Wednesday, September 30, 2009

Commercial lender CIT Group again on brink of collapse

CIT Group Inc. shares plunged Wednesday as the commercial lender is reportedly trying to craft an exchange that would cut its debt and offer bondholders an equity stake in the company in a bid to avoid bankruptcy.

Shares of the New York-based financial firm, one of the nation's largest lenders to small and midsize businesses, fell 85 cents, or 38.6 percent, to $1.35 in . . . more

Grocery-Anchored Centers Hold Their Own

When we released our annual KeyPoint Report for Eastern Massachusetts a few months ago, we reported that the regional vacancy rate as of March 1, 2009 was 8.5%. As of September 1, our data indicates a rise in the regional vacancy rate to 9.1%. This comes as no surprise in light of the current retail climate.

However, as we pointed out in last month's article on September same-store sales (Approaching A Tell-Tale Month, August 2009), grocers have weathered the recession better than most retailers. It’s not surprising that grocers would be among the most resilient retailers in a recession, but it got us thinking about whether this positive trend also applied to grocery-anchored shopping centers as an asset type. . . . more

Judge stalls bid to wrest control of Super 88

A Suffolk Superior Court judge yesterday foiled a complicated business maneuver that could have secured New York supermarket executive Jeffrey Wu’s ownership of the troubled Super 88 Asian grocery stores.. . . more

Kohl’s opens 37 locations

Kohl's Corp. said Wednesday that it is opening 37 new U.S. stores today -- adding more than 5,200 jobs -- as part of its plan to expand in key markets and gain market share.

The company is resonating well with shoppers looking to spend less during the recession. The chain also has forged successful partnerships with celebrities and designers on brands such as Abbey Dawn Girls, designed by singer Avril Lavigne, and Simply Vera Vera Wang. One of its most recent deals is an exclusive partnership with designer and former "The Hills" star Lauren Conrad on LC Lauren Conrad.. . . more

Wal-Mart supersizes its $10 holiday toy program

SAN FRANCISCO, Sept 30 (Reuters) - This year, Wal-Mart Stores Inc is supersizing its $10 holiday toy offering.

Last October, the world's biggest retailer cut its prices and began selling 10 popular toys for $10 each in its U.S. Walmart stores to win sales from early bargain hunting holiday shoppers. . . . more
SPRINGFIELD, Mo. — Bass Pro Shops is "what most retailers only fantasize about," said Ethan Allen CEO Farooq Kathwari when he introduced Bass Pro CEO Johnny Morris at an awards ceremony last year.

But try to get the details of the dream out of Morris, and you'll find he's conveniently "gone fishing."

That may say as much about his love of the sport as it does about his disdain for anything approaching braggadocio. But it still took an army of company assistants and no small amount of arm-twisting to get him to agree to, and follow through on, giving his first national media interview in more than 12 year. . . more

Target Is Off-Target, Says UBS

NEW YORK -- Target's image and numbers appear to be falling well short of targets -- or so says UBS, which downgraded the discounter on Wednesday to neutral from buy, due to "some long-term concerns over Target's perception amongst consumers."

UBS said that, according to its research, Target has lost 14% of its shoppers over the last several years and that 31% of those still shopping at the store are spending less. . . . more

Kohl's as recession winner emerges to take over rival stores

Kohl's Corp. is making the most of its rivals' woes.

The fourth-largest U.S. department-store chain is accumulating cash to grab locations abandoned by shrinking or defunct retailers, said Chairman and Chief Executive Officer Kevin Mansell. Any store takeovers would come on top of as many as 25 new locations Kohl's already plans to build for next year at a cost of about $275 million, he said.

"Nobody's come to us and said they want to sell us 50 stores, but I suspect it's going to happen," Mansell, 57, said in a Sept. 24 interview in New York. "We want to be in a position to act.". . . more

Walgreen Co. announces stores to sell beer and wine

Walgreen confirmed Tuesday that it will start selling beer and wine in a majority of its 7,000 stores.

The nationwide rollout, first reported by the Sun-Times in March, will take 12 to 18 months due to the need to obtain proper licenses, a Walgreen Co. spokesman said.. . . more

Financial Health Key to Pier 1 Imports’ Longevity

In this time of uncertainty, when many retailers are still trying to figure out strategies for long-term survival, home furnishings seller Pier 1 Imports is an unlikely source of inspiration. Even before the recession, many analysts and industry experts predicted a bankruptcy filing for the Fort Worth, Texas-based chain as it struggled with falling sales and stiff competition from more affordable big-box players.

