Tuesday, September 30, 2008

True Religion Opens New Branded Retail Store on Walnut Street in Philadelphia, PA

True Religion Apparel, Inc. (Nasdaq: TRLG) today announced the opening of a new branded retail store in the Center City district of Philadelphia, Pennsylvania. Located at 1604 Walnut Street, the 1,600 square-foot branded store will offer shoppers the entire True Religion collection for men, women and kids, including its signature jean styles, its expanding denim and sportswear collection, and a full range of licensed product, such as footwear, swimwear, headwear and handbags.

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 Philadelphias 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

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Vacancies On Rise In Small Commercial Spaces

When the mortgage company in the storefront next to Michel Moran's framing shop in Cromwell went out of business, she thought there would be a new tenant in a month or two.It's now going on six months, there's still no new neighbor and Moran is starting to feel some ill effects.

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

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Circuit City hires restructuring firm -- is bankruptcy on the horizon?

More bad news for Circuit City (NASDAQ: CC). After the resignation of its CEO followed by disappointing quarterly results and the company's decision to withdraw its guidance, the company has hired turnaround specialist FTI Consulting Inc. as an adviser on restructuring. Stifel Nicolaus & Co. analyst David Schick wrote that "The risks of bankruptcy are very real [...] Vendors will have to decide how they plan to do business at Circuit City.


''Reports of a company hiring a restructuring specialist are almost never good for shareholders, but it may be a sign that Circuit City is finally being realistic about just how dire its situation is. To date, the company has explored a bizarre strategy of opening new stores in the face of devastating sales declines as it loses traffic to better competitors like Best Buy (NASDAQ: BBY) and Wal-Mart (NYSE: WMT). . . . more

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Boston Home Prices May Have Bottomed

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 16.3 percent in July from a year earlier, extending declines that have plagued the housing market for two years, according to the Standard & Poor's/Case-Shiller Home Price Indexes.

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

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Kohl's opens 1,000th store(s): Sizing up the shopper

Kohl's Corp. has opened its 1,000th store this week in Burlington. And in Manitowoc, and at 44 other locations around the country. You can take your pick. Like a good parent, Kohl's is refusing to play favorites by designating any one of the 46 stores to open as the official 1,000th in the Menomonee Falls-based chain.


Though the stores opened without fanfare Sunday, grand opening ceremonies are scheduled for Wednesday at all 46 stores. The new locations will put the company at 1,003 stores in 48 states. Another store will open in November.

"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

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Saladworks Reaches Milestone with Mount Laurel Opening on October 1

Twenty-two years after openingits first store in the Cherry Hill Mall, Saladworks will open its 100thlocation on October 1, just over seven miles away in Mount Laurel.

To celebrate their major milestone, Saladworks will offer $1 salads at theMount Laurel location throughout the day with 100 percent of the proceedsgoing to benefit Alex's Lemonade Stand Foundation. This also marks the firstlocation with Saladworks' "fanatic'ly fresh" new store design.

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

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Franchisers Sweeten Pot to Woo Buyers

Franchise companies, facing what many say is the toughest economic environment they've seen, are offering two-for-one deals, reduced fees and financing help to woo new buyers. They are also paying existing franchisees to help spread the word.

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.

Emerald City Smoothie gives franchise buyers a kiosk in addition to a store.

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

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Circuit City Halts 2010 Store Openings

RICHMOND, VA-Circuit City Stores plans zero growth beyond existing commitments for fiscal 2010 and is examining store openings for the second half of this year (fiscal 2009) as it looks to improve the performance of its current business, the company said at its second quarter conference call.

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

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Monday, September 29, 2008

During an uncertain time, thrift stores doing brisk business

With the economy running on fumes, there is at least one industry reporting that business is thriving: thrift stores. Shoppers looking for bargains are shunning retail stores and heading to shops run by the Salvation Army and Goodwill Industries, store managers said.

“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

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Foot Locker to buy Delias brand for $102 mln

NEW YORK, Sept 29 (Reuters) - Athletic shoe and clothing chain Foot Locker Inc (FL.N: Quote, Profile, Research, Stock Buzz) said on Monday it plans to buy Delias Inc's (DLIA.O: Quote, Profile, Research, Stock Buzz) CCS business for $102 million, as it seeks to boost its appeal with teenage skateboarders.

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.

Source: Reuters

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Personal income tops forecasts

Government report shows American incomes rose 0.5% last month, but personal spending weakened.

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

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What's In The Bailout Deal

Key U.S. legislators released the compromise draft of the $700 billion bailout proposal early Sunday evening ahead of the opening of markets in Asia, and now have one final hurdle to clear: convincing the rank-and-file of their parties to support the legislation when it comes to a vote, likely on Monday.

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

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AutoZone buying back $500M in common stock

AutoZone Inc. is buying back $500 million of its common stock, the company announced Sept. 24.

The repurchase is part of an aggressive repurchase program by the Memphis-based auto parts retailer that now totals $6.9 billion in share repurchases since 1998.

Repurchasing stock is a common strategy for well-capitalized companies and is a way to boost the company’s earnings per share by reducing the number of outstanding shares.

The company also announced the election of Luis P. Nieto to the company’s board of directors. Nieto is president of consumer foods for ConAgra Foods Inc., one of the largest packaged foods companies in North America.

Also, board members N. Gerry House and Charles M. Elson have said they will not stand for re-election at the company's annual stockholders meeting on Dec. 17.

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Circuit City loss widens; company reviews business

NEW YORK (MarketWatch) -- Electronics retailer Circuit City Stores Inc. said Monday that its quarterly loss widened, hurt by charges to write down the value of its fixed assets and a significant decline in traffic that led to worse than expected sales.

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

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Friday, September 26, 2008

TJX, Costco best positioned to buy competitors

NEW YORK (Reuters) - Discount retailers, including TJX Companies Inc (TJX.N: Quote, Profile, Research, Stock Buzz), are best positioned to buy distressed competitors, assume leases or expand into new concepts as the weakening economy takes its toll on several troubled retail companies, said Hilco's Nina Kampler on Wednesday.

"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

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Toys'R'Us Announces 2008 Hot Toy List for the Holiday Season

The Toy Authority Reveals 36 New Toys Guaranteed to Top Christmas Wish Lists and Selects the "Fabulous 15" Representing the Best of the Season


WAYNE, N.J., Sept. 25 /PRNewswire/ -- With the official start of the holiday shopping season only weeks away, today Toys"R"Us announced its 2008 Hot Toy list, representing the definitive selection of toys that will top kids' wish lists this holiday season. The company's predicted list of the biggest holiday "must-haves" features 36 new toys that are sure to delight and excite kids across the country when they open their Christmas presents. Carefully selected after a comprehensive review process, items on the list are organized by age from "Baby's First Christmas" to "Big Kids" and serve as a starting point to help parents, friends and family find the perfect gift for any child. From the overall list, the "Fabulous 15" were selected to represent the very best toys of the season. All items featured on the list are available at Toys"R"Us stores nationwide and at www.Toysrus.com/HotToys

"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

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Rite Aid 2Q loss doubles on Eckerd struggles

Drugstore operator Rite Aid shook up its management ranks Thursday after posting a higher second-quarter loss because of disappointing results at stores acquired from Brooks Eckerd and heavy promotional spending.

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

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Memo To Retail Execs: Load Up On Tums

Times are tough for CFOs everywhere, but those in the retail industry are really suffering. A new survey from BDO Seidman reports that they are worried about how everything will affect holiday sales this year.

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

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Dillard's shareholders seek new stock structure

Dillard's Inc. shareholders Clinton Group Inc. and Barington Capital Group LP are asking the department store chain's board to repurchase all of its outstanding Class B shares and leave the company with only one class of stock.

Little Rock-based Dillard's should hold a special meeting as soon as possible to authorize a repurchase, which would help improve its corporate governance and create "significant value" for shareholders, the two investors said in a letter to the board filed Thursday with the Securities and Exchange Commission.

The filing suggests that shareholders may still be dissatisfied with Dillard's family control of the board and the company's share performance. The chain avoided a proxy fight in April by nominating four candidates to its 12-member board, including one proposed by Clinton and Barington.

"The public equity markets in general justifiably reward companies where management teams do not have effective control," Clinton CEO George Hall and Barington CEO James Mitarotonda wrote in the letter. "In the case of Dillard's, however, it is clear to us that the company and its public shareholders are being penalized because of its A/B share-class structure." . . . more

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Finish Line posts 2Q profit, reversing loss

Indianapolis-based sporting goods retailer The Finish Line Inc. said it swung to a second-quarter profit as growing sales helped the company post better-than-expected results.

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

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Thursday, September 25, 2008

Blockbuster sticks to the bricks

The instant gratification of video-on-demand and the novelty of movies by snail mail may get many a consumer more excited than an old-fashioned trip to the corner store, but for Blockbuster Inc., the store is still the thing.

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 passĂ©, 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

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Commercial-Property Players Find Their Pressures Growing

As Crisis Spreads, Market Seizes Up; Capital Preservation

For 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

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General Growth Among 9 Added to Short-Sale Ban List

U.S. regulators added nine companies including General Growth Properties Inc. and the government-sponsored enterprise known as Farmer Mac to the list of stocks temporarily protected against short sales.

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

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Trader Joe’s Readies New Stores in New York, Virginia

MONROVIA, Calif. — Trader Joe’s this week will open doors to new locations in Brooklyn, N.Y.; Richmond, Va.; and Williamsburg, Va., the company said. The stores, all of which are scheduled to open Friday, represent the first Trader Joe’s stores in their immediate markets, although the Brooklyn store follows other New York City locations in Queens and Manhattan. The Brooklyn store, at 14,000 square feet, is located in a landmark former bank building in the Cobble Hill neighborhood.

Source: Supermarket News

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Rite Aid replaces chief financial, chief operating officers

Rite Aid Corp. today announced a corporate shake-up that will replace the drugstore company's chief financial and chief operating officers.

The company said John T. Standley is returning to the East Pennsboro Twp.-based company to serve as president and chief operating officer, effective immediately.

He is replacing Robert J. Easley, who the company said is leaving to pursue other interests.
Frank G. Vitrano was named today as chief financial officer and chief administrative officer, effective immediately. He takes over positions held by Kevin Twomey and Pierre Legault. . . . more

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Soaring prices force women to tighten budgets

If royalty was based on frugality, Helen Braun would be Jackson's reigning queen. The 78-year-old "blond bomber," as friends call her, can sniff out a sale quicker than a bloodhound and separate treasure from trash at garage sales with uncanny ease.

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

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Wednesday, September 24, 2008

Bargain Hunting: Luxury Retailers Find an Outlet

With sales at their main locations sagging, Saks, Nordstrom, and others are tapping budget-conscious shoppers by expanding their outlet stores

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

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Lehman, Merrill Assets Expected To Be Sold

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

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Cabela's plans to open smaller stores

CHICAGO - Executives at outdoor supercenter Cabela's Inc. told investors Tuesday that they plan to open slightly smaller retail locations in the future.

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

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Mohegan Sun's Expansion Put on Hold

UNCASVILLE, CT-The Mohegan Tribal Gaming Authority is planning to delay a large capital spending component in the Project Horizon expansion of Mohegan Sun. A statement cites the ongoing economic recession affects on regional gaming markets as the cause of the interruption.


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

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Real estate investor shoring up purchase of former Yoken's site

PORTSMOUTH, NH — A local real estate investor is in the process of finalizing a purchase-and-sale agreement to buy the former site of Yoken's restaurant on Route 1 from Shaw's Supermarkets Inc.

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

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Will change at top jolt Circuit City?

RICHMOND, Va. — A change at the top may not be enough to jump-start Circuit City Stores Inc., after the head of the nation's No. 2 consumer electronics retailer abruptly resigned amid plummeting stock prices and calls for his ouster.

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

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Lowe's cuts store growth plan for 2009

ATLANTA — Lowe's Cos. Inc. backed its 2008 full-year profit forecast Wednesday, but said it would open fewer stores next year as the soft U.S. economy and housing slump hampers demand.

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.

Lowe's, which is holding an analyst meeting Wednesday, reiterated an August forecast calling for profit of $1.48 to $1.56 (U.S.) a share for this year. That would be down from $1.86 a year earlier.

