Check out American girls continuing to shun Barbie,  despite Mattel’s attempts to revitalize the once-dominant brand with sleek, new products.

Since coming to market in 1959, Barbie has played a key role in Mattel’s profits.  But that may be changing as Mattel posted a profit despite another decline in U.S. sales of the flagship line.

“Innovation has been lacking, in our view, on the Barbie line,”  Sterne Agee analyst Margaret Whitfield said in a Jan. 25 research note.

Last year Mattel rolled out new Barbie products such as Chat Divas, — a doll able to move and lip sync to music played on one of Apple Inc’s iPod music players  — and the Rainbow Adventure Elina Doll and DVD game.  The doll functions as an interactive controller for the game.

Fourth-quarter Barbie sales fell 12 percent in the U.S.  but rose 4 percent internationally, as the weak U.S. dollar boosted the value of overseas sales.

“We need to do some work. Both our spring and fall fantasy lines didn’t meet expectations,” said Chief Executive Robert Eckert, adding that Barbie’s full-year results were “disappointing.”

Also in the basket:

P&G profit rises, to carve off Folgers

J.C. Penney may slow new store openings

Nike says Umbro accepts its acquisition offer

One research group says department stores and other retailers could be missing out on an opportunity to gain sales in a part of the home that doesn’t seem to be affected by the current U.S. housing slowdown: the garage.

NPD Group said on Wednesday that garage storage products are bought mostly by high-income men. For the year ended in October, men accounted for 64 percent of dollars spent in this segment, it added.

The garage spending isn’t just confined to products like bicycle racks and tool chests, but now includes refrigerators and flat-screen TVs, NPD said. Appliance maker Whirlpool, for instance, sells cabinets, work surfaces and refrigerators to meet lifestyle needs under its Gladiator GarageWorks brand (products shown in picture).

“Garage storage is somewhat immune to the current housing market downturn,” Mark Delaney, director of NPD Group’s home division, said in a statement.

NPD found that 47 percent of total dollars spent in the garage and storage sector went to home-center chains in the year ending in October, while 32 percent went to mass merchants and 5 percent to department stores.

Gladiator GarageWorks says that garage organization is an industry valued at $1 billion. In a recent Gladiator survey, only 40 percent of garage owners listed parking their car as the garage’s primary use.

“Retailers looking to attract a higher-income consumer should consider expanding their assortment in this area,” NPD’s Delaney said.

Check out higher commodity costs taking a big bite out of corporate profits.

On Wednesday, Kraft Foods posted a lower quarterly profit after higher costs for dairy products and other ingredients offset an 11 percent increase in sales.

While the sales jump showed Kraft is having some success with new products like Oscar Mayer packaged sandwich kits and Crystal Light drink powder sticks, the food maker could not overcome higher costs for ingredients and energy.

Meanwhile, Kellogg’s  fourth-quarter profit fell after the world’s largest breakfast cereal maker was hurt by rising costs for wheat and other commodities. Although Kellogg,  the maker of Frosted Flakes cereal, Eggo waffles and Keebler cookies, has increased prices and looked for ways to cut costs to try to offset higher commodity costs, it continues to be hit by soaring costs for ingredients and energy.

But for 2008, Kellogg stood by its earnings forecast of $2.92 to $2.97 a share. Analysts, on average, had forecast $3.01 a share. 

Also in the basket:

Wal-Mart to revamp its struggling apparel unit

PepsiAmericas Q4 profit up, sees FY08 below Street view
(Photo: Reuters)

And you thought the beginning of the New Year would mean the end of holiday-type promotions.

Silly, silly you.

With 2008 retail sales expected to rise at their lowest level in six years, retailers are still rolling out many of the same type of promotions and discounts they used during the holiday season – even though it is nearly February.

Sears continues to offer limited-time sales, like sending an email on Jan. 27 promoting an extra 10 percent off game room, home appliance clearance and gemstone jewelry purchases made on its Web site for 12 hours, starting at 6 pm that night.

