Tuesday, September 30, 2008
Located in the heart of Philadelphia, Center City is the downtown and Central Business District of Philadelphia, Pennsylvania. Encompassing a population of approximately 90,000, Center City is the third most populous downtown in the United States. Additionally, the area is largely recognized as one of Philadelphia’s premiere tourist and shopping destinations and attracts an estimated 5 million visitors annually. Walnut Street in particular, offers a mix of national and local luxury businesses, including Polo, Tiffany & Co., MAC Cosmetics, Diesel, Coach, Cole Haan and Burberry. . . . more
Customers are no longer going in for mortgage business, noticing her shop and maybe coming back when they have a picture or mirror they need framed."That counts for something," Moran said.Over the past 20 months, there has been a rise in vacancies at small retail spaces in Greater Hartford, especially those of 10,000 square feet or less. That points to how the slowing economy is affecting "mom and pop" stores. Smaller locations like that account for nearly half of the region's retail space.
The trend has emerged even as the overall retail real estate market in the region remains relatively healthy when compared with other areas of the country.
According to a new report from KeyPoint Partners, a commercial real estate services firm, the biggest increase in vacancies over the past 20 months occurred in spaces of 5,000 to 10,000 square feet, which rose nearly two percentage points, to 9.7 percent. The report also found that vacancies among the smallest spaces — 2,500 square feet or less — rose nearly a full percentage point, to 10.7 percent. . . . more
The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement on Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.
S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent.
The pace of home price declines since May has slowed to about a third of the rate of the two previous three-month periods, however, S&P said. . . . more
"One thousand stores is generally kind of a marker for us," said chief executive officer Kevin Mansell. "What it says is that we have a concept that works." . . . more
The store is located in the newly-named Bank of America Plaza on Route 38and Larchmont Road in Mount Laurel.
"This is a landmark day in the history of Saladworks," said founder andCEO John Scardapane. "The formula has been a mix of fanatical customerexperience along with a remarkably fresh product. Saladworks will soon be ahousehold name across the country as we continue our turbo-charged growth to1,000 stores by 2012, but we'll always be true to our South Jersey roots." . . . more
The economy has made many would-be franchisees wary of taking big financial risks, while others simply can't get the necessary loans. Meanwhile, competition among franchisers is growing, giving investors a lot more choices. There are now about 3,000 different franchise concepts, according to the International Franchise Association.
In a survey released last week of some 150 franchise companies, respondents said their franchise sales were about 72% below their 2008 goals, with inquiries from prospective franchisees down about 48%, according to Franchise Update Media Group, San Jose, Calif.
But even as "closing deals is becoming more of a challenge," says Harold Kestenbaum, a franchise attorney in Uniondale, N.Y., franchise companies have to be careful not to alienate existing franchisees when they offer discounts and other incentives to new buyers. "How does it look for the guys who pay the higher price when they see the price is getting lowered?" he asks. Making the situation more sensitive, existing franchisees, especially in the retail and home-service sectors, are being hit by cutbacks in consumer spending. . . . more
The company current plans between 45 and 55 domestic store openings in the current fiscal year, of which 24 have already opened.
“Our current store base doesn’t support the customer or associate experience we want to deliver," said James A. Marcum, vice chairman and acting president/CEO. "We expect to dramatically reduce our store openings, other than those fulfilling existing commitments, which are limited."
Previously, the company had announced a review of strategic alternatives. But the current market has made it prudent to focus on improving the existing business, Marcum said. . . . more
Monday, September 29, 2008
“We’ve got a lot of customers coming in," said John Everett, manager of the Salvation Army store in Cambridge. "They can’t go to the stores and get the stuff they really wanted, and they come here and it’s cheaper.”
At the Salvation Army store in Hudson, manager Elaine Schwartz has seen a 20 percent increase in sales in the last few months. . . . more
Delias also said its core brands, dELiA*s and Alloy, should generate positive earnings before interest, depreciation and amortization in the fourth quarter of fiscal 2008 and fiscal 2009, helping to send its shares up 25 percent.
The all-cash deal for CCS is expected to close within 60 days.
CCS is a direct-to-consumer business that sells skateboard shoes, clothes and accessories through catalogs and the Internet. It is expected to have revenue of $80 million in 2009 and add to Foot Locker's earnings in the first full year of operation, the company said.
Barclays Capital advised Foot Locker while Financo advised Delias on the deal.
Delias, whose main customers are teenagers, said it will not decide how to use the proceeds from the sale until after the end of its fiscal year, in 2009.
Delias shares were up 63 cents, or 25 percent, at $3.13 on Nasdaq.
NEW YORK (CNNMoney.com) -- Personal income rose unexpectedly in August after a sharp decline in the previous month, while personal spending was sluggish, according to government figures released Monday.
