Judge OKs Circuit City financing

RICHMOND, Va. — Circuit City Stores Inc. on Monday received final approval for $1.1 billion in financing to keep operating while the nation's second-biggest electronics retailer is in Chapter 11 bankruptcy protection.

U.S. Bankruptcy Judge Kevin Huennekens approved the debtor-in-possession loans at a hearing in Richmond. The financing, which replaces a $1.3 billion asset-backed loan the company had been using, will be used to stock merchandise and pay employees.

Richmond, Va.-based Circuit City filed for bankruptcy protection last month as it faced pressure from vendors and consumers who aren't spending. Its Canadian operations filed for similar protection.

Gregg Galardi, an attorney for Circuit City, said that since filing for bankruptcy, the company's sales have been hurt by the weak consumer spending environment and are down between 40 percent and 50 percent. . . . more

Monday, December 22, 2008

Target Stepping Up Its Low-Price Message To Fight Wal-Mart

NEW YORK -(Dow Jones)- Target Inc. (TGT) appears to be readying a more aggressive pricing message to combat Wal-Mart Stores Inc. (WMT).

Target's management "remains frustrated with customer misperceptions that Target's prices are much higher than its main competitor," said Jefferies retail analyst Dan Binder.

As a result of the frustration, in tandem with Target's expectations for an extended consumer spending downturn, "expect the 'pay less' message to be amplified" in the company's spring marketing campaign, Binder said.

Target has already made changes to its in-store signs, its circular offering, and TV campaign, but has not had much success yet, Binder said. "New changes for spring are expected to take the effort to a new level, but without creating a price war. We could see price-matching offers...and potentially greater use of discounts around holiday events throughout the year.". . . more

Walgreens cuts store growth plans

Walgreens said on Monday it will open new stores at a rate of 4 percent to 4.5 percent in 2010 and between 2.5 percent and 3 percent in 2011. That’s down from an already reduced plan for 5 percent growth by 2011, as Walgreen contends with a weak economy and restricted consumer spending.

It will open new stores in strategic markets, in the “best corners” and where there are the best return rates, Walgreen said.

The slower store growth will result in an additional $500 million cut in capital expenditures through 2011, Walgreen said, after it post a lower fiscal first-quarter profit.

Cutting store growth frees up capital that allows Walgreen to improve existing stores, such as by making their product assortments more efficient.. . . more

Circuit City in court for bankruptcy hearing

RICHMOND, Va. (AP) - Circuit City is heading into U.S. Bankruptcy Court for a hearing to seek final approval of financing to be used while it is in Chapter 11 bankruptcy protection.

The nation's second-biggest electronics retailer filed for bankruptcy protection last month as it faced pressure from vendors and consumers who aren't spending.. . . more

Ruby Tuesday Closing 70 Locations

MARYVILLE, TN-Ruby Tuesday Inc. says it plans to close 40 restaurants early next year, followed by another 30 over the next several years. The casual-dining chain will also incur expenses during its third fiscal quarter in 2009 related to the sale of 35 to 40 surplus properties, along with lease terminations and obligations related to closures.

Pre-tax restructuring charges are expected to include between $30 million and $40 million of non-cash asset impairments to be recognized in the current second fiscal quarter, plus $10 million to $15 million for lease-related costs in the third quarter. Those charges will favorably impact future operating results, Ruby Tuesday stated in a release. . . . more

Darden Still Plans 70 New Sites in 2009

ORLANDO, FL-Supported by a relatively strong performance at Olive Garden, Darden Restaurants will only slightly cut back on restaurant openings this year, executives said at the company’s second quarter conference call. The company plans to open approximately 70 net new restaurants in fiscal 2009, down from the 75 to 80 planned earlier. “This reduction reflects our desire for slow growth, and that the retail developments we were expected to open in have slowed,” said Andrew H. Madsen, president and COO.

Olive Garden will open 35 to 40 new units, LongHorn Steakhouse is on target for 15 to 17 new units, and Red Lobster will open 10 new units. The remainder will open in the firm’s specialty group, primarily in Capital Grille. However, Seasons 52 will open in Wayne, NJ, its first location outside the Southeast.

“We believe (Olive Garden) has the potential for 800 to 900 restaurants in North America,” Madsen said. “Ultimately, we believe LongHorn has the potential for 600 to 800 restaurants in North America.” . . . more

Vornado Realty Trust, other developers seek bailout

The commercial real estate industry is the latest to seek a government bailout.

A dozen real estate development groups have asked Uncle Sam for help to avoid defaults, foreclosures and bankruptcies. The Wall Street Journal reports that some of the country’s biggest developers, including active Washington market player Vornado Realty Trust, have asked Treasury Secretary Henry Paulson to be included in a $200 billion loan program recently created by the government to support the market for car loans, student loans and credit card debt.

In a letter to Paulson, the commercial real estate leaders warn that thousands of properties are in danger of foreclosure because current financing is coming due and credit for new financing is hard to come by. The report cites research from Foresight Analytics LCC that says $530 billion of commercial mortgages will be coming due for refinancing in the next three years. . . . more

CMBS Delinquencies Speeding Up: Fitch

Back in January 2008, long before the capital markets took their astonishing twists, Fitch Ratings made a sobering prediction: By the end of the year, its CMBS loan delinquency index would be double or triple the 0.28 percent recorded at the end of 2007. Fitch’s crystal ball turned out to be right on the money. On Friday the ratings agency reported that CMBS delinquency reached 0.64 percent for November. At this pace, Fitch projects that CMBS delinquencies could hit 2 percent by the end of 2009.

A bad month or two does not necessarily make a trend, and Fitch often notes that one large delinquent CMBS loan bundle can skew the entire national picture. And the proportion of delinquent loans--those at least 60 days past due--still reflects only a small fraction of the nationwide CMBS inventory rated by Fitch.

That said, the most recent findings suggest some troubling trends. As the souring economy catches up with tenants and landlords, problem loans appears to be growing at a more rapid clip. For the first three quarters of 2008, monthly increases in CMBS delinquency stayed in the modest 1 percent to 4 percent range. But last month, that trickle started to look more like a wave. Following a 6-point uptick in October, the delinquency rate took its biggest one-month jump of the year--13 basis points. By contrast, it took from January to June for CMBS delinquencies to increase just 14 points. . . . more

Friday, December 19, 2008

Circuit City says not closing more stores

ATLANTA (Reuters) - Consumer electronics retailer Circuit City Stores Inc , which is operating under Chapter 11 bankruptcy protection, said on Thursday it has not announced plans to close more stores.

