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HenryTo
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 Posted: Wed Oct 31, 2007 4:58 pm Post subject: Retail Industry Trends |
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Retailiers already bracing for the worst. The $64 billion question is, as always, how bad will this get and how much of this has already been factored into retail stocks?
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Retail Holiday Season May Be Modest
Tuesday October 30, 5:15 pm ET
By Betsy Vereckey, AP Business Writer
Sluggish US Economy May Weigh on Holiday Sales for National Retailers
NEW YORK (AP) -- U.S. retailers are bracing for a difficult holiday season, some industry watchers say, as higher gas prices and a sluggish housing market are expected to continue crimping consumer spending.
At a conference on Tuesday hosted by the Retail Marketing Society, a membership-based organization focused on the retail industry, some industry executives said holiday sales may be sluggish.
"This holiday season will be somewhat Grinch-like," said Carl Steidtmann, chief economist at Deloitte Research.
Steidtmann said retailers are preparing for the worst, especially given tightening credit and problems in the housing market. Steidtmann said it will be at least 18 months to two years before the housing market bottoms.
Merrill Lynch analyst Jaime Sheinheit said higher energy costs will weigh on consumer spending, noting that retailers have had trouble getting customers in the door. However, it's hard to tell whether the sluggish traffic is related to softening consumer spending or warm weather, Sheinheit said.
"Cold weather may spark shopping," she said.
In the luxury sector, Sheinheit said handbag maker Coach Inc. has warned of sluggish traffic in its U.S. stores. The company recently issued a fiscal second-quarter same-store sales outlook it called "conservative." Same-store sales are sales at stores open at least a year, and the industry metric is considered a key barometer of a retailer's health.
David Wolfe, creative director at Doneger Group, a buying office, said Coach has reached its saturation point with aspirational customers, who may not have the money to spend on these handbags but still want quality at a price.
Meanwhile, wealthy customers may help other luxury retailers this season, like Tiffany & Co., as spending patterns among the affluent tend to stay the same, regardless of changes in the economy.
Sectors that might fare better include teen retailers, Sheinheit said, noting that the income of their main customer, teenagers, usually stays the same. Companies in this sector include American Eagle Outfitters Inc. and Abercrombie & Fitch Co.
One company that may emerge stronger, Sheinheit said, is AnnTaylor Stores Corp., which has leaner inventory and a new product assortment at its lower-priced Loft division. In August, the company said it increased markdowns to reduce inventory heading into fall seasons at both its Ann Taylor and Loft stores.
"There is a lot of opportunity for Loft to improve margins this holiday season," Sheinheit said. "As always, what it comes down to is having the right product."
Last edited by HenryTo on Wed Jul 16, 2008 8:40 am; edited 2 times in total |
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rffrydr
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| Posted: Thu Jan 08, 2009 10:57 am Post subject: |
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When it's all falling down you DON"T buy the best....nor is the corollary true. 
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HenryTo
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| Posted: Thu Jan 08, 2009 7:43 am Post subject: |
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Retailers hugely disappoint. Wal-Mart - which many money managers have been loading up on last year - now down by more than 8% in before hours trading:
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Retailers report dismal December sales, confirming that holiday season was weakest in decades.
Anne D'Innocenzio, AP Retail Writer
Thursday January 8, 2009, 8:27 am EST
NEW YORK (AP) -- Retailers reported dismal sales figures for December on Thursday as even Wal-Mart Stores Inc., one of the bright spots in the industry, finally buckled under the pressures of the deteriorating economy.
As merchants reported their sales figures, confirming fears that the holiday season was the weakest in four decades, the malaise cut through practically all areas from kitchen gadget stores to apparel retailers.
Among the many that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, and Limited Brands Inc. But the biggest surprise came from Wal-Mart, the world's largest retailer, which posted sales below Wall Street estimates and cut its fourth-quarter earnings outlook.