The Commerce Department reported that personal income increased by 0.5% in August after a revised 0.6% decline in July. Economists surveyed by Briefing.com were expecting income to have grown by 0.2% last month.
After adjusting for taxes and certain price changes, however, real disposable income contracted 0.9%, according to the report.
Personal spending, meanwhile, was virtually unchanged in August. Economists had forecast a 0.2% increase in personal spending. Spending has not been this weak since February when it was also flat. . . . more
In a press conference before meeting with House Democrats, Speaker of the House Nancy Pelosi, D-Calif., said the bill was a bipartisan piece of legislation. "If we don't pass it we shouldn't be a Congress," said Sen. Judd Gregg, R-N.H., who told reporters that he was confident the bill would pass without a further round of changes.
Under the legislation Treasury will be granted $700 billion in phases to acquire bad mortgage assets from financial institutions at a price it determines or through auction with a market price. If the Treasury decides to take the first option it will have some authority to determine the executive compensation structure of the firm.
If firms sell more than $300 million in assets in the auction, they will lose the ability to deduct the salaries of their top five individuals that have exceeded $500,000. For participating firms there will also be a surtax of 20% on retirement packages of top executives who are involuntarily terminated from their firms, or lose their jobs as a result of the firm's failure. . . . more
The company withdrew its previous fiscal 2009 outlook as it said it's reviewing all aspects of the business ahead of the holiday season, its biggest selling period.
Circuit City shares fell 11% in pre-market trading.
Net loss widened to $239.2 million, or $1.45 a share, from $62.8 million, or 38 cents, a year earlier. Sales in the quarter ended Aug. 31 fell 9.6% to $2.39 billion from $2.64 billion, the Richmond, Va.-based company said in statement. The decline was worse than expected by analysts. Same-store sales dropped 13%, led by a drop in the U.S. . . . more
Friday, September 26, 2008
"TJX is great, Burlington Coat is great, Costco Wholesale Corp (COST.O: Quote, Profile, Research, Stock Buzz)is great," said Kampler, an executive vice president in liquidator Hilco's real estate division. "These retailers that I'm naming are an example of the value retailers who are in a position to assume some of these more distressed, troubled retailers and perhaps they become part of their different concepts.". . . more
"After a thorough evaluation of all new toy introductions throughout the year, and consultations with our global merchandising team in 34 countries, Toys"R"Us has the unique ability to provide our guests with THE ultimate list of items certain to bring big smiles to kids' faces - the Toys"R"Us Hot Toy list," said Karen Dodge, Senior Vice President, Chief Merchandising Officer, Toys"R"Us, U.S. "With new toy shipments arriving in our stores daily, customers will have a better chance of finding the hottest toys, in stock, at Toys"R"Us than anywhere else." . . . more
The company hired two former Pathmark Stores Inc. executives, including rehiring John T. Standley as president and chief operating officer, and three top Rite Aid executives left the company.
The company also cut its expectations for full-year results.
Rite Aid, the third-largest U.S. drugstore chain, said its loss swelled to $222 million, or 27 cents per share, compared with $78.2 million, or 10 cents per share, a year ago. Revenue slipped 1 percent to $6.5 billion from $6.57 billion.. . . more
Some 57% of the executives at leading retailers included in the survey say that while high fuel costs have done the most to hurt consumer confidence so far this year, going forward they see the main threats to consumer spending in the critical months ahead as being gas prices (47%), the housing market (28%), the pending Presidential election (13%) and inflation (11%).
The poll, which included executives at chains with sales greater than $100 million, found balance sheets are in bad shape: Only 36% say sales increased when comparing the first halves of 2008 to 2007, which is down from the 56% who cited an increase last year. And 44% say comparable-store sales in that period declined.
"Overall, the CFOs estimate that the average comparable-store sales growth for 2008 will be virtually flat, averaging 0.72% growth," it says in its analysis of the poll results. "Retailers may remain wary for the rest of the year." . . . more
For the three months ending Aug. 30, the well-known mall retailer earned $13.1 million, or 24 cents per share. That compares with a loss of $1.8 million, or 4 cents per share, during the same period last year.
Revenue climbed nearly 4 percent, to $353.3 million, up from year-ago sales of $340 million. . . . more
Thursday, September 25, 2008
The Dallas-based video rental and retail chain, which closed hundreds of stores over the last year, plans to revamp many of its remaining outlets, expand its movie and game offerings, and add more rental and download kiosks.
