Check out the end of the retail lift from government economic stimulus checks.

Wal-Mart Stores, which appeals to bargain-hunting U.S. shoppers, has seen its fortunes rise as the U.S. economy headed south and as the government issued about $100 billion in tax rebate checks to spur consumer spending.

On Thursday, it appeared that the tax rebate party — such as it was — was over.

The world’s largest retailer reported a weaker-than-expected increase in July sales at established stores and issued a cautious forecast for August sales as consumers run out of extra cash from tax rebate checks.

“With the end of the stimulus checks, we know consumers are spending more cautiously, and we continue to see a pronounced paycheck cycle at the end of the month,” said Eduardo Castro-Wright, head of Wal-Mart’s U.S. operations.

Also in the basket:

U.S. July sales struggle as tax rebate cash ends

AIG’s big loss, Wal-Mart miss hit Wall St

Warnaco beats estimates, raises outlook; shares up

Abercrombie July same-store sales fall 7 percent

Delinquencies for 2007 mortgages outpacing 2006: report

(Photo: REUTERS/Jason Reed)

Best Buy is looking to ring up more market share gains now that it has added mobile phone shops to all of its U.S. stores.

The electronics chain has completed the rollout of Best Buy Mobile shops at its 965 U.S. stores – three months ahead of schedule.

The mobile shops offer a wider assortment of handsets and monthly as well as pay-as-you-go service plans. Consumers can select from Sprint, Verizon Wireless, AT&T and other carriers.

Shawn Score, Best Buy Mobile president, said market share gains in the first Best Buy stores that added the mobile departments inspired the quicker national rollout.

“About a third of our stores is producing the current share gains we’ve got,” Score said in an interview. “We are up at least 50 percent in our market share in each of the last six months.”

Banc of America Securities analyst David Strasser said in a recent research note that the Best Buy Mobile expansion was likely a factor in wireless market share losses at rival RadioShack during the second quarter. “We believe Best Buy Mobile will only become a stronger competitor as they ramp up,” Strasser said.

There are also about 15 standalone Best Buy Mobile shops in the United States now, with plans to have at least 35 up and running before the holidays, Score said.

The mobile shops, a joint venture with Britain’s Carphone Warehouse, are part of Best Buy’s strategy to double annual sales by expanding in traditional electronics categories as well as moving into new areas. For example, Best Buy now has musical-instrument shops in some of its stores.

Logo: Best Buy

Check out Procter & Gamble — the maker of Crest toothpaste, Iams pet food, Pampers diapers, and Zest soap — offsetting soaring costs for oil and other commodities by raising its prices and clamping down on costs.

On Tuesday, the world’s largest consumer products maker said its fiscal fourth quarter profit jumped 33 percent to $3.02 billion, or 92 cents per share. Excluding benefits from the adjustment of tax reserves, earnings were 80 cents a share — beating analysts’ average forecast of 78 cents a share, according to Reuters Estimates.

Sales jumped 10 percent to $21.27 billion, helped by demand from emerging markets, price increases and the impact of the weaker dollar, which boosts the value of sales from countries outside the United States.

Like most consumer products makers, P&G has raised prices and cut costs to cope with rising costs for energy, resin and other raw materials. Analysts have been watching closely for signs that those price increases will drive consumers to trade down to lower-priced items — and that may not be occurring.

The company said  it is seeing some signs that consumers are shifting to lower-priced products.
 
“We do see some evidence of trade-downs,” Clayton Daley, P&G’s chief financial officer, said during a conference call with analysts.
 
He cited laundry detergent as an example of a category where consumers are trading down, but Daley also said there are still categories in which consumers will spend more for new or improved products.

P&G will likely be keeping a close eye on shopper behavior headed into its new fiscal year. The company expects commodity and energy costs to rise by $3 billion in the fiscal year begun July 1 — and said it has been increasing prices in amounts that will offset the higher costs.

Also in the basket:

Molson Coors profit tumbles on charges

ADM profit misses Street view; revenue up 78 pct
(Photo: Procter & Gamble website)

Check out more signs of consumers being put in a vise.
 
Personal income rose 0.1 percent in June, the Commerce Department said. That was the lowest rise since April 2007.
 
And in fact, if it were not for the economic stimulus checks some consumers received in June, disposable income would have shrunk, the department said.
 
Meanwhile, costs continued to rise. The personal consumption expenditures price index — an inflation gauge — rose at its highest year-over-year pace since May 1991.
 
Consumer spending rose 0.6 percent in June, but actually fell 0.2 percent accounting for inflation. So consumers are spending more to get less.
 