"This suggests that the lower income group is feeling the pinch more than we thought and this is clearly reflected in the lower-than-expected numbers at Wal-Mart," said Ken Perkins, president of research company RetailMetrics LLC. "I think it says the economy is in more dire straits than we thought."
Wal-Mart said that same-store sales, or sales at stores opened at least a year, rose 1.7 percent. Including fuel sales, that gain was 1.2 percent. Analysts surveyed by Thomson Reuters had expected a 2.8 percent increase.
"The current economy remains challenging for all businesses, and retailers have already seen customers pull back on discretionary spending," Wal-Mart's Chief Financial Officer Tom Schoewe said in a statement. "Consumers are very focused on value and necessities."
Given the disappointing sales and higher-than-anticipated expenses, the discounter said it now expects to earn 91 cents to 94 cents per share in the fourth quarter from continuing operations. That's down from its previous projected range of $1.03 per share to $1.07 per share. Analysts surveyed by Thomson Reuters expected $1.06 per share.
Meanwhile, Costco Wholesale Corp. reported a 4 percent decline in same-store sales, but excluding the impact of lower gas prices and currency fluctuations, it actually posted a 4 percent gain. Analysts surveyed by Thomson Reuters predicted a 3.7 percent decline.
Sears Holdings said its December same-store sales dropped 7.3 percent, weighed down by a 12.8 percent drop at domestic Sears stores. The company, whose brands include Kenmore and Craftsman, said Kmart same-store sales fell 1.1 percent.
Limited Brands Inc. posted a 10 percent drop in same-store sales, larger than the 7.8 percent decline analysts predicted. Based on disappointing sales, Limited also lowered its fourth-quarter earnings outlook. |
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HenryTo
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| Posted: Wed Jan 07, 2009 12:02 am Post subject: |
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You know it's coming - retailers are now asking (and getting) better terms on their leases:
http://online.wsj.com/article/SB123129342324759689.html?mod=testMod
| Quote: | Retailers, having just struggled through one of the worst holiday shopping seasons in recent memory, are now trying to share the pain with their landlords.
Many stores are pushing to negotiate lower rents, warning that they mightn't be able to make it unless their costs are cut. Those in stronger positions are finding that the market's turmoil has provided them clout to haggle for lower lease rates.
"It's the best of times [because] landlords are trying to hold on to people like us," Gap Inc. Chief Executive Glenn Murphy told investors on a recent conference call. |
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HenryTo
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rffrydr
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| Posted: Tue Jan 06, 2009 12:20 pm Post subject: |
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This bit from across the pond is typical of how Retail is being received post Christmas. In this case NEXT
| Quote: | | ....While today's announcement does not radically mitigate the refinancing issue looming by 2011, it is certainly a much better outcome than might have been feared, i.e. profit downgrades and worries over covenant breaches, etc, hence we would expect the shares to trade higher even after yesterday’s rally.... |
It's all about the debt--or, rather covenants. Structured Finance take away your mangled maw!
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rffrydr
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| Posted: Sun Jan 04, 2009 1:49 pm Post subject: |
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Where have the merchants gone? Some say retail died years ago--when it became Wall St. The renuciation on returns marked the capitulation.
http://media.bloomberg.com/bb/avfile/News/Surveillance/vsi8B6vzhOqY.mp3
Look for service to make a comeback. Interesting that the consumer was broke last year when it was shown she couldn' t pickup the 70% off stuff.
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rffrydr
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| Posted: Fri Jan 02, 2009 7:48 pm Post subject: |
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The Plastic connection:
| Quote: | E-commerce
Published: January 2 2009 20:21 | Last updated: January 2 2009 20:21
That furious clicking at the next desk in recent weeks may have been your neighbour finishing his holiday shopping. Even so, online retailing has proved surprisingly susceptible to the first big economic downturn of the digital age. In the US, the most mature market, Comscore’s forecast that e-commerce would see zero growth, year-on-year, this holiday season initially seemed over-gloomy. It now says online spending fell 3 per cent between November 1 and December 23 – a big reverse from the 20-25 per cent annual growth of previous seasons.