But it’s still keeping an eye toward increasing Internet-based downloads through Movielink, the digital movie site it acquired last year, and attracting more movie-thru-mail subscribers. Critics say stores are passé, but Blockbuster notes that its mail customers also have the convenience of returning or trading-in their mail-ordered movie at stores — something which Netflix can't do because it doesn't have brick-and-morter outlets (just in case an Ingmar Bergman flick showed up in the mail when you were more in the mood for "Sex and the City").. . . more
As Crisis Spreads, Market Seizes Up; Capital PreservationFor the commercial-real-estate players that were in hot water before the capital-markets crisis of the past two weeks, the temperature is rising.
Retail giant Centro Properties Group, New York developer Macklowe Properties, office-building investor Broadway Real Estate Partners LLC and others are now facing an even rougher ride in the wake of Lehman Brothers Holdings Inc.'s bankruptcy, the collapse of American International Group Inc. and the buyout of Merrill Lynch & Co. by Bank of America Corp.
After these and other market crises, cash-flow projections for properties are being scaled back in anticipation of a greater economic slowdown. The sales market -- long considered the last hope of many distressed players -- has virtually ground to a halt.
Even creditors that were willing to make real-estate loans before the upheaval are pulling back, having witnessed the spectacle of some of the biggest names in finance and banking vanishing in a period of days. . . . more
The additions today bring to 926 the number of protected companies, exchange data show. General Growth is the second- largest owner of U.S. malls, and Federal Agricultural Mortgage Corp. provides financing to farmers, ranchers and rural homeowners. At least two companies, Diamond Hill Investment Group and "boutique'' investment bank JMP Group Inc., have opted off the list. . . . more
Source: Supermarket News
He is replacing Robert J. Easley, who the company said is leaving to pursue other interests.
These days, Braun is more than a model of frugality. She and others like her may hold the key to surviving the economic downturn. Between the sagging economy and soaring food and gas prices, Americans are increasingly feeling financially squeezed.
"I'm Dutch, so saving money comes naturally to me," says Braun with a twinkle in her blue eyes. "But with gas around $4 a gallon and rising, I have extra incentive to get the most mileage possible out of every dollar." So she switched to generic medical prescriptions, targets movie matinees at discount prices, and occasionally checks out garage sales. Most importantly, she remains faithful to her No. 1 rule: "Never buy anything unless it's on sale!"
Braun's example reflects an interesting national trend. Moody's Economy.com, an independent provider of economic analysis, reports that although consumer spending has not risen as much as hoped, it has risen a little every month this year, thanks in part to the $50 billion in economic stimulus checks from the federal government. Even though our economy is in a downturn, shoppers — 80 percent of whom are women — have not stopped spending money: They're just spending it differently. . . . more
Wednesday, September 24, 2008
On a recent morning at the Woodbury Commons Outlet mall an hour north of New York City, Carissa Nava is looking over a red wraparound dress by Diane Von Furstenberg at the Saks Fifth Avenue Off Fifth store. The dress retails for $365 at Saks' main store on in New York, but here it is selling for $126.99.
Nava, a pharmaceutical sales rep who lives in Manhattan, makes regular trips to Saks' flagship store on Fifth Avenue—sometimes to buy, but often just to check out the selection of big-name apparel. Then, at the earliest chance, she drives up to the Saks outlet to pick those items up at a significant discount. "I only wear Seven or True Religion jeans, and I get them here for $149," she says. "Why would I pay $216 for the same exact ones at the main store?"
There's a certain snob appeal that attaches to luxury retailers like Neiman Marcus, Saks (SKS), or Nordstrom (JWN). Which is why, even though almost all of them have operated discount outlet stores for years, they never talked much about them. Saks went to the extent of keeping its name off the outlets, calling them "Off Fifth."
Out of the Shadows
But today, with the economy stalled and consumer spending in free fall, snobbery is a bit harder to pull off. Even the most upscale shoppers are hunting for bargains. So luxury retail executives are taking their off-price operations out of the shadows and launching their most aggressive expansion plans in years. Increasingly, the outlets also are offering not just discontinued or leftover inventory from a previous season, but many items currently available at the mainline stores.
"Only stores that scream value are getting consumers in," says Erin Armendinger, managing director of the Jay H. Baker Retailing Initiative at the Wharton School at the University of Pennsylvania. . . . more
With the credit markets seized, the avalanche of bad news surrounding investment banking giants Lehman Brothers and Merrill Lynch and insurance provider AIG has caused a state of panic in the commercial real estate industry.
Merrill was exposed to about $18 billion between whole loans, conduits and direct real estate investments. Lehman, meanwhile, continues to hold $32.6 billion in commercial real estate between whole loans and CMBS bonds. About 11 percent of its portfolio is devoted to retail. AIG’s exposure is harder to pin down. The company built up a $60 billion position in the credit default swaps market—some of which is tied to CMBS. The company also has $16 billion in international real estate assets.