Oh, and one more thing on the gloomy economic front, Challenger, Gray & Christmas Inc said planned layoffs at U.S. companies rose 26 in July from June.
 
Also in the basket:
 
Retailer Boscov’s files bankruptcy, may be sold
 
Walgreen July same-store sales up
 
Burani says investor eyeing bid for 15-18 percent stake
 
Calvin Klein’s latest controversy (WWD)

(Photo: Reuters)

(Due to a tabulation error in the research, STORES Magazine has issued a corrected list. This is being corrected to remove Coldwater Creek from the Top 10 list and replace it with Citi Trends at No. 10) 

Though the retail industry cooled last year to its slowest growth since 2002, a number of retail companies experienced fiery growth, according to the National Retail Federation. The hottest retailers, in general, grew through acquisitions, according to the trade group’s STORES Magazine.

NRF’s 2008 Hot 100 Retailers list, which will be included in STORES’ August issue, ranks the nation’s fastest-growing retailers that are publicly traded and have more than $100 million in annual sales.

Topping the list this year is CVS Caremark, which grew 2007 revenue by 74 percent because of its acquisition of Caremark. The No. 2 spot also went to a drugstore chain — Rite Aid, which purchased Brooks Pharmacy units in New England and Eckerd on the East Coast, saw revenue grow narly 40 percent. IHOP, which recently changed its name to DineEquity Inc, was No. 3 with last year’s purchase of Applebee’s.

WalMart, the world’s largest retailer, clocked in at No. 80, with 8.6 percent growth. Its mass market rival Target Corp, brought up the rear at No. 100, with 6.5 percent revenue growth.

Here is a list of the top 10 retailers, according to STORES Magazine: 

          1. CVS Caremark

          2. Rite Aid

          3. IHOP

          4. Amazon.com

          5. American Apparel

          6. GameStop

          7. BJ’s Restaurants

          8. Chipotle Mexican Grill

          9. FTD

          10. Citi Trends

     (Photo: Reuters)

Check out what we learned this week.
 
After a busy week of earnings, it is time to step back and see what we learned about the state of the U.S. consumer and the companies that serve them.
 
They are still buying food and for the most part swallowing the price increases food companies are pushing through in order to mitigate rising commodity costs.
 
Kraft Foods soundly beat analysts estimates, while Kellogg Co was a penny ahead of Wall Street’s expectations and raised is forecast for the year.
 
Consumers are balking at expensive coffee drinks. Starbucks posted its first quarterly loss as a public company and said the chain would shrink in the coming year. It also had yet another management shake-up.
 
Consumers are not buying clothes for the fall yet in earnest, but some are buying shoes and handbags. Jones Apparel said revenue fell in the quarter on flat apparel sales at stores open at least a year. Comparable store sales rose 5.8 percent at its shoe stores.
 
The economy looks better from Paris than New York, as Louis Vuitton handbag maker LVMH reported stronger-than-expected profit and said things should not get worse on the economic front. At the same time, U.S. rival Coach met expectations and gave a very cautious outlook, saying the “consumer malaise” would last well in to 2009.
 
Companies expect commodity costs to continue to rise in the coming year. Clorox, on Friday lowered its forecast for the current fiscal year because of rising costs.
 
People in the rest of the world are buying cosmetics, which helped Avon overcome slow U.S. sales.
 
And lastly, if you sell cigarettes outside the United States, especially in emerging markets, your business might be doing better than if you sell them in the United States.
 
Also in the basket:
 
July jobless rate highest in four years
 
Crisis in Credit: One year on, what’s next?
 
An offer for Jil Sander (WWD, subscription required)

(additional reporting by Martinne Geller)

 (Photo: Reuters)

J. Crew is getting personal with an emailed mea culpa apologizing to customers who may have had “issues” while shopping online in recent weeks.

While the email’s introduction sounds like a missing line from Sinatra’s “My Way“, it goes on to plead for patience. Humility is in fashion!

The apology also appears at the bottom of the company’s home page.

Here is the full text of the email (lowercases included):  

we’ve made some mistakes….

(too many in our mind).

we want to say that we’re sorry for any issues you have experienced while shopping J.Crew online or over the phone over the last few weeks — we know we’ve let you down.

we are in the midst of making some enhancements to our web site and call center (and, unfortunately, encountered some bumps along the way). please bear with us as we work through these issues — we know it’s not perfect.

we appreciate your patience.

millard drexler, chairman and ceo

tracy gardner, president

(Photo: CNN/Money)

Check out the majority owner of Talbots exerting more control.