Yet a year after peers Linens 'n Things and Bombay Co. have liquidated, Pier 1 is still around. Last week, the retailer even announced it would cut the number of expected store closings in fiscal 2009 to 50 from the previously scheduled 125. . . . more

Tuesday, September 29, 2009

Moody’s Takes More Upbeat View of Retail

NEW YORK CITY-Moody’s Investors Service has changed its assessment of the US retail industry from negative to stable. Although the ratings agency says it believes the sector’s credit profile will be generally stable over the next 12 to 18 months, industry conditions remain weak.

"Consumers continue to face many pressures including high unemployment, low housing prices, and a reduction in available installment credit," says Maggie Taylor, senior credit officer at Moody’s, in a release. "In addition, we believe the current consumer trend towards saving and repaying debt will continue over the intermediate term. This will likely make it challenging for industry conditions to materially improve from their very weak levels." . . . more

Dollar General IPO to Fund Store Growth, Reduce Debt

GOODLETTSVILLE, Tenn. — Dollar General is seeking to raise up to $750 million in an initial public offering that would reduce debt and help fund growth including the potential to more than more double its 8,500 stores.

In a prospectus filed Friday with the U.S. Securities and Exchange Commission, the discounter said its market analysis showed more than 12,000 opportunities for new stores located in the 35 states in which Dollar general already does business, and said it could continue to add new stores at a rate of about 500 a year.. . . more

Walgreen profit falls as non-pharmacy sales decline

NEW YORK -- Drugstore chain Walgreen Co. said Tuesday that its fiscal fourth-quarter profit fell 1.6% as demand for prescription drugs wasn't enough to offset budget-wary consumers' decisions to cut purchases of non-pharmacy items.

Comparable-store sales rose 2.4%, including a 1.4% decline in non-pharmacy sales. Prescription sales, about two-thirds of total, climbed 9% with their comparable sales increasing 4.5%. Walgreen operated about 7,000 stores as of Aug. 31. . . . more

Consumer confidence dip is bad holiday omen

Index of consumers' moods declines surprisingly in September, highlighting concerns about weak retail sales at year end.

NEW YORK -- A key measure of consumer confidence fell in September, after a gain in the previous month, raising concerns about retail sales in the upcoming holiday season, a research group said Tuesday.

The Conference Board, a New York-based business research group, said its Consumer Confidence Index fell to 53.1 in September from an upwardly revised 54.5 in August.. . . more

Rockaway project gets some stimulus

New neighborhood gets the supermarket of its dreams; rare residential success

In an era when big residential real estate projects have stalled all across the city, one of the biggest of the lot—Arverne by the Sea, in Rockaway, Queens—is motoring ahead briskly.

Four of the planned six “neighborhoods” on the once-desolate 308-acre seaside stretch have been completed, their 800 condominium units sold off and occupied. A fifth is nearly sold out, at prices starting at $599,000 for a two-family home.

But five years after it all began, Arverne still lacks that most important neighborhood ingredient, a supermarket. A huge Stop & Shop has long been planned.. . . more

Mass. housing market perks up

BOSTON -- The number of home sales in Massachusetts rose slightly in August compared to the same month a year ago, as prices continued to fall.

The Warren Group, a Boston-based publisher of real estate data, reported Tuesday that sales of single-family homes crept up about 2 percent last month when compared to August 2008, while the median selling price dropped more than 6 percent, from $322,500 to $302,625. . . . more

Glimmer of hope: Holiday sales forecast to tick up

A retail industry report released Monday predicts holiday sales will gain by about 1 percent or slightly higher, marking one of the first positive holiday forecasts so far this year.

The International Council of Shopping Centers, a New York-based trade association for the shopping center industry, forecast sales at major chain stores, excluding Wal-Mart Stores Inc., will rise 1 percent for the combined months of November and December and gain 1.5 percent for the extended November-through-January season.. . . more

The Future Still Trying To Catch Save-A-Lot


Save-A-Lot was a small-format food retailer long before compact store concepts became popular among major chains, but it has been shifting from its original focus on grocery products to feature perishables and develop into more of a full-line supermarket operator for frugal consumers.


And, in that way, it may be the supermarket of the future.. . . more

Monday, September 28, 2009

Paying the price

While other retailers have cut prices in the recession, Abercrombie has clung to an 'aspirational' image. But sales have tumbled. Will A&F come back strong when the economy rebounds?

It's as if the coolest kid in class woke up one morning and found himself among the outcasts.

New Albany-based teen-apparel retailer Abercrombie & Fitch, long a darling of stock analysts and the young and trendy, has suffered a fall from grace in the past few months.. . . more

Crowds flock to H Mart's grand opening

A 51,000-square-foot H Mart supermarket debuted today to large crowds and in-store festivities at its new location on Old Concord Rd. in Burlington. It is the first New England store for the New Jersey-based Korean grocery chain, which has more than 40 locations nationwide.