The question now is, with Lehman in bankruptcy, Merrill Lynch in the process of being acquired by Bank of America and AIG sold off in parts by the government, what’s going to happen to all those holdings?
In the case of Lehman and Merrill Lynch, their commercial real estate assets will likely end up on the auction block, according to David Akeman, director in the capital markets group of Stan Johnson Company, a Tulsa, Okla.-based commercial real estate investment firm. Before filing for bankruptcy last week, Lehman had planned to spin off its commercial real estate portfolio into a stand-alone, publicly-traded entity, Real Estate Investments Global, which would allow the bank to avoid a forced fire sale. But after its September 14 bankruptcy filing, Lehman will not likely be allowed to spin off one of its divisions, says Adam B. Weissburg, partner with Cox Castle Nicholson LLP, a Los Angeles-based real estate law firm. . . . more
Speaking at the Thomas Weisel Partners Consumer Conference in New York, Cabela's Chief Executive Dennis Highby said new stores being developed by the Sidney, Neb.-based chain will follow three size formats ranging from 80,000 square feet to 125,000 square feet.
Cabela's current stores average about 140,000 square feet, although its largest location is a massive 245,000 square foot store.. . . more
The components that will be suspended are the Earth Expansion and the adjacent parking garage. The complex consists of Casino of the Earth, Casino of the Sky, Casino of the Wind, Sunrise Square, the Shops at Mohegan Sun, along with a 10,000-seat arena, a 350-seat cabaret theatre and 100,000 sf of meeting and convention space. There is also a 1,200-room Sky Hotel Tower. The Project Horizon project included costs spent on different parts of the complex with $17 million to Sunrise Square, $116 million for Casino of the Wind, $58 million for Property Infrastructure and $75 million has already been spent on Earth Expansion and $5 million on the parking garage. By halting the expansion now, the project will save $734 million. . . . more
Anthony DiLorenzo, owner of several commercial properties in Portsmouth, entered into an agreement with Shaw's on April 21, according to a published report in the Portsmouth Herald.
DiLorenzo is the owner of the former Meadowbrook Inn, which was recently demolished to make room for a large multipurpose development on the Route 1 Bypass. He is president of Portsmouth Chevrolet, as well as principal of Key Auto Group.. . . more
Four months ago, Chief Executive Philip J. Schoonover asked shareholders for more time to turn around the company amid talks of a possible sale, despite some acknowledged missteps. This week, Circuit City's board decided more needed to be done.
But the move did little to inspire investors or analysts, and the company's shares dropped more than 4 percent.
Circuit City, which has seen only one profitable quarter since the second quarter of 2007, "still faces a mountain of challenges," JPMorgan analyst Chris Horvers told investors in a report following the change of command.
Schoonover stepped down Monday as chief executive, chairman and president of the Richmond, Va.-based company. Schoonover had joined the company in 2004 from rival Best Buy Co., where he was executive vice president of customer segments. . . . more
The second-largest home improvement retailer behind Home Depot said it would open 75 to 85 new stores in 2009, down from about 120 it expects this year.
“While a pullback in the pace of our expansion is appropriate given the pressures in many markets, we continue to see opportunity for new store growth in the years ahead,” Gregory Bridgeford, Lowe's executive vice president for business development, said in a statement.
For 2009, Lowe's forecast profit of $1.40 to $1.65 a share.
Analysts currently expect profit of $1.53 a share for 2008 and $1.57 a share for 2009, according to Reuters Estimates.. . . more
Tuesday, September 23, 2008
Lowe's won approval earlier this year to build a 119,328-square-foot store with an attached 27,265-square-foot garden center and a 437-space parking lot.
A combination of the deteriorating economy and a challenging building site appear to have killed the plan, said Tom Sevigny, president of Canton Advocates for Responsible Expansion, which fought the project.
CHICAGO -- Consumers are changing their shopping patterns to cut costs and save gasoline, reported Beverage Industry. As a result, total shopping trips are down nearly 3%, trips are shifting across channels and trip missions within all channels are evolving, according to Chicago-based Information Resources Inc.'s "Times & Trends: Snapshot of Trends Shaping the CPG & Retail Industries."
While total trips are down, drug stores are expanding their role as a fill-in trip destination and are securing major share gains across healthcare categories. Beverage sales play a smaller role in drug stores compared to other channels, but they benefit from the convenience aspect of the channel, said the report. In 2007, drug stores accounted for 3% of beverages sales, compared to supermarkets' 61% share, according to IRI's Consumer Network for the 52 weeks ending May 19, 2007. But beverages should expect to profit from drug stores' new fill-in trip role and the major drug store chains' focus on front-end sales.
