Monday, August 31, 2009

Best Buy to add 22 stores in Q3

Best Buy Co. Inc. to open 22 new stores during the fiscal third quarter of 2010, the company announced Monday.

The Richfield-based consumer electronics retailer’s new stores will include a location at Union Station in New York City and one in Puerto Rico. The only Upper Midwest opening is planned for Oshkosh, Wis.. . . more

Sears hopes to woo shoppers with federal rebates on home appliances

Sears, Roebuck and Co. is hoping to woo shoppers looking for federal government rebates that will be available on home appliances this fall.

The rebates, expected to be available in November, are part of the Obama administration's stimulus program and are designed to boost sales of more energy-efficient home appliances. . . . more

Malls buy into retooling

From grocery stores to indoor skate parks, shopping complexes are reaching beyond fashion-first retailers to address growing vacancies

The recession and declining mall sales have spurred a historical change in fashion-oriented shopping centers.
Mall owners are being forced to think outside the big box as retail tenants dry up because of bankruptcies and closures, and are now focusing on nontraditional businesses to fill their growing vacancies, at 7.5 percent industrywide. . . . more

Surviving the storm

When you’re in the middle of the storm, all you can focus on is the rain around you,” Taubman Centers COO William Taubman told CNBC last week, referring to the uncertainty around commercial real estate.

Some specialty apparel stores stores are showing signs of life, but commercial real estate still has a long way to go, he noted. With some $300 billion to $400 billion of debt to be financed, with no liquidity in sight, he said, the hole is still pretty deep.. . . more

Sears is returning to selling cosmetics

Eight years after getting out of the cosmetics business, Sears is jumping back in, banking that the high-margin sector can give the retailer a much-needed profit boost.

The flagship brand of Sears Holdings Corp. is opening full-service beauty counters at 13 stores in Los Angeles, Chicago and New York this week.. . . more

Flat incomes raise doubts about economic recovery

WASHINGTON – Household income in the United States is essentially stagnant, raising doubts about whether consumers already hurt by job losses can sustain an economic recovery.

The now-ended Cash for Clunkers program helped lift consumer spending last month and is expected to deliver a bigger boost in August. But any economic rebound likely would falter if shoppers lack the income to spend more in the long run.. . . more

Stretch of Derry's Route 28 may be widened to five lanes

DERRY, N.H. — A decision to open 200 acres of land off Route 28 to development could happen in the next few weeks.

It would require widening Route 28 from two lanes to five. A public hearing is scheduled for tomorrow night. The Town Council might create a tax increment finance district in the area that would help fund infrastructure improvements. Councilors are expected to vote on the TIF Sept. 15.. . . more

Retailer Rumble

Saks Fifth Avenue is aiming for a clean break from last year's disastrous holiday season, but upscale rivals could still make for a messy Christmas.

The struggling luxury chain attracted industry criticism last October when -- only weeks after the Wall Street crisis peaked -- it slashed prices 40 percent across its stores. Holiday markdowns grew to more than 80 percent, spurring speculation that Saks might not survive 2009. . . . more

Friday, August 28, 2009

American Eagle Q2 profit plummets 52%, meets Street

American Eagle Outfitters reported Thursday that its second-quarter profit dropped 52%, citing lower sales and increased markdowns and promotional costs. The results met analysts' expectations.. . . more

Waterfront project is scaled back

Facing weak economy, developer plans more apartments, fewer stores

Developer John E. Drew, facing stiff economic headwinds, is scaling back plans for a massive urban shopping center on the South Boston Waterfront and will shift to building more residences, which are seen as easier to finance. Drew said yesterday that the revisions will help him proceed with construction of $600 million Waterside Place, which was originally planned to include a 640,000-square-foot retail center, a 19-story condominium building, and a 300-room hotel. He said plans for the retail building are still being discussed, but will probably include mostly apartments, with a smaller number of stores.. . . more

Thursday, August 27, 2009

Jo-Ann sewing up some bigger sales

Jo-Ann's ''small-format'' stores of less than 24,000 square feet in size have been benefiting from Wal-Mart exiting fabric sales at nearby stores, Darrell Webb, chairman, president and chief executive said in the conference call with investors.

Wal-Mart has removed fabric from about 1,300 of its stores, leaving another 2,000 stores still selling fabric, he said.

''Small-format stores have performed better than large-format stores recently,'' Webb said.. . . more

Stop & Shop expands its discount program

The Stop & Shop Supermarket Co. said it is escalating its discount program by doubling the number of sale items each week.

The Quincy-based chain added in a press release that is also "introducing new shelf tags and in-store signage, along with a redesigned loyalty card.". . . more

Approaching a Tell-tale Month

“Since September 2008 comp store sales at many retail firms indicate dramatic year-over-year declines. Consequently, we are about to complete the worst 12-month retail cycle since the Great Depression.”