An earlier Globe story by reporter Erin Ailworth noted that members of the Asian community have been eagerly awaiting the opening of the store, as the local Asian population has grown steadily in recent years.. . . more

Gander Mountain to go private

Sept 28 (Reuters) - Outdoor-products retailer Gander Mountain Co. said it intends to go private, with two of its largest shareholders agreeing to buy out shares held by the remaining shareholders, sending its stock up as much as 37 percent.

Shares of the company touched a high of $5.25, but later shed some of their gains and were trading up $1.33 at $5.15 Monday morning on Nasdaq.. . . more

Finish Line Hopes for Big Rent Cuts

INDIANAPOLIS-With nearly 300 stores coming up for renewal through the end of 2010, the Finish Line is not just looking for rent cuts, but serious reductions from landlords to turn unprofitable stores into the black, executives said at the company’s second-quarter conference call.

About 40% of the company’s units are coming up for a lease renewal or possible kickout, and the company has in some circumstances seen rents decrease from the high teens or low $20s per square foot to high single digits. . . . more

U.S. Retail Industry Numbers: 1,131 Store Closings, 9 Chapter 11 Risks

The sum total of the numbers found in the U.S. retail industry store closings, store openings, job cuts, and Chapter 11 assessments in the second half of September don't add up to recovery yet. But despite the threat of recessionary aftershocks which some predict will hit the retail industry in the next year, many retailers are finding opportunites for expansion in the rubble of the recession's initial quake.

The most recent major additions to the retail store closings list were more sobering than surprising. In any other year, Blockbuster's announcement of 960 store closings and 10,000 retail jobs cuts would have been big news. But after a year's worth of upstaging, Blockbuster's huge jump up the store closing list was almost uneventful. . . . more

You better watch out

Retailers give the Christmas shopping season an even earlier start, elicit few holiday cheers

Clad in cargo pants and flip-flops on a recent day that reached into the upper 70s, Marie Mason browsed the aisles at Kohl’s with a breezy nonchalance. She had no list, no shopping agenda to speak of. Just skimming about for something to strike her fancy.

But when her eye caught the department store’s Christmas display, a sparkling showcase of ornaments, snow globes, and stockings just past the “Indian Summer’’ home decor collection, her light-hearted mood darkened into a grinchlike glower.. . . more

Friday, September 25, 2009

Rite Aid Negotiates Rent Cuts

CAMP HILL, PA-Rite Aid Corp. has obtained rent concessions in 20% of its worst-performing units, executives said at the company’s second quarter conference call.

The company contracted with a national real estate firm to assist with negotiations on 465 underperforming stores, and also is considering closures, said Frank G. Vitrano, senior executive vp and CFO. An in-house team is working on an additional 230 units. The rent reductions will be fully achieved over five to six years. . . . more

Thursday, September 24, 2009

Report: Citigroup may abandon the Hub

Citigroup Inc., which has about 31 bank branches in the Boston area, may abandon or scale back its presence in the area. The Wall Street Journal reported today that Citigroup plans to narrow its retail banking network to six major metropolitan areas where it has a significant presence: New York, Washington, Miami, Chicago, San Francisco, and Los Angeles. Despite opening more than two dozen branches in Massachusetts in 2006 and 2007, Citigroup remains a minor player in the local banking market. Roughly 30 banks ranked higher in Massachusetts deposits as of June 2008, according to the Federal Deposit Insurance Corp.. . . more

With frugal now cool, Dollar Tree pursues growth

SAN FRANCISCO, Sept 23 (Reuters) - Dollar Tree Inc's business is booming amid the downturn, and that momentum will not fade when economic conditions improve as a new frugal mind-set has emerged, making it cool to be thrifty.

That was the message delivered by Dollar Tree executives on Wednesday at the retailer's annual capital markets conference, which was broadcast over the Internet.. . . more

Whole Foods hits South Burlington hurdle

SOUTH BURLINGTON, VT — Concerns over unwieldy traffic management and pedestrian-unfriendly designs will likely delay quick approval of a proposed commercial and residential development anchored by a Whole Foods Market in South Burlington.

Complications and delays posed by a proposed six-lane access road north of Williston Road at Dorset Street for the 50-acre project make it “a non-starter,” Development Review Board Chairman John Dinklage said at a specially scheduled Wednesday night meeting.. . . more

Toys R Us Names Hot Holiday Toys

Toy Store Predicts This Season's Big Sellers

NEW YORK -- The nation's biggest toy-store chain is placing its holiday bets -- and because the stakes are high, the prices are lower.