The company, which is currently closing 155 of its 722 stores, issued a statement responding to a Credit Suisse research note that said it planned to shutter more outlets.

"Circuit City has not announced any plans for additional store closures," the retailer said in its statement. . . . more

SOUTH STREET SEAPORT'S OWNERS SET SALE

The iconic South Street Seaport is being put up for sale for nearly $200 million, as debt-laden owner and mall operator General Growth Properties looks to shed assets.

Sources tell The Post that the Seaport, along with Boston's Faneuil Hall and Baltimore's Harborplace & The Gallery, are being marketed together as the "Festival Marketplace," though it's likely the three sites will be purchased by different buyers.

Among the Seaport's potential buyers are the Related Cos. and Vornado Realty Trust.

According to public documents and the marketing flyer being shown to prospective buyers by investment advisers DTZ Rockwood, the Seaport has no debt and retail sales of $598 per square foot. The brochure says the Seaport posted sales revenue of $102 million for the year ended Sept. 30. . . . more

More Store Closings In Line for Rite Aid

CAMP HILL, PA-Drugstore chain Rite Aid has closed 181 stores year-to-date, including 29 in its most recent quarter. Executives at the company said during their Q3 conference call to expect more of the same in the future.

Management is currently looking at its 4,900 units on a store-by-store basis, said John Standley, Rite Aid’s president and chief operating officer. "I do think there will be some additional stores closures," he said. "You’ll see some clumps here and there as we work our way through it."

Store closures were, in part, what led to the company’s $243.1-million net loss in the quarter, compared to a $84.8-million shortfall during the same period in 2007. Other charges leading to the loss were a result of underperforming stores and tax setbacks. . . . more

Pier 1 Imports Looking for Rent Reductions

FORT WORTH-With its goal of returning to profitability by August 2010 delayed by the current downturn, Pier 1 Imports is working closely with its landlords to cut rents, executives said at the company’s third-quarter conference call. The company has approximately 200 leases coming up for renewal or termination in the next 12 months, and has already begun negotiating reduced rents, said Alex W. Smith, president and CEO.

“We’re finding that landlords are much more willing to make concessions than they were a year ago,” Smith said. “We have already made progress and started to achieve significant rental reductions, and we intend to continue to do so.”

The company now plans to close between 25 and 30 stores this year. However, store closings are not the main goal right now. . . . more

Faneuil Hall: The perfect gift to impress that special someone

Faneuil Hall Marketplace, the city’s premier tourist destination and one of the nation’s first historic urban shopping developments, went on the block yesterday as mall giant General Growth threw a major real estate distress sale.

The all-but-bankrupt real estate investment trust put its entire “Festival Marketplace” portfolio up for bid including South Street Seaport, a 285,847 square foot retail center in New York City, and Harbor Place & The Gallery in Baltimore.

“Faneuil Hall is a trophy,” said Boston real estate guru Kevin Phelan of Colliers Meredith & Grew. “Even in this lousy economy it will easily bring over $100 million, and $130 million to $140 million is not out of the question.”. . . more

Thursday, December 18, 2008

Retailers Beware: The Worst Is Yet to Come TNS Retail Forward Forecasts Slow Growth Through 2009

COLUMBUS, December 18, 2008 – As retailers struggle to survive the 2008 holiday season, TNS Retail Forward forecasts retail sales will remain weak through 2009 and not experience a clear rebound until 2010.

For 2009, sales growth for the year (excluding automobiles and gasoline) is forecast to approach 2% growth compared with the 2.3% average growth for 2008 through November, based on data reported by the U.S. Department of Commerce.

TNS Retail Forward anticipates a rebound to occur in 2010 and gain momentum through 2013, when annual increases in sales will again approach the 5% average growth rate of the past 10 years. Adjusting for inflation, however, growth is forecast to remain below average going forward. (Fig. 1)

“Although inflation-adjusted growth in core retail sales should rebound toward 4%, this will represent a decline from the 5% pace averaged during the 10 years prior to 2008,” comments Frank Badillo, Senior Economist for TNS Retail Forward. “The difference represents the demand-dampening effect of inflation,” he adds. . . . more

Circuit City plans to break 154 additional leases

Circuit City Stores Inc., the nation's second-largest electronics retailer, said Wednesday it plans to break the leases for almost all the 155 stores it plans to close this month.

The Richmond, Va.-based company was scheduled to auction the leases on Thursday as part of its Chapter 11 bankruptcy protection proceedings. But too few bids came in to hold the auction, company spokesman Bill Cimino said.

"It's a tough retail real estate market now," Cimino said.

Circuit City filed for federal bankruptcy protection last month as it faced mounting debt, pressure from vendors, a drop in consumer spending and heightened competition from rival Best Buy Co. and others. Its Canadian operations filed for similar protection. . . . more

CRE Lending Is at a Virtual Standstill

WASHINGTON, DC-The National Association of Realtors released its latest Commercial Real Estate Outlook and the findings, while not surprising, are very sobering. NAR reports that commercial investment and lending activity is at a virtual standstill and the environment is likely to worsen next year. “Based the data we have available, there are few if any bright spots in the picture right now,” NAR Economist George Ratiu, tells GlobeSt.com.

The culprits, of course, are the frozen CMBS market and, more importantly, the financial crisis. Even though borrowers had been locked out of the debt markets for the better part of a year, Ratiu says, the industry had been performing relatively well – until the financial crisis hit. “That pushed us over the edge.” In Q3 of 2008 only $33 billion of investment sales closed, he notes. In the same period last year, that figure was $110 billion. Deals that are getting done are being financed with cash or some form of equity. . . . more

Wednesday, December 17, 2008

Centro soars after bank bailout deal

SECURITIES in Centro Properties soared yesterday after financiers extended its $5.05 billion debt deadline for a month and agreed on a long-term rescue plan that effectively gives them ownership.