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

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Tuesday, September 23, 2008

Lowe's Drops Plan For Canton, CT Site

Lowe's has pulled the plug on its plan to build a store and garden center on a 24-acre parcel just off Route 44 near the Avon and Simsbury lines.

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.

Maureen Rich, a spokeswoman for Lowe's, said Monday night that a variety of factors led to the company's decision. "After further evaluation, Lowe's has decided not to move forward with the project," Rich said. . . . more

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'The C-Store of Tomorrow'?

Drug stores faring well in changing economy thanks in part to convenience factor


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

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Wall Street Pain Expected to Spread to Luxury Retailers

With New York City at the epicenter of America’s woes, troubles on Wall Street may spread uptown to Fifth and Madison Avenues as the important holiday season nears.

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

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Circuit City CEO resigns amid troubles

RICHMOND, Va. (AP) -- The chief executive at Circuit City Stores Inc. stepped down Monday and was replaced by a board member appointed to defuse a fierce proxy battle as the struggling electronics retailer steps up its turnaround effort.

Philip J. Schoonover, Circuit City's chief executive, chairman and president, had joined the company in 2004 from rival Best Buy Co., where he was executive vice president of customer segments.

The 48-year-old will be replaced by board member James A. Marcum, who will stand in as the chain's interim president and chief executive. Meanwhile, former tobacco executive Allen B. King will become Circuit City's new chairman.

. . . more

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Lifetime Brands Latest Retail Casualty; Plans to Close All Stores, Distribution Center

Lifetime Brands Inc., a nationally branded kitchenware, tabletop and home decor products company, is the latest casualty among retailers to announce the closing of stores. The company plans to close all of its remaining 53 outlet retail stores as well as its York, Pa., distribution center in 2009.

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

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J. Crew's CEO, Mickey Drexler, doubles down

J.Crew's CEO says that this is the worst retail environment he's seen in 40 years in the business. His strategy? Take J.Crew upscale and launch a new brand called Madewell.

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

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Gap to buy Athleta for $150 million

Gap Inc. is investing in the activewear market with its $150 million cash purchase of Athleta Inc., a Petaluma company that makes women's sports apparel, the San Francisco retailer said Monday.

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

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Trumbull, CT getting 2nd Target store

TRUMBULL -- Even as she arrived at the north side of the Westfield Trumbull Mall last week, Irene Soboeiro knew she'd soon have reason to head to the other end.

"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

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NJ: Rockaway Plaza Sells for $16.1mm

ROCKAWAY, NJ-Rockaway Plaza, a 104,549-sf shopping center at 295 Route 46 here, has a new owner. The seller, identified only as a regional development company, sold the property for just more than $16.1 million, or about $154 per sf.

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

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Monday, September 22, 2008

General Growth reviews alternatives after stock plunge

NEW YORK (MarketWatch) -- Debt-laden mall operator General Growth Properties Inc. (GGP:
General Growth Properties, Inc. said Monday it is considering asset sales and mergers after its stock price received a serious bruising last week.

Fretful about the fate of highly-leveraged companies, investors frowned on the news, causing General Growth's shares to tumble 19% in recent trading.

General Growth, the second-largest U.S. mall owner and operator by market value, said it should be able to offer long-term fixed-rate portfolio mortgage financing to lenders in November and is pursuing other financing for debt maturing soon. In addition, various capital-raising efforts are being explored - including divestitures, preferred-stock sales and mergers.

The move comes after the real-estate investment trust's share price slumped 34% on Thursday, forcing General Growth executives to sell more than 2.4 million shares to cover margin calls. The stock slide was prompted by disclosures that it granted a concession in a $1.5 billion loan it will use to replace other debt. . . . more

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Developer hopes for hit at Fenway

Retail residential complex proposed for area between Park Drive, Yawkey Way

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

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Burlington: Forest sale is scratched

Scope of project too large for town

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

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Future IKEA Somerville Advances as Developer Begins Demolition on Site of Swedish Retailer's 2nd Boston-Area Store

SOMERVILLE, MA, Sep 19, 2008 (MARKET WIRE via COMTEX) -- With company representatives, local officials and community leaders on-hand, IKEA, the world's leading home furnishings retailer, joined Assembly Square Mall owner Federal Realty Investment Trust (NYSE: FRT) as the developer initiated demolition at the site of the future IKEA Somerville store. Demolition of buildings within the Assembly Square area will allow for construction of Federal Realty's 145-acre planned 'Assembly on the Mystic' development, including the IKEA Somerville store. Until IKEA Somerville opens in 2011 as the 2nd IKEA store in the Boston area and 38th in the United States, customers can shop at IKEA Stoughton or www.IKEA-USA.com.

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

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Retailers Assess U.S. Banking Crisis

Although inventories and expenses have already been slashed in response to the slowing economy, the current Wall Street crisis is apparently causing many retailers to re-examine their pricing, promotions and inventory plans for the holiday season. Even marketing messages may need to be softened as consumers grapple not only with shrinking 401Ks and home values but a loss of faith in the financial system.

"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

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Home Depot's total rehab

First the customers revolted. Then housing went into a free fall. Time to slash and burn - unless you're CEO Frank Blake, who thinks an army of orange aprons will save the day.


(Fortune magazine) -- The Home Depot's Francis S. (Frank) Blake has one of the biggest jobs in corporate America but one of its least famous faces. Which is what the CEO is counting on one weekday morning when he goes on an undercover mission in Riverside, N.J.: a secret walkthrough at one of his company's 1,970 U.S. stores. He's been taking the walks an average of four times a week, all around the U.S., since January 2007, when he took over as CEO after Bob Nardelli's abrupt and painful departure. Blake wants to see for himself the way regular folks are treated when they shop at the big orange box. And he's not sure what to expect. "This is going to be like a Cracker Jack box," he says, a bit nervously. "You don't know what you'll get."

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

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Lowe's to slow openings?

Lowe's Cos. this week could announce it is slashing new-store growth in light of the tough business environment, calling into question whether the home-improvement retailer can achieve its long-term targets.

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

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Stores Plan for Weak Holiday Sales

Retailers Respond to Shaky Economy With Earlier Ads, Fewer Seasonal Workers

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

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Sunday, September 21, 2008

Fitch Cuts Sears Ratings On Sales, Strategy

SAN FRANCISCO -- Fitch Ratings said Friday it downgraded ratings of Sears Holdings Corp. because of negative same-store sales and an unclear long-term retail strategy. Fitch cut Sears' long-term issuer default rating to B+ from BB, and its secured bank facility rating to BB+/RR1 from BBB-. About $3.6 billion of total debt is affected. The outlook is stable. "The rating actions reflect significant pressure on operating margins on negative comparable store sales trends and continued share repurchases in the current challenging operating environment leading to weaker credit metrics," Fitch said in a statement.

Source: Fox Business

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Boscov's will sell assets to equity firm

READING, Pa. -- Financially struggling Boscov's Department Store LLC announced Thursday evening it plans to sell "substantially all of its assets" to a Philadelphia-based private equity investment firm.

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

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Friday, September 19, 2008

Retail is a rewarding business

Customer Service; Loyalty programs give stores more bang, more bucks

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

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Supervalu goes small for big spenders in Chicago

CHICAGO, Sept 18 (Reuters) - Supervalu Inc (SVU.N: Quote, Profile, Research, Stock Buzz), best known for supermarkets such as Jewel-Osco, is testing a small-store format again to attract upscale professionals who don't want to dine out, but don't want to cook much either.

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

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Thursday, September 18, 2008

Linens 'n Things could sell itself

Sept 17 (Reuters) - Home furnishings retailer Linens 'n Things may take liquidation bids as soon as mid-October after missing a recent chance to sell itself, the New York Post said on Wednesday, citing unnamed sources.

Private equity firm Cerberus Capital Management [CBS.UL] had been weighing a deal for six weeks but last week decided not to go ahead with the buyout of the retailer, which has been marred by falling sales and steep losses, the Post said.

Linens 'n Things, which filed for Chapter 11 bankruptcy protection in May, may take liquidation bids as soon as mid-October and this could lead to chain-wide clearances in November and December, the newspaper said, citing sources.
. . . more

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Retail's Bah Humbug

As retailers wrap up a lackluster back-to-school season, grim forecasts for the holidays have already begun to trickle in. The Christmas shopping season will be the worst in 17 years, according to a survey by TNS Retail Forward. The Columbus, Ohio-based research firm predicts holiday retail sales this year will rise just 1.5 percent - their smallest gain since 1991, when they inched up a paltry 1.2 percent. Furniture and home-furnishings stores will be hit hardest, collectively posting a slight decline in holiday business as the stumbling housing market continues to victimize consumers, said Frank Badillo, senior economist at TNS Retail Forward.

"Unfortunately, the trends in economic conditions offer no sign of an impending recovery," he said.

. . . more

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The final yard for Fabric Place

Economy, lifestyles tear at family business


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

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Wednesday, September 17, 2008

Harris Teeter set to open in North Bethesda

A Harris Teeter grocery store will open Sept. 23 at North Bethesda Center, marking the first retail tenant to open in the development.

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

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Airport Retailing Takes Off

After the internet, the fastest growing channel at retail is the often-maligned airport terminal. The growth is being driven by a number of new airport terminals opening in major foreign markets as well as aggressive efforts by luxury brands to reach the jet set.

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

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Employment in MA still relatively robust

As the nation struggles with an economic downturn, you can at least say one thing for Massachusetts: There are a lot of worse places to be looking for a job.

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.

. . . more

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After Lehman, Banks Jettison Commercial Real Estate Debt

The bankruptcy of Lehman Brothers Holdings Inc. is adding pressure on banks and other financial institutions to sell off their holdings of commercial real-estate debt, as they try to stay out ahead of the Wall Street firm's expected liquidation of its $30 billion portfolio.

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."

. . . more

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First retail clinic opens at Medway CVS

Massachusetts joined the retail medical clinic revolution in primary care today when the state's first MinuteClinic opened in a CVS store in Medway.

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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How Lehman Hurts Commercial Real Estate

I’m still trying to get my head around the implications that Lehman’s collapse has on the commercial real estate sector. As I see it, there are a handful of ways this is negative or potentially negative for the sector. If you’ve got any feedback or disagreements, let me know in the comments section.

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

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Merrimack NH outlet mall gets go-ahead

MERRIMACK – Before a packed room last night, the planning board approved a site plan with conditions for an estimated $100 million, 135-store outlet mall project that would generate a combined 1,400 full- and part-time jobs and more than $800,000 in property taxes.

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.

. . . more

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Steve & Barry's store plans announced

Steve & Barry’s has announced its go-forward plan for existing stores, following its acquisition last month by BH S&B Holdings LLC, a newly formed affiliate of investment firms Bay Harbour Management and York Capital Management. Steve & Barry’s will operate with a smaller base of 173 stores, better positioning the company to reach its profitability goals.

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

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Radio Shack to Upgrade Stores

RadioShack Corp. (RSH) plans to change the look of two-thirds of its 6,000 stores as the consumer-electronics retailer undertakes the next step of its turnaround.


The costs to upgrade merchandise presentations at some 4,000 stores will fall under the current fiscal year's capital-spending plan of $80 million to $100 million. Most of the stores will have the work done in time for the holidays.

Merchandising chief Peter Whitsett said the changes will result in more organized and easier-to-navigate stores that will help customers more easily compare products. Many of its locations are smaller in size, unlike many big-box retailers. . . . more

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Home Depot slashes prices, seeking to gain share

Analysts caution move may lead to a price war, hurting profit margins

In a bid to drive traffic and sales hurt by the housing market downturns, No. 1 home improvement retailer Home Depot Inc. said it will lower prices on 1,200 items from paint to a toilet repair kit by as much as 50%.

Price cuts ranging from 5% to 50%, which Home Depot intends to keep permanent, will be lowered on about 400 items each starting Thursday over each of the next three weeks, Home Depot spokeswoman Jean Niemi said.

For example, the price on a Stratford Brushed Nickel Ceiling Fan was lowered to $69.00 from $89.97 while a THD moving box was cut to 97 cents from $2.76. The affected stock marked about 4% of Home Depot's average of 30,000 items in each store, she said.