If Toys R Us' testing is any indication, a $10 toy hamster might be a runaway hit.

Chief Merchandising Officer Karen Dodge said her staff of buyers spends the better part of the year mulling what will
be the top toys for gift-giving. Some they test in small markets and gauge consumers reaction.. . . more

Loss narrows for Rite-Aid

Rite Aid Corp. on Thursday reported a smaller second-quarter loss than a year ago as it cut expenses, but the nation's third-largest drugstore operator lowered its expectations for the fiscal year due to the weak economy and high unemployment.

Rite Aid said economic conditions have hurt its sales of nonpharmacy items like food and cosmetics because customers looked harder for bargains and bought more items that were on sale. It said rivals spent more money on promotions — a move Rite Aid is countering with a new rewards program — and profit margins at pharmacies fell.. . . more

Walgreens Slows Down To Boost Profits

After years of strong growth, Deerfield, Ill.-based drugstore chain Walgreen Co. is slowing down in a bid to boost profits and reinvest its capital into its current store portfolio. In a big shift, new CEO Greg Wasson announced late last year that the company would chop its new store growth from 9 percent to 3 percent by fiscal 2011.

The strategy—more and more popular among retailers as the economy became more of a hindrance to growth—allows the chain to shore up its profits while still adding new locations, says Walgreen spokesperson Vivika Vergara. “With this approach, we will have a positive impact on operating profits and ROIC and still be the fastest-growing retailer in the country,” she says, adding that slowing down the pace of store growth can “lessen the financial drag of a large number of new stores opening each year.” . . . more

Savvy Retailers Snatch Leases Out of Other Chains’ Bankruptcies

As the number of bankruptcies continues to mount, retailers with stable financial footings are making silk purses from other retailer's sows' ears. Paul Kinney, executive director of the National Retail Tenants Association, says more and more retailers are searching through the lease portfolios of their bankrupt competitors and considering buying the unexpired leases. Kinney offers some advice to those retailers looking to turn one chain's troubles into another's growth opportunities.

Site Optimizer: When a retailer enters bankruptcy, whether it’s Chapter 7 or 11, what happens to any unexpired leases? . . . more

Mall retailers suffering larger sales declines than other retailers

Construction spending for shopping centers and shopping malls is down more than 40% from a year ago, about a 10% deeper decline than for other retail facilities. Project starts data also shows a relatively deeper decline for shopping centers and malls than for other retailing.

Overall, little further decline is expected for retail construction in this building recession but shopping centers and malls will lag stand alone retail facilities in the retail construction recovery. The types of stores that operate principally from shopping centers and especially shopping malls are suffering larger sales declines than other retailers.. . . more

Wednesday, September 23, 2009

Consumer spending cuts reach across incomes

NEW YORK — Across all income levels, the recession has led shoppers to reevaluate their spending and adopt cost-saving strategies — and people say those new habits will last even after the economy recovers.

A new survey commissioned by IBM found that 72 percent of respondents have made "significant spending cuts" because of the economy. While the hardest hit are people who earn $45,000 a year or less, as might be expected, 59 percent of those earning $100,000 or more say they've cut back too.

The steps taken to save money most often involve shopping at more stores to get the best deal, by 49 percent of the people surveyed, and switching grocery stores, by 35 percent. . . . more

Hamilton Canal project breaks ground in Oct.

LOWELL -- The first phase of the $800 million Hamilton Canal District revitalization project will break ground next month, Hank Keating, of developer Trinity Financial, told the City Council last night.

The former Appleton Mill buildings are slated to be transformed into 130 artist live/work spaces in the next 18 months. Keating said Trinity expects to close on $40 million in private investor funding next Wednesday.

"We are effectively rebuilding the entire building, with the exception of the facades along the canals," Keating said. "It is very laborious." . . . more

Taubman cuts value on Richmond, VA mall by two-thirds

The owner of Regency Square believes the western Henrico County mall is worth 66 percent less than what the company had carried on its books.

Taubman Centers Inc. wrote down the book value of Regency Square by $55 million to $58 million, the company said yesterday, pegging the new value at about $30 million.. . . more

Taubman to relinquish Pier Shops to lender

When the $200 million Pier Shops at Caesars opened in summer 2006, with stores and restaurants touting signature names such as Louis Vuitton, Gucci, and Buddakan, it was supposed to usher in a new era for Atlantic City as a high-end shopping and dining mecca.

