Check out the grim view from Bon-Ton.

The department store operator not only posted a drop in fourth-quarter profit, hurt by higher markdowns,but its chief executive also said he expects the macro-economic environment tobe difficult this year.

“We will operate to a conservative plan in order to maintain our strong financial position,” CEO Bud Bergren said.

Bon-Ton, whichoperates the Elder-Beerman, Boston Store and Carson Pirie Scott stores,expects same-store sales to be down 1to 2 percent this year.

Theweak results come after major department store chains — from JC Penney to Nordstrom — reported lower February same-store sales last week, as recession-wary consumers pull back on purchases of furniture and women’s clothing.

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Is Target’s credit too generous (Wall Street Journal, subscription required)

Kroger posts lower quarterly profit

Altria units set long-term targets

(Photo: Logo from bonton.com Web site)

Check Out rising February sales at McDonald’s

U.S. shoppers may be eating out less, but they are still finding time to grab coffee and sandwiches at McDonald’s.

The world’s biggest fast-food chain said sales at stores open at least 13 months gained 11.7 globally in February, and its shares rose on the news.

Europe, where sales rose 15.4 percent, led McDonald’s growth in the month. The Asia/Pacific, Middle East and Africa region had same-store sales growth of 10.9 percent.

Sales rose 8.3 percent in the United States, better than many analysts expected amid the slowing economic environment. Investors had become cautious when McDonald’s reported flat U.S. same-stores sales in December andblamed severe winter weather for the disappointing result.

McDonald’s said February’s extra leap year day boosted sales by about 4 percentage points.

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Adidas shares up on talk of Nike interest

U.S. wholesale inventories rose in January

(Photo: Reuters)

Wal-Mart is going green — and the retailing behemoth says its new metro Atlanta outlet shows how it will build stores that are more friendly to communities and the environment.
 
    Built at the site of a vacant mall in an area targeted for urban renewal, Wal-Mart says the new store will bring more than just money, a.k.a. greenbacks, to the neighborhood.
    
    The new outlet has water and energy-saving features that include low-flow toilets and refrigerated food displays with motion sensors that turn LED lights on when customers approach and off when they leave. 
 
    Executives say the store, which is shaded by green awnings, is the first to feature an al fresco dining area. Trees pepper the property, which has access to a football stadium. 
    
    Wal-Mart in the past has been criticized for gobbling up unused land for its so-called “big box” stores and for other practices that have exacted a toll on the environment. For instance, U.S. environmental regulators penalized the company in 2004 for violations of the Clean Water Act.
    
    Arkansas-based Wal-Mart unveiled its plan to cut environmental waste and reduce greenhouse gases a few years ago, and this year said it would build more energy-efficient stores. The company has said its future goal is for stores to use only renewable energy and to create zero waste.
    
    “I really believe our business now looks through green-colored glasses,” said Michael Mills, a regional director of corporate affairs for Wal-Mart. “Sustainability drives everything that we do.” 
    
    Executives said the new store’s softer, less warehouse-like feel is intended to be friendlier to shoppers.
    
    For instance, small kitchen appliances are displayed on lower counters (shown in picture) as opposed to being stacked on high shelves.
    
    The location is also one of eight U.S. Wal-Marts that have mini-room displays featuring Canopy furniture, a new private label product line that also includes bedding, bath accessories and dinnerware.  
 

(Photo: Wal-Mart)

Check out another monthly jobs decline.

U.S. February nonfarm payrolls fell by 68,000, the biggest drop in nearly five years, adding to the evidence of an economy in recession.

The report comes a day after most U.S. retailers posted lackluster sales for February, leading analysts to say that the rest of the year is not looking much better, either.

“People are trading down everywhere they can to hold onto cash because there is a lot of economic concern out there,” said Patricia Edwards, managing director at investment firm Wentworth, Hauser and Violich.

What’s a retailer to do? Michael Niemira, chief economist for the International Council of Shopping Centers has a couple of thoughts.

Retailers have already been more conscious about watching expenses during the economic slowdown. But they need to be more conscious of price points, Niemira said.

“And you also need to be more promotional, getting consumers to think ‘it’s not such a discretionary purchase,’ ” he said.

That could include when federal tax rebate checks hit consumers’ wallets. In the past, some retailers have offered to cash those checks. Now, retailers will probably also need to offer some sort of promotion so consumers feel they are saving money when they spend that rebate cash, he said.

“It will still be an environment where demand will be weak,” he said. “You are just trying to get some sort of competitive advantage and do the best you can until the recession is over.”