To promote the deals, Home Depot also is launching a marketing campaign involving TV commercials and print and radio ads. Store signage touting "new lower price" and labels on racks comparing the old and new prices will be prominently displayed.




. . . more

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Longs Drug Stores rejects Walgreen offer

Longs Drug Stores Corp. on Wednesday said it will not enter into discussions with Walgreen Co. about its $2.8 billion bid for the drugstore operator.

Walgreen made a $75-per-share offer for Walnut Creek, Calif.-based Longs on Friday, hoping to unseat Woonsocket, R.I.-based CVS Caremark Corp.'s previous bid of $71.50 per share, worth about $2.7 billion.

CVS reaffirmed its offer on Sunday and extended the deadline to Oct. 15.


. . . more

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Tuesday, September 16, 2008

Commercial construction costs continue to rise

Commercial building costs rose 1.77 percent in the third quarter over the second quarter and nearly 6.5 percent over the third quarter of last year, according to Turner Construction Co.'s Building Cost Index.

The index, which projects domestic commercial building construction costs, found that construction costs are rising faster than the Consumer Price Index.

The increase is due in large part to price hikes for steel, non-ferrous metals, petroleum-based products and energy.

. . . more

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Best Buy to acquire music-sharer Napster

CHICAGO—Napster Inc., the online music community that rose from a dorm room project to became the scourge of the global recording industry, is being purchased by Best Buy Inc. for nearly $127 million as the electronics retailer tries to boost its digital music business.

The $2.65 per share all-cash deal announced Monday is nearly double the music network's Friday closing price but a small sum to pay for Best Buy, which gets access to Napster's 700,000 subscribers who pay a monthly fee to access digital music catalogs.

"It's not a huge investment, but it definitely has brand recognition," said Morningstar analyst Brady Lemos, who said Best Buy also benefits from the acquisition of technical expertise about the digital music industry.

In a statement, Best Buy valued the deal at $121 million, and said the difference was due to unvested employee stock awards at Napster. According to its most recently quarterly filing, Napster had about 47.9 million shares outstanding as of Aug. 8, implying a price of $126.9 million.

Napster, a once-free file-sharing network incorporated in 2000, was a favorite tool among cheap college students earlier in the decade. . . . more

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Lululemon Still "Om" Track With Yoga Mantra

After tumbling more than 62% so far this year, shares of Lululemon Athletica (Nasdaq:LULU) rallied more than 21% late last week. So, what prompted this dramatic about face for this maker of pricey Yoga-inspired activewear? And, more importantly, is a sustainable recovery in the company's share price now underway?

Earnings Surprise Prompts Bullish Shift

In the case of Lululemon, the catalyst for the sharp price move was a better than expected quarterly earnings result that prompted a number of positive calls from analysts covering the company. For the 13 weeks ending August 3, the company reported that it had managed to double its earnings to $11.1 million, or 16 cents per share, compared with $5.1 million, or 7 cents a share for the same period a year earlier. (For more on analyst expectations, read Analyst Recommendations: Do Sell Ratings Exist?)

Revenue was also sharply higher, rising 48% to $85.5 million. Sales at stores open for a least a year, a key gauge of retail health, rose by 13% on a constant dollar basis.. . . more

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Monday, September 15, 2008

The Future of the Regional Mall

Regional shopping malls, the stars of retail real estate in the eighties, have long been losing share since the arrival of supercenters and power centers. And with the economic downturn, regionals are only expected to lose more ground.

According to a survey conducted by TNS Retail Forward, about 30 percent of primarily household shoppers now visit a regional mall on a monthly basis, down a whopping 4 percentage points from just three years ago. The leading traffic driver by a wide margin is the power center, with 60 percent of shoppers visiting monthly. That's followed by strip malls with supermarket anchors, at 49 percent; and online shopping sites, 42 percent.

Of the retail formats, only power centers, strip malls with supermarkets and e-commerce captured a larger share of monthly shoppers in 2008. With tough economic times and rising food prices, consumers are gravitating more to retailers such as Walmart and Target at power centers for value, according to TNS Retail Forward. At the same time, with gas prices also surging, convenience has become more important to consumers. And with Walmart and Target adding food to their mix, power centers are only increasing their one-stop appeal.. . . more

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Australia's Centro says U.S. deal fails to close

MELBOURNE (Reuters) - Centro Properties Group (CNP.AX: Quote, Profile, Research, Stock Buzz), one of the highest profile Australian victims of the global credit crunch, has failed to close a $714 million deal to sell 29 U.S. malls just two weeks ahead of a critical bank refinancing deadline, Centro said on Monday.

Centro had announced the sale in principle in July. It was the only major asset sale the troubled property firm had arranged this year, since it began trying to sell assets to pay down debt to allay banks' concerns.

Centro, which owns 665 U.S. shopping malls and is the third-largest mall manager there, and its affiliates have some A$7.4 billion ($6.1 billion) of debt to refinance by the end of the year, a portion of which expires September 30.

The deal had been for 29 of the 31 U.S. shopping malls in the Centro America Fund and was subject to due diligence by the unnamed buyer.. . . more

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Mall developers facing excess space, too few tenants

Shopping-mall owners have struggled this year with a darkening economy, slowing consumer spending and store closings by retailers. But they face another problem that may persist long after the economy bounces back: a decade of overbuilding.

Developers have built one billion square feet of retail space in the 54 largest U.S. markets since the start of 2000, 25 percent more than what they built during the same period of the 1990s, according to Property & Portfolio Research Inc. of Boston. U.S. retail space now amounts to 38 square feet for every person in those 54 markets, up from 29 square feet in 1983, the firm says.

Consider a six-mile stretch of highway north of Dallas, where three developers are racing to finish four huge shopping centers with a combined three million square feet of space. Not only will they compete with each other, but there are three existing malls within a 10-mile radius.. . . more

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Five Below Gets $17M for Expansion

Five Below has closed on $17-million follow-on investment by private equity firm LLR Partners Inc., also based here. The “extreme value” chain, which aims primarily at a younger customer base, will use this financing to support its plans to grow to 200 locations over the next three years.

“By the end of this year, we’re going to open 17 to 18 stores,” David Schlessinger, co-founder and chairman of Five Below, tells GlobeSt.com. “Next year, we’re going to open 30 stores, and our goal is to open more than 100 over the next three years.” Currently the company has 80 stores in seven Northeastern and mid-Atlantic states.

The fact that Five Below is looking to expand at a time when several other retail chains have scaled back plans to open new units might seem like a function of the chain’s pricing model—all merchandise lists $5 or less. However, LLR partner Howard Ross tells GlobeSt.com, “I thought their strategy was timely when it started” in 2002. “It’s even more compelling in this kind of economic environment.” . . . more

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District’s Golden Triangle sees golden opportunity

A landscaped median down Connecticut Avenue NW. Charming benches and quaintly designed vendor booths dotting the sidewalks. And yellow flowers everywhere.

That’s the vision business leaders in D.C.’s Golden Triangle district have laid out for a neighborhood they say is underrated as a retail opportunity.

“We’re trying to think more Fifth Avenue, not Times Square,” said Steven Gewirz, a principal with developer Potomac Investment Properties Inc., noting that Gallery Place and Chinatown are more akin to New York’s flashy and gritty 42nd Street. . . . more

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Miles of Aisles for Milk? Not Here

HARMAR TOWNSHIP, Pa. — Like cars and homes, grocery stores are beginning to shrink.

After years of building bigger stores — many larger than a football field and carrying 60,000 items — retailers are experimenting with radically smaller grocery stores that emphasize prepared meals, fresh produce and grab-and-go drinks.

The idea is to lure time-starved shoppers who want to pick up a few items or a fast meal without wandering long grocery aisles or paying restaurant prices.

Safeway has opened a smaller-format store in Southern California, and Jewel-Osco is building one in Chicago. Wal-Mart plans to open four “Marketside” stores in the Phoenix area this fall, and Whole Foods Market is considering opening smaller stores.

And here in the northern suburbs of Pittsburgh, the grocery chain Giant Eagle opened a Giant Eagle Express last year that is about one-sixth the size of its regular stores. It has gas pumps, wireless Internet and flat-screen televisions in a small cafe, a drive-through pharmacy and an expansive delicatessen that offers sushi, rotisserie chickens and ready-to-heat dinners. . . . more

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Friday, September 12, 2008

Retailers trek north in search of sales

Drawn by a strong currency and fashion-hungry consumers, U.S. and European retailers are altering Canada's apparel landscape and turning a once skimpy retail scene into a shoppers' paradise.

The biggest headline so far in Canada's clothing retail evolution occurred in July, when Hudson's Bay Co. was sold to the U.S.-based NRDC Equity Partners, the owner of Lord & Taylor and the Fortunoff jewelry and housewares chain. Hudson's Bay, known as Hbc, is North America's oldest continually operating company - its first director was a cousin of King Charles I and it dominated the region's fur trading for centuries.

Hbc's 605-store chain, which includes The Bay department stores, has struggled in recent years as consumer preferences have shifted to specialty stores. Those shops, many from the United States and Europe, now account for 67 percent of the Canadian retail clothing market, and NRDC says it intends to compete.

"The Canadian consumer is more interested in better quality, better brands and better service than what's been served up to them in the past," said Richard Baker, NRDC's chief executive and now the 38th Hbc governor. "That is why you're seeing a lot of international brands in Canada. . . . more

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Safeway Opens in Downtown Washington

New “urban lifestyle” store in revived neighborhood is the retailer’s first in D.C. in 11 years

Safeway Inc. (Pleasanton, Calif.) will open a new, 58,000-square-foot supermarket in downtown Washington, D.C., today.

The store, the first one built by the retailer in the District in 11 years, is on the ground floor of the new CityVista complex in Mount Vernon Triangle, a $250 million project with 685 condominium and apartment units and 120,000 square feet of retail. The Safeway is located at 5th Street and New York Avenue NW, on the former site of a wax museum.

"This is just a very vibrant part of D.C.," Steve Neibergall, Safeway's eastern division president, told The Washington Post. "I think the community will be very pleased."

The store is Safeway's 17th in the city and one of only five in the company's eastern division with a nut bar, where shoppers will be able to grind their own cashew butter and other spreads. Dubbed an "urban lifestyle" store by the company, it also features an open-flame hearth oven and a large assortment of wine.

The once-blighted area is slowly attracting new retailers. Locally owned Fifth Street Hardware opened this summer, and popular bar and coffee house Busboys and & Poets is expected to open within two months. The Post said the neighborhood hopes to attract more retail and restaurants, though development has slowed with the economic downturn.

Source: VMSD.com

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Retail Clinics Rise With High-Deductible Health Plans

Once the consumer-driven health plan market started to ignite, so did the retail clinic industry. Today, there are nearly 1,000 such sites operating in the U.S., compared with about 100 in 2006.

Much of the growth in the retail medical clinic industry has been attributable to insurers adding clinics as in-network providers in traditional health plans, but the consumerism movement is expected to further boost this fledgling market.

When retail clinics appeared on the health care scene in the early part of this decade, they seemed as if they could be a natural complement to consumer-driven health plans that were emerging at the time. In fact, retail clinic growth has pretty much coincided with that of consumer-driven health plans.

Even though retail clinic providers saw consumer-driven plans as a potential growth catalyst, disappointing initial enrollment in such plans forced retail clinics to consider alternatives, says Tom Charland, CEO of Merchant Medicine, an online consulting and research company that focuses on retail medicine.

"We had not yet actually figured out how to get the attention of employers and, at the time, it was cash-only" to visit a retail clinic, says Charland, who is also a former executive of Minneapolis-based MinuteClinic Inc., the largest and one of the first providers of retail clinics.. . . more

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Mattress Discounters closing New England stores

PROVIDENCE, R.I. – Mattress Discounters is closing 48 New England stores - 11 in New Hampshire - because its regional operations are losing millions of dollars, according to court records.

The retailer, based in Upper Marlboro, Md., on Wednesday filed for Chapter 11 protection in U.S. Bankruptcy Court in its home state. Plans to close its New England branches in Rhode Island, Massachusetts and New Hampshire were detailed in court filings.. . . more

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Retail sales in surprise decline

August drop signals further weakening of the nation's economy.