But the city's foray into the luxury retail market - to fortify itself against growing gambling competition - hit a significant snag yesterday when shopping-mall heavyweight Taubman Centers Inc. announced it would no longer provide financial support for the Pier.. . . more

Are Rite Aid, Macy's Bankruptcy-Bound?


NEW YORK -- We all knew times were tough for retail stalwarts Macy's and Rite Aid. But are those companies, in fact, in danger of collapse?

According to a recent study, they are.

Audit Integrity
, an independent financial research and risk modeling firm, identified those two as being among 20 publicly traded companies with the highest probability of filing for bankruptcy in the coming 12 months. . . . more

Kohl's places big bet in opening 35 new stores

When Mervyns called it quits last year, many in the recession-battered retailing world were surprised that Kohl's Corp. rushed to take over dozens of the failed chain's locations.

Both department stores sold a similar mix of mid-priced apparel, accessories and home furnishings. There was a significant overlap in the customers who shopped at Mervyns and Kohl's. The retailers' stores were even alike in size and layout.

On Sept. 30, Kohl's bold move will be put to the test when it opens 35 stores in former Mervyns locations, 30 of them in California. . . .
more

Tuesday, September 22, 2009

Holiday 2009—Second-Worst in 42 Years, Retail Forward Forecasts

COLUMBUS, September 22, 2009 – Retail sales during the fourth quarter holiday period will be on the road to recovery but will still rank as the second-worst holiday in 42 years, Retail Forward forecasts. Retail Forward forecasts flat growth—compared with a 4.5% decline a year ago—for the holiday fourth quarter in the key holiday retail segments combined.

The holiday segments represent all retailing except the auto, food and drug channels. Included are home improvement stores, catalogs, online sales and the key retail sectors—where many holiday gifts are traditionally purchased—known as GAFO (general merchandise stores such as conventional and discount department stores, supercenters, warehouse clubs, apparel stores, furniture, home furnishings, consumer electronics and other specialty stores).. . . more

Outlet malls weather the recession well, attract more chains to invest

The outlet mall industry has not evaded the recession, but bargain hunters trading down for deals have definitely tempered the tough times.

"The past three years have actually been pretty decent," said Linda Humphers, editor of Value Retail News, an outlet mall trade journal published in Clearwater that just put out its state-of-the-industry report. "There's an old saying, 'People look for bargains in good times, but in bad times they need bargains.' ". . . more

Commercial real estate sales plummet in July 2009

If you are looking for a deal on a commercial property and are planning on holding it for a while, it is probably time to move. For the month of July, commercial sales, both prices and volume, dropped significantly from last years numbers.

It looks like the lack of credit combined with a major retrenchment byinvestors is putting the squeeze on the market and creating a vacuum very quickly. . . . more

Main Street Rents Suffer Biggest Fall In 24 Years

More than half the world's most expensive shopping streets have seen prime rents slump in 2009, marking the biggest fall in retail rents in 24 years, data from real estate advisor Cushman & Wakefield showed on Tuesday.

New York's Fifth Avenue remained the world's most expensive street, though prime rents dropped 8.1 percent to $1,700 per square foot per year, Cushman & Wakefield said.. . . more

Lowe's Cautious on Earnings View for Coming Year

Lowe's Co. gave a cautious earnings outlook for next year, though it expects same-store sales to rise after several years of declines.

The announcement, which also included a reiteration of this fiscal year's expectations, though up to $100 million of write-downs could be recorded, came ahead of a presentation for analysts and investors by executives. . . more

Aldi Moving Into New York City, Joining Trader Joe's in Queens

The Trader Joe’s folks won’t discuss it and the Aldi folks will get mad at you if you suggest it, but the two chains, both owned by the ALDI Group in Germany, seem to do a lot of the same things, including opening up in Queens.

The Aldi location that’s been reported as preparing to bow there would represent the chain’s first in New York City.. . . more

Monday, September 21, 2009

Subway to surpass McDonald's in number of restaurants

It's hard to imagine a cultural icon with greater ubiquity than McDonald's. After all, it seems the Golden Arches are present in every town, no matter how small, and at every exit off an interstate highway. But while you'll never have trouble finding a Big Mac, change is on the horizon: The sandwich shop Subway is close to exceeding the number of McDonald's restaurants worldwide.

When exactly will Subway overtake MickyD's? "My guess is it's going to be before the end of the year," says Tony Pace, chief marketing officer of the Subway Franchise Advertising Fund Trust. He says consumers are always surprised to learn that Subway has more than 32,000 outlets. . . . more

Baltimore-area 'distressed’ properties hit $1.8B

Latest research shows much of region's properties face foreclosure, are behind on mortgages

More than $1.8 billion in commercial real estate properties are in “distress” and at risk of foreclosure across Greater Baltimore.

