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Aug 6, 2009
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Check Out Line: July pain for retailers

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Check out the continuing struggle in the retail world.U.S. retailers reported disappointing sales declines for July, suggesting shoppers are still searching for bargains and basics in the downturn.    July’s results mark the 11th consecutive month of falling sales at stores open for at least one year, a measure known as same-store sales.Rising unemployment, cool weather and a lack of tax-free holidays like those held last year disheartened shoppers, who bought just daily essentials last month.Still, some companies like Gap and Macy’s managed to forecast better-than-expected earnings for the quarter, as they managed their expenses better.But retailers’ true test?  September, according to one analyst.”The true month to watch will be September because it will mark the first month that started the streak of negative same-store sales in 2008,” said Jharonne Martis, senior research analyst with Thomson Reuters.Also in the basket:Jeweler Finlay files for bankruptcy, to liquidateWendy’s/Arby’s post profit, sees better July trendsMacy’s sees second-quarter profit above Street, shares riseWhat’s in a wool? The secret of Loro Piana – (WSJ, subscription required)(Reuters photo)

Aug 3, 2009
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Check Out Line: Want growth? Buy up.

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Check Out retail strategy for growth.A list of the top 10 companies from a “Hot 100 Retailers list” compiled by Planet Retail for the National Retail Federation showed that while a few companies grew organically, most grew as a result of a merger or acquisition.Topping the list of companies that grew through a deal was DineEquity,  which bought Applebee’s last year. Others in that category include Susser Holdings after its purchase of Town & Country Food Stores and Village Market grocery stores, as well as the combination of fast food chains Wendy’s and Arby’s into Wendy’s/Arby’s.Of the companies that grew on their own, Los Angeles-based American Apparel was “tops,” with revenue growth of 57.6 percent, the list showed.Another not-so-surprising name in the top 10 was Apple, known for its iPod, Mac computer and one of the latest favorites in the market — the iPhone. “Still opening new locations, Apple also uses its stores as a way to build brand awareness,” according to the survey.Some retailers actually managed to maintain growth, averaging a 10.8 percent compound annual growth rate, the list showed.  Those on the growth chart include GameStop, Urban Outfitters, Best Buy and J. Crew to name a few.The Hot 100 Retailers study is the annual ranking of the fastest-growing publicly traded retail chains, and rankings are decided by increases in year-over-year revenues between 2007 and 2008.Here’s the list of the top 10 companies in the Hot 100 Retailers List:

1.       DineEquity

2.       American Apparel

3.       Susser Holdings

4.       A&P

5.       Apple Stores/iTunes

6.       Wendy’s/Arby’s Group

7.       O’Reilly Automotive

8.       Finlay Enterprises

9.       The Pantry

10.     Amazon.com

 

Also in the basket:

 

Molson Coors profit jumps more than expected

 

Tyson profit led by chicken, shares higher

 

Equities too hot for their own good?

 

(Photo/Reuters)

Jul 22, 2009
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Check Out Line: Penney pinching in Manhattan

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Check Out J.C. Penney’s new store in Manhattan.On July 31, J.C. Penney will open its first Manhattan store in the midtown area, promising to deliver trendy yet affordable items for New York’s notoriously savvy shoppers.Penney is taking direct aim at rival Macy’s, whose flagship Herald Square store is a block away.In fact, the department store chain, which signed the lease for the space in December 2007 just as the U.S. slipped into recession, hopes the store will give its sales a much-needed boost and help it snag some of the city’s higher-income shoppers, just when they may need it most. ”I think they will be glad to save some money too, don’t you, especially if they are bankers?” Penney District Manager Pete Sadler said during a walk-through of the store ahead of its opening later this month.The store, located inside the Manhattan Mall at 34th Street, occupies a space that once included a food court.The 153,000 square foot store is smaller than some other J.C. Penney stores and stocks merchandise ranging from women’s clothing and accessories to home goods. It has a Sephora makeup boutique, and fine jewelry store and will even deliver to people’s homes for a $15 charge.Texas-based Penney is using the store opening to launch two exclusive brands — Joe by designer Joseph Abboud and Cindy Crawford Style home goods — as it tries to draw shoppers with the promise of affordable but special merchandise.  But even before the launch, the Joseph Abboud line was already on sale. Sadler was unsure why, but speculated that it could be in keeping with a storewide discount drive.An opening event on July 31 will feature an appearance by Mayor Michael Bloomberg, fashion events and prize giveaways, Sadler said.But for consumers who are not penny pinching that much, Nordstrom is planning to open its first Nordstrom Rack store in Manhattan’s Union Square next year.Also in the basket:Pepsico posts stronger-than-expected profitWhirlpool beats views; cost cuts offset weak sales Altria profit rises; beats Street viewStarbucks brews up profit beatP&G drug unit closer to sale – (WSJ) (Photos/Reuters)