It was September 2008 when the economy went into freefall. You remember: banking failures, stock market crash, financing woes - all the things that can force commercial development to a screeching halt. Oh, and a brutal acceleration in retail sales declines.

Looking back, retail sales trends in selected categories began showing signs that American consumers may have overextended themselves as early as fall of 2006. In October of that year, the Building Materials, Garden Equipment and Supply category experienced its first monthly decline in total sales since March 2001. Since the fall of 2006, spurred on by the housing crisis and declining home purchases, Building Materials sales have experienced only two positive months, and none since November 2007.
. . . more

Legacy Place opens in Dedham

The first “lifestyle center’’ mall inside Route 128 makes its formal debut in Dedham today, offering the potential to dramatically alter the retail landscape in a town known for its strip malls and big-box outlets. Legacy Place, the first big shopping center alongside Route 128 between Burlington and Braintree, is built in the increasingly popular mold of so-called lifestyle centers - essentially open-air malls that mix high-end specialty retail shops with dining and entertainment, in a pedestrian-friendly setting that allows for parking near stores. . . more

Super 88 grocers being sold

Super 88, Boston’s homegrown Asian supermarket chain, is being sold to a New York company, Hong Kong Supermarkets Inc., ending months of speculation about the future of the firm.

Hong Kong Supermarkets officials declined to disclose the sale price because it had not been finalized, but Hong Kong Supermarkets’ comptroller Richard Tang said the news would be official any day now.

“It’s coming soon,’’ Tang said of the new ownership. “Hopefully by this weekend you’ll see posters’’ announcing the change.. . . more

Toys “R” Us clunker crib exchange

So you thought the “cash for clunkers” idea only extended to cars?

Think again.

Toys “R” Us, the U.S.-based specialty toy retailer, announced a national plan that lets consumers trade in their used cribs, car seats and other baby-related items in exchange for a 20-percent discount to buy a new product in the same categories and by specific manufacturers.. . . more

New York & Co. reports loss, meets expectations

New York & Co. on Wednesday reported a fiscal second-quarter loss, but results matched analyst expectations. Loss for the three months ended Aug. 1 totaled $4.8 million, matching the average analyst expectation, compared with a profit of $8.8 million last year.. . . more

Wednesday, August 26, 2009

Casual Male shares pop as reorg takes root

Shares in Casual MaleTuesday surged after the company reaffirmed its guidance for the year amid signs that its recent cost and inventory overhaul has taken root. The Canton, Mass.-based company’s stock (Nasdaq: CMRG) jumped 41.5 percent Tuesday, pricing out at around $3.10 a share.

The positive investor response came despite a double-digit slide in Casual Male’s sales for the quarter ended Aug. 1. The company’s top line totaled $98.3 million, off 13.4 percent from the $113.5 million in sales posted a year earlier. Among stores that have been open for at least a year, Casual Male’s year-over-year sales slide was 13.9 percent.. . . more

Food Prices Likely to Start Ticking Up

Prices for beef, milk, eggs and some other grocery items have been dropping for several months, providing relief for consumers who suffered through the steep increases of a year ago. But prices are likely to start edging upward again as the economy recovers, according to a new federal report and economic analysts.

“The impact from lower energy prices on grocery store prices has largely been played out, and so we’re now looking at grocery store prices to rise modestly through the end of the year,” said Mark Vitner, a managing director and senior economist at Wells Fargo. . . . more

CMBS Delinquencies Drop for the First Time in Almost a Year

The good news may prove to be short-lived however

According to a new report from Reapoint LLC, the delinquent unpaid balance for CMBS decreased in July for the first time since August 2008—snapping a string of 10 straight monthly increases. The balance fell to $25.68 billion from $28.65 billion a month prior. However, the good news may prove to be short-lived.

The decline came after nearly $4.8 billion of General Growth-sponsored loans were returned to current payment status following a 30-day delinquent status in June. . . . more

Avalanche of store closings coming, study says

Food, clothing among industries likely to be hit hard

As many as 10,000 retail stores will close nationwide this year, led by clothing stores, electronics and food-and-beverage stores, and department stores, in that order, a study released Tuesday shows.

If the forecast holds, the store closings this year will be nearly double that of last year, when store closings stood at 5,100, said Sandra Reese, a principal at Grant Thornton LLP's offices in Chicago. Last year, the biggest store closings occurred in electronics, followed by home improvement-furnishings stores and in third place, apparel stores.. . . more

Chico's doubles profit in Q2

Fort Myers, Fla. ( August 25, 2009 ) Chico's FAS reported Tuesday that its profit more than doubled in the second quarter, helped by stronger sales and trimmed inventory.