The research firm that crunched the numbers only expects it to get
worse nationwide as a lack of financing forces property owners to shed buildings at bargain-basement prices.. . . more

Dick’s Sporting Goods' Big Goal

Dick Stack’s grandmother told him to “Always follow your dreams” as she gave him the $300 that would get him started in his own business. But even she probably didn’t dream that what he started would grow into one of the largest sporting goods chains in the United States.

With currently some 409 stores across the country, Dick’s Sporting Goods continues to dream big – with a goal of a store count almost double that number to 800 stores. The company had increased its store count by 60 stores in 2007 and by 55 in 2008 (in 2007 the company acquired both specialty chain Golf Galaxy and Chick’s Sporting Goods, the latter of which was this year completely converted to the Dick’s Sporting Goods banner.) Because of the economy, the chain’s rate of growth for 2009 slowed but in no way stopped. . . . more

Boscov says stores are in 'good shape'

Analysts agree the retail chain's emergence from bankruptcy helps greatly, but they say serious challenges remain.

Al Boscov received a great birthday present.

The chairman and CEO of Boscov's turns 80 on Tuesday, and he is already celebrating after the Reading-based chain his father, Solomon, founded nearly a century ago emerged from bankruptcy Thursday.

"We're alive, we're well, we're doing much better than we ever thought we would," Boscov said. . . . more

Target chief stresses values

A business strategy guided by employee development and steady values can allow a company to compete with the world's largest retailer, Chairman, President and Chief Executive Officer of Target Corp. Gregg Steinhafel said during a "Boardroom Insights" lecture Friday in the Mendoza Business College.

In the early 1990s, when Wal-Mart began to implement more aggressive pricing tactics, Target faced a "crossroads" - the retailer could compete with Wal-Mart and Kmart for the same consumer base, or it could develop a new strategy, Steinhafel said. . . . more

Retailers set to leap into seasonal sales, tighten reins on costs

Here comes Santa Claus

Autumn is just arriving and already struggling retailers are gearing up for the holiday shopping season. Analysts say consumers can expect a full onslaught to begin by month’s end.

Shoppers also can expect less merchandise from which to choose and weaker customer service from retailers trying to control costs by keeping leaner inventories and staffing fewer workers.. . . more

Friday, September 18, 2009

Investors Seek $1.4 Billion Under TALF CMBS Program

NEW YORK -(Dow Jones)- Investors applied for $1.4 billion in loans from the Federal Reserve to buy existing commercial mortgage-backed bonds.

One market participant said there has been a flurry of bid lists put out by money managers to match the tremendous demand from investors to buy eligible securities.. . . more

Blockbuster's private debt offering a real blockbuster

Blockbuster Inc. still has a few fans with deep pockets.

The Dallas-based company said Thursday that a private debt offering generated more money than it expected. That gives it room to maneuver out of its declining profile as yesterday's chain of video rental stores and evolve faster into a multi-channel provider of home entertainment.

The largest U.S. movie rental company had sought to borrow $340 million but attracted $675 million, which chief executive Jim Keyes called a "vote of confidence." . . . more

Goodwill adds new stores in weak economy

These days, it's good to be Goodwill.

A new Goodwill store in Des Moines made more than 800 sales within an hour of opening Thursday morning as recession-wary shoppers stocked up on everything from used toddler toys for $2 to women's Levis for $6. . . . more

A healthy Boscov's emerges from bankruptcy

A Delaware judge on Thursday approved Boscov's emergence from Chapter 11 bankruptcy protection.

At a court hearing in Wilmington, Judge Kevin Gross approved the Exeter Township-based department-store chain's plan to resolve all outstanding claims from creditors.. . . more

Retail gets the message

As shoppers cut down, stores go back to basics on products and prices

NEW YORK -- The Great Recession and Americans' retreat into thriftiness are teaching retailers a new lesson: How to survive when consumers are focused on "needs" rather than "wants."

For years, shoppers splurged on everything from $5 lattes to $200 jeans, and retailers responded by opening more stores and offering more choices. Now, beset by high unemployment and limited access to credit, shoppers are limiting most of their purchases only to essentials or the best deals. . . . more

Hotel Chocolat Opens Boston Store

U.K.-based Hotel Chocolat, an upscale European chocolatier that launched a U.S. Website in October 2007, is set to unveil its first U.S. retail store. Hotel Chocolat’s 1,200 sq. ft. retail store on Boston’s Newbury St. in Boston will open by the end of next week.