In the UK, Europe’s biggest e-commerce market, IMRG Capgemini found online sales increased 13 per cent year-on-year in October, and 16 per cent in November, with December expected to be similar. But just months ago growth was running at 35-50 per cent. Still, with high-street retailing performing far worse, e-commerce is taking a bigger slice of the pie.
The factors driving online spending growth for a decade – increasing internet use and an expanding online retail offer – might have been expected to make it more resilient. Instead, the headwinds have proved too strong. Perhaps the biggest is that online shopping is dominated by discretionary purchases – exactly what consumers have been cutting back on. Similarly, online payment is usually by credit card, and shoppers are frantically reducing such debts. Thus while the number of people shopping online has increased, they are spending less. Comscore says sales figures have also bounced around more than usual, zooming up whenever retailers offered discounts or free shipping.
Amazon and Ebay still win the war of the clicks. But many of the largest internet retailers are now online arms of bricks-and-mortar groups – Wal-Mart, Target and Best Buy in the US; Argos, Tesco and Marks and Spencer in the UK. Online sales growth may have slowed but, more than ever, big retailers need to be there. |
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rffrydr
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HenryTo
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| Posted: Sun Dec 28, 2008 12:29 am Post subject: |
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Retailers - as well as owners of retail real estate - bracing for some significant changes over the next 6 to 12 months:
http://online.wsj.com/article/SB123033610871336369.html?mod=testMod
| Quote: | This year's retailing slide -- when stores were forced to cut prices to convince wary consumers to spend -- promises to have a lasting impact on the way the retail industry operates. Many retailers are rethinking how they do business, as others prepared for a large number of bankruptcies and store closures.
The first retail casualty of the weak holiday season could be Goody's Family Clothing Inc., a Southeast apparel retailer. The 287-store chain emerged from bankruptcy court in October but its holiday sales were below plan and financing it was counting on didn't materialize, according to a person familiar with the situation. The retailer is negotiating with lenders to avoid potential liquidation, say two people familiar with the matter.
A representative for Goody's was unavailable to comment. But in October, Chief Executive Paul White was upbeat about its prospects, saying "we are energized by the opportunity in front of us and are focused on continuing to fulfill the Goody's mission."
Other retailers are saying they will trim inventory and reduce the number of suppliers. That, in turn, will cause a ripple effect, prompting a number of weaker manufacturers, small brands and underfunded fashion labels to fail. New retail formats and concepts stores are likely to be curtailed in the coming year. And luxury-goods makers already are working to cut the long lead times between orders and store delivery as a way to reduce risk.
"We will have a lot fewer stores by the middle of 2009," says Nancy Koehn, professor of business administration at Harvard Business School. "It's happening very, very quickly because of the financial crisis and the recession."
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Analysts estimate that from about 10% to 26% of all retailers are in financial distress and in danger of filing for Chapter 11. AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010. In the previous two years, the firm had estimated 4% to 7% of retailers then tracked were at a high risk for filing. Retailers are particularly vulnerable to a recession because of their high fixed costs.
The most vulnerable retailers are those with debt coming due, says AlixPartners Chief Executive Fred Crawford. "There are companies in virtually every retail sector in distress, whether it's a jeweler or a high-end luxury store. But if they have a lot of debt and it's coming due soon, that's probably a better predictor that they may need to file," said Mr. Crawford.
Several turnaround experts said retail lenders including General Electric Co.'s GE Capital, CIT Group and Wachovia Corp. are dialing back lending to retailers.
CIT, which lends money against vendors' receivables, recently withdrew coverage for orders to Bon-Ton Stores Inc., of York, Pa. Bon-Ton spokeswoman Mary Kerr said, "We are in the process of contacting those affected vendors with whom we have good relationships in order to work directly with them." A CIT spokesman declined to comment.