WASHINGTON (AP) -- Frugal shoppers cut back again in August, driving down sales at the nation's retailers for the second month in a row, further proof the economy is losing traction.

The Commerce Department reported Friday that retail sales dropped by 0.3% last month. Economists expected sales to rise by 0.3%.

Sales in July also turned out to be even weaker than previously thought, falling by 0.5%, the worst showing in five months.

Rising unemployment, strained household budgets and falling home prices -- which make homeowners feel less wealthy -- are making shoppers more cautious. . . . more

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Consumers Likely To Lead a Cooldown

The latest consumer data may look summery, but they mask a sharp cooldown coming in the fall.

[Retail and food-service sales]The Census Bureau reports August retail sales Friday. Economists estimate they rose 0.25% from July, thanks largely to healthy automotive sales. Excluding autos, the number will likely be worse, down 0.2%. But a lot of that has to do with falling prices at gasoline stations.

Falling gasoline prices, higher auto sales -- what's not to like?

For one thing, aggressive incentives were mainly responsible for dragging autos off dealer lots, and that could be stealing sales from future months. Though up from July, August's sales pace was down 16% from a year ago, according to sales tracker Autodata. . . . more

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Thursday, September 11, 2008

A call for a housing bottom worth listening to

A call for a housing bottom worth listening to


NEW YORK (CNNMoney.com) -- Alan Greenspan famously declared the worst was over back in November of 2006. And the National Association of Realtors' erstwhile chief economist David Lereah called the bottom a few times, starting in May 2006.

Plenty of other economists and real estate analysts have attempted to do the same - and of course they've all been wrong.
But a consensus seemed to emerge among experts at a housing forum held by Standard & Poor's and the Chicago Mercantile Exchange on Wednesday in New York. Readers will be forgiven for taking this pronouncement with a large grain of salt.

Several panelists, including Economy.com's chief economist Mark Zandi, Goldman Sachs (GS, Fortune 500) economist Charlie Himmelberg, S&P managing director David Blitzer and S&P senior economist Beth Ann Bovino all agreed that home prices would stabilize sometime during the summer of 2009.

"The bottom of the housing market is coming into view," said Zandi, whose recent book "Financial Shock," examines how the subprime mortgage crisis occurred. "House prices, based on the S&P Case-Shiller index, are down 20% peak-to-trough and I expect them to fall another 5% to 10%.". . . more

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Mattress Discounters files Chapter 11 again

Mattress Discounters Corp. has filed federal bankruptcy protection for the second time in six years, according to a Bloomberg report.

The Upper Marlboro-based mattress retailer listed debt and assets of between $10 million and $50 million in Chapter 11 documents filed Sept. 10 in U.S. Bankruptcy Court.

Mattress Discounters, founded in 1978, previously sought bankruptcy protection in October 2002 due to missed interest payments on some senior notes. Its reorganization plan was confirmed in March 2003 by the U.S. Bankruptcy Court. . . . more

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Which Patients Are Going to Retail Clinics?

There’s been plenty of debate over the walk-in clinics cropping up in drug stores and big-box retailers. But research has been lacking on just who is using those clinics and what they’re being treated for.

retail clinicIn a new study that helps fill that gap, researchers pooled data from 1.35 million visits to more than 300 clinics operated by eight different companies. The clinics were in a variety of stores, including Wal-Mart, CVS and Walgreen.

Among their findings:

Roughly 90% of the patients came for one of 10 relatively simple treatments. The list included ear infections, upper respiratory infections, immunizations and blood pressure checks. “Most of the conditions cared for in retail clinics likely do not require the level of training of a physician,” the authors wrote. That’s important because most retail clinics are staffed by nurse practitioners.

Insurance paid for 67% of visits. That’s striking, given the fact that the clinics are often viewed as places where uninsured patients pay cash out of pocket.

Most of the patients said they didn’t have a primary care provider. One concern about the clinics is that they would lead to further fragmentation of care, by disrupting the patient-doctor relationship. “We found that three-fifths of patients did not report having a PCP, so for these patients there is no relationship to disrupt,” the authors write.

It’s possible that the clinics prevent some patients from going to the doctor and forming those relationships in the first place. On the other hand, some of the patients who show up at retail clinics might otherwise have gone to the emergency room.

The study, published in Health Affairs, was conducted by RAND researchers and funded by the California HealthCare Foundation.

Source: Wall Street Journal

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Small-Store Grocery Concept Sets Massachusetts Opening

PLYMOUTH, Mass. — The Market, a 14,000-square-foot grocery store its developers say is a “state-of-the-art” store taking advantage of the trend toward smaller stores specializing in fresh foods and essential groceries, is set to open here next week, published reports said. The store was conceived by the developers of Pinehills, a planned community here, and Michael Szathmary, a founder of the Nature’s Heartland natural food stores that were bought out by Whole Foods Market in 2000. The grand opening is set for Sept. 17, the Boston Globe reported.

Source: SuperMarket News

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Dave & Buster’s Maintains Growth

DALLAS-Even as it prepares for its initial public offering, Dave & Buster's is continuing with its store opening schedule, the company said at its second quarter conference call.

One new unit, of 33,000 sf in Plymouth Meeting, PA, has opened in 2008. Under construction are units in South Arlington, TX (opening in November); and Tulsa, OK (to open early in the next calendar year). Units in Richmond, VA; and Indianapolis will open in the first and second quarters of 2009, respectively.

"We’re still going through the details for the last couple of 2009 openings," stated Steve King, CEO. . . . more

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Luxury Shoppers' Behavior Bending But Not Breaking

NEW YORK -- The economic downturn that has hurt sales at luxury retailers such as Saks Inc. and Nordstrom Inc. may have forced shoppers such as Damasa Doyle to watch budgets and scale back shopping trips, but it hasn't caused Doyle to renounce designer labels.

"Now I go to stores and ask, 'When do you have a sample sale or a sale?' and ask to be put on mailing lists [to be notified of such promotions]," said the model from Chicago, adding that she's cut back on her forays into New York's Soho district. "Now I won't buy full price. Clients are paying less. I look at my stock portfolio and see its performance. I'm looking more at the bottom line."

As more than 200 designers showcase their collections during New York Fashion Week, many luxury shoppers are reporting that they're keeping a tighter rein on the purse strings and looking for creative ways to get the designer styles they still desire. They resort to high-end consignment shops, seek out sample sales or factory outlets, and rely more heavily on high-low mixing and matching -- pairing designer labels with, for example, items from cut-rate fashion retailers such as H&M. . . more

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Wednesday, September 10, 2008

Bloomingdale's to open in Georgetown Park

Bloomingdale’s is expected to open its doors in the Shops at Georgetown Park in D.C. by August 2011.

The retailer will take 82,000 square feet in the D.C. mall, the retailer announced Wednesday.

In July 2005, the owner of Bloomingdale’s -- then known as Federated Department Stores Inc. -- scoured the area for a site, one being the former Staples building at 3307 M St. NW. But the company moved its focus to its Chevy Chase store and said it no longer had specific plans for Georgetown.

“This is for a faster, younger and hipper crowd. There are only a few places in the country they could do this and would want to do this. Georgetown has that cache and the retail and entertainment energy to land a store like this,” said Ben Miller, owner of D.C.-based Western Development Corp., the developer of the site. . . more

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A Squeeze on Retailers Leaves Holes at Malls

It was planned when the local real estate market was very hot, and now the Crossroads of Cresthill, a modest-size strip mall of 44,000 square feet in the Chicago suburbs, is almost completed. But the developer, Gierzyck Midwest, has managed to nail down only a couple of small tenants. The 10,000-square-foot anchor it hoped to land, Menards, a hardware retailer, was lost to another shopping center a mile away.


So Gierzyck is offering prospective tenants something that may become more common in future months: free rent. And not just while the store is being fitted out but even after it opens, said Dan Tiberi, a senior associate at Gierzyck. “It’s our way to get more people to look at our center,” he said. “With the market taking a turn for the worse, we decided to address the problem.”





In larger shopping malls, operators have not yet had to resort to giving away their space to attract tenants, but most landlords are facing mounting challenges these days. Vacancies are up, retail sales have been disappointing, and long established chains like Mervyn’s, Linens ‘n Things, Boscov’s and the Sharper Image have filed for bankruptcy protection, raising the specter of more dark spaces with fewer potential tenants to replace them. . . more

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U.S. real estate hasn't hit the bottom yet

U.S. commercial real estate prices are likely to tumble over the next 12 to 18 months as more borrowers default on their loans and regulators crack down on banks, pushing even more properties onto the market.

Since the market's peak in 2007, the availability of debt - the lifeblood of commercial real estate - has dried up and choked off sales. Borrowers have resisted selling because of falling prices. Banks have not sold off their troubled loans, fearing a huge write-down of all commercial real estate loans. But it looks as if the clock is running down.

"We're going to see a whole lot more trouble going forward," said Peter Steier, vice president of Inland Mortgage Capital in New York.

Steier was speaking at the Distressed Commercial Real Estate Summit East, where about 200 investors, lenders and buyers recently gathered to discuss how to capitalize on the distress of the commercial real estate sector, as signaled by the growing number of foreclosures, sick banks and distressed loans. . . more

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Mall Glut to Clog Market for Years

Scarce Shoppers,Lack of Tenants Ding Developers

Shopping-mall owners have struggled this year with a darkening economy, slowing consumer spending and store closings by retailers. But they face another problem that may persist long after the economy bounces back: a decade of overbuilding.

[Mall glut]

Developers have built one billion square feet of retail space in the 54 largest U.S. markets since the start of 2000, 25% more than what they built during the same period of the 1990s, according to Property & Portfolio Research Inc. of Boston. U.S. retail space now amounts to 38 square feet for every person in those 54 markets, up from 29 square feet in 1983, the firm says.

Consider a six-mile stretch of highway north of Dallas, where three developers are racing to finish four huge shopping centers with a combined three million square feet of space. Not only will they compete with each other, but there are three existing malls within a 10-mile radius.

"There just aren't enough tenants to go around for three projects," concedes Gar Herring, president of shopping center developer MGHerring Group of Dallas, which is building the largest of the centers. . . . more

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Lehman Spins Off CRE Into Publicly Traded Firm

NEW YORK CITY-Management of troubled investment bank Lehman Brothers plans to spin off the $25 billion to $30 billion of the firm’s commercial real estate into its own public company. The entity, called Real Estate Investments Global [REI Global], will debut during next year’s first quarter.

According to the firm’s third-quarter financial report, REI plans to hold onto the assets to maximize shareholder value and not sell them based on pressure in a volatile market. However, REI will sell some properties if they provide favorable returns.

Though the new entity will be a long-term holder of commercial real estate, management said during its earnings call this morning that it does not expect it to be structured as a REIT.

GlobeSt.com reported last month that Lehman was in talks to spin off its commercial real estate portfolio. Reports at that time said Lehman could sell off the portfolio to BlackRock Inc., Blackstone Group or other firms.

Source: GlobeSt.

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'Tesco effect' causes U.S. grocery mega-stores to start shrinking

The UK's largest grocery chain Tesco has been cited as the reason American grocery chains are moving away from sprawling mega-stores to smaller stores that are faster to navigate.

The U-turn in what is seen as a fundamental American characteristic - that bigger, whether it be cars, portion sizes, or grocery stores, is better - has been called 'radical' by American media.

Grocery stores in the United States have been steadily growing for 20 years based on the idea that customers want as much choice as possible. Many are now larger than an American football field and stock up to 60,000 items. . . . more

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Tuesday, September 9, 2008

HOBBY LOBBY PLANS STORES IN 50 STATES

Pity the poor hobby store during an economic slowdown, some might say. Don’t squander any tears on Hobby Lobby, though. This Oklahoma City–based, 399-store chain of arts-and-crafts superstores, established in 1972 inside a single, 300-square-foot shop, is doing just fine, says its founder and CEO, David Green.

The private company has always tried to provide “everything a person would need for whatever they want to do,” said Scott Nelson, assistant vice president of real estate. It boasts an inventory of 50,000 arts, crafts and home decor products, plus up to 40,000 additional specialty items during such high-traffic seasons as back-to-school and Christmas.