Because of their ability to meet consumer needs as a fill-in trip destination, drug stores have a tremendous opportunity to rethink what they offer to the shopper for those fill-in trips, Thorn Blischok, president of IRI Innovation & Consulting, told the publication. Changes may range from offering new beverages, alcohol or even fruit and other perishables, he said. "We're seeing a little bit of emergence from the center store category in drug stores, and that's a very good strategy."
He added, "The drug store itself is the new convenience store of tomorrow.". . . more
Saks Inc. (SKS) and Tiffany & Co. (TIF) may be among the luxury retailers hit worst given that their flagship stores on Fifth Ave. account for 20% and 10% of total sales, respectively. But others linked to high-end spending such as Coach Inc. (COH), Nordstrom Inc. (JWN) and Polo
Ralph Lauren Corp. (RL) could also be shrunk in the dryer.
Even Saks chairman and CEO, Steve Sadove, has pointed out that equity markets are the most important leading indicator of spending at his stores, according to Goldman Sachs analyst Adrianne Shapira.
. . . more
The stores being closed by Lifetime include 39 Pfaltzgraff factory stores, eight Farberware outlet retail stores and six clearance stores. The company will continue to operate its Internet and mail order catalog businesses. Clearance sales at the stores will start Tuesday and should be completed by Dec. 31.
The company has entered into an agreement with a joint venture between Gordon Brothers Retail Partners and Hilco Merchant Resources L.L.C. to manage and operate the inventory clearance sales at the stores. . . . more
Is now the time for a retailer to go upscale? The guru behind clothier J. Crew thinks that's the right strategy.
J. Crew is relatively small - its entire retail square footage would fit into the space of just 13 Sam's Clubs - but CEO Mickey Drexler, the man who made Gap (GPS, Fortune 500) into a pop-culture phenomenon and reinvented retailing icon J.Crew, is closely watched in his industry. He says that the current retail environment is the worst he's seen during his 40 years in the business, and he's making a risky bet on upscale clothes and an edgy new brand. (This is an excerpt from a story in the Sept. 1 issue of Fortune. Read the full story.)
Part of what makes Drexler influential is his ability to predict not only what will sell but also how shopping habits are changing. What does Drexler's trend-spotting instinct tell him now? He thinks the dominance of the big-name designer is played out. He's stacking his chips on quality goods at a fair price, repositioning J. Crew (JCG) as a luxury-for-less alternative. . . . more
The deal will give Gap, which has made previous forays into the segment, a ready-made player in the $31 billion women's athletic clothing market, which includes such brands as Vancouver, British Columbia, sportswear retailer Lululemon Athletica Inc.; Lucy, headquartered in Portland, Ore.; and Title Nine, which is based in Emeryville.
"This is a strategic acquisition that makes sense for both Gap and Athleta. Both brands complement each other, so we see many opportunities for growth," said Gap spokeswoman Louise Callagy. Callagy described the privately held Athleta as profitable but declined to reveal the company's annual revenue.
Gap plans to add Athleta to its online brands, which include Gap, Banana Republic, Old Navy and Piperlime. It also might consider giving the brand space in its retail outlets. . . . more
"I like Target," she said of the chain slated to open on the south side next month. "I like everything in there."
Nearly two years after it won Planning and Zoning approval, the town's second Target plans its official opening Oct. 12, though the doors will actually open more quietly a few days earlier. It's one of 45 stores the Minneapolis-based chain is opening in October, bringing the total number of stores to 1,685. . . . more
The buyer was similarly not identified, but described as a regional investment group. The property was originally listed with an asking price of $18 million, and then reduced to $17 million before subsequently trading for the $16.1-million number.
Brokers from Marcus & Millichap’s New Jersey office in Elmwood Park represented both sides in the transaction. Senior associate Seth Pollack and investment specialist Michael Kestin represented the seller; investment specialist Kevin McCrann spoke for the buyer.
Situated on a seven-acre lot, Rockaway Plaza is anchored by Ace Hardware, Drug Fair, Kiddie Academy and Party Fair. A number of regional and local tenants round out the roster, and the center itself recently underwent a renovation. . . . more
Monday, September 22, 2008
A developer is proposing his third retail and residential complex outside Fenway Park - a project that would be aided by a new street the city wants to build to spur fresh development in the neighborhood. The plan disclosed by Steve Samuels and city officials yesterday is the next step in transforming the gritty triangle between Park Drive and Yawkey Way, where residents and neighborhood planners have long sought to create an "urban village" in the shadows of the ballpark. Mayor Thomas M. Menino said plans for the new quarter-mile-long street, to run parallel to Yawkey Way, would ease traffic congestion and lay the groundwork for a shopping district where Fenway sausage vendors would intermingle with high-end boutiques.