The women’s apparel retailer, which has endured hardships in recent months including falling sales, job cuts, an executive departure and a credit problem, said on Thursday that Tsutomu Kajita would become chairman of its board.

Kajita is senior vice president of international operations for Japan’s Aeon Co, Talbots’ majority owner.

“The appointment of Mr. Kajita as non-executive chairman further signifies Aeon and its management’s commitment and confidence in our continued success and ability to execute our long range strategic plan,” said Talbots Chief Executive Trudy Sullivan in a statement.

Talbots is working hard to turn itself around after a string of fashion and merchandising missteps hurt sales of its classic fashions that target women over 35. The weak U.S. economy hasn’t helped either.

There is a new design team, and early reviews are positive.

Lazard Capital Markets analyst Todd Slater said the company’s new fall and holiday assortments were more “design driven” versus a “more traditional formulaic product development process.”

“While we weren’t able to preview entire floorsets, what we did see was more iconic, with the brand returning to its heritage, utilizing bold color (red), patterns (hounds tooth, plaid), directional fabrications (tweed), and iconic styles (the great white shirt, shift dresses, pea coats, totes, scarves and pearls),” Slater wrote in a research note on Thursday.

Jennifer Black, of Jennifer Black and Associates, waxed even more poetic.

“The collection in its entirety was everything we had envisioned and more.  The fabrics exuded quality.  The colors radiated the classic Talbots styling, the lines were clean and simple, and the styling was timeless.  The fall/holiday collection flows well together … The fits have been modified for today’s fashion style, but not changed as far as the fit specifications.  The waists on pants no longer cover the woman’s ribcage; gone are the days of the ugly, baggy, boxy fits,” Black wrote last week.

But Slater did have a warning for Kajita, whose company operates Japan’s Jusco chain of general merchandise stores.

“Current expectations (are) likely too high. Management is focused on reducing
inventory, which should continue to lead to improved merchandise margins. However, we believe current trends remain below plan, and near-term expectations appear to be getting too high,” Slater said.

Also in the basket:

GDP gets stimulus checks boost

Target offering Web customers installation services

CVS second-quarter profit rises

Check out how international sales and the weak dollar continue to lift quarterly results at U.S. companies.

Second-quarter profit at cosmetics firm Avon Products Inc more than doubled, as demand in Latin America and other overseas markets more than made up for sagging U. S. results.

Office Depot posted a 6 percent drop in North American retail sales, but a 13 percent rise in international sales during in its most recent quarter.

Still, investors are wondering when and if the United States’ economic malaise will spread to markets like Europe, Asia and Latin America.

Some cracks are already showing. Britain’s stressed housing market is putting pressure on consumer spending and Spain has reported a plunge in June retail sales amid a severe economic slowdown.

Also in the basket:

Los Angeles City Council passes fast-food ban

Oil slide, US glimmers of hope boost stocks

Jones Apparel 2nd-qtr profit tops estimates

(Photo: REUTERS/Jo Yong-Hak)

What would Mattel wish for if it had one wish to make? The launch of the toy giant’s “My Meebas” points to one possibility — better fortunes for its girl’s toy business, as Barbie sales continue to face trouble.

Mattel launched “My Meebas” — a toy for girls aged 6 to 12 that houses a plush “Meeba” in a plastic tube, which serves as a gaming device with a movable LCD screen.

The toy is aimed at the latest generation of girls, who like plush toys but are also into electronic games, Mattel said. The launch comes at a time when Mattel is struggling to revive sales in its girl’s division, best known for its iconic Barbie dolls. Sales of Barbie have suffered in past quarters, as other toys such as “Hannah Montana” and Bratz steal market share. 

The “Meebas”, also made in China like many other toys, will retail for $19.99, while a Barbie “Top Model” doll can be bought for $14.97 at Wal-Mart. The toys have gone through extensive checks, Mattel said, following the spate of recalls last year.

With a “Meeba,” the idea is for a user to buy the toy as they make a wish, and then go through seven levels of game play, or over 20 activities, which could take anywhere from seven to 12 hours, according to Mattel. 

The LCD screen can be moved up and down the side of the tube, showing how the “Meeba” grows as game progresses.

Once all activities are completed, the tube pops open, and the user can pull out their ”Meeba” — in a sign meant to signify that the user’s wish has finally been granted.

If the user buys another Meeba, maybe Mattel’s wish will get granted as well.

 The company has 60 such “Meebas” listed under categories such as friendship, love and intelligence.

The bonus? Some tubes have twin Meebas.

Watch out girls! (And make a wish, Mattel.)

(Photo: Mattel)