But despite the surge on the back of the company's Tuesday night announcement, analysts say it is just a matter of time before the company is broken up and sold off piecemeal. The deal just gives the banks more time to do so.

"Surely it's a dead man walking," said one analyst.

"It is a bowl of spaghetti that needs to be unwound." . . . more

A Shopping Nexus Outside Washington Plots a Future as an Urban Center


TYSONS CORNER, Va. — This intersection in Fairfax County is a mecca for shoppers: it is the Washington region’s largest retail center, with 5.9 million square feet of shopping, and it includes the country’s 10th-largest mall. It is also due for a major makeover — after the sinking economy rebounds.

In October, the Fairfax County Board of Supervisors accepted the
recommendations of a 36-member task force that had labored for three years on a plan to turn this traffic-clogged maze of malls and office parks into an urban center that has more housing and is less dependent on cars. This month, the supervisors said they would move quickly in 2009 to pass regulations allowing for greater density, consistent with the long-range plan for Tysons.

The plan has been widely applauded as a forward-thinking blueprint to convert this “edge city,” 13
miles from downtown Washington, into the epitome of “smart growth” by 2050. The area is ultimately envisioned as having high-rise apartments adjoining four new rail transit stations built along an extension of the Metro system, shuttle buses, a pedestrian-friendly street grid, urban parks and outdoor plazas.. . . more

PREIT, Cafaro Lend Boscov’s a Helping Hand

In unorthodox moves, two major retail real estate developers are helping keep Reading, Pa.-based regional department store chain Boscov’s afloat. Cafaro Co. and Pennsylvania REIT, both of which have holdings in the state, gave $30 million to former chairman and CEO Albert Boscov –10 percent of the $300 million he has lined up from a consortium of banks and private and public sources that will enable the chain to continue operations.

Boscov’s rescue package was originally approved Nov. 21, but the unusual details of the financing only emerged last week. The privately held, Youngstown, Ohio-based, Cafaro Co., which owns more than 34 million square feet of retail space, invested $20 million in the retailer through Cathco Diversified Fund, LP, owned by members of the Cafaro family. Meanwhile, PREIT, a Philadelphia-based REIT with a 26.1-million-square-foot portfolio, provided a $10 million unsecured loan. . . . more

Aaron Acquires Franchisee

Aaron Rents has acquired its second largest franchisee, Rosey Rentals, bringing 35 stores under the Aaron's fold. Rosey, based in Windermere, Fla., has been a franchisee since 2003. The company had 35 Aaron's stores in six Southeastern states. Total annual revenues were about $45 million. Aaron's has more than 1,535 company-operated and franchised stores in 48 states and Canada. . . . more

The Dead Mall Problem

Experts say Atlanta, Las Vegas, and retail hubs in California and Florida are at real economic risk if thousands of more stores shutter in 2009.

As the recession leaves more retail casualties in its wake, rising store bankruptcies and mall closures could have devastating economic consequences. As more stores exit malls, vacancies in regional malls could rise past 7% by year-end, a level not hit since the first quarter of 2001, according to real estate research firm Reis. Major cities across America will be affected, said David Birnbrey, Chairman and co-CEO of Atlanta-based The Shopping Center Group, a retail real estate services firm.

Both Birnbrey and Susan Wachter, professor with University of Pennsylvania's Wharton Real Estate Department, warn the social and economic impact of empty stores can be devastating.

"One of the biggest consequences [of store and mall closings] is the loss of a sense of community," Birnbrey said. "I am a big believer that malls are an essential part of Americana. A mall is a place where people gather and socialize."

In addition, many municipalities are heavily dependent on retailers for the tax revenue and jobs that they generate. . . . more

Consumers Focus on Basics, Buy Grocery Gift Cards

Dominick Lombardi and his wife usually buy his mother-in-law jewelry at Christmas. This year, they're giving her a gift card to the Harmons grocery chain in Utah.

"My mother-in-law takes care of plenty of kids and grandkids, and this is the best gift for her," Mr. Lombardi told the Deseret News.

"In this day and age, with the economy the way it is, the thing you have to do is take care of food and gas," he said. "Everything else is extra."

Mr. Lombardi's mother-in-law will become one of the many consumers who receive a gift card this holiday season. According to the National Retail Federation, cards will be the most-requested gift this year. . . . more

Mexico's Gigante Sells Stake In Radio Shack Joint-Venture

MEXICO CITY -(Dow Jones)- Mexican retailer Grupo Gigante SAB (GIGANTE.MX) has sold its stake in a joint-venture with Radio Shack Corp. (RSH) after failing to agree on an expansion strategy following several months of negotiations.

The 563.2 million peso (US$42.4 million) transaction makes Radio Shack the sole owner of its Mexican unit, Radio Shack de Mexico, and boosts Gigante's cash reserves, Gigante said in a filing late Monday with the Mexican Stock Exchange.

Gigante selling its stake was one of three options considered as the partners reviewed the joint-venture. Others were an expansion of the electronics goods chain in Mexico and Latin America, or Gigante buying Radio Shack's share of the joint-venture.. . . more

Retailers Lose Sales from More Than 20% of Consumers Due to Out-of-Stocks, Says New Research from IHL Group

Consumer Electronics Retailers Lose $1.35 for Every Customer that Walks in Their Doors Because of Out-of-stocks

NASHVILLE, Tenn.--(BUSINESS WIRE)--As if retailers did not have enough problems attracting consumers in a weak economic environment, a new research study from IHL Group says that retailers lose sales of at least one item to as many as 20% of consumers coming into their stores – leading many consumers to quit shopping with the retailer altogether.

Consumer Electronics stores are losing the most, with consumers saying that they leave the store without buying at least one item 21.2% of the time. Or put another way, these retailers are losing $1.35 for every customer that comes into their stores due to their level of out-of-stocks. Likewise, Warehouse Clubs lose $1.78 and Grocery stores lose $.68 in sales for every customer when consumers cannot buy that product or an adequate substitute. . . . more

Barnes & Noble Booksellers Ranked Number One Company in Leading Customer Experience Index Report

NEW YORK--(BUSINESS WIRE)--Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller, today announced that it has been ranked the number one company in the customer experience index by Forrester Research. According to the December 2008 report titled The Customer Experience Index, 2008 published by Forrester Research, “Barnes & Noble takes the top spot” with an “excellent” rating and overall score of 92%.