"What we want to do is have a balance between residential, retail, and some office space," Menino said. "It will be a more walkable area, a more friendly area. Now all you see is auto repair shops and sub shops. That's not the future, that's the past." . . . more
After much hoopla in town and beyond, Burlington officials are putting the brakes on an ambitious development proposal to turn a large swath of forest land into the state's largest life sciences complex, senior housing, and playing fields.
The Board of Selectmen has decided against selling the 247-acre landlocked parcel near Route 3, saying the community is not ready to let go of the property.
"The land is not for sale," said Sonia Rollins, chairwoman of the panel.
But Patriot Partners, the development group that holds an option to buy the land if the town does decide to sell, is not giving up on its vision for the site bounded by Route 3, Interstate 95, and the towns of Lexington and Bedford. . . . more
Future IKEA Somerville Advances as Developer Begins Demolition on Site of Swedish Retailer's 2nd Boston-Area Store
The 340,000-square-foot future IKEA Somerville, with 1,350 parking spaces comprising two levels of parking below the store, will be built on 12 acres previously occupied by buildings within Assembly Square, southeast of the Assembly Square Mall, east of Assembly Square Drive and the MBTA's Orange Line. Federal Realty and IKEA also will be contributing towards the creation of a T-station along the Orange Line. IKEA Somerville will reflect the unique architectural design for which IKEA stores are known worldwide, and will employ approximately 500 coworkers.
"Today's demolition event is the result of collaboration and hard work by Mayor Curtatone, Federal Realty and key interest groups in Somerville who have worked towards the common goal of opening IKEA Somerville as part of a vibrant, transit-oriented mixed-use development," said Doug Greenholz, U.S. real estate manager for IKEA. "We now look forward to closing on the purchase of the land next year and then beginning construction so we can open IKEA Somerville in 2011, and grow our Boston-area presence that began two years ago with the opening of IKEA Stoughton." . . . more
"This is like watching a car crash, but the two vehicles haven't hit yet," Marian Salzman, chief marketing officer for public relations agency Porter Novelli, told the Associated Press last week before the U.S. government's bailout plan was announced. "Is this the worst week, or are we waiting for the other shoe to drop?
The bailout of financial institutions announced on Friday is designed to free up credit for consumers as well as companies albeit with tighter restrictions. But, as the Washington Post noted, "the economy remains fragile with consumer confidence flagging, spending down and unemployment at its highest level in five years. The turmoil on Wall Street could further slow spending, the economy's key engine." . . . more
Things get off to a promising start: Barely are we in the door when an orange-aproned associate asks brightly, "Can I help you find something?" A small smile plays across Blake's poker face. "That's always good," he says, stooping to pick up some pink flower petals that have fallen to the ground. As he makes his way to the carpet section, which has been redesigned so that women customers can actually reach the rugs, the level of service begins to border on obsessive. "You need help with anything?" "How you doing today?" "Folks, you sure you don't need any help?"
It should be a gratifying moment for Blake, who has bet the ranch on Home Depot (HD, Fortune 500)'s quest to reclaim the $77.3 billion retailer's once-vaunted edge in customer service. Instead he looks uncomfortable. He's accustomed to walking freely through most stores; with his preppy clothes, thinning hairline, and lack of entourage, he resembles a suburban accountant who gets his jollies riding his power mower. Not this time. "You've been outed," I tell him. And sure enough, the manager of store No. 919, Mike Pleskach, comes bounding over to say hello. (Blake says he should have worn a baseball cap; his bald head is too distinctive.) . . . more
As the slump in housing markets and economic pressures weigh on profitability of new stores, Lowe's could cut next year's square-footage growth by as much as 50% from recent targets, according to several analysts tracking the company.
Citigroup analyst Deborah Weinswig expects Lowe's will open 75 new stores next year for 4.5% growth in retail-square footage, down from 120 stores opening this year to generate about 8% growth. . . . more
As economists predict the worst holiday sales season since the recession of 1991, retailers are fighting back with an arsenal of new selling strategies, staff cutbacks and more emphasis than ever on low prices.
Retailers are planning bigger, bolder and earlier ad campaigns to lure shoppers as early as possible, racing to make the most of the shorter holiday season this year-five fewer days between Thanksgiving and Christmas than in 2007. Some chains, including Macy's Inc. and Costco Wholesale Inc. already have put out holiday merchandise.Stores are expected to hire fewer part-time staffers during the holidays, to control labor costs. Gift cards will be fancier, and companies, such as Target Corp. say they'll be emphasizing affordability with a range of gifts under $25. . . . more
Sunday, September 21, 2008
Source: Fox Business
Boscov's, which recently declared bankruptcy, said investor Versa Capital Management Inc. intends to keep the chain open after the sale is complete.
