First LL Cool J. Now MTV.

Sears may not be striking the right note with parents (or investors) but the struggling retailer is hoping it can at least make some inroads with teenagers.

In May, Sears announced plans to roll out an exclusive line of clothing named for rapper LL Cool J in its stores.

Today, Sears said it was teaming up with MTV to launch a new movie musical from the executive producers of “High School Musical” — “The American Mall.”

The movie  is about a group of “young adults” who work in a mall over the summer.  Scenes were shot in a Sears store and characters wear Sears clothing. Of course, extras carry Sears shopping bags in the background. 

But the partnership is much deeper than just a movie musical. ”A multi-layered integrated marketing campaign built around the movie targets the core MTV audience on-air, online and in stores — in time for the back-to-school shopping season.”

Sears will have “in-store experience zones” featuring “The American Mall” character looks, “The American Mall” merchandise and the movie DVD. The movie will premiere on MTV on Aug. 11.

But Sears may have an uphill battle when it comes to gaining lasting traction with teens. The age group is a notoriously fickle and fashion can turn on a dime, leaving retailers that stock the wrong trends left to clear through piles of unsold merchandise.

Teens also like wearing what other teens are wearing. That could be challenge for Sears, which is struggling for two years with declining sales at existing stores, meaning it is very likely that teens have not been flocking to the retailer to do their shopping,

(Photos: Reuters)

The U.S. government is currently putting $100 billion into consumers’ hands in the form of tax rebates, hoping the fresh cash will stave off a recession.

It’s a plan similar to the once the government followed in 2001, except at that point, the economy was already in a recession.

Back then, the National Bureau of Economic Research said the U.S.  economy entered a recession in March 2001. To get the economy out of its funk, the government passed a stimulus package and mailed out rebate checks over a ten-week period from late July to the end of September 2001, according to research conducted by Thomson Reuters.

When looking at the monthly year-over-year changes, U.S. retail sales started slumping in the beginning of 2001 and reached their lowest level in September 2001, according to the research report. The Thomson Reuters Same Store Sales Index registered a rise of just 0.8 percent in September 2001, but then began to bounce back once the rebate checks were mailed out, with October notching a 1.6 percent gain.

“When comparing the sectors within our retail universe, we find that the discount sector performed the best during the 2001 recession and remained within the 3 percent - 6 percent growth range,” the Thomson Reuters report states. “It registered its strongest same store sales result ever of 9.5 percent in February 2002.”

The report said similar trends are being repeated now as middle class consumers cut back on spending and head to discount stores.

“In 2001, Wal-Mart beat Target’s same store sales results 11 out of 12 months. Today, we’re witnessing a similar trend as Wal-Mart has smashed Target’s comps over the last six months,” the report stated.

During the 2001 economic slowdown, the apparel sector performed the worst and posted its weakest comp ever of -9.5 percent in September 2001, the research shows. It also said the teen apparel group and department stores underperformed and posted sluggish comps during the period leading up to September 2001, but were able to bounce back shortly after.

“If past behavior is a good indicator of future behavior, we are likely to continue to see an increase in consumer spending in the short-term while the 2008 rebate checks are distributed,” the report states. “This in return could help improve the overall economy since consumer spending accounts for about 2/3 of GDP. The discount group is expected to post a 3.1 percent comp, but analysts continue to look for an even stronger 3.5 percent result excluding Wal-Mart.”

(Photo: Reuters)

Check out a new fashion foray for Jones Apparel.

The clothing and shoe company announced a joint venture to develop, market and license fashion brand Rachel Roy, and said it owns a 50 percent stake in the venture.

The up and coming luxury fashion brand is named after its creator Rachel Roy, who is married to music mogul Damon Dash. 

The remaining 50 percent interest in the joint venture with Roy, Dash and TSM Capital LLC, will be owned by those three parties.

 ”We see tremendous opportunity in Rachel Roy as a designer and brand,” said Wesley Card, Jones’ chief executive officer.

Stay tuned to learn more about Jones’ plans for Rachel Roy and its business in general.  
Card is scheduled to attend the Reuters Consumer and Retail Summit being held in New York on June 16.

Also in the basket:

InBev courts Anheuser-Busch with mega-bid

InBev gets funding, offers olive branch to A-Busch

(Photo: Rachel Roy dress shown on http://www.net-a-porter.com/Shop/Des igners/Rachel_Roy/All)

Wal-Mart has been cutting prices ahead of key events this past year, like Black Friday, Christmas and the Super Bowl, to drive shoppers into its stores.

Now the world’s largest retailer is cutting prices on baked beans, barbecue sauce and patio furniture, betting the big event in many shoppers lives this summer will be a “staycation” — a vacation basically spent at home.

“With gas prices climbing 21 percent and airline costs rising 10 percent since last year, families may be skipping longer summer vacations in favor of ’staycations’ — time off spent near home,” the retailer said in a press release.

So the discounter has reduced prices on items for the patio, the backyard, the cookout, and at-home entertainment.

Wal-Mart is selling 4 cans of Bush’s Baked Beans for $5 — a savings of 20 percent, and Kraft BBQ Sauce for $1.18 — 25 percent off, it said.

It is also offering a five-piece Bali Island patio set for $400, a markdown of 20 percent, and a Sanyo 50 inch plasma TV for $998 — a 22 percent savings.

Here’s to a long, hot summer. 

(Photo: Reuters)

Retailers looking to sell seasonal merchandise got a helping hand from the weather last week — at least in some parts of the country.

According to weather tracking firm Planalytics, the week ending June 7 marked the first time in 7 weeks that the temperature average across North America was warmer than the same week the prior year.