Forrester asked nearly 5,000 consumers about their interactions with 114 companies across 12 different industries and developed its customer experience index. The report is based on companies’ combination of ease of use, usefulness and enjoyability of experience. According to the report, “only 11% of the firms wound up with ‘excellent’ ratings.”

Barnes & Noble is the number one company overall in the customer experience index. The bookseller’s rankings in each category measured by the report are as follows: . . . more

License Approved for Wegmans’ Massachusetts Project: Report

WESTWOOD, Mass. — In a vote expected to pave the way for Wegmans’ first store in Massachusetts, state officials have voted to approve a beer and wine license for the Westwood Station retail project here, published reports said this week.

Pending approval of the bill by Gov. Deval Patrick, Wegmans is expected to apply for the license. Developers in May said that Wegmans would be an anchor of Westwood Station, a $2 billion mixed-use project here, but was waiting to see whether it could obtain a liquor license before committing. . . . more

Tuesday, December 16, 2008

PetSmart Continues to Gain Traction

Among pet supply retailers, PetSmart Inc. (NASDAQ: PETM) continues to gain traction at the expense of rival PETCO. The average PetSmart customer shopped at the store 1.44 times in November, compared to only 1.28 in November 2007, an increase of more than 12%. By comparison, PETCO has suffered a 1% drop from 1.26 visits per customer in November 2007 to 1.25 visits per customer this year. This data was compiled by Geezeo's Main Street Spending Index (MSSI). . . . more

Eight senators back Whole Foods in fight with FTC

WASHINGTON, Dec 15 (Reuters) - The Federal Trade Commission acted hastily in changing its rules for investigating mergers and the changes made the assessment process less fair, eight senators said in a letter sent to the commission.

The rules have come under sharp criticism from Whole Foods (WFMI.O: Quote, Profile, Research, Stock Buzz), which has been battling the FTC since February 2007 over whether it should be allowed to merge with rival Wild Oats. The merger was completed in August 2007 but the FTC is still assessing it, and could order it undone.

In a letter dated Dec. 12, the senators criticized the FTC for accepting public comments for just 30 days on proposals to speed up the agency's process for assessing mergers and having commissioners preside over hearings held prior to internal trials by FTC administrative law judges. Commissioners also vote to investigate mergers. . . . more

Target Losing Battle to Wal-Mart

Rise & fall of Target: After a nearly four-year streak of beating its chief business rival, the Minneapolis-based retailer has been losing the discount battle to Wal-Mart this year.

Not so long ago, Target was the popular kid on the block, and Wal-Mart was working diligently to soften its image among some as an uncool bully.


What a difference a year makes.

A widening housing crisis, sporadic spikes in food and fuel prices, and a massive meltdown in the global financial markets have led to a reversal of fortunes among the nation's top two discount retailers. Now Target is the one trying to get noticed.

After losing the monthly head-to-head battle for same-store sales growth to Minneapolis-based Target for nearly four years, Wal-Mart has turned the tables. Since November 2007, as the nation's housing crisis was widening, Wal-Mart has beaten Target and nearly every other retailer in America in monthly sales data for 12 straight months.



"Wal-Mart positioned themselves perfectly for this economy," said Stan Pohmer, a Twin Cities retail consultant and former senior buyer at Target. "It's just serendipitous. Fifteen months ago, Wal-Mart was trying to emulate Target and it didn't work. So they ended up going back and repositioning on their core focus of everyday value and price.". . . more

Best Buy beats expectations, offers staff buyouts

ATLANTA, Dec 16 (Reuters) - Best Buy Co (BBY.N: Quote, Profile, Research, Stock Buzz) reported better-than-expected quarterly results on Tuesday and plans to offer employee buyouts and trim back store openings as consumers cut spending, sending shares up 17 percent.

The top consumer electronics retailer has taken several steps to counter the U.S. recession and fend off increased competition from discounters such as Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz), which has stepped up its product offering and cut prices in the key holiday shopping season.

Best Buy said it is offering buyout packages to its 4,000 corporate employees. It plans to cut new store openings next year in the United States, Canada and China as it pares capital spending by about 50 percent.. . . more

Rate Cut Expected Today

Investors await several economic indicators today including the consumer price index and housing starts data as well as news from the Fed regarding interest rates and the central bank, Reuters reported. The Fed is expected to lower interest rates closer to zero and point toward emergency tools it could deploy to end a year-long recession, the report stated. Goldman Sachs is expected to report a quarterly loss of as much as $2.5 billion, hit by the falling value of many of its investments, the report stated. Apart from Goldman Sachs, companies reporting earnings on today include Adobe Systems and Best Buy Co Inc. Costco Wholesale Corp's quarterly profit rose slightly as strong results from its gasoline stations helped to offset weak consumer demand for all but the most essential household items, according to the report.

American International Group, the insurer bailed out by the U.S. government in September, said it sold $39.3 billion of assets to a fund established by the Federal Reserve Bank of New York, Reuters stated. Shares of real-estate investment trusts traded lower Monday as disappointing corporate news from the sector fed concerns that the credit crunch and a slowing economy will continue to weigh on owners of commercial properties, according to MarketWatch. Mall developer General Growth Properties Inc. said it hasn't yet been able to reach a deal with its lenders to further extend the maturity date on $900 million in mortgage loans and Developers Diversified Realty Corp. said a previously announced deal to sell assets to a joint venture with an institutional investor would not close in December as had been expected, MarketWatch reported. . . . more

Specialty stores get holiday gift: Sales aren't that bad

Dec. 16--Christmas is a big deal for Lin Hanzelko, who owns a specialty toy shop in Lake Mary. But this year, she stocked fewer items at her store, Timmy's Toy Chest, not knowing if the jittery economy would scare away some of her usual holiday shoppers.

To her surprise, Hanzelko has already placed reorders for high-ticket items such as Playmobil play sets, which can retail for more than $100. And although shoppers are holding off a little longer than normal in hopes of deals, sales last month were on par with last year.

"When times are tough, mom and dad might forgo each other, but Santa Claus still comes," Hanzelko said. "People are still looking for the same amount of presents under that tree."