The retailer earned $14.9 million for the period ended Aug. 1, up from $6.7 million a year earlier.. . . more

Jos. A. Bank plans faster expansion

Clothing chain to open 30 to 40 new stores in vacant spaces next fiscal year

Jos. A. Bank Clothiers was forced to pull back aggressive expansion plans when the economy tanked and developers stopped building the open-air shopping centers where the men's retailer tended to locate.

But the Hampstead-based clothing chain said Tuesday it was increasing the number of stores it plans to open in fiscal year 2010 as it takes advantage of real estate that has opened up as other retailers have closed stores. The company now hopes to open 30 to 40 stores, an increase from the 10 to 15 it initially planned for next year. It will change its strategy somewhat by moving into existing, rather than new, spaces.. . . more

State can’t collect tax on sales in N.H.

SJC blocks Mass. in case seen as bid to expand authority

Massachusetts’ highest court has ruled the state cannot collect sales taxes from a New Hampshire retail store that sold tires to Bay State customers, ending a case some tax specialists saw as an effort to dramatically expand the state’s taxing authority.

The unanimous ruling by the Supreme Judicial Court found that the Department of Revenue, which initiated the case in 2003 while Mitt Romney was governor, overreached in its interpretation of state law, and failed to prove it had the right to collect taxes on tires sold by Connecticut-based Town Fair Tire Centers.. . . more

Tuesday, August 25, 2009

Landlords find creative ways to fill retail spaces

When the Fort Lauderdale Children's Theatre first approached Galleria Mall about leasing rehearsal and classroom space, the organization knew it was a long-shot. Would the prime regional shopping mall in East Fort Lauderdale be willing to rent space at a below market rate to a nonprofit organization?

In the midst of the real estate boom, the answer would have been a resounding ``No.'' But times have changed. Bankruptcy has left a trail of retail vacancies including Circuit City, Linens 'N Things and Sound Advice. Plus many national retailers are putting the brakes on expansion plans. That's forced some South Florida landlords to get creative in order to fill space. . . . more

Mass. housing market shows signs of recovery

BOSTON (AP) -- The Massachusetts housing market is showing signs of recovery with sales of single-family homes up about 12 percent in July compared to the same month last year.

It's the first time since December 2008 that home sales have increased year over year.

The Warren Group, a Boston-based publisher of real estate data, on Tuesday credited the 11.8 percent jump to low interest rates, reduced prices, first-time homebuyer tax credits and improved consumer confidence.. . . more

Charlotte Russe agrees to be sold to Advent International

Specialty retailer Charlotte Russe Holding Inc. said Monday that it had agreed to be acquired for about $380 million by investment funds managed by a private equity firm.

Advent International Corp. agreed to pay $17.50 a share in cash to take over the San Diego chain, which announced in March that it was formally putting itself up for sale after a difficult holiday season.. . . more

Staples Q2 Earnings Fall 38% on Sales Weakness

Staples Inc. fiscal second-quarter earnings fell 38% as the world's largest office-products seller continued to experience sales weakness in large purchases and falling margins.

In addition to offices simply closing during the recession, companies have tightened budgets and waited to fully exhaust supply cabinets before they reorder. To lure in foot traffic, Staples joined the ranks of retailers deeply discounting, in June offering a slew of products for only a buck. . . . more

Borders Posts Wider-Than-Expected Loss

CHICAGO - Bookseller Borders Group Inc posted a wider-than-expected quarterly loss on Tuesday as sales slumped.

The second-largest U.S. brick-and-mortar book retailer, behind Barnes & Noble Inc , posted a net loss of $45.6 million, or 76 cents per share, in the second quarter ended August 1, compared with a loss of $11.3 million, or 19 cents per share, a year earlier.. . . more

Ethan Allen Expands Its Reach

DANBURY, Conn.--Ethan Allen continues to expand its reach this month with the opening of new Design Centers in Raleigh, N.C., and Dubai, U.A.E. In addition to these new locations, the company is pursuing new locations in several markets in the U.S. and abroad.

“We are pleased that even during these challenging times we continue to move our business forward in both domestic and international markets,” said Farooq Kathwari, Chairman, President and CEO of Ethan Allen. . . . more

Monday, August 24, 2009

In Hooksett, more than just a grocery store

HOOKSETT – After a Market Basket supermarket is built on Route 3A this winter, a 750,000-square-foot, three-story hotel could be built on the same property, project managers said yesterday.

A hotel is listed as the second phase of the Market Basket project in an application submitted to the Hooksett Planning Department.

The proposed supermarket location is on Route 3A, directly next to the southbound side of Interstate 93 at Exit 10. The supermarket property would be connected to Central Park Drive and is only two property lots away from the Walmart SuperCenter that had its grand opening Wednesday. Town officials announced Aug. 11 that a Market Basket is planned for the location.. . . more

Staples' pullout doesn't cloud Crossing's potential as it nears opening

One anchor's away from Gloucester Crossing.

