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Shop Talk

Retailers, consumers and prices

October 20th, 2009

Martha Stewart decorates your home… and your pets

Posted by: Michele Gershberg

Here is a post from our colleague Shradhha Sharma in Bangalore:

Martha Stewart loves youmarthar pet.

The home decorating expert and tastemaker (Macy’s good, Home Depot good, Kmart not so good) wants you to buy pet clothing, collars, leashes, bedding, grooming supplies, toys and more, Martha Stewart Living Omnimedia said on Tuesday. Pet products retailer PetSmart Inc will sell the accessories starting in the spring of 2010.

Age Group Ltd, which makes licensed products for brands such as Disney, Baby Phat, Hello Kitty and Peanuts, will design the goods.

The announcement adds pet stores to the roster of retailers where you can see Martha’s name emblazoned on various products. As we mentioned above, Macy’s and Home Depot are two others. One place where you WON’T see her name anymore after next January is Kmart, the discount retailer. The company and Kmart are ending their relationship, something that’s been known for months. Stewart’s latest comment on that relationship came last Friday when she wished them well and said it would be wrong to interpret earlier remarks she made about Kmart as being inconsistent with her good feelings.

Those remarks, which she uttered on CNBC in September, were more in the spirit of “doberman pinscher” than “cute little kitten,” but no matter — PetSmart no doubt will sport a variety of tasteful Stewart products to suit a variety of temperaments and breeds.

(Photo: Reuters)

October 6th, 2009

Layaway goes virtual at Kmart

Posted by: Nicole Maestri

kmartLast holiday season, Kmart touted its layaway program as a way to help cash-strapped shoppers afford their holiday purchases (and ultimately help boost its own sales).

This year, with consumers still reluctant to spend and estimates emerging that overall holiday sales may not rise from last year’s depressed levels, Kmart is extending the program and will launch online layaway on Oct. 9.

Shoppers can browse items on its website, place those items on layaway and then pick up the item at a local Kmart store.

In addition, shoppers who start layaway contracts in stores, can make their layaway payments online — or online layaway users can make their payments at the Kmart store where their layaway order is being held.

Kmart says it is launching the online program after seeing a double-digit increase in layaway customers and sales in 2008.

But don’t fret if you’re more of a Sears shopper than a Kmart shopper (the two retailers fall under the umbrella of Sears Holding Corp, which is controlled by hedge fund manager Edward Lampert).

Sears is also offering online layaway.

(Photo: Reuters)

September 16th, 2009

Martha Stewart KA-Bars Kmart

Posted by: Robert MacMillan

After seeing Martha Stewart on CNBC this morning, I was surprised to find that she doesn't sell a Martha Stewart-branded KA-Bar knife because she seems like she knows how to use one.

Stewart appeared on TV to talk about the company's new merchandising agreement with Home Depot. The hardware big-box retailer will offer a line of products sold under the Martha Stewart brand. Before they got too far into the interview, they talked about a similar program with discount retailer Kmart that ends in January 2010 -- the same time that the Home Depot deal begins.

Here is an excerpt:

The new [Kmart] ownership really has let our line deteriorate. It's been kind of ripped off, I would say, and really diminished, and the quality is really not what I am proud of. Have you been into a Kmart lately? it's not the nicest place to shop. ...

The stores are not what they were. The shopping experience is not what it was. The products are not there that people go in for. And it's not a good situation. And as a designer-supplier, I have been extremely disappointed.

CNBC reporter Becky Quick didn't hide her agreement:

I've been in a Kmart recently too and I know exactly what you're talking about. It's not only that the quality of the stores has dropped, it's that it's hard to find sales people to help you in some of these stores.

And it went on like that for a while. Are you listening, Home Depot and Macy's? Make sure you keep making good things.

(Photo: Reuters)

August 20th, 2009

Check Out Line: When cost cuts aren’t enough

Posted by: Nicole Maestri

shldCheck out the cost cutting formula failing at Sears.

In the past few weeks a slew of retailers, ranging from Target to Macy’s to Dillard’s, have posted results that were better than Wall Street expected, helped by cost cuts.  Retailers have done everything from freezing executive salaries to eliminating jobs to slowing store expansion plans.

But on Thursday, Sears reported a surprise loss in its second quarter while analysts were expecting a profit.

The company, controlled by hedge fund manager Edward Lampert, cut total costs and expenses 8 percent. But revenue fell 10.3 percent to $10.55 billion.

Sales at its Sears stores continued to suffer from the faltering housing market, which has sapped demand for its Craftsman tools and Kenmore appliances.

Same-store sales at Sears fell 12.5 percent, while Kmart’s same-store sales slid 3.9 percent. Overall, same-store sales fell 8.6 percent, and the decline accelerated after slowing during the past two quarters.

“Ouch,” wrote Morgan Stanley analyst Gregory Melich in his note reviewing the results. “This morning’s 2Q miss was pretty much across the board, with weak comps and lack of gross margin expansion standing out.”

Bottom line, he said, Sears remains a weak retail asset.

Or, as Credit Suisse analyst Gary Balter put it in his note entitled “Put a Fork In It” — “We continue to view Sears Holding as the most overvalued stock in our coverage.”

Also in the basket:

Barnes & Noble profit declines less than expected

Clothing makers beat estimates, but outlooks mixed

Kohl’s loooking at spots in Manhattan

Dick’s Sporting Q2 tops market

Club stores accepting coupons (WSJ, subscription required)

July 17th, 2009

Some retailers hope for Christmas magic

Posted by: Ian Sherr

Santa’s not getting any rest this year.