Even as many department store and other large retailers suffer this year, some small specialty retailers in Central Florida are reporting that sales are better than expected. They credit factors such as knowledgeable sales staffs, unique offerings and loyal customers for saving the season. . . . more

Monday, December 15, 2008

Macerich Inks Mervyn's Tenants, Lands $250M Loan

SANTA MONICA, CA-At a time when new tenants and financing are both hard to find, shopping center REIT Macerich has lined up tenants for 22 of 41 Macerich-owned Mervyns sites and has borrowed $250 million on a 1.5-million-square-foot Portland, OR center called Washington Square. The 22 Macerich-owned Mervyn's sites will be filled by retailers Forever 21 and Kohl's, pending approval by the court overseeing Mervyn's bankruptcy proceedings. Forever 21 will be taking 12 of the spaces and Kohl's will be taking 10.


Forever 21 and Kohl's were the winning bidders in the auction of Mervyn's leaseholds held Dec. 10, a preliminary step leading to final court approval of new tenants for the Macerich-0wned Mervyn's sites. The court is expected to approve the leases within a month. Of the 22 locations, eight are within centers owned by Macerich.. . . more

S&K Famous Brands closing 58 retail stores

S&K Famous Brands Inc. is closing 30 percent of its 196 stores and has put its West Broad Street headquarters up for sale as it works to restructure its store base and operations.

The Henrico County-based men's clothier would not say how many store employees would lose their jobs.

"This is the toughest retail environment I've seen in 20 years," said President and CEO Joseph A. Oliver.

Oliver said yesterday that the moves were designed to streamline the company as it works to reach new customers and improve weak sales. . . . more

Tops Markets plans to open more stores

Despite wounded economy, grocery chain is growing

Even with an economy on the ropes, Tops Markets is planning a one-two punch to secure its title as the local supermarket heavyweight.

The Williamsville-based grocery store chain is celebrating its one-year anniversary as a locally operated company with plans to open seven to 10 new stores.

It has already embarked on $150 million in improvements for 60 existing ones. . . . more

Wal-Mart CEO sees recession change consumer habits

NEW YORK (Reuters) - Wal-Mart Stores Inc's chief executive said on Sunday he sees changes in the habits of the chain's customers as they contend with the recession, and also said Wal-Mart had offered to help the incoming Obama administration with health care and environmental issues.

"The number one issue today is (consumers') concern about their job," Lee Scott said on NBC's "Meet the Press."

"In our pharmacy group, we have increases in prescription drugs, but not at the same rate it was," he said. "What we're seeing is an increase in self-treatment."

Strained consumers are also changing the food they buy at Wal-Mart, Scott said. "We're seeing an increase in food storage as people are cooking more at home," he said. They are "using leftovers more extensively," and buying more frozen food. . . . more

Discounts drive shoppers to stores this weekend

MILWAUKEE (AP) — Steep discounts on clothes, toys and electronics enticed shoppers to stores this weekend but they still are making fewer purchases leading into the final stretch of the holiday shopping season.

Based on early reports from analysts and malls, sales results were generally mixed to moderately down this past weekend, the second-to-last of the season that can make or break many retailers.

Stores offered big discounts to shoppers who have been pulling back their spending, concerned about the recession and job stability. Shoppers came to stores for these discounts but largely stuck to their shopping lists and basic items like clothing, analysts say.

Traffic levels at stores were comparable to last year, said Marshal Cohen, chief industry analyst at market research group NPD Group. People were looking for deals but not as willing to spend their money as last year.. . . more

Retailers' market caps fall below asset values

Target Corp., Gander Mountain Co., Best Buy Co. Inc. and Caribou Coffee Co. Inc. are all upside down, in a sense, as are many of their peers.

The economic downturn has sent retail and restaurant stocks plunging, and in some cases, their inventories now are worth more than all of their outstanding shares of stock combined.

For example, you could buy all 24.1 million shares of St. Paul-based Gander Mountain’s stock for about $39.1 million. That’s a 90 percent discount on what it would cost to buy all the goods on the shelves of the company’s 116 stores, according to its most recent balance sheet. It’s also 75 percent off the value of all the company’s property.

Some analysts say the drastic stock slump makes it difficult to accurately valuate companies, but others say it’s just a sign of the times.. . . more

Friday, December 12, 2008

Even luxury shops must coax

Turn to discounts as clientele holds back

Get ready to pry open those Prada purses and Gucci wallets. Upscale merchants who typically disdain deep discounts are suddenly embracing them this holiday season like a new best friend.

Yes, even the affluent want a break this Christmas. And they're getting it. Diners at Back Bay steakhouse Fleming's receive a free round-trip ride in a Mercedes anywhere in Boston. Off 5th, the luxury outlet stores for Saks Fifth Avenue, recently promoted a buy-one-get-two-free deal for cashmere sweaters that normally cost at least $125 each. And Spa Newbury is doubling consumers' money with its "Recession Relief" deal: $200 gift certificates for $100 and vitamin spa facials and lavender full-body scrubs for $50, usually $100.

These aggressive promotions are signs of the struggles faced by luxury merchants that once rode the tide of easy spending by the rich in recent years. Now, wealthier consumers, who have seen their nest eggs dwindle, bonuses shrink, and job security wither, are cutting back on purchases. And the luxury market, which had been more insulated from previous downturns, also is losing many aspirational customers who had been using credit cards and home equity lines to fund shopping sprees.. . . more

General Growth refinances mortgages

General Growth Properties, owner of Landmark Mall, Tysons Galleria and about 200 shopping centers nationwide, has refinanced $896 million in debt, potentially avoiding a bankruptcy filing.

The Chicago-based company used the proceeds to refinance $814 million in mortgage debt and to pay off a $58 million bond. General Growth says it is still in talks with lenders about extending two other mortgage loans due this month, but says there is no guarantee it will get extensions.