But neither critics of the project, or the city's courtship of it, should see that as any reason to begin writing the development off before it even opens.

Last week's word that Staples, the office supply giant, will not be among the three anchor stores that Boston developer Sam Park had hoped would be in place when the commercial, retail and housing complex opens this later this month and next off the Route 128 extension just above Blackburn Circle, may, for some dampen what should be an exciting time for all connected with this project, and local consumers.. . . more

Dick's Ups New Store Growth Plans

Dick's Sporting Good is increasing the number of new-store openings it originally planned this year from 20 to 24 after more opportunities arose in the Pacific Northwest with the liquidation of the Joe's sporting goods chain where Dick's is entering a handful of former spaces. And Dick's is following up in 2010 by opening another 24 namesake stores as well as five of its Golf Galaxy units.

Plans are still in the works to operate 800 Dick's stores throughout the country, up from its current 409, said Edward Stack, the retailer's chairman and chief executive officer, during his company's second-quarter earnings call. "We're not changing our store count right now," he said.
But many of those stores could go into existing spaces since developers are having trouble coming up with capital to build new projects. "We think the new development piece is going to be difficult," Stack said. . . . more
FREEPORT, Maine - L.L. Bean will use a designer who once worked for Abercrombie & Fitch and Ralph Lauren and later founded the Rogues Gallery line of urban chic clothing to create a new signature line of clothing. Hunters and fishermen need not panic, however, because no one’s abandoning Leon Leonwood Bean’s outdoors roots.

Alex Carleton will take L.L. Bean’s classic style elements and give them a modern look that’s meant to be slimmer, hipper, and more urban but not a radical departure from L.L. Bean’s traditional tartan plaid shirts, thick sweaters, and rubber-soled hunting boots.. . . more

Retailers entertaining new ideas to spark sales

Area stores are beefing up customer service and personal touches to lure shoppers.

Lisa O'Brien, owner of Underwired vintage clothing store in downtown Bethlehem, is focusing on keeping her prices reasonable and getting to know her customers by name as she tries to make it a personal experience in her shop.

Urszula Abolik, owner of Amber Connection fashion boutique on Hamilton Boulevard in Allentown, hosts events such as belly dancing demonstrations and recitals to draw a crowd with the hope they return to purchase some of her store's goods.. . . more

Wal-Mart on the prowl for a D.C. site

Wal-Mart Stores Inc., long interested in opening a store in the District, has stepped up its efforts in recent months and is moving aggressively to work out a deal, according to local developers.

The company appears to be zeroing in on land along Howard Road Southeast, next to Poplar Point. Developer Jeff Epperson, president of Urban-City Ventures
LLC, said he is in ongoing discussions with the chain about opening its first D.C. store there.. . . more

Price Index Suggests Declines Are Ebbing

NEW YORK CITY-June saw a "mild" 1% decline in property values after two back-to-back months of 7% drops, Real Estate Analytics said on Friday. At the same time, REAL reported that the month also represented an uptick in sales volume compared to May, possibly auguring a market bottom.

"This month is not unexpectedly bad news like the two previous months," Neal Elkin, president of REAL, in a release accompanying the newest Moody's/REAL National All Property Type Aggregate Index. "It could signal the beginning of a gradual tapering of the decline, the beginning of the final stage of the price correction from the lofty bubble of two years ago." . . . more
The discounter has thrived during the recession, but beware its $4.1 billion in debt and its lease obligations.

Dollar General stores offer bargains to consumers. Will the retailer's stock be as good a deal for investors?

Dollar General, which is owned by the private equity firm Kohlberg Kravis Roberts, filed on Thursday with regulators
for an initial public offering, seeking to raise as much as $750 million. Since the filing is preliminary, it's not entirely clear how the proceeds will be spent, but some of the money will go to pay down the retailer's sizeable debt.. . . more

Charlotte Russe to go private in $380 million deal

(Reuters) - Women's-apparel retailer Charlotte Russe Holdings Inc (CHIC.O) said it has agreed to be acquired by private equity firm Advent International Corp for about $380 million in cash.

Advent International will pay $17.50 per Charlotte share in a tender offer, representing a premium of 27 percent to the stock's Friday's close.. . . more

The Children’s Place Down But Expanding

SECAUCUS, NJ-Second quarter 2009 sales at The Children’s Place Retail Stores Inc. were $315.7 million, a 7% decline compared to the previous year’s Q2 sales of $338 million.

"Second quarter 2009 financial results were pressured by the economic environment and the negative impact of foreign exchange," said Chuck Crovitz, the company’s interim CEO. "In addition, we faced a challenging comparison as last year’s second quarter was the best in the company’s history. But despite these headwinds, we were pleased to have made significant progress on various initiatives including further growth in our e-commerce business, acceleration of our cost cutting efforts and the successful rollout of a new value-engineered store format." . . . more

Friday, August 21, 2009

Dollar General Makes Filing for a Public Stock Offering

Dollar General, the discount retailer owned by Kohlberg Kravis Roberts, filed for an initial public offering with regulators on Thursday, in what many analysts expect to be a swell of companies owned by private equity firms regaining stock listings.