Jul 6, 2009
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Check Out Line: Private equity targets Pet Valu

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Check Out this deal in pet land.Canada-based Pet Valu and Atlanta-based private equity firm Roark Capital Group have signed an agreement for certain Roark affiliates to buy the Markham, Ontario-based specialty pet supplies retailer for about $143.7 million.Pet Valu’s board is for the deal and will recommend to shareholders that they vote in favor of the transaction, the company said.  Geoffrey Holt, the founder and CEO of Pet Valu, plans to retire after the transaction is completed, according to the company’s statement.Pet Valu will be Roark’s 15th franchise investment, said Neal Aronson, a Roark managing partner.The Canadian chain has 295 stores in Ontario and Manitoba.  It also has 61 in Delaware, Maryland, New Jersey and Pennsylvania.Also in the basket:LCD shares: More gains or is the boom over?S. Korea to spend $85 bln on green industriesRetailers ax non-core brands to play safe in slumpMedium is the message: Home shopping hits its stride (WWD: subscription reqd)(Photo/Reuters)

Jun 29, 2009
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Check Out Line: Delaware vs. Walgreen

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Check Out the battle over Medicaid money.Pharmacy chain Walgreen Co and Delaware are playing hardball in a battle over cuts in prescription drug reimbursements — a model other cash-strapped states could follow as they try to compensate for budget shortfalls.Delaware plans to reduce the amount it reimburses pharmacies for filling Medicaid prescriptions though by half as much as it previously intended.Medicaid provides health insurance to low income people and is jointly funded by states and the federal government.Walgreen, Delaware’s largest pharmacy with 62 stores, says it would lose money on most branded drug prescriptions it fills for Medicaid patients under the state’s new plan. It will now stop taking Medicaid prescriptions as of July 6. So far, the 100 or so other pharmacies in Delaware are not taking Walgreen’s cue.Also in the basket:Japan’s top retailers tap into near-beer marketChina shoe maker denies talks with Pierre CardinDemand soars for Jackson music after singer’s deathRetailers cut back on variety – (WSJ - subscription required)(Photo/Reuters)

Jun 25, 2009
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Check Out Line: Stuck with the bling…

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Check Out who’s holding the most and least inventory these days.Jewelry retailers are now holding their merchandise the longest among retail peers, according to a study by financial analysis firm Sageworks. In the last 12 months, jewelry retailers have held inventory for 102 days — 19 days longer than they did in 2006 and the same as in 2008. The sector has been among the top sufferers in the recession, with consumers shying away from jewelry to save money, while retailers resort to discounts and promotions to sell off merchandise.”The longer it takes for inventory to turn, the more serious the implications are on cash flow and profits,” the study noted. Lawn and garden equipment stores took the No. 2  spot, holding inventory for 14 days more while beer, wine and liquor stores  and building materials retailers were third and fourth on the list, holding merchandise for 12 and eight days more than they did in 2006 respectively.The surprise factor? Auto parts and tire stores came in last in the list holding their merchandise for four fewer days than in 2006. Why, you ask? “Likely because people are repairing what they already own as opposed to buying new,” the study said. That’s more bad news for car sellers.Also in the basket:Nike orders disappoint, shares fallH&M profit beats forecast Downwardly mobile: Living on less in the city (WSJ - susbscription needed)(Photo/Reuters)