To try to sell TVs heading into Super Bowl weekend, Best Buy is advertising no interest for three years on all Samsung flat panel TVs $999 and up, while in a similar move, Circuit City is offering no interest for 36 months on all TVs $999 and higher.

And Wal-Mart has joined the fray.

The discount retailer is cutting prices on “thousands” of items by 10 to 30 percent this week to try to get shoppers to load up on their Super Bowl goodies in its stores.

It is selling a Vizio 32-inch LCD TV for $597; an RCA or Polaroid 32-inch LCD TV/DVD combo for $683; six rolls of Viva paper towels for $4.86; and a 5-pound bag of Tyson frozen chicken wings for $8.88.

Wal-Mart is calling it their own “economic stimulus plan” for shoppers.

With U.S. consumer confidence falling in January and data released on Tuesday pointing to a worsening housing slump, shoppers should expect to see many more stimulus plans this year as retailers try to win sales from cash-strapped Americans.  

(Photo: Reuters) 

Check out the January chill at chain stores.
 
Chain store sales fell 1.2 percent in the latest week according to the International Council of Shopping Centers and UBS Securities. That was the largest weekly decline since Dec. 1, ICSC/UBS said.
 
“The consumer is not motivated to shop and spend this January –aside from necessities– and the sales performance has reflected just that,” said Michael Niemira, ICSC’s chief economist.
 
ICSC now expects same-store sales for all of January to be flat or even down. Sales for the month are typically low, so they are more susceptible to special factors like the weather or promotions, ICSC said in its weekly report.
 
ICSC estimates a 1 percent drop in same-store sales at Target, an 8 percent drop at Macy’s and a 7 percent drop at J.C. Penney. Wal-Mart is estimated to post a 1.5 percent increase.
 
Wal-Mart is trying to add to its sales with an unusually timed price cut. The world’s largest retailer said Tuesday that it would cut prices on thousands of items by 10 percent to 30 percent.
 
The discounter has made such wide-reaching price cuts before, but they typically come during the key holiday season.
 
But with some economists saying the U.S. economy is already in a recession, retailers are not afraid of trying the unusual to get shoppers into their stores.
 
Also in the basket:
 
Fashion Getting Faster: Net-a-porter to Deliver Halston Day After Show (WWD)

Pepsi Bottling tops estimates by a penny, volume flat
 
Pilgrims Pride posts loss due to high feed prices 

 (Photo: Reuters)
 

Its official, ladies.

Brace yourselves for a less sparkling Valentine’s Day gift this year.

Some men out there will spend a little less on wooing their significant other this Valentine’s Day than they did last year, according to a survey by Discover Card.

On average, men plan to spend $98.20 this year, compared with $100.10 last year, Discover card said.

But the men got lucky. It seems, according to the national telephone survey of 1,018 adults, that women plan to spend $54.20 — $3 more than last year — on their significant other this time around.

The news is even less encouraging for the married folks – while singles being courted will have an average of $95.50 spent on them, those already married plan to spend only $69.30 on average for their spouses.

Planing an inexpensive Feb. 14 this year? You better hope your partner is one of the 75 percent of surveyed consumers who didn’t gush over the possibility of getting a gift.  

(Photo: Reuters)

Check out the resignation of Sears Holdings Corp chief executive Aylwin Lewis,  the latest in a shake-up for the U.S. retailer, which warned earlier this month that its fourth-quarter results would be much less than those from a year ago.

Despite its management moves, the company might also still be interested in a deal with Restoration Hardward Inc.

Sears Holdings, which is controlled by hedge fund manager Edward Lampert, was formed with the 2005 merger of Kmart and Sears. It has struggled to entice customers and is now being hurt by an economic slowdown that has hurt sales of home goods such as appliances and tools. 

Last week the company said it would separate into five types of business units and simplify the way it’s managed in a bid to boost results and reverse recent profit declines.

“We will be redefining how our leaders operate by giving them greater autonomy and accountability for their businesses,” Sears chairman Edward Lampert said on Monday.

