Shop Talk

Odd woman in

Simone Bagel-Trah bucks the trend.  The number of women on German company top-level board posts — low to begin with in Europe’s largest economy – is dropping.  In steps Bagel-Trah. The slender blonde will become the first supervisory board chairwoman at a German blue chip. On Tuesday, she takes over the helm at glue-to-detergents maker Henkel .

 The doctor of microbiology will also head the shareholders’ committee which represents the Henkel family members who hold about 52 percent in the creator of Persil detergent.

But the 40 year old great-great-granddaughter of the Henkel founder is not the pioneer many would like to see in her.

“She basically helps to manage her own fortune. It’s a family job,” said Hagen Lindstaedt, head of the Institute of Management at the Karlsruhe Institute of Technology.

“Male supervisory board members are typically made by the company. With women, it’s different. Female supervisory board members are often representatives of families or owners,” he said and referred to Susanne Klatten as an example.

Klatten’s family owns almost half of German premium carmaker BMW and about 92 percent in specialty chemicals maker Altana. She sits on both companies’ boards.

Lindstaedt just published a research paper which found that the number of women on German management boards has been on the decline since 2005 and stood at 2.4 percent last year.

Check Out Line-Retail sector racks up more bad news

Check out the not-so-chipper news in the retail world.

Restaurant chain Burger King reported lower profits and cut its full-year forecast due to the currency fluctuations, while cosmetics and perfume companies Estee Lauder and Elizabeth Arden rang up lower, albeit better-than-expected, profits and said they would cut jobs.

Indeed, retailers overall posted the second weakest monthly same-store sales performance since Thomson Reuters began tracking the data in 2000 as heavy job losses, weakness in the U.S. housing sector and the still-tight credit markets have many consumers closing their wallets.

In the mixed-bag camp, apparel retailer Gap saw same-store sales fall more than expected, but raised its full-year profit outlook.

There is some good news out there, however. 

Discount giant Wal-Mart posted a better-than-expected increase in sales at U.S. stores open at least a year, almost double what analysts had expected. Meanwhile, Kellogg’s quarterly profit rose and the cereal maker stood by its 2009 profit outlook, and department store operator Macy’s saw a smaller-than-expected decline in same-store sales and raised its fourth-quarter profit forecast.

Also in the basket:

Everything is on sale, even franchises

(updates with day offer began)              

Retail workers need a pick me up these days after brutal holiday sales, rising unemployment and bleak expectations for 2009.  One chain is offering its own spoonful of medicine, in a way.

GNC, which sells vitamins and supplements at more than 6,200 stores (often with buy one, get one 50 percent off promotions), is offering a 25 percent discount on its initial franchise fee to retail workers who have lost their jobs.  The fee is normally $40,000 for new franchisees, so the deal brings it down to $30,000.

Even with the discount, which is available until July 31, it will cost more than $100,000 to open up a location.  The company contends it is worth it.  GNC said its industry is valued at $21 billion and is growing at 4 percent to 6 percent a year.  That definitely outpaces the overall retail market, which even the National Retail Federation expects will see a drop in 2009.  GNC said sales at franchise locations and its own stores grew in 2008.  At the same time, it forecast that 14,000 retailers will close down this year, forcing more workers out of jobs. 

Executive Vice President of Store Development Tom Dowd said GNC opened 237 stores in North America over the last three years and has plans to open another 50 in 2009.  The offer began on Monday. As of Tuesday afternoon no one had taken GNC up on the offer, though several people have asked about it.

(Photo courtesy of GNC web site)

Check Out Line: Mother Nature matters more than ever

Check out the cool and wet weather that hit U.S. retailers in September as the month will go into the books as the fifth coolest in the last seven years and much cooler than last year, according to Planalytics Inc, a business weather tracking company.

While the mean September temperature in the 96 largest U.S. metro areas fell about 4 points from last year to 64.2 degrees, retailers selling rainwear (demand up 29 percent based purely on weather), pants (up 13 percent), dehumidifiers (up 10 percent) and hot cereal (up 2 percent) benefited, Planalytics said.

September also was the 11th wettest since 1961, driven by six tropical storms, including Hurricane Ike, the consulting firm said. Some cities, such as Chicago, St. Louis and Wichita, Kansas, had their wettest Septembers ever recorded, while Houston, Kansas City and Little Rock, Arkansas, had months that still ranked among the the 10 wettest.

“The tropical systems that pummeled both the Gulf and Atlantic coasts became the real weather story of the month. Despite challenging economic times, businesses that supply pre- and post-hurricane staples such as gas, ice, water, non-refrigerated foods, generators, tarps, plywood, and chainsaws experienced brisk sales in the affected areas, driven by need-based purchases” Fred Fox, Planalytics CEO Fred Fox said in a statement. “In addition, foot traffic into grocery stores, restaurants, and hotels was robust along evacuation routes.”

The weather was a favorable factor for 78 percent of the publicly traded companies tracked by Planalytics, with the biggest positive comparisons seen at BJ’s Wholesale Club (store traffic up 24 percent), Family Dollar Stores (up 22 percent), Shoe Carnival (up 16 percent) and Target (up 13 percent).

More broadly, the index for retailers that sell a broad line of merchandise was up 14 percent based solely on weather, and it rose 8 percent for retailers that sell mostly apparel, Planalytics said. On the down side, were indices for home centers (off 4 percent) and restaurants (off 6 percent). 