Dollar General said in its filing that it was seeking to raise $750 million, which would make it one of the bigger initial offerings this year. Kohlberg Kravis will help underwrite the sale.

As the stock markets have posted gains this year, private equity firms — which typically hold onto companies for several years — have indicated that they will seek to cash out by taking their acquisitions public.

Dollar General said in its filing that it would pay a special $200 million dividend to its existing investors. Kohlberg Kravis acquired the retailer for $7.2 billion in 2007. . . . more

Buckle, Aeropostale Lead Specialty Earnings Pack

Teen retailing’s two top performers Thursday continued to outpace their specialty store competitors with double-digit increases in second-quarter sales and profits.

In reporting stellar quarterly results, The Buckle Inc. and Aéropostale Inc. pulled well ahead of the pack — and marginally above analysts’ consensus expectations — at a time when, confronted by weak mall traffic and indifferent consumers, most youth-focused chains would be content to simply tread water.

If there are questions about the two specialty retailers among investors, they stem from their ability to sustain such strong performances. . . . more

Thursday, August 20, 2009

BJ's Gears Up for Smaller Box Shops

BJ's Wholesale Club, during a Q2 earnings call, looked to the future of a smaller, more accessible real estate market. Although the club company's profit was down year-over-year, it was only a slight dip from $36.5 million in net income at the end of Q208 to $35.1 million this year.

President and COO of BJ's, Laura Sen, explained that the wholesale club was planning a few smaller-sized stores with a footprint of around 85,000 square feet. The notion, Sen said, was to find a model that worked for a middle-sized market more efficiently than a larger club. The smaller-box offers BJ's some flexibility in space, as well as an ability to push into a dense market, which they could not entertain with their full-box. "Certainly, we have the flexibility to run clubs like this and we know that they can produce some very attractive ROIs, so we are going to be able to slip into some marketplaces that we know competition could not go and within our current geography," Sen said. . . . more

Empty Bank Branches Add To Supply In Retail Real Estate

The ruins of Washington Mutual's aggressive and unorthodox growth strategy is no more apparent than in the Windy City, where roughly 75% of the bankrupt bank's branches have gone dark.

It's a stark harbinger of what looms ahead for recession-battered retail real estate. A growing number of vacant branches being dumped on the market due to mergers and Chapter 11 filings are poised to push vacancy rates higher and exacerbate weak property values.

During boom times, WaMu opened about 170 branches in the Chicago area. The growth spurt underscored the Seattle company's ambition to be the Wal-Mart of retail banking. WaMu attempted to build a presence in "Chicagoland" from the ground up by opening brand new branches to attract customers. It was a nontraditional strategy given that banks usually purchase an existing bank or branch network to expand into new regions.

As WaMu struggled, it shuttered about 60 branches in Chicagoland before it went bankrupt and was acquired by JPMorgan Chase & Co. (JPM) earlier this year. Subsequently, JPMorgan Chase closed about 70 more branches in the area, leaving only 40 of the original WaMu branches open, a company spokesman confirmed. Nationwide, Chase has closed nearly 400 one-time WaMu branches. . . . more

GameStop profit drops as sales slump

GameStop Corp. said Thursday that its fiscal second-quarter profit 32% fell to $38.7 million from $57.2 million a year earlier, with the loss attributed to the stalled economy and difficult comparisons. The video-game retailer also cut its profit forecast for the rest of the year.. . . more

Hot Topic Vampires Draw Mall Traffic

Maybe it takes a vampire, or a musician or two, to change landlords’ perceptions – they’ve certainly helped Hot Topic, executives said at the company’s second-quarter conference call.

The success of the chain’s tie-ins with last year’s vampire-centric Twilight film and more than 6,000 individual in-store music performances have helped tenant/developer, and even tenant/tenant relations, as the promotions draw young shoppers, says Betsy McLaughlin, CEO.

“Developers are happy with us,” McLaughlin says. “They’ve gone from being suspicious of us to asking how they can help us. Many other retailers have been helpful because they seeing us driving traffic to the mall.” . . . more

Profits Tumble for Owner of Victoria's Secret

Even sexy isn't selling in this lengthy recession.

Limited Brands, the owner of the Victoria's Secret chain, posted quarterly profits on Wednesday night that beat expectations - but only by trimming expenses and luring customers with discounts.

The company, which also owns Bath & Body Works, said profits tumbled 27% to $74.3 million from $102 million a year ago.

Sales fell 13% to $2.3 billion, and sales at stores open at least a year, a key gauge of a retailer's health, were down 9%.