Jun 24, 2009
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Check Out Supervalu’s shopper woes

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Check Out Supervalu’s troubles from consumer thrift.The third-largest  U.S. supermarket operator, with about 2,500 stores, said that its earnings in the first quarter, which ended on June 20, were hurt by a “tougher than expected business environment.” Its results would be much below analysts’ expectations, the grocer said.”Since providing guidance on our fourth quarter earnings call, consumers have become more value focused and cautious in their spending, which has pressured sales and margins greater than anticipated,” Supervalu’s CEO Craig Herkert said in a statement.The pressure on Supervalu underscores how consumers have become highly conscious of how they spend their money in the long recession — shopping mainly for essential items, and seeking low prices even on those products.Herkert recently took over the top job at Supervalu, after having worked as the president and CEO for discount giant Wal-Mart’s America’s region, which includes Canada, Puerto Rico and parts of South and Central America.Also in the basket:U.S. recession to bottom out this year: OECDMonsanto earnings fall 14 percentRite Aid posts narrower loss, lower revenuePepsi and Calbee form food deal in Japan(Photo/Reuters)

Jun 22, 2009
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Check Out Line: Celebrating July 4 in the recession

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Check Out consumers’ plans for Independence Day.According to a poll by the National Retail Federation, 62.6 percent of U.S. consumers – or 144 million people – plan to host or go to some kind of July 4 celebration this year. That compares with 61.2 percent or 139 million people in 2008.Also, 2.5 percent more people will attend local fireworks or a community bash this year, while some others will attend a parade or use the chance to take a vacation, the study showed.The event also gives retailers a chance to add to their sales at a time when shoppers are spending  close to need, and looking for deals.  Consumers’ desire to stay close to home and attend local events comes amid a global economic slump that has forced them to hunker down and look for new, cheaper ways to entertain themselves. For instance, 44.5 percent of Americans said they would rejig their plans for Independence Day due to gas prices, which have ticked up recently.”With gas prices on the rise again, some Americans will opt to spend the weekend close to home, taking advantage of neighborhood gatherings and local celebrations,” said Phil Rist, executive vice president of strategic Initiatives at BIGresearch, which conducted the survey for NRF.The survey was conducted June 2-9 and included 8,635 consumers.Also in the basket:Walgreen profit slipsChina’s retailers show new conservatismSuper cars, premium beer help rich Indians beat blues(Photo/Reuters)

Jun 15, 2009
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Check Out Line: Dean Foods to milk global soy market

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Check Out Dean Foods inking a deal with Vandemoortele N.V.The largest U.S. dairy company agreed to buy Alpro, the soy products unit of the Belgian company for 325 million eurors, or roughly $450 million, as it tries to venture outside the United States in the soy products market.Dean, which already has the Silk soymilk and Horizon organic milk brands, is expecting the deal to add modestly to its 2009 earnings. Through the deal, it will have control over Alpro’s two brands — a namesake one for retail and Provamel, for the specialized health category.The acquisition “establishes Dean Foods as a clear global leader in the attractive soy beverages and related products category, with over $1 billion in combined annual retail sales,” said Dean Foods CEO Gregg Engles.Also in the basket:Heineken to close two Czech breweriesCrisis gives high-end retail industry a makeoverCutting back? So are the bigwigs Calvin Klein expands intimates – WWD (subscription required)(Photo/Reuters)

May 27, 2009
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Check Out Line: Good news from apparel companies

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Check Out better-than-expected results at apparel retailers.

Chico’s FAS, American Eagle Outfitters and Polo Ralph Lauren posted quarterly results that were better than Wall Street’s expectations, as they kept a close watch on expenses and inventories.

Investors’ spirits lifted as the results came as a spot of good news for a sector hit hard in the recession, which has gobbled up demand for anything other than essential items such as food.