Sales at stores open at least a year — a key retail measure known as same-store sales — have fallen at Kmart and Sears for the last seven quarters.

 Also in the basket:

McDonald’s net up, but same-store sales flat

Tyson’s earnings tumble

Is it a recession? Marketers seem to think so (New York Times)

Makeover at Old Navy: Faster Fashions key to monthly collections (Women’s Wear Daily, subscription required)

Wendy’s says strategic review in final stages

U.S. antitrust officials seen swallowing beer deal

Forget the notion that economic downturns only hurt lower and middle-class consumers. The affluent are definitely battening down the hatches and buttoning up their Birkins, said a new study by Unity Marketing.

According to the market research firm’s ”Luxury Consumption Index,” luxury consumer confidence has never been lower.   

“Luxury consumers have lost the impetus to spend,” said Pam Danziger, founder of Unity Marketing.  “The idea that one group of people is going to be completely immune to the effects that are happening in another segment of the market … it’s an illusion.”

The firm’s index of luxury consumer confidence fell to 63.6 points in the fourth quarter, down 27 percent, from 87.4 points in the third quarter.

“The number one thing that dragged down the index is this lack of confidence in the economy as a whole and its leadership,” Danziger said.

Their actual spending has slowed as well.

Luxury consumers spent an average of $24,301 on things like yachts, fancy cars, spa treatments, house keepers and deluxe vacations in the second half of 2007, Danziger said. That’s down from $29,307 in the first half of the year.

In the fourth quarter, spending on high-end home goods was down 24 percent, while spending on luxury experiences like dinners and spas was down 25 percent, Danziger said, while spending on “personal luxuries” like handbags and clothing rose.

“Clothing is a more affordable luxury than buying a new sofa and a plasma screen TV,” Danziger said.

While the National Retail Federation was quick to praise the $150 billion U.S. economic stimulus package agreed to by the White House and Congress, analysts said it was nothing more than a desperate move by lawmakers in an election year.

“This is a band-aid on nothing. This is a temporary stimulus — in an election year and for Bush’s reputation — that doesn’t address any of the systemic problems,” said Howard Davidowitz, chairman of New York-based retail consulting firm Davidowitz & Associates Inc.

Mark Coffelt, the chief investment officer of Empiric Funds, said he was disappointed in Federal Reserve Chairman Ben Bernanke’s response.

“Instead of endorsing all the politicians’ lust to send checks out to all the voters, it would have been better to say at the Federal Reserve ‘we don’t see a recession,” said Coffelt, who holds short positions on retail stocks.

“Basically what he said was, ‘we don’t have things under control.’ That’s not what the markets wanted to hear.”

 (Photo: Reuters)

Check out canaries in the consumer coal mine?
 
A couple of consumer products companies reported their quarterly resulys yesterday. One makes chocolate bars and one makes diapers and Kleenex. 
 
But both, Hershey Co  and Kimberly-Clark, gave earnings forecasts for 2008 that could signal more weakness in the consumer sector. Hershey’s was below analysts’ estimates, while Kimberly-Clark’s indicated it could be below analysts estimates.
 
Both flagged higher commodity prices as a continuing trend that would likely pressure earnings again in 2008. (Hershey also is being hit by the need to spend more money to try to spur sales growth, but that’s a different issue.)
 
Higher commodity prices have meant higher prices on store shelves for consumers. And when you are paying more for basics like toilet paper, that leaves less money for discretionary items like clothes and electronics.
 
We should get a clearer picture of how much commodities like milk, wheat and oil will hit the consumer sector when companies ranging from Kraft and Kellogg to Altria and Procter & Gamble report earnings next week. 
 
And we will also see if consumers are cutting back, with McDonald’s and CVS/Caremark also set to report.
 
Has the stress on the U.S. consumer gotten bad enough to dull their appetite for Big Macs? We’ll find out.
 
Also in  the basket:
 
Carrefour to enter Indian market - Embassy
 
Carlsberg, Heineken agree on $15.3 billion S&N deal
 
Fortune Brands fourth-quarter net falls