The deal "will result in Boscov's being well capitalized and allow us to move quickly toward completion of our restructuring," Boscov's CEO Ken Lakin said in a news release. "Versa appreciates Boscov's commitment to its customers, co-workers and the communities we serve, and is well positioned to provide the resources to ensure that we build upon our nearly 100-year tradition of providing a friendly, local place to shop with brand names, great values and service." . . . more
Friday, September 19, 2008
National Post Retailers and consumers have been loyal to customer loyalty programs for more than half a century.
In Canada, Canadian Tire was the first chain to introduce the concept of rewarding customer loyalty. Muriel Billes, the wife of Canadian Tire's co-founder and first president, A. J. Billes, was the inspiration for Canadian Tire money, introduced as "cash bonus coupons" at the company's first gas bar in Toronto in 1958.
Originally given for gas purchases only, after 1961 the coupons were presented with purchases at Canadian Tire stores as well.
Today, Canadian Tire Money can be used to buy in-store products and automotive service, but not gas.
In the United States, Niemen-Marcus was the first department store to institute a loyalty program. The company's InCircle program, inspired by Stanley Marcus, has been in operation since 1984 and is considered the father of retail loyalty programs in the United States.
Across the continent, retailers operate on the principle that rewarding return customers pays dividends to them as well as to the clients.
From coffee bars that offer a free cup after a set number of purchases to major department and specialty stores that offer merchandise, cash discounts and special events through elaborate rewards programs, customers are given tangible reasons for loyalty. . . . more
Supermarkets have followed in the steps of chains such as Whole Foods Market Inc (WFMI.O: Quote, Profile, Research, Stock Buzz) by offering more prepared foods in their large stores in recent years.
Now they're trying out smaller locations with ready-to-go entrees, as well as produce and basics like milk, so that shoppers can skip the hassles of a big store when they only want a few items.
"I don't think that anybody has got it yet where they've got the exact format that they could run with and know exactly why it works," said Jim Hertel, managing partner at Willard Bishop LLC, a grocery consulting firm.
Supervalu's newest store, Urban Fresh by Jewel, opens in Chicago on Thursday. It is clearly targeted toward shoppers who want to get in and out of the store quickly with pre-made meals and items that don't take much time to prepare.. . . more
Thursday, September 18, 2008
"Unfortunately, the trends in economic conditions offer no sign of an impending recovery," he said.
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Annie Isaacson and her twin sister were children of the Great Depression. As early as age 11, they picked blueberries in the woods around Framingham and sold them door to door, carefully guarding every penny earned. Their childhoods were spent moving from one foster home to another, and working, always working: babysitting, housecleaning, and, eventually, sewing.
The lessons they learned helped them create Fabric Place, which became a beloved institution in downtown Framingham before spreading across the region. At its peak, the family-owned company had seven New England stores earning $33 million in annual revenue, with 550 employees. But that was a few years ago, before the economy started to slide.
Now, much to the dismay of its loyal customers, the original store, which opened in Framingham in 1946, will be the last to close, sometime in the next month or two.
"I can't believe it," said Isaacson, now 90, in an interview last week in her Framingham home. "It makes me very sad.". . . more
Wednesday, September 17, 2008
The two-story , 63,000-square-foot store is the largest Harris Teeter outpost in Maryland, according to the company. The building also has a 17,500-square-foot green roof. It will be open 24 hours a day.
The 32-acre, $850 million North Bethesda Center is being developed by Berwyn, Pa.-based LCOR. It’s a mixed-use development with office space, retail and four apartment buildings, and is a joint development with Metro. The White Flint Metro station is adjacent to the project. . . . more
According to Generation DataBank, global travel retail revenues jumped 17.2 percent to $34 billion in 2007 from $29 billion in 2006, and are nearly double the levels reached in 2002. (In local currencies, airport retail revenues were ahead 11.8 percent last year.)
Sales are set to continue to grow strongly over the next five years, particularly in emerging markets, driven by the rapid increase in air travel and major investment in new airports and retail facilities. New terminals opening in London, Beijing and Paris have recently boosted airport retail's appeal, but India, the Middle East and Russia are also building terminals and expected to become much bigger markets in the future. . . . more
The economy here is slowing, but unlike many other states, Massachusetts is still adding jobs. The state gained about 12,000 jobs over the past year even as the nation shed 125,000.
The job market here has been buoyed by traditionally strong sectors, including technology, scientific research, healthcare, and education. Employment in professional, scientific, and technical services rose 3.1 percent over the past year; healthcare, 2.5 percent; education, 1.4 percent; and information, which includes software makers, 1.2 percent, according to the state Department of Workforce Development.