General Growth is saddled with debt from its 2004 acquisition of Columbia, Md.-based The Rouse Co., an $11 billion deal financed largely with borrowings. The company last month warned it may be forced to seek legal protection from its creditors. . . . more

A Very Anxious Christmas for Toys 'R' Us

The toy giant is discounting heavily, its business model is strained, and it's weighed down with $6 billion in debt

Times are tough for every toy seller, but this holiday season could prove particularly hard on Toys 'R' Us. The $14 billion chain, which was taken private three years ago, is heading into Christmas with $6 billion of debt, growing pressure from Wal-Mart (WMT), and a business model that leaves some analysts scratching their heads. "Its key value to consumers was a much broader selection, particularly of more expensive toys," says Dartmouth professor M. Eric Johnson. That doesn't exactly fit with the times, never mind an era where people gain a wide range of choice with a click of the mouse.

While Chief Executive Gerald L. Storch has made big changes at his 1,500-plus stores, the question is whether they will be enough to weather the storm. He has introduced electronics such as Apple (AAPL) iPods, spruced up the Web site, and combined Babies 'R' Us and Toys 'R' Us outlets into single locations to lift traffic and save costs. . . . more

Rising Retailer Threat: Liquidations

When Competitors Close, Their Fire Sales Lure Away Customers; KB Toys Latest to Shut Doors, Slash Prices

Retailers grappling with the grimmest holiday shopping season in decades face another threat: a boom in liquidation sales by competitors.

Linens 'n Things and Circuit City are among troubled chains whose liquidations are worrying competitors.

The sour retail market is leading to a flood of store closings, followed by the inevitable going-out-of-business sales. In a vicious cycle, the "everything must go" banners and ads are siphoning off shoppers from already-struggling retailers, further weakening their results, analysts say.

In the last few weeks, retailers ranging from Signet Jewelers Ltd. to Bed Beth & Beyond Inc. blamed competitors' liquidations, in part, for sharply reduced revenue and profit in the fiscal third quarter.

On Thursday, KB Toys Inc. said it has returned to Chapter 11 bankruptcy and will liquidate all of its more than 400 mall-based and outlet stores. The company said it plans to quickly start going-out-of business sales "to take advantage of the last two weeks of the holiday selling season.". . . more

Retail sales fall 1.8% in fifth straight decline

Falling gas prices exaggerate drop in spending in November

WASHINGTON (MarketWatch) -- With gasoline prices plunging and auto sales on life support, U.S. retail sales dropped 1.8% in November for their fifth straight decline, the Commerce Department reported Friday.
Retail sales -- which account for about a third of final demand -- were down 7.4% compared with a year earlier. In the past three months, sales have fallen 4.7% compared with the previous three months.

The big drop was roughly in line with expectations by economists for a 2.1% decline. See Economic Calendar.

"The financial markets were braced for a horrific retail sales report for November, but the numbers were actually not so bad," wrote Mark Vitner, an economist for Wachovia.

Sales fell a revised 2.9% in October and a revised 1.6% in September. . . . more

Kohl's and Forever 21 jointly buy 46 Mervyns sites


Kohl's and Forever 21 jointly purchase 46 Mervyns locations


NEW YORK (Associated Press) - Department-store operator Kohl's Corp. said Friday it jointly acquired 46 Mervyns locations for about $6.25 million.

Kohl's will assume 31 locations and closely held Los Angeles-based retailer Forever 21 Inc. will have 15 locations, pending approval by the court overseeing Mervyns bankruptcy proceedings.

Kohl's Chief Executive Kevin Mansell said the stores will boost the retailer's presence in markets where it does not have a significant presence
.. . . more

Costco Maintains Growth Plans

Costco Wholesale Corp. is maintaining its store opening schedule, with plans to build 22 new stores this fiscal year, executives said at the company’s first-quarter conference call.

The company opened eight stores in the first quarter (down from 10 in the first quarter of last year) and closed one store in Las Vegas that will be converted to a business center. More stores will open in the third and fourth quarters.

“So far, so good,” said Richard Galanti, CFO. “We’re pretty much in line with what we said in the beginning, [opening] 20 to 25 stores. We think there are some good real estate opportunities coming down in the next few months”

Expect more of these new stores to be located near malls. A store at Cumberland Mall in Atlanta, which attaches to the center only via a breezeway, has been very successful for the retailer. . . . more

Thursday, December 11, 2008

KB Toys Succumbs to Holiday Slump

The anemic holiday shopping season has already taken its toll on one major retailer: KB Toys, the toy chain, has filed for Chapter 11 bankruptcy protection in Delaware, saying in court documents that it plans to hold going-out-of-business sales at its hundreds of stores.

The filing could be a grim sign for other toy sellers, especially Toys ‘R’ Us, which was saddled with billions of dollars in debt when it was taken private in 2005 by a group that included Kohlberg Kravis Roberts and Bain Capital.

In its filings, KB blamed a “sudden and sharp decline in consumer sales due to macro-economic concerns” and said that between Oct. 5 and Dec. 8, sales at stores open for at least a year plunged nearly 20 percent from the comparable period in 2007. . . . more

Retail Property Owners Warned to Innovate

Retailers and industry consultants have warned shopping center and mall owners to innovate their properties or risk failure.

"The real issue now is to innovate because without it you cannot be successful. We all know that retail traffic is down dramatically," Millard S. Drexler, chief executive of retail chain J Crew, said during opening day sessions at the International Council of Shopping Centers National Deal Making Conference in New York.

The council, also known as ICSC, recently reported that chain store sales in November fell 2.7% from the same month in 2007, the biggest year-over-year drop in the history of its index of 37 leading chains.

"We cannot (let ourselves) become a General Motors-Chrysler-Ford thing," Drexler said in reference to the U.S. automobile industry, which is seeking a federal bailout to stay afloat.

The conference's special guest speaker further warned that, unlike the auto industry, retail property owners must risk taking new and unconventional steps. "There's no way to build a business without appropriate risk." . . . more

Whole Foods CEO speaks out in case against FTC

PORTLAND, Ore. - Whole Foods CEO John Mackey said Tuesday that the Federal Trade Commission's pursuit of antitrust claims in his company's acquisition of Wild Oats is "almost a vendetta" and is wasting time and money.

Whole Foods Market Inc. filed a lawsuit late Monday against the regulator, claiming it has violated Whole Foods' due process rights in continuing proceedings about the deal.