Nonetheless, Limited boosted its yearly outlook last night, and its shares rose more than 2% in after-hours trading. The stock, which gained 61 cents to $14.58 in regular trading, has surged 45% this year. . . . more

Sears shares plunge on surprise 2Q loss

Sears Holdings Corp. said Thursday that it lost money in its second quarter - missing expectations - as its results were dragged down by lower sales and one-time costs, causing shares to plunge.

The weak housing market cost it sales in home-improvement and appliance categories at Sears department stores, and clothing sales were weak at both Sears and its Kmart discount chain.

Shares fell $9.26, or 12.6 percent, to $64.50 in premarket trading.

The retailer lost $94 million, or 79 cents per share, for the period ended Aug. 1. That compares with a profit of $65 million, or 50 cents per share, a year ago. It was the company's third loss in the past six quarters. . . . more

Survey: 70 Percent of Retailers Optimistic for 2010

The outlook for the retail industry is bright, according to a new study released today from New York-based KPMG. The majority of retail executives believe 2010 will be a better year in terms of profitability and job placement.

Seventy percent of industry executives expect business to improve next year, with about two-thirds predicting stronger revenue (68 percent) and greater profitability (66 percent).

Executives said they expect the retail job market to improve (84 percent), with 32 percent believing conditions will be better than in 2009. More than half (52 percent) of executives polled said they are confident that stability is on the way. Only 14 percent of respondents reported possible further headcount reductions.

“The KPMG survey findings reflected an expression of guarded optimism among retail executives, given the industry’s challenges as demand for goods continued to plummet during the recession,” said Mark Larson, KPMG global retail sector chair. “Their optimism is in sharp contrast even with the latest report from the Commerce Department, which revealed last week that retail sales dropped in July, despite evidence that the economy has stopped contracting and that economists were forecasting a gain in sales.”. . . more

TJX Posts Record Second Quarter Sales

Bad times are putting good numbers on TJX’s bottom line. The parent company of off-price brands T.J. Maxx, T.K. Maxx, Marshalls, HomeGoods, A.J. Wright, Winners, HomeSense, and STYLESENSE posted record sales and earnings for the second quarter ending August 1.

A 4-percent increase in comparable store sales helped to drive sales to the $4.7 billion mark for the quarter and $9.1 billion for the first half of the company’s 2010 fiscal year. Despite the adverse impact of foreign exchange rates, that volume delivered a quarterly profit of $262 million, a 27-percent increase over the previous year. Carol Meyrowitz, TJX president and ceo, credited the company’s “extreme values on exciting brands and fashions” for “extraordinary increases” in consumer traffic counts. . . . more

Wednesday, August 19, 2009

Retail Figures Show Continuing Consumer Deterioration

The last few days have brought a bunch of earnings reports from prominent retailers allowing us a window into consumer spending.

Last Thursday, the world’s largest retailer, Walmart (WMT), reported a surprising 1.5% drop in same store sales at U.S. Walmart stores. That is only the second drop (the other was -0.1%) I see in my data going back almost 10 years.

What does it mean? I think there are two interpretations of this. It can be argued that the drop in sales at Walmart is a result of an improving economy. As the stock, real estate and job markets improve, consumers are feeling better and have more money in their pockets. As a result, they are trading up, shopping at more expensive retailers instead of trading down to Walmart as they were in the depths of the recession. The other interpretation is that consumers are under so much pressure that they are cutting back even at discount stores like Walmart.

There is an obvious way to decide between these two interpretations. How are sales at other, higher-end, retailers?

This morning, Target (TGT) reported their second quarter earnings. Same store sales dropped a staggering 6.2% from the year ago period. Earnings held up pretty well as a result of lower costs of goods. During the boom years, there was a notable shift among consumers away from Walmart and towards Target. A classic Wall Street Journal article documented this trend: “Walmart Era Wanes Amid Big Shifts In Retail”, The Wall Street Journal, October 3, 2007, A1. But that trend has reversed during the great recession and the resulting “Walmart Economy”. . . . more

Home Depot CFO Sees 'A Lot of Market Share' For Co's Taking

Home Depot Chief Financial Officer Carol Tome said tough industry conditions mean additional opportunities for market-share gains by the world's largest home-improvement retailer by sales.

"The good news is there's a lot of market share to go get," Tome said in an interview Tuesday.

Like smaller rival Lowe's Cos. (LOW), Home Depot believes it is taking market share from smaller dealers, including lumber and building material suppliers and specialty stores, Tome said.

"We're at 20% [market share], [Lowe's is] at 15%, so we're at 35% together," Tome said. "There's a lot of market share to get."