Also in the basket:

Check Out Line: Boscov’s sold to private equity

Check Out private equity gobbling up department store chain Boscov’s Department Store LLC, one of the latest retailers to get into trouble as customers reduce spending.

Boscov’s, which filed for bankruptcy protection last month, has agreed to sell most of its assets to private equity firm Versa Capital Management Inc. for an undisclosed amount.

Founded in 1911 by Solomon Boscov, who emigrated from Russia to Reading, Pennsylvania with $1.37 in his pocket, the department-store chain grew from its first “Economy Shoe Store and Dry Goods Annex” to a chain of more than 50 stores across the Eastern Seaboard.

But the collapsing housing market, skyrocketing energy and gas prices and higher food costs caused consumers to spend less on discretionary items, and weak credit market conditions led to vendors tightening terms, which proved too much for Boscov’s to weather.

Boscov’s joins more than a dozen retailers to go bankrupt in the past year, including Bombay, Goody’s Family Clothing, Linens n’Things, Mervyn’s, Sharper Image, Shoe Pavilion and Steve & Barry’s.

Also in the basket:  

Retailers go beyond discounts to win customers

Check Out Line: Are you ready for some (more expensive) football?

Check out what it costs National Football League fans to attend games.

The latest NFL season got under way Thursday night as the defending Super Bowl champion New York Giants opened their season with a win (pictured right). For their fans, there were some changes that affected their wallets.

The average ticket price to attend an NFL game rose almost 8 percent to $72.20, according to Team Marketing Report, a Chicago-area sports marketing firm. And if a family of four wants to take in a game played by the Giants, get ready to shell out almost $500 for tickets, beers, hot dogs and other items.

The increases are de rigueur nowadays as the various North American leagues continue to report record attendance and revenues, but cracks may be starting to appear as some fans have begun dialing back spending amid high prices for gasoline and food, and rising unemployment.

As long as the market will bear it, however, fans of the NFL and other professional sports will have to budget for the increases if they want their game-day fix.

Also in the basket:

Altria in advanced talks to buy UST: source

Check Out Line: Mixed messages from retailers

Check out retailers’ profits and forecasts.

A discerning shopper, or investor for that matter, could browse the aisles of the retail financial world and come away with very different messages on the strength of the U.S. economy depending on which company’s results they chose.

On the plus side,  upscale jeweler Tiffany posted a better-than-expected profit and raised its full-year outlook, although that was driven by strong sales overseas. Tiffany expects U.S. same-store sales to return to growth in the fourth quarter. Shoe and hat retailer Genesco, and home-appliance and consumer-electronics retailer Conn’s also topped Wall Street’s views and boosted their forecasts.

For the pessimists out there, Williams-Sonoma saw its profit fall and it cut its forecast, while Sears Holdings also fell short of expectations amid the weak housing market.

Somewhere in the middle was discount store operator Fred’s, which reported a profit in line with what analysts were expecting.

Retailers have been hit in varying degrees as consumers dial back discretionary spending due to the pressure from high food and gasoline prices. Even as the U.S. economy grew stronger than first thought in the second quarter, economists see growth slowing as the year progresses.

Also in the basket:

Fighting the fugly jean

American Eagle is fighting a fickle foe: fugly jeans.

What makes jeans sit on the shelf instead of flying off the shelves? That’s up to the whims of American Eagle’s 15- to 25-year old target customer. The retailer’s summer offerings didn’t quite meet the expectations of its core audience, and sales suffered.

“We had a number of styles that just did not perform. And that hurt us very, very much,” American Eagle’s Chief Executive Jim O’Donnell said on a call with analysts.

“We’ve identified those (styles). We’ve taken appropriate action, both from a mark down point of view and also from a repositioning of holiday for ’08,” O’Donnell continued.

While O’Donnell declined to identify the worst selling styles, the retailer says it’s changing things up for the holiday season and next spring, bringing in at least four new styles for women and a few new lines for men “that we think are going to be very brand appropriate,” O’Donnell said.

 American Eagle posted sharply lower profits on Tuesday, hurt by weaker sales and increased markdowns needed to move unsold merchandise, and forecast third-quarter results below analysts’ estimates. 

(Photo/American Eagle)

Check Out Line: The short-lived tax rebate boost

Check out the fading influence of tax rebate checks.

Tax rebate checks helped boost June retail sales but their influence appears to have petered out by July, according to data released by the Commerce Department on Wednesday.

The figures showed that total sales at U.S. retailers declined 0.1 percent in July, which was in line with forecasts made by Wall Street economists. A big reason for the drop was a fall off in auto sales. Auto and auto parts sales fell 2.4 percent in the month, their biggest drop since April, and were off a whopping 10.5 percent from year-ago levels. 

But excluding autos, retail sales were up 0.4 percent in July. That was roughly in line with forecasts, but down from a 0.9 percent rise in June. 

Economists said before the numbers were released that spending has been supported by government stimulus checks but that the stimulus effect was waning in July because most of the checks already have been issued. Meanwhile, prices for many food items are on the rise and there was only a slight moderation in gasoline prices during the month. 

The Commerce Department said gasoline sales in July were up 0.8 percent after a 4 percent June jump. But reflecting higher prices, gasoline sales were 24.6 percent higher than in July last year. 

Excluding gasoline, retail sales in July fell 0.2 percent after a 0.1 percent June decline.

Check Out Line: Talbots’ makeover includes board

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.”