Retailers, consumers and prices
Mary-Kate and Ashley Olsen, the former child actresses turned fashion designers, are launching a new juniors’ sportswear and accessories line for J.C. Penney. The travel-themed line is called Olsenboye, with each collection highlighting a new city.
The mid-priced line features clothes, shoes and handbags priced from $20 to $50.
Fashion is not new for the sisters, who were television stars from infancy and grew up to have a quirky bohemian style. They currently have high-end lines, such as The Row, which sells at Bergdorf Goodman, and Elizabeth and James, which sells at Neiman Marcus. They even once had a line of girls’ clothes at Wal-Mart, though it no longer exists.
Items from the new line will be available for a limited time in select JC Penney stores and online starting Nov. 6, with a full launch set for spring 2010. Let’s see if it lasts longer than the line at Wal-Mart.
Check out the growing J.C. Penney-Macy’s rivalry.
The deal will give Penney more exclusive products, guarantee revenue and profits for Claiborne and free up Macy’s to better differentiate itself as its customer base increasingly overlaps with Penney’s, analysts and consultants said.
Deciding where to spend the remainder, if any, of this month’s paycheck?
At the department store chain’s annual analyst meeting in New York, Penney discussed the steps it is taking to win consumers’ hearts (and their money).
One of the steps highlighted: A chance for its rewards program customers to meet country music band Rascal Flatts, which recently topped U.S. pop album charts with its album called “Unstoppable.”
The company has canceled its annual analyst meeting at its headquarters in Plano, Texas. Seems the recession has hurt many firms’ travel budgets.
But not to worry — J.C. Penney will come to New York to meet with analysts instead!
Of course, the story Penney has to tell isn’t the greatest one right now. Profit fell 51 percent in the key fourth quarter, and the company expects a deeper loss in the first quarter than Wall Street expected.
But at least the analysts get to stay home (well, the ones based in New York) and Penney executives get out of Plano!
Also in the basket:
Lowe’s posts sharp drop in profit
As U.S. downturn deepens, repair business thrives
Crop scientists say biotechnology seed companies are thwarting research (N.Y. Times)
The financial crisis of the past two months has rocked retailers, and many are now planning to hire fewer seasonal workers and roll out promotions earlier than planned to try to salvage holiday sales, according to a recent survey by the Hay Group.
The human resources consulting firm conducted an informal survey in September with 20 of the top American retailers, including Best Buy, JC Penney, Costco, and Macy’s to get a glimpse into their plans for the holiday season.
The group then ran the survey again this month to find out how those plans may have changed given the recent financial crisis. Here is what the they found:
Check out disappointing September retail sales
Many U.S. retailers posted worse-than-expected sales at stores open at least a year on Wednesday, and some cut their profit outlooks and said things won’t improve anytime soon as consumers remain shaken by the financial crisis, job worries and the housing slump.
Discounter Wal-Mart Stores and warehouse clubs managed the best sales performances in September as shoppers sought bargains on necessities. Wal-Mart, the world’s biggest retailer, stood by its third quarter earnings forecast.
On Tuesday night, JC Penney didn’t let the difficult retail environment get it down.
The Commerce Department said on Tuesday that total sales at U.S. retailers rose a less-than-expected 0.1 percent in June. Economists polled by Reuters had forecast total retail sales to rise 0.4 percent in June, following a 0.8 percent gain in May.
A downgrade by Goldman Sachs.
Goldman sharply raised its forecast for oil prices in the second half of this year, saying it expects U.S. crude to average $141 a barrel, up from a previous projection of $107. Goldman also forecasts prices will rise further next year to average $148.
That is not good news for retailers.
“Higher energy spending in the second half is likely setting the stage for a more challenging backdrop for consumer discretionary sectors, particularly for the department store stocks,” Goldman noted.
Check out the 50 percent drop in quarterly profit at JC Penney.
The mid-tier department store operator had warned in late March that its first-quarter profits would be hammered after a drop in store traffic and dismal Easter sales forced it to cut prices to clear out unsold merchandise.
Penney shoppers can expect more price cuts on future visits to the retailer.
The department store operator said it is now trying to get inventory in its stores to better match the weak sales environment, meaning it will roll out more promotions and cut future merchandise orders.