Hobby Lobby’s selection, combined with competitive pricing and knowledgeable staff, has built the chain a loyal following of predominantly female shoppers from middle-income households. The company operates or is soon to open stores in all but 15 of the contiguous states. Hobby Lobby plans to maintain its pace of roughly 30 store openings per year, as it has for the past decade, and Nelson says it is working to fill in those gaps that remain primarily in the West and in the New England states. Las Vegas, western Arizona, southern Idaho and Montana are priorities, says Nelson. The company is looking for power and open-air centers that can accommodate a 55,000-square-foot Hobby Lobby store. (As such, these stores are the biggest in this niche.) . . . more

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Ethan Allen Takes Battle To Europe

With the dollar slowly but surely crawling back from the dead and the some signs of optimism for the U.S. housing market after the bailout of Fannie Mae and Freddie Mac, furniture maker Ethan Allen Interiors took the opportunity Monday to announce plans to expand into slow-growing Europe.

On Monday, Ethan Allen Global revealed it will increase its international business in Europe in order to take its store-within-a-store concept there. But with investors and economists worried about a global economic slowdown driven by financial market turmoil, housing market downturns and high commodity prices, moving to Europe seems like an odd strategy. (See " European Central Bank Sparks EU Debate.") . . . more

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Boston adds jobs as nation loses them

Metro Boston gained 18,900 jobs from July 2007 to July 2008, as non-farm employment rose 0.8 percent.

That bucks the national trend, which saw a 0.1 percent decline in employment. At the end of July, metro Boston’s non-farm employment stood at 2.5 million, according to the U.S. Department of Labor.

The education and health services supersector experienced the largest employment gain, adding 10,900 jobs over the year, an increase of 2.4 percent. Employment in that sector rose nationally, too, up 3.1 percent since July 2007.

Manufacturing jobs posted the largest decline in metro Boston, down 2,600, or 1.2 percent over the past year. Construction employment fell by 2,300 jobs, or 2.2 percent.

Source: Boston Business Journal

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Wegmans breaks ground on Leesburg store

Rochester, N.Y.-based Wegmans opened its most-recent area store this summer in Woodbridge. It will open another location in Gainesville later this year. Wegmans, which opened its first store in Northern Virginia in 2004, also has locations in Sterling and Fairfax.

It also has a store in Hunt Valley, Md., and will open another in Fredericksburg, Va. later this year.

The Leesburg location is at The Village at Leesburg, being developed by Dallas-based Cypress Equities and Washington-based Kettler at Route 7 and River Creek Parkway. The 140,000 square foot Wegmans is expected to open in November, 2009. . . . more

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Lowe's grows in downturn

Amid a national housing crisis, the No. 2 home improvement store shows it has the right marketing tools to attract a greater share of customers.


If you think you've been going to Lowe's more in recent years, or simply considering it more – well, it's probably not just your suspicion.

Even as the downturn in housing has hammered home improvement stores, the Mooresville-based chain is claiming a growing share of the market, and aiming for more. That comes as its chief rival, Home Depot, has seen its market share slide and is working to recover, and as smaller competitors go under, too.

In a tough climate, the gain is a bright spot for the nation's second-largest home improvement retailer: If the pie isn't getting much larger, at least at the moment, it helps to claim a bigger slice.

“The key for home improvement retailers during this time is to keep shoppers coming to the stores, and I think Lowe's is doing a good job trying to focus their marketing message on smaller needs,” said Nick McCoy, a home improvement analyst with TNS Retail Forward, a Columbus, Ohio-based retail consultancy.

Lowe's CEO Robert Niblock said recently he can see the company eventually having 2,500 stores in the United States, up from about 1,575 now. Even so, Lowe's still has a long way to go before it's larger than the orange-aproned competition – nor is that necessarily a realistic goal, Lowe's President and Chief Operating Officer Larry Stone noted in an interview last week. . . . more

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Target to Pop Up in New York

Retailer to open four temporary stores in the city during Fashion Week

Target Corp. (Minneapolis) will open four “pop-up” stores around New York this week to sell fall merchandise by its 22 designers.

Target is calling these temporary stores “bodegas” (Spanish for “stores”) to convey an egalitarian and very New York shopping experience, said Kathee Tesija, Target’s executive vp, merchandising. They will be located in vacant storefronts in Midtown Manhattan, Union Square, SoHo and the East Village, and will open Friday, September 12, which is the end of Fashion Week.

The pop-up stores will be open for four days, from 10 a.m. to 10 p.m., selling merchandise averaging $25 in price. “We can emphasize ‘Expect more’ or ‘Pay less,’ depending on the economy,” Tesija told The New York Times, playing on the company’s tagline. “We are putting a little bit more emphasis on ‘Pay less.’ ”

Source: VMSD.com

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Bloomingdale's in talks for store in Prudential Center

Bloomingdale's is in talks with Boston Properties to be the retail centerpiece of a proposed Prudential Center tower, according to a local official briefed on the matter. Bloomingdale's said the company does not comment on prospective locations. Andy LaGrega, of Wilder Cos., a Boston development firm, said Bloomingdale's, which already has a store in Chestnut Hill, has been trying to open a store in Boston since 2004, when the old New England Life building was being transformed into The Newbury. The developers could not accommodate the space Bloomingdale's needed, but the clothier remained interested in moving to the city. The Prudential Center has more than 75 shops and restaurants including Saks Fifth Avenue, Lord & Taylor, and Sephora.

Source: Boston Globe

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Monday, September 8, 2008

Dunkin' runs on Starbucks

Is Dunkin Donuts Chicago going to be a nation-wide trend?

Dunkin' Donuts is moving to fill in the gap as Starbucks Corp. retrenches.

The doughnut chain is eyeing at least four Chicago area sites for drive-through locations where Starbucks had planned to open stores. Seattle-based Starbucks has pared back expansion plans and in July said it would close about 600 outlets, including 18 in the Chicago area.

Dunkin' Donuts' move shows that the coffee wars won't abate even as Starbucks retreats. Canton, Mass.-based Dunkin' Brands Inc. is accelerating the pace of store openings as it takes on Starbucks and Oak Brook-based McDonald's Corp. to grab a bigger share of the fast-food breakfast and coffee business.

In the Chicago area, Dunkin' Donuts has almost 500 stores and has been opening about 50 annually for the past few years, says Mike LaVigne, the company's head of retail development in the Midwest. "We want to accelerate that pace," he says. "Chicago has been a very good market for us."

The chain isn't specifically targeting Starbucks sites, Mr. LaVigne says. But sources identified four locations that the coffee chain had once considered where Dunkin' Donuts is now negotiating deals: 3200 W. 111th St. in Chicago; Grand Avenue and Rollins Road in Gurnee; 1700 E. Euclid Ave. in Mount Prospect, and Skokie Boulevard and Gross Pointe Road in Skokie.

Dunkin' Donuts, which had sales of $5.3 billion last year, is expanding into new markets, too, including Minneapolis, St. Louis and Kansas City, as it pushes west from its New England base. As Starbucks abandons locations, Dunkin' Donuts should find opportunities to expand.

"For Dunkin', this is a golden opportunity," says Gregory Kirsch, a principal with the Chicago office of real estate brokerage Newmark Knight Frank, who has represented Starbucks.

Dunkin' Donuts is poised to pounce thanks to its franchise model, which should allow the company to expand more rapidly because much of the cost to open stores is borne by franchisees, says Darren Tristano, an executive vice-president at Technomic Inc., a Chicago-based food consultancy. . . more

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The Allure of Plain Vanilla

LIKE its reclusive German founders, the supermarket chain Aldi doesn’t do much to draw attention to itself.

Its stores are small and spartan, with minimal décor and a limited selection of products. They are often found in nondescript shopping strips and lack the flashy signs and window displays of some competitors. Grocery carts cost a quarter apiece, which is refundable after the cart is returned.

But as the economy sputters and consumers look to save money, the privately held Aldi is suddenly emerging as a major force in the grocery business, one that some predict could one day rival Wal-Mart.

What makes Aldi so special is that, quite simply, its prices are cheaper than just about anyone else’s, including Wal-Mart’s. Where else can you buy an 18-ounce box of raisin bran cereal for just $1.49? Or a frozen pizza for $3.99? Or how about a DVD/CD player for $24.99? . . . more

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Jobless Rate Tops 6%, Fueling Fight On Economy

A jump in the unemployment rate to 6.1% in August, the highest in nearly five years, underscored the economy's fragility and deepened political debate over whether a second stimulus package is needed.

The jobless-rate jump, from 5.7% in July, was larger than anticipated, reflecting how energy prices and problems in the housing and financial sectors have radiated outward to slow overall economic activity.

Nonfarm employers shed some 84,000 jobs, after revised net declines of 60,000 in July and 100,000 in June, according to a Labor Department survey. That brought net job losses so far in 2008 to more than 600,000.

"It's clear at this point that businesses are battening down the hatches and worried about the persistence of this slowdown," said Bank of America senior economist Peter Kretzmer. "They may be preparing themselves that this won't be something that ends quickly."

Barack Obama seized on the job numbers to push his plan for $115 billion in federal stimulus. It would include $65 billion in rebates for middle-class earners and $50 billion divided between infrastructure spending and money for states and local governments. Democrats are expected to propose something along these lines when Congress reconvenes Monday.

"People are anxious because of the kind of statistics you see released today," the Democratic presidential nominee said at a glass factory in Duryea, Pa.

Although a senior adviser to John McCain said the Republican nominee wouldn't take a stimulus plan "off the table," Sen. McCain is focusing on tax cuts, instead, as a key to recovery. "All you ever asked of government is to stand on your side, not in your way, and that's what I intend to do," he said at a rally in Cedarburg, Wis.

On Wall Street, the job losses sparked concern that housing markets would continue to slide because more people would have trouble meeting mortgage payments. "What started with the housing market and turned into the credit crisis is now turning itself into an old-fashioned unemployment-led slowdown," said Saumil Parikh, a portfolio manager at bond specialist Pimco. The result could be a "negative feedback loop," he said: "As unemployment goes up, you'll see more forced sellers."

For much of the year, many on Wall Street had expected its losses from bad mortgage-related investments to diminish in the fourth quarter. Now such forecasts are in doubt. And many analysts also doubt stocks can stage a lasting rebound until there's convincing evidence the worst is over for financial firms.

When the jobless report first came out Friday, the Dow Jones Industrial Average slid more than 150 points, but it ended the day up 0.3% at 11220.96. The Dow's nearly 345-point fall on Thursday was largely attributed to anticipation of grim job news. The Dow was down 2.8% for the week amid worries about the global slowdown.

[Pressure Rising]

The Federal Reserve has sought to prop up the economy by cutting short-term interest rates, to 2% from 5.25% a year ago. But the Fed isn't expected to make further cuts, because it's concerned about inflation, too.

Indeed, speculation has focused more on when the Fed might raise rates. Such a move got less likely after Friday's jobs report. Economists at J.P. Morgan predicted the Fed will begin raising interest rates in the fourth quarter of 2009; previously, they had projected a first-quarter 2009 move. Other forecasters expect the Fed to stay on hold until at least the spring.

With the Fed effectively out of ammunition for stimulating the economy, at least for now, that leaves fiscal policy: tax cuts or government spending. Many economists credit the $168 billion stimulus package passed in February with helping stabilize consumer spending in subsequent months. Fed Chairman Ben Bernanke essentially endorsed that package, helping ease its way through Congress.

This time, the decision is tougher. Many economists are unsure whether another package is needed, thinking that past stimulus and the Fed rate cuts actions may be sufficient.

Mr. Bernanke hasn't taken a firm position. In July, when he last addressed the issue, he said he needed "a bit more time" to gauge the effects of the first stimulus round, while saying "we should consider all options."

He especially expressed doubt about the wisdom of more infrastructure spending -- a central plank of Democratic plans -- unless the funds could be injected immediately into the economy. Mr. Bernanke and many other economists worry that stimulus spending, if delayed in Congress, could come when the economy is already in recovery and essentially be wasted.