Earlier, Home Depot said that its market share increased from a year earlier in 6 of 13 consumer-oriented departments, including appliances, paint, hardware and lawn and garden. . . . more

BJ's Wholesale profit beats Street; raises FY view

* Q2 EPS 64 cents vs Wall St view 62 cents

* Q2 sales fall 5.2 pct

* Raises full-year profit outlook

* Shares up 4 pct in premarket trading (Adds background, full-year outlook, stock activity)

BANGALORE, Aug 19 (Reuters) - BJ's Wholesale Club (BJ.N) reported a higher-than-expected quarterly profit on Wednesday on improved margins, and the warehouse club operator raised its profit outlook for the year.

BJ's profit for the second quarter that ended Aug. 1, was $35.1 million, or 64 cents per share, compared with $36.5 million, or 61 cents per share, a year earlier.

Analysts, on average, had been expecting earnings of 62 cents per share, according to Reuters Estimates.

BJ's previously announced its second-quarter sales fell 5.2 percent to $2.5 billion, while sales at its clubs open at least a year, or same-store sales, dropped 7.7 percent.

As the recession pressures household budgets, warehouse clubs such as Costco Wholesale Corp (COST.O), Wal-Mart Stores Inc's (WMT.N) Sam's Club and BJ's Wholesale are attracting shoppers seeking low prices on staple items, like bread and paper towels.

People pay an annual fee to shop in the clubs and get discounts on everything from cartons of fresh fruit to flat panel TVs and gasoline for their cars.

But the clubs are facing greater challenges compared with a year ago when high gas prices and food inflation spurred their sales.

For the full year, the company expects earnings of $2.46 to $2.56 a share, up from its prior outlook of about $2.44 to $2.54 a share.

Source: Reuters

Saks Continues Off Fifth Growth

Off Fifth will be the growth vehicle for Saks Inc. for the next year, executives said at the company’s second-quarter conference call.
Plans call for opening three to five new Off Fifth stores a year across the United States in a combination of outlet malls and strip centers, said Stephen I. Sadove, chairman and CEO.

“Growing OFF 5TH makes even more sense in this environment, as customers focus on value,” Sadove said. “There is less than 10% overlap between Saks Fifth Avenue and Off Fifth customers, so we are essentially reaching an entirely different customer base with these stores.”

The company has letters of intent for Saks stores in Westchester County, NY, and San Juan, Puerto Rico, but those appear to be less certain. . . . more

Tuesday, August 18, 2009

JC Penney Opens Stores in Q2, Plans More

JC Penney Co. Inc. reported better-than-expected sales and break-even earnings during Q2 2009. Highlights of the quarter also included a reduction in debt and the opening of 38 new Sephora inside JC Penney and five new stores, including one in New York City.

The breakeven earnings per share compared to last year's $.52 per share is a positive trend, especially given the continued weak economy commented JC Penney's chairman and CEO Myron E. Ullman. . . more

TJX breach suspect linked to new thefts

Data grab may be largest ever in US

The Miami man accused of masterminding the theft of more than 40 million credit card numbers from TJX Cos. of Framingham, BJ’s Wholesale Club of Natick, and other stores four years ago was charged yesterday with a new crime, said to be the largest data theft in US history.

Federal prosecutors yesterday charged Albert Gonzalez, 28, and two unnamed conspirators with breaking into the computer networks of several major financial institutions and retailers around the country and stealing data from more than 130 million credit and debit cards. . . more

Monday, August 17, 2009

Five Below Planning to Double Chain Size

Philadelphia-based Five Below recently announced plans to accelerate its pace of store openings. The retailer's stores sell items at $5.00 or less and the concept is geared towards tweens and teens (10 to 15 year olds), outfitting its stores with plenty of trendy products and store décor to match. This year, Five Below expects to open 20 stores, followed by 30 to 40 stores next year and the year following. Currently, the retailer operates 80 stores along the east coast in DE (2), MD (16), MA (3), NH (2), NJ (15), PA (25), VA (16), and WV (1).

Five Below's real estate requirements call for a 6,500 to 8,500-square-foot store with at least 55 feet of frontage located in a mall, lifestyle center, power center or outlet center. The company prefers a population of at least 125,000 with at least 13% age 0 - 9 and 30% college graduates and a median household income of at least $50,000 in the trade area. The company has targeted PA, Washington D.C., Baltimore, New England, NJ, DE, and New York City for expansion.

Source: CoStar

US commercial real estate lending reemerging-Citi

Competition in commercial real estate lending is reemerging on the U.S. west coast, possibly marking an early sign that the financing drought that has wreaked havoc with the sector is easing, Citigroup Inc analysts said on Friday.

The lack of financing has been a chief cause of falling values on office, retail and apartment buildings since 2007, forcing sales at depressed prices. To avoid that, lenders have been busy extending or renegotiating loans, aiming to mitigate investor losses.