After U.S. retailers posted the longest running decline in same-store sales in nearly a decade, Sears, Kmart and Toys R Us announced Christmas-themed sales for the month of July.  While actual sale dates and locations vary among the three chains, the event has drawn a lot of attention from news media, which had the once-in-a-year joy of headlining a story with “Christmas in July.”

Not to be outdone, Disney has sent a train to 36 states around the country to promote its new animated film “A Christmas Carol,” slated for release this November.  Yes, November.

The re-purposed Amtrak train is filled to the brim with Disney Christmas items, the latest in cinematic 3D audio and video equipment, a lot of HP computers, and even artifacts on loan from the Charles Dickens Museum.  Oh, and it has a picture of Ebeneezer Scrooge on the front.

Whether any of these campaigns will work is anyone’s guess.  But for now, at least, it gives us all a chance to laugh and play and maybe even listen to some Bing Crosby records.

November 28th, 2008

Wal-Mart shows its strength on Black Friday

Posted by: Lisa Baertlein

Wal-Mart flexed its retail muscle on Black Friday to the delight of deal-seeking shoppers who spoke with our reporter Nicole Maestri in Columbia, Maryland.

Early bird buyers with shopping carts stuffed with toys, electronics and clothes stood 10 deep in checkout lines and the parking lot was packed with cars at 7:30 in the morning. In Valley Stream, Long Island, the crush turned tragic when a temp worker was killed by the crowd surging through a Wal-Mart’s doors.

The Friday after Thanksgiving, known as Black Friday, kicks off the Christmas shopping season and marks what is traditionally the busiest retail day of the year. But what began to emerge from shoppers’ stories was that even if they were willing to look for deals elsewhere, they kept coming back to Wal-Mart.

Marathon shoppers April Richards, 26, and her mom, Diana Eichhorn, 49, started their holiday gift hunt at the Thanksgiving Day sale at Kmart, which was out of the pajamas they hoped to buy. From there they went to Arundel Mills, that features outlet and discount stores, at midnight. They also stopped by Kohl’s at 4 a.m.

But at Wal-Mart they found deals on everything from a sewing machine to $8 jeans and $4 pajamas. The duo said the store’s discounts were so good that they bought jeans and other items that they normally would have purchased elsewhere.

Wal-mart is expected to be one of the few companies to prosper this holiday shopping season, which is feared to be the weakest since the early 1990s as a credit freeze and home price implosion hit consumers’ wallets.

In Oakland, California, shoppers who lined up in the darkness to be first to get their hands on deals when the store opened at 5 a.m. sprinted for the electronics and computer departments.

Back in Maryland, Adel Beshai, 42, said he arrived at a Wal-Mart at 6:30 in the morning knowing that he could get a low price on a flat-screen television. He walked out with a 50-inch Samsung for a little less than $900.

Beshai, who lost his carpentry job about a year ago and now drives a taxi, said he is not trimming his holiday budget. He still plans to take his four children to the stores to pick out what they want for gifts.

“It’s our life,” Beshai said. “We cannot die because the economy is down.”

The scene was more subdued across the street at Target, where the registers were not as busy ringing up sales and few lines had more than two people waiting.

Still, the store’s electronics department was busy.

In the Target parking lot, Alice Hughes, 45, said her purchases included an $89 digital camera.

Hughes said she was expecting to see more people at Target. “They need more people to be out so they will probably lower prices,” she said.

Hughes, a senior contracts administrator for the government, said she and her 25-year-old daughter had already been to Sears, Macy’s and JCPenney.

A treadmill deal at Sears lured Hughes out on Black Friday, when she usually stays home.

In addition to buying the treadmill at Sears, Hughes bought a 32-inch flat screen TV.
At JCPenney, she bought a $60 coat for herself and a $30 leather coat for her daughter.

Still, Hughes said she was not overly impressed with the prices.

“I think they’re playing. They tell you they’re marking down but they’re really not,” said Hughes, who expects prices to fall further as Christmas approaches.

Jamal Bullock, 30, has already learned that lesson.

In the Target parking lot after buying a stand for his new television, Bullock said he was headed to Best Buy later in the afternoon to get a refund after the flat-screen TV he bought last week for $1,499. Its price has already fallen to $1,299.

(Photos\Reuters)

October 7th, 2008

Women plan to spend less at department stores, mass merchants

Posted by: Nicole Maestri

shop.jpgLast month, in a poll conducted by SheSpeaks, a women’s insights marketing firm, almost 50 percent of respondents said they would spend less this holiday. That was up from nearly 30 percent who answered the same way last year.

In a new poll, SheSpeaks asks where shoppers intend to spend fewer dollars. Here are the results from the updated poll:

If you are planning to curb your spending, where will you be spending less money? 
1 - Department Store (37.64%) 
2 - Mass Merchandiser (Wal-Mart, Kmart, Target)   (23.62%) 
3 - Big Box Retailer (Home Depot, Staples, Toys R Us, etc.) (16.85%) 
4 - Grocery Store  (11.50%) 
5 - Club Store (Costco, Sam’s, etc.)  (3.94%) 
6 - Discount Store (TJ Maxx, Filene’s, etc.) (4.41%) 
7 - Drug Store  (2.05%) 

Aliza Freud, founder of SheSpeaks, said she was surprised by the high percent of respondents who said they would cut their spending at mass merchants like Wal-Mart and Target. Wal-Mart’s results have been outpacing rivals in recent months as consumers seek out its low prices.

But Freud said: “People are feeling like they’re not getting the deals that they really expected to get there.” She said one reason for this feeling may be the lack of coupons that these retailers distribute. Instead of relying on a retailers’ promise that they offer low prices, Freud said respondents indicated that they prefer shopping with coupons these days to feel as if they are getting the lowest prices possible.

“We think coupons are a huge opportunity right now for retailers,” Freud said.

(Photo: Reuters)