Even so, the employment report is bound to give a boost to those, like Sen. Obama, who want a new round of stimulus. The last time unemployment rose so sharply late in an election year, in 1980, the deteriorating economy helped Ronald Reagan unseat Jimmy Carter. But the political lesson of that year is ambiguous. While Mr. Reagan won as a challenger to the party in power, the position Sen. Obama is in, Mr. Reagan came in promising big tax cuts, an agenda that Sen. McCain is trying to follow.

Polls consistently show voters prefer Sen. Obama on economic issues. Congress is considered unlikely to pass a stimulus package this month, as Sen. Obama says it should. Even so, his campaign senses a big opportunity to use the stimulus proposal to show how activist government could help the economy.

Sen. McCain's chief economic adviser, Douglas Holtz-Eakin, said a second stimulus package could be wasted because the economy suffers from fundamental problems that need to be fixed. He said that unless the financial sector rebounds, the economy will remain weak, and short-term spending or tax cuts probably won't do much good.

Citing a decade of economic decline in Japan, despite heavy infrastructure spending, the McCain adviser said: "Straight fiscal measures in absence of getting credit markets functioning again" are ineffectual. He said Sen. McCain wants to extend and reform unemployment insurance.

The political positioning is scant comfort to people like Ahtreb McFee in Detroit, who lost a hospital job paying $15.85 an hour in June 2007 has been out of work since. The 35-year-old is struggling to keep her house, which is in foreclosure, and says she recently could barely afford to buy her 13-year-old son a school uniform and a haircut.

"I'm eager and willing and want to work, but there are no jobs," said Ms. McFee, adding that she has been turned down by fast-food restaurants, which tell her she is overqualified.

The job cuts in August hit across the economy. Manufacturers eliminated 61,000 positions, the most in a month since July 2003. Business and professional services lost 53,000 jobs. Employment in retail trade fell for the ninth month in a row.

Construction employment fell by less than in previous months. But service-sector employment, which has often bucked the downward trend, declined in August. On the plus side, health care and education added 55,000 jobs, while government payrolls grew.

Separately, the National Federation of Independent Business reported that there hasn't been any job growth overall in the past few months in small businesses, according to a survey of 812 companies.

Source: Wall Street Journal

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Club Memberships Growing

Sam’s, Costco have enjoyed a rise in traffic, especially among high-income shoppers

According to figures recently released by Mediamark Research Inc. (New York), the number of shoppers visiting club stores like Sam’s Club (Bentonville, Ark.) and Costco Wholesale Corp. (Issaquah, Wash.) grew three times as fast over the previous two years as the adult population of the United States.

The market research company, which asked about 26,000 adults whether they had visited a club store within the preceding six months, said the gain (between September 2006 and April 2008) was particularly significant among shoppers with household incomes above $75,000. Club stores had an 11.9 percent jump among those shoppers, who now make up just under half of their visitors, according to the Mediamark figures.

“My guess is that lower-income people were already shopping at club stores, and the economy has made people who are more affluent shop there, too,” said Mediamark president Kathi Love.

Last week, Costco was presented with the 2008 VMSD/Peter Glen Retailer of the Year Award at the International Retail Design Conference in Seattle.

Source: VMSD.com

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Big Lots mulls not-so-small changes to keep on its roll

Changing plans two-thirds of the way into a three-year plan could be a sign of trouble.

Not at Big Lots Inc.

The closeout merchandise retailer expects to reach most of the goals of its strategic plan by the end of 2008, a year earlier than anticipated, and it is starting its planning for the next three years, looking toward a future that could include smaller stores and online sales.

“As I’ve said on a number of occasions: In retail, if you aren’t constantly challenging and reinventing yourself you’ll fall behind your competition or lose all together,” CEO Steve Fishman said Aug. 26 in a phone discussion with analysts who follow the company’s stock.

The Columbus-based company expects to hit its operating profit rate goal of 5.5 percent by the end of the year, Fishman said, one of several goals achieved or surpassed in Big Lots’ strategic plan since it began in 2007.

Tim Johnson, vice president of strategic planning and investor relations for the company, said the executive team formulating the new plan is the same one that developed the current program and many pieces will remain the same, such as the company’s view on real estate and merchandising.

Out with the old

Big Lots’ goals in the current plan were to expand its operating profit, create sustainable share earnings growth and improve cash flow to either reinvest in the business or return to shareholders.

In addition to meeting the operating profit goal, Big Lots surpassed its share earnings in the plan’s first year and expects to do it again this year. The goal for the three-year period was to generate per-share earnings between $1.01 and $1.75, but the company is projecting $1.90 to $2 for 2008.

Big Lots also completed a $600 million share repurchase program in 2007, which was part of the plan. It followed that with a $150 million stock buyback program that wrapped up in February.
Two markers Big Lots is on pace to reach by the end of 2009 are a cumulative cash flow of $550 million to $600 million for the three years, with the total projected to be $415 million by the end of this year. Capital expenditures are expected to be between $160 million and $165 million for 2007 and 2008, close to the three-year goal of between $170 million and $190 million.

Big Lots also has shown same-store sales gains in each year of Fishman’s tenure as chief executive since July 2005, when he replaced Michael Potter. Same-store receipts rose 1.8 percent in 2005, 4.6 percent in 2006 and 2 percent last year.

Patrick McKeever, an analyst with Greenwich, Conn.-based MKM Partners LLC, wrote in an Aug. 27 report that sales and profit margins were better than expected at Big Lots in part because of the company’s Raise the Ring strategy, which is creating higher average sales, and reduced operating expenses from improved efficiencies in payroll, distribution and transportation.

He raised his share earnings forecasts to between $1.89 and $1.97 for this year and to between $2.10 and $2.18 for 2009.

In with the new

Still, Fishman thinks there is room to improve.

“Our team at Big Lots does not believe that we’re anywhere near as productive, as efficient or as profitable as we have the capability of being in the future,” he told analysts.

Big Lots will toy with the size of its stores in a bid to find new business opportunities and meet future goals.

“We want to understand ... if there are opportunities to open more stores in smaller size boxes (and) what are those businesses that we want to be in,” Fishman said.

The initiative is market-driven. Fishman said much of the storefront space on the market or being built by developers for retailers is in the 20,000-square-foot range, but a typical Big Lots store is 25,000 to 30,000 square feet in size.

“How many opportunities were we missing?” Johnson asked, noting that the test and possible rollout of smaller stores would be a slow one.

Fishman said to reduce store size, the chain likely would need to reduce merchandise categories. Those cuts likely would be made individually by stores.

“When 75 to 80 percent of your customers or more come in with nothing in mind to buy, there are classifications that you have to have and there are classification that you just don’t have to have,” he said.

The company has a testing ground for smaller stores. It retrofitted 70 stores in California last year, many of which were 20,000 to 22,000 square feet. Thirty-five of the stores include furniture departments, one of the company’s most-thriving merchandise categories.

But the growth isn’t expected to be linked only to real estate. Big Lots is exploring cyberspace, too.

“I think that there’s an opportunity to create some excitement online with brands and products that don’t necessarily lend themselves to our store environment,” Fishman said of a venture into electronic commerce.

Johnson said the goal is to develop a strategy that differentiates the e-commerce site from Big Lots stores and online competitors.

E-commerce could take the company into merchandise categories it doesn’t stock at its stores, Johnson said. Also, selling over the Web could help when the company acquires product lots that are too small to stock in its stores but would still attract consumers.

Johnson said Big Lots expects to open 20 stores by the end of the year. The chain again will not see a net gain in stores, with between 45 and 50 closings anticipated in 2008, but the number of openings has increased from seven in 2006 to 11 last year to 20 in 2008.

Big Lots runs 1,355 stores.

Fishman said the company’s distribution network could support up to 1,800 stores, but the pace of growth toward that total will depend on the commercial real estate market.

“We’re not in a race to grow the store base,” he said. “We’re focused on profitable store growth and there is a big difference. We’ll only open stores where I can say to shareholders that we can make money.”

Source: The Columbus Dispatch

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Mom-and-pop stores buried?: WVU study finds Wal-Mart hasn't changed size of small-business sector

Sep. 7--FAIRMONT -- In a recent study, Dr. Russell Sobel found that Wal-Mart hasn't changed the overall size of the U.S. small-business sector.

Sobel is a professor of economics at the West Virginia University College of Business and Economics and holder of the James Clark Coffman Distinguished Chair in Entrepreneurial Studies. He has been teaching at WVU for 14 years.

Sobel and Andrea Dean, who is working on her Ph.D. in the WVU Department of Economics, cowrote a study titled "Has Wal-Mart Buried Mom and Pop?: The Impact of Wal-Mart on Self Employment and Small Establishments in the United States."

Their research will appear in an upcoming issue of the journal Economic Inquiry. The team was also asked to write a version of the article for the general public, which was published in Regulation magazine.

Once that magazine was released, WVU started getting a lot of positive publicity from national media, Sobel said.

He said the idea for the research came about five years ago. During his four years as director of the WVU Entrepreneurship Center, Sobel worked to help entrepreneurs start their own businesses every day. A common topic of discussion was how big-box stores like Wal-Mart impact the business climate.

"I thought it'd be great to get the data and actually answer that question," he said. "Does (Wal-Mart) affect the overall size of the business sector?"

Sobel was interested in trying to collect and apply real statistical research to determine the effect.

Sobel and Dean gathered data on the number of businesses across the states and through time, broken up by the amount of employees. They found statistics for establishments with one to four employees, businesses with five to nine workers, and sole proprietorships.

In addition, Sobel and Dean collected information on the average revenue for these small mom-and-pop retailers, profitability per establishment, and bankruptcy. They completed the study in about two years.

The study isn't trying to look at all the issues related to Wal-Mart, but focuses solely on the impact of Wal-Mart on the small-business sector, Sobel said.

"The perception is that when Wal-Mart comes into town it drives out these small mom-and-pop businesses," he said. "Everybody sees that happen."

It's easy to talk about businesses that fail when a Wal-Mart store opens, but Sobel was also interested in examining the new ones that start up in their place. He wanted to look at the aggregate measures of the whole small business sector and include all the possible effects.

Sobel said the data is clear, and no matter how it's measured, the net effect of Wal-Mart's presence is zero. The study found that Wal-Mart had no impact on the overall size of the small-business sector, which is just as big and vibrant as it was 30 years ago without Wal-Mart.

High Street in downtown Morgantown, for example, saw the closing of a lot of stores, but now this street is filled with new small businesses. Of course, some businesses that compete with Wal-Mart are not going to survive. But as some stores fail, others replace them and offer new things -- which is a process called creative destruction, Sobel said.

"Wal-Mart doesn't run anybody out of business," he said. "It's consumers who when Wal-Mart comes into town choose to shop there. It's really consumers who run those out of business."

The big-box stores carry brand-name products and are all about cost, hours and convenience. According to purchasing habits, consumers know exactly what they want for some items. A shopper just wants to get those particular products at the least possible cost, Sobel said.

He said people shop at Wal-Mart to save money, and families can in turn take the extra dollars they save and spend them at other businesses.

Wal-Mart has created new opportunities for people who may have never been able to open a new business downtown, Sobel said. Maybe these small businesses couldn't compete in downtown years ago, but they have better chances today.

He said mom-and-pop stores that close around 5 p.m. may find it difficult to compete with Wal-Mart's long hours. But in the face of big box stores, small businesses thrive when it comes to personal attention and advice. Consumers want a store that they can call on the telephone and that knows about the products.

Entrepreneurs have the same number of opportunities in starting small businesses and are just as plentiful now as in the past, Sobel said.

"Small businesses around today are just as profitable as the ones before," he said.

Source: Plain Vanilla Shell

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Bound to go bust?

Retail construction booms, but economy raises doubts

Sparkling new shopping complexes have opened in recent months in Foxborough, Mansfield, Plymouth, and Wareham. Legacy Place, a 675,000-square-foot "lifestyle center," is slated to open next summer in Dedham. The South Shore Plaza in Braintree is expanding, and large retail projects are planned in Hingham, Sharon, Westwood, and Weymouth.

But this wave of suburban retail development is arriving on an uncertain landscape. The real estate market, which was sizzling when the projects were first drawn up, has cooled considerably, and consumers are pinching pennies. Across the country, businesses are struggling, and empty storefronts are becoming a more common sight.

