Wednesday, December 31, 2008
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
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
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.
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
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
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
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.
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'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
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
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
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
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
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
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
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
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'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
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
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
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
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
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
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
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
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
“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
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
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
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
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
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
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
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
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
"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
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
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
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
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
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
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
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
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
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
"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
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
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
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
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
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
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
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
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
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
"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
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
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
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
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
“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
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
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
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
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
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