The FTC would not comment on the case Tuesday but maintains the deal could hurt consumers and
said it is treating this like any other case. . . . more

Tweeter Trustee Trying To Reopen Stores

Philadelphia — Tweeter’s court-appointed trustee is trying to finalize a deal with liquidators that would reopen the stores for one final clearance sale before month’s end.

Under the plan, Tweeter’s current liquidators — SB Capital, Tiger Capital and Hudson Capital Partners — would re-hire store employees and reopen the chain’s 70 stores in order to resume going-out-of-business sales and to deliver previously-purchased merchandise to customers.

George Miller, Tweeter’s Chapter 7 bankruptcy trustee, told TWICE he is also attempting to resolve issues involving unpaid compensation due employees. Staffers say they are still owed commissions, stay-on bonuses and/or vacation pay promised by Tweeter under chairman George Schultze, although paychecks for the most recent salary period have been received. . . . more

Costco profit little changed from last year

Costco Wholesale Corp., the biggest U.S. warehouse-club chain and owner of stores in Brick, Hazlet and Ocean Township, said first-quarter profit was little changed as sales growth slowed.

Net income rose to $262.5 million, or 60 cents a share, from $262 million, or 59 cents, a year earlier, Issaquah, Wash.-based Costco said today. Twenty analysts surveyed by Bloomberg estimated average profit of 62 cents excluding one-time items.

Sales slowed because of lower fuel prices and the dollar’s gain against other currencies, which eroded the company’s revenue from international locations. Waning demand for jewelry and other pricier items shows that even Costco’s higher-income customers are feeling the effects of shrinking values in their homes and stock holdings, increasing job losses and the U.S. recession. . . . more

Saks Closing All But Two Bridal Shops

Saks Fifth Avenue is going to be closing 16 of its 18 bridal shops reports Bloomberg. Only the Manhattan and Beverly Hills Saks bridal stores will remain open.

Saks is shutting 16 of its 18 salons, Jessica Gioia, a spokeswoman, said in an e-mail. The retailer will stop taking orders as soon as the end of this month, Kert Rosenkoetter, vice president and general manager of Saks Fifth Avenue's St. Louis store, wrote in a Dec. 1 letter to customers.

"After much consideration, and only after a thorough analysis of the wedding dress business Saks Fifth Avenue offers, as well as what is offered in the local marketplace, we have decided to discontinue offering a Bridal Salon in most of our stores," Rosenkoetter wrote. . . . more

McDonald's Is Still the Fast Food King

Customers are gong to McDonald’s (NYSE: MCD) in record numbers despite the lagging economy. The average consumer ate at the golden arches an average of 2.7 times in November, compared to 2.4 times a month in November 2007. This data compiled by Geezeo’s Main Street Spending Index (MSSI).

The average spend per each visit has also increased from $6.98 in November 2007 to $7.24 in November 2008. That means customers spent an average of $19.78 in November 2008, which is up 16% from the $17.09 customers were spending in November 2007. . . . more

Neiman Halts Cusp Chain’s Growth

With an eye to controlling expenses in a difficult environment, Neiman Marcus Group will cease expansion of its new Cusp format for the rest of the 2009 fiscal year, executives said at the company’s first-quarter conference call.

Originally planning to open between four to six Cusp stores this year, the company now will not expand beyond the two stores already opened in the quarter. However, management is maintaining planned openings for its namesake Neiman Marcus stores, although on a lengthier schedule.

“We have six full-line stores on the schedule,” said Burton M. Tansky, president and CEO. “That has not changed, but in same cases [the opening dates have] shifted.”

Neiman Marcus stores will open in Bellevue, WA; Walnut Creek, CA; Sarasota, FL; San Jose, CA; and Princeton, NJ, through fall 2013. Tansky did not give a specific date for a scheduled unit in Oyster Bay, NY. . . . more

Wednesday, December 10, 2008

U.S. retailer Talbots eyes upscale outlet stores

BOSTON, Dec 10 (Reuters) - Talbots Inc (TLB.N: Quote, Profile, Research, Stock Buzz) plans to start opening stores in upscale outlet malls next year, marking the latest set of dramatic changes at the venerable U.S. women's clothing retailer.

"In 2009 we will open upscale outlets in premium outlet centers," Trudy Sullivan, the 61-year-old retailer's chief executive said at a breakfast meeting.

For years, Talbots has been known as a better-priced brand that sold the bulk of its merchandise at original prices and had only a few well-advertised sales.

Now it hopes to appeal to penny-pinching shoppers by moving into the outlet market at a time the country is facing its sharpest downturn since the Great Depression. . . . more

Westwood Station clears legal hurdles

A legal action against Westwood Station, filed by a neighboring town, has been dismissed.

According to court documents, the $1.5 billion mixed use development in Westwood was opposed in a suit by the Town of Canton. Canton officials, according to a Web site set up by the town board, were concerned about local traffic issues, rush hour traffic jams on Route 95, and waste- and storm-water issues.

The suit asked that a decision of the state Executive Office of Transportation be vacated. Those findings supported the developers’ contention that planned measures linking the project to major arteries were sufficient. . . . more

Kohl’s posts a hefty hike in third quarter web sales

In a reverse to what’s happening with the online channel at several other chain retailers, e-commerce sales boomed for Kohl’s Corp. in the third quarter.

For the quarter ended Nov. 1, web sales rose by 92.2% to $81.7 million from $42.5 million in the third quarter of 2007. The web was the only growth channel for Kohl’s, No. 63 in the Internet Retailer Top 500 Guide, as total revenue dropped by 0.5% and comparable store sales declined by 6.7%. For the quarter, Kohl’s reported net income of $160.2 million on revenue of $3.8 billion vs. net income of $194 million on sales of $3.82 billion in the third quarter of the prior year. The web accounted for 2% of sales in the quarter. . . . more

Pep Boys Execs Look at Acquisition Opportunities

PHILADELPHIA-Even though the company didn’t have a fabulous quarter and the economy’s in a recession, executives at auto-parts chain Pep Boys are looking to increase the firm’s market share. The locally based company is considering the acquisition of regional or local competitors to grow in existing markets, management said during their third-quarter conference call.