Recent changes in the bankruptcy code make it more difficult for retailers to emerge from bankruptcy reorganization. The changes, passed in 2005, shortened to 210 days the time retailers have to determine whether or not to assume real-estate leases, limiting the amount of time they have to complete their restructuring. Lawrence Gottlieb, a New York bankruptcy attorney at Cooley Godward Kronish LLP says that only two retailers have successfully emerged from bankruptcy proceedings since the amendments to the code were passed.
In turn, because the debtor-in-possession market for financing bankrupt companies remains squeezed, many bankrupt retailers could quickly turn into liquidations -- as was the case earlier this year with chains Linens 'N Things, Mervyn's and Steve and Barry's.
Store Closings: The International Council of Shopping Centers estimates that 148,000 stores will close in 2008, the most since 2001, and it predicts that there will be an additional 73,000 closures in the first half of 2009.
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Despite the closures, the U.S. is still likely to see a net gain in square footage mostly due to projects under way before the credit crisis hit. Barclays Capital analyst Jeff Black says growth in retail square footage will slow to 5% in 2009 from 8% in 2008. Some retail sectors likely to see growth include specialty teen stores while cutbacks are coming in the women's apparel sector.
Already a number of specialty retailers have said they are closing stores, including AnnTaylor Stores Corp., Talbots Inc. and Charming Shoppes Inc. Those that aren't closing stores will likely curtail expansion to conserve capital. J. Crew Group Chief Executive Mickey Drexler said that the company is "revisiting all new store openings" and plans to cut square footage growth in half in 2009, excluding a new concept. Liz Claiborne Inc. is postponing store expansion until the economy improves.
Less Selection: Several department stores, including Saks Inc. and Neiman Marcus Group Inc., already have announced that they would narrow the range of merchandise they carry and drop vendors that don't perform. The cutbacks will ripple through the apparel industry, hurting the companies that are most exposed to the wholesale channel. Companies such as Jones Apparel Group Inc., for example, generate 50% of sales from department stores. Other manufactures, such as VF Corp., are less vulnerable because they have rolled out their own retail stores and realize only 10% of sales from department stores, according to J.P. Morgan Chase & Co. |
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HenryTo
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| Posted: Fri Dec 26, 2008 10:59 am Post subject: |
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SpendingPulse's summary for the 2008 Holiday season:
http://www.msnbc.msn.com/id/28390232/
| Quote: | | While total retail sales are down in the 5.5% to 8% range for November and December, there were a few signs of relative strength, according to Michael McNamara, Vice President of Research and Analysis for SpendingPulse. Sectors that sell food, such as grocery and general merchandise stores and some sectors of the restaurant sector helped keep total declines in the single digit range; eCommerce sales remain comparatively healthy; moreover the 40% drop in the price of gasoline compared to December 2007 accounts for almost half of the decline. Excluding gasoline, total sales were down 2% to 4% this holiday season compared to the same period in 2007. Still, Mr. McNamara noted, "A difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades." |
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HenryTo
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| Posted: Fri Dec 26, 2008 12:59 am Post subject: |
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| Not sure about the others - but I'll probably go check out the sale at Barnes & Nobles tomorrow - but not until after I check out the prices on Amazon.com. As far as I know, this is their most widely-publicized post-Christmas sale ever. |
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rffrydr
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| Posted: Thu Dec 25, 2008 4:49 pm Post subject: |
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The "new" Black Friday":
You've endured Black Friday, Cyber Monday, weeks of gift wrapping, hitting stores, and checking off lists. But just when you thought it was over, retailers across the country are offering post-Christmas, year-end, and clearance sales in hopes of luring shoppers back into stores.
Make way for the new Black Friday, the day after Christmas. For many retailers, the holiday shopping season is expected to be a bust, courtesy of the recession, overall economic uncertainty, and poor weather. So consumers can expect rock-bottom prices and promotions at several retailers, which plan to sell any overstock in stores, stockrooms, and warehouses, make way for spring inventory, and boost their bottom lines.