Why Boston? “It’s a very cosmopolitan city with a fantastic mix of downtown residents, commuting business executives and tourists who know and frequent Newbury Street and would be likely to appreciate a distinctive quality brand,” says Nicki Doggart, the company’s U.S. CEO.. . . more

Herrell’s Harvard Square site closing after 27 years

After more than 27 years, Herrell’s Ice Cream shop in Harvard Square is shutting its doors, just months after another location closed in Allston. Jeffrey Stanett, owner of the Dunster Street spot known for premium sweet treats, said the business had been losing money for years and he could no longer afford to subsidize the store in the face of higher rents, increased franchise fees, and growing competition from rivals like J.P. Licks.

“I feel horrified that I cannot keep the Herrell’s flag flying. I’m devastated,’’ Stanett, 67, said yesterday, leaning back in the corner bench of his Cambridge shop. “It just wasn’t possible anymore.’’. . . more

Thursday, September 17, 2009

Vornado may join plan to inject credit in market

Vornado Realty Trust, the third-largest real estate investment trust by market value, may soon take part in a federal program to pump credit to consumers as well as owners of commercial real estate.

The Federal Reserve enacted its Term Asset-Backed Securities Loan Facility, or TALF program, during the financial markets panic last year. Aimed at restarting the markets for asset-backed securities, this program is separate from the Troubled Asset Relief Program, or TARP, the large government bailout aimed at propping up the nation's banking system. . . . more

Mass. unemployment hits 9.1 percent

The Massachusetts unemployment rate rose to 9.1 percent in August, matching the peak unemployment during the recession in the early 1990s, the Massachusetts Executive Office of Labor and Workforce Development reported this morning.

The Massachusetts unemployment rate in July was 8.8 percent, and earlier this month, the US Labor Department reported that nationwide, the unemployment rate was 9.7 percent, nearly the highest in a generation, up from 9.4 percent the previous month.. . . more

Pier 1 plans to close fewer stores

Pier 1 Imports Inc. reported a smaller second-quarter loss on Thursday, helped by reduced expenses and lower inventories.

The home decor company lost $15.8 million, or 17 cents per share, for the period ended Aug. 29 compared with a loss of $30.2 million, or 34 cents per share, a year earlier.


Pier 1 had 1,061 North American stores at quarter's end. It plans to close about 50 stores during the fiscal year, down from its initial estimate of 125 closings. The company has shuttered 31 stores for the year to date and anticipates closing another 19 locations in January and February.. . . more

Retailers' Credit Outlook Improves

NEW YORK CITY—The pace of negative ratings activity for retailers has slowed as 2009 has progressed, Fitch Ratings notes in a special report: The Retail Register, released last week. Among the retailers whose debt is rated by Fitch, there were no ratings changes during the second quarter; three outlooks were changed in a negative direction and two were changed in a positive direction. During the first quarter, Fitch downgraded two retailers, changed the outlook for one to negative and had no positive actions.

“Despite the challenging sales environment, many companies across Fitch’s US retail coverage have been managing inventory positions well. Gross margins have rebounded for those companies in the discretionary categories that were hit particularly hard during the 2008 holiday period,” according to Fitch’s report.. . . more

Area sees drop in grocery prices

Here’s at least one thing consumers can celebrate about the recession: It has helped drive grocery prices down in the Boston area for the first time in more than six years.

The U.S. Bureau of Labor Statistics reported on Wednesday that the cost of groceries in the Boston area fell by 1.5 percent in August compared to the same time a year ago. That marked the first annual decrease in grocery prices in Greater Boston since April 2003, and the largest decline in food prices in the region since 1992.. . . more

Wednesday, September 16, 2009

BHA says Russia Wharf owners reneged on promise

The Boston Harbor Association alleges that Russia Wharf’s owners, Boston Properties, is going back on its promise to locate free public performance space on the first floor in favor of putting a restaurant there instead, said Vivien Li, executive director of the association. According to the BHA, Boston Properties was granted the right to build a taller building in exchange for public space on the ground floor.

The Boston Harbor Association wrote a letter to the state in April commenting on changes Boston Properties requested. The changes have to be approved by DEP since the agency grant licenses for waterways development under Chapter 91.. . . more

Kendall Square starting to work as a home

Ijad Madisch is thrilled with his new neighborhood. It has restaurants, a riverside walkway, a skating rink, even a farmers market. He enjoys getting together with neighbors to barbecue, watch a movie, or just hang out. But Madisch doesn’t live in the suburbs or even an established residential section of the city; he’s at home in Cambridge’s Kendall Square, best known as one of the nation’s prime biotechnology and research centers.. . . more

Rich Returning to Familiar Spending Habits

BATAVIA, Ohio. (AdAge.com) -- A year after the Lehman Bros. collapse sent financial markets and consumer spending reeling, conspicuous consumption isn't dead after all among the 23.9 million U.S. households with incomes of at least $100,000.