“We just do not have the market density that we need in most of our markets,” said CEO Mike Odell. Even in its strongest two metro areas, Philadelphia and Los Angeles, Pep Boys, with 560 units nationwide, could stand to beef up, he said. The company is targeting the purchase of 30 stores per year over the next few years, and Odell said it would be happy buying between 20 and 40 units annually during that time. . . . more

Wharton and Verde Group Study Shows Economic Woes Aren?t the Only Factor Putting Malls at Risk This Holiday Season

At a time when the economic environment is already causing great challenges for the retail industry, a new survey by the Baker Retailing Initiative at the Wharton School of the University of Pennsylvania and the Verde Group says four of the five most common problems in malls reflect a need for elements that encourage greater exploration, such as a wider range of restaurants, diverse portfolio of stores, and a general sense of newness or uniqueness.

The study, which looks at shopper loyalty and purchasing decisions, reveals an undercurrent of dissatisfaction among shoppers with malls that eclipses problems they have with individual stores.

"The lack of "discovery" or the "what"s around the corner" factor seems to be sorely missing for shoppers who want to enjoy themselves at the mall," says Wharton Professor Stephen J. Hoch, and faculty director of Wharton"s Jay H. Baker Retailing Initiative. "These findings should be a call-to-action for mall developers who are failing to quench this thirst for excitement. Malls can"t be mundane in this economic climate, they need to excite shoppers from the moment they arrive versus make them want to turn around and leave.". . . more

Office Depot to close 112 stores, 6 distribution facilities

Office Depot, Inc. said Wednesday that over the next three months it will close 112 underperforming North American stores and another 14 stores as their leases expire in 2009. New store openings for 2009 now have been reduced to approximately 20, down from the previous estimate of 40 stores. Office Depot also plans to close six of its 33 distribution facilities in North America. The company anticipates taking charges in the fourth quarter 2008 and in 2009 for these actions totaling in a range from $270 million to $300 million.

Boston putting up $40M for development

The city of Boston is creating a $40 million pool to fund bridge loans for developers whose projects have been stalled by the credit crunch — including the tower at the former Filene’s site in Downtown Crossing, Mayor Thomas M. Menino said Tuesday morning.

The $40 million is coming from the federal Department of Housing and Urban Development, and is called "Boston Invests".

Menino stressed that the funds, which will be available in about four months, is only for projects that are ready for ground-breaking.

“It can’t be somebody’s vision for doing something great,” he said. . . . more

Safeway to become a developer?

Safeway, owner of Dominick's grocery stores, has created a real estate development business that has reviewed 36 projects for possible development and is working actively on a handful of the projects, a spokesman confirmed.

The spokesman declined to identify the projects' locations.

"The opportunities (to develop undervalued real estate) are pretty extraordinary right now for people who can step up to the table," Safeway CEO Steve Burd told Wall Street analysts during an investor conference on Thursday.

One example of a project would be Safeway developing a shopping center where it operates a grocery store, and leasing or selling the retail space surrounding its store. Safeway would retain ownership of its grocery store in that center. . . . more

Monday, December 8, 2008

Abercrombie Refuses to Discount, Stock Plunges

Eight years ago, Abercrombie & Fitch was the bee's knees of discreetly sexy casualwear. Overpriced sandblasted jeans and button-up plaid shirts were boxed up and put under the tree (or menorah) of any 16-year-old with a Suburban in the driveway. Those were the good, pre-recession, naked-models-riding-horses-in-catalogues days. But now Abercrombie is suffering much worse than its competitors, like American Eagle, in the economic downturn. Though the competition is discounting prices to get consumers to shop, Abercrombie has kept its prices the same because they don't want to look cheap. The Wall Street Journal reports:

Wall Street has begun to question the soundness of Abercrombie's no-discount pledge. The stock has tumbled nearly 80% from its January high of around $80, in part because of the pricing strategy. Some analysts now rate the stock a "sell." . . . more

Mothers Work now ‘Destination Maternity’

Maternity-wear retailer Mothers Work Inc. has a new name.

Effective at the close of trading Monday the company changed its corporate name to Destination Maternity Corp.

The change includes a new ticker symbol (NASDAQ:DEST), effective Tuesday.

Mothers Work was founded in 1982 to provide work clothes for pregnant career women. . . . more

Sales Since Cyber Monday Up 9 Percent Versus Year Ago

RESTON, VA, December 7, 2008 – comScore (NASDAQ : SCOR), a leader in measuring the digital world, today reported its tracking of holiday season retail e-commerce spending for the first 35 days of the November – December 2008 holiday season. For the holiday season through December 5, $14.92 billion has been spent online, essentially the same level compared to the corresponding days last year. For the five days beginning with December 1 (Cyber Monday), the kick-off to the heaviest part of the online shopping season, sales totaled $3.74 billion, up 9 percent versus year ago. Two individual days in the past week achieved more than $800 million in online spending: Monday, December 1 (“Cyber Monday”) with $846 million, and Tuesday, December 2 with $823 million.. . . more

Close Enough for Mass.

A liberal interpretation of local parking standards has cleared the way for construction of a new shopping center in Massachusetts.

Plans call for construction of the shopping center in Chelmsford, and its location will be directly across the street from an existing shopping center, Eastgate Plaza. As such, the two centers will directly compete for local customers, since each will house a supermarket.

But because plans for the new shopping center do not comply with Chelmsford parking requirements for a supermarket of its projected size, the owners of Eastgate Plaza have contested the competing construction. They argue that parking needs will fall short of standards by nearly 100 spaces.

The Chelmsford planning board consequently conducted public hearings to settle the matter. And after hearing from both parties, the board granted a special parking permit that allows the parking shortfall. . . . more

Liz Claiborne predicts fashion industry revamp

New York: Slowing purchases of clothing and accessories may spur consolidation in the fashion industry, Liz Claiborne Inc's chief executive officer (CEO) said on Friday, but the owner of the Juicy Couture and Kate Spade brands is not looking for acquisitions right now.

As he completes a restructuring that includes shedding several brands, CEO William McComb said industry deals may come as clothing makers and retailers struggle with the weakest holiday shopping season in years.

In contrast to previous slowdowns, "there is a strong sense here that this particular economic force ... is Darwinian, and that across all industries, market structures, competitors and competitive structures will change as a result," McComb said.

Outlook
. . . more