Here's where you can score some impressive post-holiday deals:
J.C. Penney announced it will open at 5:30 a.m. the day after Christmas--the earliest opening in the store's history--and offer 100 door-buster specials, including 50 to 60 percent off private-label clothing for men and women, as well as 75 percent off Christmas decorations. The general merchandiser is offering a free wake-up call so that shoppers don't miss the sale.
Target is offering clearance products and promotions of up to 75 percent off on select clothing, furniture, electronics, holiday décor, and more. Consumers can also save up to 50 to 70 percent on bath and bedding.
The savings and values at Toys "R" Us stores will stretch into the New Year. Some of the items that will be available from Dec. 26, 2008, through Jan. 3, 2009, include 75 percent off a 1.60 Scale X-Trek Pro 15' Race Track Set; 60 percent off certain table games; 50 percent off some Hannah Montana Dolls; and 20 percent off all iPod cases and headphones.
You can get a jump on your holiday decorating for next year. Home improvement retailer Home Depot will be offering 50 percent off of all holiday décor beginning December 26.
Barnes & Noble, the nation's largest book retailer, is offering thousands of books at 50 to 90 percent off for its "After Holiday Warehouse Clearance Sale." Discounts are also available on music, DVDs, toys, video games, journals, calendars, and albums.
Starting this Sunday, Wal-Mart, the largest retailer in the United States, will introduce additional savings, with new values on select electronic games, $60 savings on select HDTVs, and reduced prices on home and office needs.
KB Toys announced Monday that it will be closing its doors for good and has launched a liquidation sale at all 461 of its KB Toys, KB Toy Outlet, KB Toys Holiday, and KB Toy Works stores. Sales at KB Toys stores will begin at 40 percent off regular prices.
The bath products retailer Bath and Body Works is having an after-holiday sale of up to 50 percent off on products including body lotions, shower gels, hand creams, and fragrances.
Circuit City will see the holiday shopping season extend into January. The electronics retailer will be offering big discounts on televisions, digital cameras, home theater systems, computers, computer accessories, GPS, music, movies, and games, according to company spokesperson Jim Babb.
Kohl's is having a huge clearance of 60 to 80 percent off on men's, women's, and children's clothing.
Even luxury retailer Neiman Marcus will be offering steep discounts with its After Christmas Sale. Shoppers can find sales on women's, men's, and children's designer apparel, as well as designer shoes, handbags, and jewelry. Neiman Marcus will be offering an extra 40 percent off already-reduced prices.
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rffrydr
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| Posted: Thu Dec 25, 2008 8:56 am Post subject: |
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From above:
| Quote: | "Cold weather may spark shopping," she said.
In the luxury sector, Sheinheit said handbag maker Coach Inc. has warned of sluggish traffic in its U.S. stores. The company recently issued a fiscal second-quarter same-store sales outlook it called "conservative." Same-store sales are sales at stores open at least a year, and the industry metric is considered a key barometer of a retailer's health.
David Wolfe, creative director at Doneger Group, a buying office, said Coach has reached its saturation point with aspirational customers, who may not have the money to spend on these handbags but still want quality at a price.
Meanwhile, wealthy customers may help other luxury retailers this season, like Tiffany & Co., as spending patterns among the affluent tend to stay the same, regardless of changes in the economy. |
The good news (besides the cold)? That's Oct '07. It's later than we think.
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HenryTo
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| Posted: Wed Dec 24, 2008 12:39 pm Post subject: |
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Definitely a sign of consumer panic as many are avoiding buying gift cards this year on concerns of further bankruptcy filings in the retail sector. I'd never buy a Circuit City gift card either, but stores such as Gap, Best Buy, etc, are still solid:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBjVkPXJkvGk&refer=home
I am off to go take a last minute "peek" at one of the local malls here in West Houston. Have a great Christmas, everyone. |
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