Tight credit has exacerbated the effect of the U.S. recession, which has increased vacancies and reduced rents to a point where revenue is falling short of debt payments. . . . more

Abercrombie May Cut US stores

With more than 270 leases up for renewal through 2011, Abercrombie & Fitch Co. may cut back some of its stores, most probably in its namesake brand, executives said at the company’s second quarter conference call.

Now a mature business in the United States with the exception of Gilly Hicks, the company will take the rest of the year to review the number of stores in each of its brands, said Jonathan Ramsden, executive VP and CFO. . . . more

New School Year, Old Clothes

The back-to-school shopping season could be the worst for retailers in years.

School is coming, but that doesn't mean parents are spending on anything but their children's basic needs. Notebooks, pencils and calculators? Sure. The latest in cool shirts, pants and shoes? Forget it.

Consumers surveyed by the NPD Group, a market research firm specializing in retail, are showing even more resistance toward laying out cash for back-to-school shopping than they did last year. With the new school year just around the corner, 44% of respondents told NPD Group they plan to spend less on back-to-school shopping than they did last year. That's up 9% from the same point in 2008. Only 23% said they plan to spend more, eight points down from last year. About 32% will spend the same as last year.

"Parents are taking back control of the purchasing decisions from their kids this year," says Britt Beemer, who runs America's Research Group, which tracks consumer spending habits. Beemer predicts back-to-school sales will drop by a whopping 8.5% to 12% this year, by far the biggest decline in the 12 years he's been tracking the season. It would also mark the first time back-to-school sales decline two years in a row. . . . more

Lowe's profit, revenue miss expectations

No. 2 home-improvement retailer Lowe's said Monday poor weather and cautious consumer spending caused sales to fall below expectations and earnings to fall 19% in the second quarter.
The company also plans to scale back store openings in its next fiscal year in response to the poor economy and consumer pullback.

"Wavering consumer confidence, unseasonable weather in core markets, and restrained customer spending compared to last year's fiscal stimulus-aided results led to lower than expected sales in the second quarter," said Robert Niblock, Lowe's chairman and CEO. . . . more

Brookfield Looks to Public Offering For Dough

Brookfield Properties Corp. is the latest REIT--and there have been a good many of them lately--to turn to public offerings to raise much-needed capital. On Wednesday, Brookfield priced $900 million worth of common shares, or 95 million shares at $9.50 each, a discount of about 7.4 percent compared with the company's closing price on Tuesday.

The offering will help Brookfield, which owns commercial properties in the United States and Canada, and especially New York City, deal with its debt load. Roughly $3.5 billion of that debt, for instance, is due in 2011.

The company is hardly alone in turning to investors for a cash infusion. According to the National Association of Real Estate Investment Trusts, there have been more than 50 common stock offerings in the first half of 2009 that have fetched the REIT industry a considerable $15 billion for its trouble. . . . more

In-Place Debt Crucial For Sales

In-place assumable financing continues to be crucial to getting closed many of the property sale transactions that are getting done in this market environment. For the net lease market in particular, that has resulted in a tale of two markets, notes CapLease Inc. chairman and chief executive officer Paul McDowell: properties with attractive and assumable financing and those without.

“There is a wide and still growing price differential between the two,” McDowell said during the New York City-based REIT’s recent second quarter earnings call. He likewise said that cap rates have not risen nearly as much for net lease properties with in-place financing and high-quality tenants as they have for other assets. . . . more

Friday, August 14, 2009

Will dual-branding work for Wendy's and Arby's?

Now that Wendy's and Arby's are under the same corporate umbrella, it wasn't that surprising when the company announced aninternational franchise agreement for 135 dual-branded restaurants in the Middle East and North Africa.

But it is surprising that the two brands would consider co-existing in U.S. stores.. . . more

Benderson buys back area malls from DDR

BUFFALO, NY--In a whopping day for Benderson Development Co., the region’s largest retail property owner spent $108 million to repurchase Boulevard Consumer Square in Amherst and two large Transit Road retail properties from Developers Diversified Realty as part of a much larger, previously disclosed package.

In one of the biggest single transactions locally, the Florida-based developer paid $68.5 million to buy back Boulevard Consumer Square on Niagara Falls Boulevard in Amherst. . . .more

Shoppers shift loyalty from brands to retail experiences

Everyone from economists to marketers to social-media experts has an opinion about how the recession will change forever the way people shop.

The market-research firm Hartman Group, in Bellevue, takes a longer view, saying a radical transformation was happening before the recession hit.. . . more

Wal-Mart widening aisles and brightening stores in major overhaul

TAMPA - Nice wide shopping aisles. No piles of merchandize or stand-up displays clogging your way. Brighter atmosphere.

This is a Wal-Mart?

That's the reaction the world's biggest retailer wants you to have shopping, and it knows that's not always the case. So Wal-Mart Stores Inc. is launching an immense renovation of U.S. stores to a new, cleaner, brighter, happier design.. . . more