Of course, it's still hurting: The 2009 Ipsos Mendelsohn survey of the affluent, being released a year to the day of the Lehman collapse, finds consumers in that income bracket planning less overseas travel than in 2008 (down 10%); fewer are planning on buying new cars (down 18%); and are less inclined to invest in securities (down 5%).. . . more

Borders names Edwards chief merchandising officer

Borders Group Inc. said Tuesday it appointed Michael J. Edwards executive vice president and chief merchandising officer, effective Sept. 28.

Edwards, 49, will lead teams responsible for buying and merchandising, inventory allocation and control, supply chain, customer relations, marketing and e-commerce, the company said. He will succeed Anne Kubek, 43, who is leaving the company.. . . more

Blockbuster may close as many as 960 US stores

SAN FRANCISCO — Blockbuster Inc. may close as many as 960 stores by the end of next year, shedding more dead weight as the struggling video rental chain tries to reverse its losses and fend off rapidly growing rivals Netflix Inc. and Redbox.

The cuts outlined in documents filed Tuesday would leave Blockbuster with about 20 percent fewer U.S. stores. The previously confidential documents didn't identify the locations of the endangered stores.. . . more

Preparing for Recovery

CHICAGO -- Deal seeking, investing time to hunt for the best price and "search engine" shopping represent characteristics of the post-recession shopper, according to researchers with TNS Retail Forward. "We're looking at a new retail world," said Lois Huff, senior vice president for Retail Forward Inc., Columbus, Ohio, as she addressed the 175 attendees at its 2009 Strategic Outlook conference last week. "We'll be headed back to normal, but it will not be a wholesale return."

At a conference in Chicago, the research and consulting group revealed findings from its latest report on consumer trends, which polled 4,000 shoppers on their attitudes and behaviors as the economy improves.. . . more

Institutional Players Keep Holding Out

NEW YORK CITY-Far from losing interest as the expected flood of distressed opportunities remains a trickle at best, institutional investors are patiently biding their time. They expect that their patience will be rewarded eventually, according to the third-quarter PricewaterhouseCoopers Korpacz Real Estate Investor Survey, released Tuesday.

"Many of these investors had been expecting opportunities to arise before now, and many are surprised that there has been such a lack of forced sales and more motivated sales on the part of distressed lenders and distressed property owners," PwC’s Susan Smith tells GlobeSt.com. At the same time, she notes, they’re seeing fundamentals continue to decline and the economy continuing to struggle. . . . more

Tuesday, September 15, 2009

Looming Defaults Could Jump-Start Distressed Commercial Real Estate Opportunities

So far, the de-leveraging of the commercial real estate industry has disappointed many investors who have been waiting patiently to acquire quality, stable assets at distressed pricing.

While some investors are looking to the $153 billion of CMBS loans due in 2012 to spur buying opportunities, commercial banks account for a much greater percentage of the total looming debt and could provide distressed sales sooner than 2012.. . . more

Developer Remains Optimistic About Cheshire, CT Project

With the economy still in a precarious spot, the proposed north end development continues to remain on hold, yet tenants are still being recruited for the large-scale project.

Multiple delays have slowed down the project, but not the optimism of W/S Development, the Chestnut Hill, Mass.-based developer handling the project. According to Project Manager Jeff Curley, “We’re starting to see things move a little bit.”

“Tenants are coming back to the table and are interested in doing deals,” Curley said. “I hope that momentum continues and starts more conversations about Cheshire.”. . . more

Toys R Us will open 350 'Holiday Express' pop-up shops

NEW YORK - Toys R Us plans to open nearly 350 pop-up stores in malls and inside Babies R Us stores by early October to drive sales during the crucial holiday season.

It is the first time the company has opened a significant amount of such stores for its busiest time of year. About 80 of the stores will be in shopping malls and more than 260 will be shops within Babies R Us locations.

Toys R Us CEO Jerry Storch said store closings among other retailers and the weak economy helped the company get some good deals on the temporary leases, but location was the primary factor in selecting space. . . . more

Walmart's Latest Move to Crush the Competition

Walmart loves to shock and awe. City-size stores, absurdly low prices ($8 jeans!) and everything from milk to Matchbox toys on its shelves. And with the recession forcing legions of stores into bankruptcy, the world's largest retailer now apparently wants to take out the remaining survivors.

Thus, the company is in the beginning stages of a massive store and strategy remodeling effort, which it has dubbed Project Impact. . . . more