Also in the basket:
 
Investors eye modest U.S. Feb growth at McDonald’s 

Check out retailers’ best performance since November

Led by spending at Wal-Mart and other discounters by consumers looking to save, U.S. retailers turned in a 2 percent overall same-store sales gain for February. It was the best monthly performance since November, said Ken Perkins, president of Retail Metrics.

The world’s largest retailer posted a 2.6 percent gain in February same-store sales, ahead of expectations.

The teen clothing retailers also saw strength. Aeropostale sales rose 7 percent.

Still, investors might not want to celebrate yet. Department stores and apparel retailers struggled as consumers tightened their wallets. Even the high-end sector is not immune, as Nordstrom sales fell 5.8 percent.

Will Spring bring better sales? We can at least hope.

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Home foreclosures reach record highs

January pending home sales unchanged

(Photo: Reuters)

Retailer Kohl’s, which has partnered with romance writer Danielle Steel, skateboarding mogul Tony Hawk and bridal designer Vera Wang, has added pop star Avril Lavigne to its roster of celebrities peddling branded goods exclusively at the mid-price department store.

Lavigne’s apparel and jewelry collection, called Abbey Dawn, will debut at Kohl’s in July, just in time for the back-to-school season.

The brand gives feminine touches to rock ‘n’ roll styles and will include items priced from $24 to $48.

“Abbey Dawn will aspire to be a unique and accessible reflection of my ever-changing style,” the Canadian crooner said in a statement.

The Lavigne fashions join a growing list of name brands launched at Kohl’s in recent years, including perfume by Steel, clothing by Hawk and Simply Vera apparel and accessories by Wang.

Coach Inc is testing out a new larger store format, meant to enhance its mall-based flagship stores.

The U.S. handbag maker will be testing its new Gallery stores in four upscale malls, according to Mike Tucci, president of Coach’s North American retail division.

The first upgrade will occur in June at the Coach store in New Jersey’s Mall at Short Hills, followed by the store in King of Prussia, Pennsylvania before the December holidays.

The King of Prussia store will soon cover 5,100 square feet, Tucci said.

Coach divides its stores into three types. Its highest-end stores are called “flagship” stores, followed by “fashion” stores and “factory” stores, where items are discounted.

In addition to enhancing the flagship stores, Tucci said the new store formats would help the process of moving its whole store base up the value chain. He noted that 86 percent of sales now come from fashion and flagship stores, up from 39 percent in 2004.

Coach said it plans to open as many as 40 new stores this year in North America, bringing the total to about 300 stores by year-end.

The company has previously said it believes North America can support about 500 Coach stores.

Check out Clubland.

One part of retail that has been outperforming the rest of the sector is warehouse clubs, where cash-strapped consumers shop looking for lower prices on food and gasoline.

BJ’s Wholesale Club posted better-than-expected profit for its fiscal fourth quarter, while Costco’s quarterly earnings were in line with expectations.

Both retailers posted better-than-expected same-store sales in February, helped by higher gasoline prices. Both companies operate gas stations at many of their locations.
 
At the other end of the economic spectrum, Saks also posted higher-than-expected quarterly profit, and actually had a 9 percent increase in same-store sales in the fourth quarter.

But management also noted the economy has become tougher and the industry more promotional, squeezing its margins. Same-store sales rose only a 3.4 percent increase in February same-store sales, though that still beat expectations.

And then there is Chico’s. The women’s apparel retailer posted a $20.5 million fourth-quarter loss as sales fell. And things didn’t look any better to start the current year. Same-store sales fell 14.9 percent in February at the chain, which has been struggling to attract customers for some months now.
 
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Neiman Marcus Feb. same-store sales down 7.4 percent
 
A 1950s Brand Mascot Fights 21st-Century Indigestion (NY Times)

Check out trouble at the office.
 
Staples reported flat profit for the fourth quarter. But that is good news compared with rival Office Depot, which reported a bigger-than-expected drop in quarterly profit last week.
 
The trouble for the  office supply retailers has been around for a while now. Slowing job growth, the distressed U.S. housing sector, credit market jitters and general U.S. economic malaise have caused small businesses to cut spending.
 
But the news from Staples was that it does not expect U.S. sales to improve in the second  half of the year as the credit crisis has continued longer than Staples executives were expecting.
 
“When we talked to you last last quarter, we believed the slow sales environment might turn around by midyear as the credit crises looked like it would get cleaned up by then,” CFO John Mahoney said. “It now looks like it could take a little longer.”
 
So, when can we mark our calendars for some improvement? Not for a while, it seems.
 
Sames-store sales could continue to decline “well into 2008,” Staples CFO  John Mahoney said during a conference call.
 
Also in the basket:

Walgreen February same-store sales up on Leap Day
 
CKE same-stores sales up 1.5 pct in latest period