"It's a very difficult retail market right now," said Robert F. Sheehan, vice president of research for KeyPoint Partners LLC, a Burlington-based commercial real estate firm. "This is just my opinion, but I think you're going to see significant vacancies if all of these projects get off the ground.

"It's not the greatest time."

Indeed, vacancy rates at US shopping centers are the highest they've been since the mid-1990s, and mall vacancy rates haven't been this bad since 2002, according to the New York-based real estate research firm Reis Inc.

A recent KeyPoint study found that the overall retail vacancy rate in Eastern Massachusetts (based on square footage) rose slightly to 7 percent in March 2008 from 6.9 percent in October 2006, but that big retailers seem to be weathering the downturn better than smaller businesses. The study showed that over 99 percent of big-box stores were occupied, but that the vacancy rates among smaller stores - under 2,500 square feet - climbed to 9.9 percent in 2008 from 8.4 percent in 2006.

"Within that segment, you have mom-and-pops, and you have national and regional chain stores closing," said Sheehan.

It seems that no sector is immune. The national chain Linens 'n Things Inc. announced in July that it would close three Massachusetts stores, including one in Taunton. Starbucks announced that it was closing coffee shops in Dartmouth, Sharon, and Stoughton.

Smaller independent businesses, meanwhile, can be hurt by the proliferation of giant shopping centers. Book Ends, a locally owned bookstore on North Main Street in Mansfield, is closing because it couldn't compete with online retailers and the Borders bookstore that opened at Mansfield Crossing, a new 383,000-square-foot shopping plaza on Route 140.

In Massachusetts, the amount of unoccupied retail space varies widely from community to community.

The KeyPoint report found the highest retail vacancy rates in Swansea (22.1 percent), Stoneham (17.5 percent), and Lawrence (15.8 percent). Retail vacancy rates for the Globe South region ranged from as low as 1.3 percent in Wareham to as high as 12.5 percent in Foxborough.

In Wareham, Chuck Gricus, the town's former director of planning, said the retail scene has been thriving, especially since the arrival of Wareham Crossing, a 675,000-square foot open-air shopping center that opened last fall.

The plaza, which Gricus described as "booming," is home to big-name tenants such as Best Buy, Target, Borders, and Old Navy. JC Penney will celebrate the grand opening of its store there next weekend.
"Wareham is a regional retail center; people come from all over, and off the Cape to shop here," said Gricus. "Wareham has its share of problems, but retail is not one of them."

On the other end of the spectrum, Stephen M. Costello, Norwood's planning and economic development director, chalks up the town's 12 percent vacancy rate to two large empty properties: the long-dormant Home Quarters Warehouse and the former Decathlon Sports Megastore.

"Those two are substantial vacancies on our Route 1 landscape," said Costello. "We're trying to actively fill them with tenants."

The Home Quarters Warehouse, known as HQ, was part of a national chain of home improvement stores that went under in 1999. The 115,000-square-foot warehouse has been empty ever since, according to Costello. The former 40,000-square-foot Decathlon store has been vacant since 2006.

"With HQ, it's a substantial space for a specific type of use. . . . We're working with the owner to make it permit-friendly and tax-friendly," Costello said.

"It's the larger spaces that seem to be nagging and chronic," he said. "We're in pretty good shape, except for those" two properties.

Costello said the situation in Norwood is still much better than during the 1990s, when several manufacturers left town, Raytheon closed, and hundreds of local jobs disappeared.

When Klein's department store on Washington Street closed in the early 1990s, several other merchants followed. "That really caused a big ripple in downtown," said Costello. By 1998, the town center was left with 18 vacant storefronts and a vacancy rate of 22 percent.

Norwood's downtown has since been revived, said Costello, thanks partly to such initiatives as a sign and facade improvement program, which helped make the downtown area more attractive to restaurants and niche tenants. Costello said the former Klein's site is now occupied by Woodstuff, which sells unfinished wood furniture, and Byblos Restaurant, which is Zagat-rated and serves Middle Eastern cuisine.

The regional boom is evident in Braintree, where big changes are underway at South Shore Plaza. The mall, which opened in 1961, is undergoing renovations and creating a large addition that will include a 150,000-square-foot Nordstrom department store.

A recent visit to South Shore Plaza found more than a dozen empty storefronts. Most of them appeared to be in transition and were covered with "Coming Soon" signs. A mall spokeswoman said that several spaces are undergoing renovations, and that other tenants recently moved to bigger spaces within the mall.

Five new stores - Chipotle restaurant, Teavana tea shop, children's clothing retailer Janie & Jack, Zumiez skateboard and snowboard shop, and Zounds - opened in mall this summer, and two other restaurants - Shrimp Market and Quiznos - will be opening in the food court, according Judy Tullius, the mall manager.

All told, there are "essentially 22 different properties coming into the shopping mix," Tullius said in an e-mail. "And this is all before a new wing opens, featuring Nordstrom."

"Not only is the mall doing major upgrades and improvements," she said, "but the existing tenants are also taking the initiative to remodel and rebrand their stores, while new tenants are seeing what's coming with the mall's expansion and additions and want to be on board."

Nordstrom officials last month hosted a project preview for several minority- and women-owned building contracting firms, according to Nordstrom spokesman Michael Boyd. "Our store is still on track there at the South Shore Plaza, scheduled to open in spring 2010," said Boyd. "We don't have a specific opening date to share with you yet, but we are on track."

Retail development is also humming along in Hanover. On Route 53, the site of the former Decathlon sporting goods store at 1207 Washington St. is fenced off and surrounded by construction vehicles. Bulldozers have removed acres of trees behind the store to make way for a shopping center that will be anchored by Target. The Decathlon space could become a restaurant.

The La-Z-Boy furniture showroom at 1271 Washington St. is empty. But most retailers along Route 53 are open. The Hanover Mall is also fully occupied.

Tom Burke, president of the Hanover Chamber of Commerce, is optimistic.

"To me, it really feels like we're at the traditional occupancy level, given the current conditions," he said. "The impression I get is that we probably have the normal amount of vacancies. With all the development, when you look at what's going on . . . it's pretty promising."


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Jos. A Bank Slows Growth for Site Availability

HAMPSTEAD, MD-Despite rising sales and profits, JoS. A. Bank Clothiers will cut back its 2009 store openings somewhat from this year, executives said at the company’s second quarter conference call, but the slowdown is a result of real estate availability.

The company will open 25 to 35 new units next year, compared with the 38 to 45 stores to open by the end of this year.

“The number could be more or less, depending on economic conditions,” said Robert N. Wildrick, CEO and executive chairman. “It’s clear that real estate development has slowed, and we will not open new stores just to hit a number.”

However, he noted, landlords have been “much easier to deal with” given the chain’s strong balance sheet. And some good sites have opened up because of bankruptcies.

For the quarter, net income was $8.9 million, up from $8.2 million in the second quarter of fiscal year 2007. Total sales were $152.7 million, up 13.7% from the previous year. Comparable store sales increased 6.8%.

JoS. A. Bank Clothiers operates 447 stores in 42 states and the District of Columbia.

Source: GlobeSt.

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Friday, September 5, 2008

Boscov's gets approval for bankruptcy financing

NEW YORK, Sept 4 (Reuters) - Bankrupt U.S. department store chain Boscov's Inc said on Thursday it has received final court approval for financing that will allow it to continue operating during bankruptcy.

Boscov's, which calls itself the largest U.S. family-owned full service department store chain, said the U.S. Bankruptcy Court in Delaware approved $250 million of debtor-in-possession financing from Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), in a hearing on Aug. 29.

The company filed for bankruptcy protection from creditors on Aug. 4, citing a decrease in consumer spending and inability to locate new equity investors. The chain is closing some stores and exploring a possible sale. (Reporting by Emily Chasan, editing by Gerald E. McCormick)


Source: Reuters

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The Squishy Results At Sears Holdings

When companies hit hard times, it pays to keep a close eye on their financial reporting for signs they may be overstating their strength.

Take Sears Holdings' second-quarter results. Alongside slumping sales and earnings, there was a bright spot: a sizable drop in selling and administrative costs.

That contributed to a 4.2% pop in the stock price when earnings were posted Aug. 28. But Sears subsequently released a filing with the Securities and Exchange Commission showing the expenses in question were substantially reduced by insurance payments relating to a matter from March 2000.

That is hardly a recurring source. Arguably, it should have been flagged in the earnings release, especially because another one-time gain, a reversal of legal reserves, was clearly broken out.
The numbers involved aren't a trifle.

Sears, led by Chairman Edward Lampert, said second-quarter selling and administrative costs fell $46 million year-on-year, excluding the reserve reversal. The retailer added that the $46 million drop came "mainly as a result of our focus on controlling costs."

But the subsequent SEC filing said the insurance payment reduced selling and administrative expense at Sears-branded U.S. stores by $23 million, which is more than 12% of companywide second-quarter operating income of $187 million.

Sears responds that the insurance payment was offset by other special items, thus keeping its cost-reduction claims intact. But those $22 million in offsets, which weren't disclosed in the SEC filing, include legal charges, store closures and severance payments, which sound like general costs of doing business.

If not, Sears might want to break them out as exceptionals in its next filing.

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Shoppers are changing their buying habits

If they need it, they will come – but they're spending less.

That's the shopper cadence major retail chains have seen this back-to-school season. After spending economic stimulus checks in early summer, shoppers delayed any further purchases, and sales finally picked up in the last week of August.

What does that mean for Christmas?

While the last quarter of 2007 gives stores some easy comparisons, weakening trends suggest the holiday shopping season could be another last-minute nail-biter for an industry that lives by the fourth quarter.

Three out of four consumers said the downturn in the U.S. economy has significantly or somewhat changed how they shop this year, according to TNS Retail Forward Inc.'s ShopperScape August survey.

"Signs suggest that retail spending will resume a weakening trend through the end of the year," said Frank Badillo, senior economist at TNS Retail Forward.

The International Council of Shopping Centers index of major chains rose 1.7 percent in August, below the 2 percent that had been forecast.

Excluding Wal-Mart Stores Inc.'s better-than-expected 3 percent increase, August's results are unchanged from a year ago.

Ways to save

In August, shoppers looking for ways to save boosted warehouse clubs' results and Wal-Mart's market share. Most teen specialty stores posted worse declines than expected.

Inflation lingers. Goldman Sachs analysts said in a report Thursday that they are skeptical of companies' ability to pass on increases given tepid consumer spending forecasts.

Most executives, appearing at the investment firm's annual retailing conference this week, said they can maintain margins by controlling inventories and expenses.
Retailers are, by nature, optimistic.

Zale Corp. has a new "Celebration" diamond collection for this holiday season complete with sleek new gift boxes, because chief executive Neal Goldberg says shoppers still mark special days with gifts of fine jewelry.

J.C. Penney Co. chairman and chief executive Myron "Mike" Ullman has typically used the term "appointment shopping" to describe shoppers' habits of returning to the mall en masse for key periods such as back-to-school and Mother's Day.

Lately, Mr. Ullman has expanded the definition to describe the current consumer sentiment. Business isn't bad when shoppers have a purpose.

Shorter holiday season

The days between Thanksgiving and Christmas are the industry's biggest "appointment" period, and this year it's shorter by five days, including one weekend.

In some ways that might make it better, Mr. Ullman said, because shoppers may feel the urgency to focus on their holiday shopping after the initial post-Thanksgiving rush.

Conservative spending trends are trickling up the income ranks. Neiman Marcus, Nordstrom and Saks Fifth Avenue posted weaker August sales results.

Dallas-based Neiman Marcus Inc. reported a 0.5 percent decline in August comparable sales.
Saks Inc.'s decline of 5.9 percent follows an 18.2 percent increase a year ago.

Upscale chains were holding up, but now they're reflecting higher-income shoppers pulling back, Mr. Badillo said.

"That will be part of the story the rest of this year."

SHOPPING HABITS

People are changing the way they shop, according to TNS Retail Forward's August survey:

How much has the downturn in the U.S. economy changed how you shop this year?