That compares to the less than a half-percent growth in total Massachusetts employment, and one-tenth percent decline nationally in employment.
"The outlook really depends on what field you're in," said Alan Clayton-Matthews, a professor and economic forecaster at the University of Massachusetts at Boston.
The Massachusetts economy has performed better than the na tion's in large part because it was less exposed to the deep downturn in housing. While local housing markets were hard hit, the state avoided much of the speculative building that has helped push states like Florida, California, and Nevada into recession. Massachusetts also has a relatively small construction sector.
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The likely rush to sell is driving down the already battered market, forcing financial firms to take additional losses on the estimated $150 billion worth of commercial real-estate debt on their books as the once relatively resilient pocket of the property sector now comes under heavy fire.
"As a result of Lehman's bankruptcy, other financial institutions will feel more pressure to sell assets at deeper discounts sought by investors," said Spencer Garfield, a managing director of Hudson Realty Capital, a New York-based real-estate fund manager.
Goldman Sachs Group Inc. on Tuesday said it had reduced its portfolio of commercial mortgages and securities by about $2 billion to $14.7 billion as of the end of its third quarter, which ended Aug. 29, taking a $325 million loss.
"It sure doesn't feel like the real-estate markets are improving anytime soon, and we will reduce that class going forward even if we think they are good assets," said Goldman Sachs Chief Financial Officer David Viniar. "Those assets are marked where they can be sold."
The limited-service clinics, staffed by board-certified nurse practitioners, offer treatment for minor illnesses and vaccinations for common diseases, including flu shots starting next month. The model of care is designed to offer convenient access for patients with sore throats or rashes who may not be able to make an appointment with their primary care doctors, or who may not have a regular healthcare provider. The clinics will be open 8 a.m. to 8 p.m. weekdays and 10 a.m. to 4 p.m. weekends. A visit costs $59.
By late morning two patients had already been seen for minor illnesses, MinuteClinic chief nursing officer Donna Haugland said in a phone interview from the store in the town southwest of Boston. One patient came in after seeing television reports about the clinic's opening day and another person working across the street came in when her boss urged her to get help, Haugland said, declining to be more specific about their conditions.
"My experience working in these clinics is patients are very excited to have access and convenience for minor acute illnesses," said Haugland, a nurse practitioner who staffed a Minneapolis MinuteClinic for 18 months. "Sometimes they can't wait for an appointment with their primary care physician or there are long waits in urgent care or the emergency room."
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I. Values: Lehman’s sitting on $32.6 billion in commercial real estate investments in the form of loans and equities. It was a big investor in commercial mortgage-backed securities. What’s it going to do with that? Will it still roll those holdings into the bank it talked about last week? Or will it try to sell this stuff on the market. Right now, investors are so skittish about any kind of securitized debt, Lehman may have to sell at deep losses. That, in turn, will force other holders of CMBS bonds to “mark to market” based on Lehman’s precedent. So we’re looking at a real potential drop in perceived values of CMBS bonds. That could also have effects on determining the value of actual real estate. If the CMBS valuations are to be believed, it would imply deep discounts on actual property values. The industry, I think, had been hoping that the correction in prices would be something like 10 to 15 percent. Now it’s looking like it may be a steeper drop than that.
A perceived drop in values of real estate is also going to hurt retail REITs. The correction in REIT stock prices had settled in at a 10 percent to 20 percent drop from 52-week highs. Now it’s looking like REITs are going head lower again. . . . more
The planning board voted 6-1 to approve the retail project, with Nelson Disco, Pete Gagnon, Alastair Millns, Stan Bonislawski, Tom Koenig and Tom Mahon in support. John Segedy served as the lone voice of opposition.
Segedy said he voted against the mall because he perceives it as unfair to the residents living near the retail project. He also said it would put a considerable burden on town staff and may be too much for them to handle.
Meanwhile, Koenig said he has put "a level of trust in Chelsea" Property Group despite some concerns he has about the plan. He added that there is no legal reason to deny the project, which could be justified in a court of law.
Millns said he's all for Chelsea coming in for the tax advantages related to the project, but reiterated his previous concerns on the traffic impact.
Gagnon described the project as "the most complex plan" he's ever seen, even more so than when Digital came to Merrimack years ago.
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Final liquidation sales have begun at 103 closing Steve & Barry's locations. The last sales day for 24 of these stores will be Wednesday, Sept. 24. The other locations will close soon, although there is no set final sales date, the company reported.
Regarding new store openings, the company said it will move forward with previously announced plans to open a Steve & Barry's store in the next few months at 692 Broadway in New York City. No other new store decisions have been finalized at this time. . . . more