It was only the 8th week this year where temperatures across North America were warmer compared to last year, Planalytics said.

The higher temperatures in the East and Mid-Western North America sent consumers to the stores in search of air conditioners, shorts, sandals, and cold beverages. 

“For those areas that experienced severe storms, demand for emergency items such as generators, batteries, and canned foods surged,” Planalytics said.

But in Western portions of North America, cooler temperatures and occasional periods of rain kept seasonal demand levels muted, it said.

(Photo: Reuters) 

Check out darkening consumer sentiment in the month of May.

According to the latest results of NPD’s Fast Checks Study: Consumers Speak Out On the U.S. Economy, in May, 58 percent of consumers said we are in a recession, up from 55 percent in April.

Respondents to the survey said they are planning to spend less on items like apparel and footwear. With vacation season getting underway, 49 percent of consumers said they plan to cut back on leisure travel. 

A greater percentage of consumers also said they are spending less because they need to put money toward essentials, such as gas and utilities.

“Consumers are finally starting to react to the price of gas and other rising costs and are shifting shopping intentions.” according to NPD’s Marshal Cohen.

“Overall, in the past month, a 5 percentage point increase was seen in survey respondents who tell us they are going to do something different by taking advantage of promotions/events such as store sales, coupons, and discount or membership programs.”

Also in the basket:

French fashion king Yves Saint Laurent dies

As Wal-Mart turns around, investors eye second act

Pinched Consumers Scramble for Cash (WSJ: Subscription required) 

(Photo: Reuters)

During Big Lots’ conference call, the closeout retailer was asked what it is seeing in terms of product cost inflation, especially when it comes to merchandise that is sourced in Asia.

CEO Steve Fishman was unambiguous in his answer: “That’s real. That’s very real”

Fishman said factors like the devaluation of the dollar and rising salaries overseas are making sourcing products from Asia more expensive.

“There are absolute real cost pressures coming in from overseas,” he said.

And it is becoming impossible for retailers to swallow these increased costs.

“There is no such thing as absorbing those costs. And I don’t think there’s a retailer in the United States that’s absorbing those costs. You’re seeing real price increases for the first time in a long time on product,” he said.

That is certainly not great news for cash-strapped U.S. shoppers.

The average price for gasoline soared 6.9 cents over the last week to a record of $3.79 a gallon. That means the national price for regular, self-service gasoline is now up 57 cents from a year ago, according to data relased by the federal Energy Information Administration on Monday.

With personal income stagnating, consumers are finding it hard to offset the ongoing spike in gas prices.

According to the latest Discover U.S. Spending Monitor, which polls consumers on their spending habits, 54 percent of consumers are cutting back on basic living expenses, like grocery shopping, to compensate for the high cost of gas. 

Nearly 55 percent are cutting back on discretionary spending, like eating out and going to the movies. 

High gasoline prices have soured economic sentiment. Seventy-four percent of consumers think the U.S. economy is getting worse – up two and a half points from the week before, according to the survey. 

In addition, nearly 54 percent think that their personal finances are deteriorating.   

Meanwhile, the Deloitte Research Leading Index of Consumer Spending has reached its lowest level since 2001. The index tracks consumer cash flow as an indicator of future consumer spending.

“This significant drop in the Index gives us empirical data of what many have long suspected,” said Carl Steidtmann, chief economist with Deloitte Research and author of the monthly index. “The current economic downturn is as significant as anything we have seen since the last recession.”  

Deloitte said retailers are now trying to aggressively court consumers to get them to spend their tax rebate checks in their stores.

But unless they sell food of fuel, retailers could face big challenges in that arena.

According to the most recent survey by the National Retail Federation,  U.S. consumers will use much of their tax rebate money to pay for increasingly expensive gas and groceries, rather than spend it on electronics or clothes. 

(Photo: Reuters — “A man walks beneath a sign advertising the price of gasoline at a filling station in San Francisco, California on April 28, 2008)

Check out a busy day for retailers as earnings — or losses – poured in from BJ’s Wholesale, Talbots, Charming Shoppes and Brown Shoe. 

The “flight to necessities” by the U.S. consumer was on display as BJ’s  — which sells food and fuel — posted a 26 percent jump in quarterly profit.

But for businesses steeped in discrection, the quarter was no cakewalk.  Talbots posted sharply lower quarterly net profit; Charming Shoppes reported a quarterly loss and Brown Shoe posted a lower first-quarter profit.

With the U.S. environment a tough one to navigate, retailers are looking to add or subtract businesses to put themselves in a better position. 

Spectrum Brands announced plans to sell its global pet supply business to a subsidiary of Salton Inc; the Wall Street Journal reported that Barnes and Noble Inc is looking into a possible bid for competitor Borders Group; and Dutch office supplier Corporate Express is seeking to buy French rival Lyreco for 1.4 billion euros ($2.2 billion), as it fends off a hostile bid from U.S. rival Staples.

(Photos: Reuters)

Check out those furrowed consumer brows.

In April, 24.5 percent of American consumers postponed a major purchase — an item of $500 or more – citing worries over higher gas prices, job security, credit card debt and the wait for a tax refund, according to a survey conducted by America’s Research Group.

That’s a big shift from a year ago, when almost 23 percent delayed a major purchase, saying they “did not want to spend the money right now.”

“This year most consumers did not even try to shop,” said C. Britt Beemer, founder and CEO of ARG. “They just stayed home to save on gas prices.” 

That new consumer mindset is a negative sign for retailers at least into 2009, Beemer said.

Also in the basket:

Lowe’s posts lower net, cuts year forecast

Dillard’s to open only four stores in 2009

 (Photo: Reuters)