Significantly 33%
Somewhat 42%
Not very much 20%
Not at all 5%

How has your shopping behavior changed this year? (Asked of those who answered "significantly" or "somewhat")

Taking advantage of good sales/deals 67%
Buying only things I truly need 66%
Buying fewer things 56%
Shopping less often 54%
Doing more price comparisons before making a purchase 53%
Buying fewer luxury items 51%
Postponing purchases 47%
Using more coupons 47%
Buying less expensive versions of products 44%
Buying more store brands instead of national or high-end brands 43%
Buying only items needed in the near term 40%
Doing more shopping at discount and value retailers 37%
Using/keeping items longer before buying replacements 35%
Trading down to less-expensive brands 33%
Buying in bulk quantities 23%
Stocking up on items expected to rise in price 22%
Other/some other way 4%

Source: Dallas Morning News

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Staples Not Pulling Back on Openings

FRAMINGHAM, MA-Despite a second year of declining comp-store sales Staples remains on track with its 2008 expansion plans, executives said at the company’s second quarter conference call.

The company will open approximately 100 stores in North America this year, in line with original projections. During the quarter, the company also opened three stores in Portugal and its first unit in South America, in Argentina.

"We are maintaining our strong pace of new store openings," said Michael A. Miles, Jr., president and COO.

During the last quarter, the company finalized its acquisition of Corporate Express. Integration is proceeding well, the company said.

For the quarter, total company sales were $5.1 billion, up 18% from the second quarter of 2007. Net income was $150 million, a 16% drop. North American comparable store sales declined 7%. Comparable store sales in Europe also declined 7%.

At the end of the quarter, Staples operated 1,802 stores in North America, 337 stores in Europe, 31 stores in China, and one store in Argentina.

Source: GlobeSt.

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74 Bank, Retail Properties Gain Buyer Interest

NEW YORK CITY-Locally based Carlton Advisory Services Inc. is conducting the sealed bid auction of Gramercy Capital Corp.'s 74 properties it acquired earlier this year from its $3.3-billion purchase of Jenkintown, PA-based American Financial Realty Trust, as GlobeSt.com earlier reported. Howard Michaels, chairman of the firm, tells GlobeSt.com that the properties are being marketed predominantly on an individual basis.

The sale of the outstanding bank branch and retail property assets have a set bid date of Oct. 13, 2008. Gramercy tells GlobeSt.com that they decline to comment at this time. The portfolio is geographically diverse; it includes assets in 19 states, although most of the assets are located on the east coast with particular concentrations in Florida, Alabama, Pennsylvania, Georgia and Virginia. Most of the portfolio’s properties are primarily vacant former bank branches, although 12 are cash flowing assets and are fully or partially leased to existing bank tenants.

Michaels tells GlobeSt.com that Carlton will consider selling the 12 cash flowing properties as a block to an investor. In addition, he says, "we would consider selling the portfolio to one or two buyers." Carlton executives, Thomas McCarthy, managing director, John MacConnell, vice president, and Sandy Myer are handling the sale for Carlton.

"Buyers have definitely shown a ton of interest," Michaels tells GlobeSt.com. "These are good retail investment properties all located in prime areas." He continues to say that "these assets are former and current bank branches that are all located in high visibility areas. Retailers, such as restaurants, fast food, regional banks, clothing stores, would love to purchase these properties, especially since they can buy the properties at a good price."

Michaels says that the properties, which total 275,000 sf, excluding the six land only assets, range in value from $200,000 to $3 million. As for why Gramercy intended to sell the assets, Michaels says that due to the size of the portfolio that the New York City-based firm bought from American Financial Realty Trust, "these assets are non-core assets and represent the last remaining vacant properties that are not accretive to Gramercy." Furthermore, he notes, "these assets will sell for very good prices."

Source: GlobeSt.

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Thursday, September 4, 2008

Discount stores score big in August

Consumers flock to low-cost stores such as Wal-Mart, Costco and BJ's in back-to-school season, abandoning higher-end retailers such as Abercrombie, The Gap, Limited.

NEW YORK (CNNMoney.com) -- Consumers nervous about the weak economy abandoned higher-end clothing store chains for discount retail giants such as Wal-Mart, Costco and BJ's, which reaped back-to-school sales in August.

"Americans haven't slowed their spending," said Ken Brown, president and retail analyst with ResearchConnect.com. "They just moved their spending, from some of the retailers with bigger-ticket items to the discounters."

That was why the August same-store sales for Wal-Mart, BJ's and Costco increased and trounced analysts expectations, while sales plunged for Abercrombie & Fitch and The Gap, experts said.

"This is Wal-Mart's year to eat share," said Dean Hillier, retail expert with management consultant firm A.T. Kearney.

The discount stores
Discount stores tend to thrive in a weak economy, because many consumers perceive low-cost retailers as the best places to stretch their dollars in purchasing necessities. Some analysts had expected - incorrectly, it turned out - that discount retailers would experience a softening in sales as the government-issued stimulus payments that came out in the spring and summer dried up.

Wal-Mart (WMT, Fortune 500), the leading retailer in the world in terms of annual sales, said Thursday that sales at stores open at least one year increased 3% during the four weeks ended Aug. 29, compared to the same period last year. The figure didnot include fuel sales.

A consensus of analysts interviewed by Thomson Reuters had expected a gain of 1.6%.

"Quite honestly, I think their brand is a comfort zone for consumers during bad economic times," said Hillier. "They're the trusted brand in uncertain times."

Wal-Mart, the biggest food retailer in the world, attributed the gain to strong sales in groceries and "health and wellness" products. The company also was lifted by back-to-school sales, and said that sales in certain electronics - such as flatscreen TVs, cell phones and GPS units - continued to do well.

Wal-Mart's U.S. sales, not counting its Sam's Club division and fuel sales, rose 2.8% in August, compared to the same period last year. Analyst consensus from Thomson Reuters had expected a gain of 1.4%.

BJ's Wholesale Club (BJ, Fortune 500) said Thursday that same-store sales jumped 15.4% in August, lifted largely by rising gas sales from inflation. BJ's beat analyst expectations of a 14.1% gain, according to a consensus of projections compiled by Thomson Reuters.

But even without gas, BJ's outperformed higher-end retailers with a same-store sales gain of 8%, matching the consensus projection from analysts. The company said that food was among its biggest sellers, with an 11% gain in sales of perishable foods.

Costco Wholesale (COST, Fortune 500), another top low-income merchant, reported Wednesday that same-store sales jumped 9% in August, compared to the same period last year. But the company still fell short of a consensus of analysts pooled by Thomson Reuters, who had expected a gain of 9.9%.

Costco said that its sales gain was bolstered by the 40% surge in the price of gasoline. Without gas, Costco said same-store sales rose 6%.

Higher-end retailers
August is generally a good month for retail sales, as parents and college students stock up on clothing and supplies before the start of the school year. But these shoppers stayed away from retailers of higher-end clothes, according to analysts, who noted that many consumers are simply continuing to wear the clothes that they own.

The Gap (GPS, Fortune 500), which owns Old Navy and Banana Republic, said that same-store sales fell 8% in August. This was much worse than the 1% decline experienced in August 2007, but it wasn't quite as bad as the 9.7% decline expected by a consensus of analysts surveyed by Thomson Reuters.

The worst-performing part of its business with Banana Republic North America, with a 14% plunge.

"I don't see those guys coming back any time soon," said Brown of ResearchConnect.com, referring to The Gap and other clothing retailers.

Abercrombie & Fitch (ANF) said same-store sales fell 11% in August, which wasn't as bad as the 7.9% projected by analyst consensus from Thomson Reuters. Limited Brands (LTD, Fortune 500), owner of Victoria's Secret and Bath & Body Works, reported that same-store sales fell 7% in August, slightly worse than the 6.9% decline projected by analysts.

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MA: Hanover draws Target to new retail center

Passing motorists see only boulders and tree trunks. But the town of Hanover envisions a retail hub for the site on Washington Street (Route 53) between Mill and Pond streets, and already has secured a prominent national retailer.

Target Corp. has agreed to set up shop in a 137,000-square-foot building that will serve as the anchor for the Washington Street Shopping Center complex. According to Town Planner Andy Port, the town hopes to have the store opened by late summer or early fall 2009.

The new Target will be the largest single retail store in Hanover, according to Port. While the Hanover Mall is larger in overall size, it houses dozens of individual retailers.

Though Target will serve as the centerpiece for the site, which is in its early excavation and grading stages, plenty of other construction is already planned.

The former Decathlon Sports building, which more recently housed a furniture retailer, will not be demolished. Instead, the existing structure is to be expanded and incorporated into the new complex.

"The building will be expanded by construction by 10,000 square feet," said Port. "This will house two large retail units, and will be about 50,000 square feet total."

Another new retail building will be constructed, and at 17,000 square feet, will house five smaller retail units.

To make the center more than just a shopping destination, two restaurants, at 6,000 to 7,000 square feet each, are also planned for the site. Tenants for the smaller retail units and restaurants have yet to be confirmed.

The Washington Street Shopping Center project was bolstered by the continuing road-widening project along Route 53. "The road-widening has been in the works for a while, but Target probably wouldn't have found the site as beneficial without it" and would have had to pay to widen the road in order to prevent backups, Port said.

Due to the anticipated increase in traffic from the shopping center, Target will be required by both Massachusetts and town law to install a lighted intersection and turning lanes to facilitate entering and exiting the complex, similar to those just up the road at the Hanover Mall.

Source: Boston Globe

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Kohl's To Cut '09 Store Openings, To Emphasize Exclusive Brands

Kohl's Corp. (KSS) said Wednesday it will cut its 2009 new store openings to 50 from 90, but sees the money saved as aiding opportunities for expansion from coming "consolidation" in the retail industry.


"We are keeping our powder dry" for consolidation of retailers and retail outlets that will come in the next few years, or as soon as "the next six months," said Kohl's Chairman Larry Montgomery.

Montgomery, who relinquished the title of chief executive to Kohl's President Kevin Mansell last month, spoke in New York City at a retail conference sponsored by Goldman Sachs.

Kohl's said last year it would have 1,400 stores by 2012, but now isn't expected to reach that number as soon. Montgomery did not give a timeframe.

As for the 50 openings for next year, "We want to be prudent" given economic conditions and also have cash on hand for opportunistic acquisitions, Montgomery said.

The company also plans to play up its exclusive lines from designers like Vera Wang and introduce new ones. Its own private-label products are also going to be a focus.

Both exclusive and private-label lines generally carry higher margins than branded products from outside companies.

When it comes to producing its apparel, Kohl's plans to be nimble by doing more in Vietnam and Central America as inflation in China grows, Montgomery said.

He added that Kohl's also plans an early start to its holiday promotion season in the U.S.

Source: Morningstar.com

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H&M Defies Retail Gloom

As a purveyor of stylish clothing at reasonable prices, retail chain H&M looks at the economic slowdown as an opportunity to expand

With the credit crunch in full swing, retailers around the world are slashing prices and shuttering shops. But Sweden's Hennes & Mauritz (HMB.ST), a pioneer of cheap but chic fashion, is managing to buck the trend: opening stores, entering new markets, and adding new brands. "Our strategy is based on the concept of fashion and quality at the best price," says H&M Chief Executive Rolf Eriksen. "It helps us stay balanced even during economic downturns."

Defying tough times, H&M will enter one of the world's most competitive fashion markets with the opening of its first store in Japan on Sept. 13. The initial outlet, in Tokyo's Ginza shopping district, will be followed by a second store in Harajuku on Nov. 8. At the same time, H&M will also launch its latest high-profile design collaboration with Japanese designer Rei Kawakubo, the founder of cutting-edge fashion brand Comme des Garçons. A third Japanese store in Shibuya is expected to open next fall.

The fashion chain's arrival is bound to thrill members of its Japanese H&M fan club, who already number 20,000. "With H&M's track record in entering new countries, the strong interest in fashion in Japan, and the existing H&M fan club, H&M has a good chance of doing well there," says Erik Sandstedt, retail analyst at Kaupthing (KAUP.ST) bank in Stockholm.

A Global Expansion

Indeed, as a purveyor of stylish clothing for reasonable prices, H&M sees the economic slowdown as an opportunity to expand. With its entry in