Check out the Retail Metrics earnings snapshot.

About two-thirds of the way through the second-quarter earnings season, retailers are beating earnings expectations by 5.1 percent on average, the research firm said.

But those were pretty low expectations and earnings are still down 6.4 percent compared with a year earlier. It is even worse when Wal-Mart is excluded. Then earnings are down 9.8 percent, Retail Metrics said.

Revenue is also down 2 percent.

With 83 retailers reporting, 41 percent had year-over-year earnings gains and 57 percent had declines.

Auto parts, drug and apparel retailers were among the groups seeing earnings gains, while teen apparel, department stores and home building supply stores were among the worst performers, Retail Metrics said.

Also in the basket:

Chico’s profit rises,  meets street view

Staples profit falls; says won’t give outlook

Burger King profit rises

Borders posts wider-than-expected loss

(Reuters photo)

Check out what’s hot in fall fashion. 
 
Lazard Capital Markets looked at 10 September fashion magazines and identified these trends:
 
Boots, with Jones Apparel getting seven call-outs in the magazines.
 
Skinny denim and leggings, both getting play with looser, less form-fitting tops.
 
Motorcycle jackets, military jackets, trench coats, sheath dresses and one-shoulder tops.
 
Also, “studs appear everywhere in clothing and accessories, including handbags, belts, shoes, dresses.”
 
Companies best capitalizing on the various trends include Jones, Gap, American Eagle and Guess, among others, Lazard said in a research note.
 
We were going to toss in a kicker of some fashion trend that is never coming back.  But face it, they all seem to come back at some point.  We expect to pull out our Members Only jackets any day now.
 
Also in the basket:
 
Tween Brands Q2 loss narrower than expected

BJ’s Wholsesale profit beats Street, raises FY view 

Popcorn, a hidden source of antioxidants, study says (ABC News)

(Reuters photo from 2004, because leggings always come back)

Could Americans really be getting the hang of life without excess? According to two recent consumer studies, they just might be.

NPD Group Inc, a market research firm, said on Tuesday that it found consumers are starting their back-to-school shopping later, spending less, and shifting away from discretionary items like shoes, clothes, and beauty items. Instead, they are focusing on necessities like school supplies and calculators.

“Back-to-school will be a big indicator of the consumer’s psyche with regard to overall spending this year compared to last year,” said Marshal Cohen, NPD’s chief industry analyst. “Consumers are clearly putting need over desire. They are more highly influenced by value than by fashionable or trendy products.”

According to NPD’s survey, the number of people who said they either ‘haven’t started’ or ‘don’t plan to shop for back to school’ by the end of July dropped 5 percent from last year .

About 44 percent of respondents said they planned to spend less for back to school, compared to 35 percent last year. The study also found that the percent of back-to-school dollars people plan to spend on footwear and apparel fell 9 points to 39 percent and 8 points to 52 percent, respectively.

Meanwhile BrandKeys, a marketing consulting firm, surveyed 10,000 households across the United States in July and found that the plans for back-to-school spending were down 10 percent this year. Spending fell across all categories, except for clothing.

“Clothing is unchanged because children grow,” said Robert Passikoff, president of BrandKeys. Even though spending fell in categories like computers, school supplies and study aids, Passikoff said kids will be going back to school pretty well kitted out in the classroom.

“Even in this economy, it’s still true that any investment in knowledge always pays the best interest,” he said.

(Reuters photo)

RadioShack is giving itself a new, shorter nickname - The Shack.

The gadget retailer is introducing a new ad campaign and intends to refer to itself as The Shack - something it says customers have already been doing.

“Our customers, associates and even the investor community have long referred to RadioShack as ‘THE SHACK,’ so we decided to embrace that fact and share it with the world,” said Lee Applbaum, RadioShack’s Chief Marketing Officer, in a statement.

While consumers often think to go to RadioShack to buy cables or batteries, the retailer said it is “critically important” that customers also think to go to it for mobile products.

“You will see a real focus on mobility and wireless products from leading brands in our new advertising,” Applbaum said.

The branding change brings to mind a switch made by former rival Circuit City.  Circuit City began calling its stores “The City” not long before it filed for bankruptcy protection and then liquidated it stores.

(Photo: Reuters)

Check out more retail doors closing.
 
Jones Apparel, which owns Nine West, Jones New York and other brands, said it will close 240 retail stores this year and next.

The company said the move will save it $4 million this year, $15 million next year and $21 million in 2011.
 
Saving money is the strategy many retailers have adopted over the past year as the recession clobbers sales. 

Jones also sought refuge in cost cuts as it beat Wall Street estimates for second-quarter profits. Jeans sales were strong, which was good because sales of pretty much everything else fell.
 
Jones is trying out a new retail concept, a shoe store called ShoeWoo, which could provide something the retail sector needs, if the ShoeWoo website is correct.
 
“WOO is a FUN FUN FUN rush of HAPPY,” the web site proclaims. And what retailer couldn’t use a FUN FUN FUN rush of HAPPY right now?
 
WOO!!
 
Also in the basket:
 
Coca-Cola Enterprises profit beats expectations
 
Timberland Q2 loss wider than estimates
 
KKR plans a Dollar General IPO (WSJ, subscription required)

(Photo: ShoeWoo website)

Check out the lack of interest in pens and purses.
 
Retailers as varied as Coach and Office Depot reported lower quarterly sales, continuing to show that despite some forecasts that the recession may be at an end, consumers are cutting back on just about everything.
 
Coach sales fell 1 percent and profit, excluding one-time items, dropped 21 percent.
 
Sales at Office Depot fell 22 percent and the company posted a wider than expected loss, sending its shares down 14 percent.
 
Oh, and it isn’t just office supplies and fancy bags consumers are cutting back on.
 
Grocery chain operator Supervalu reported a 4.5 percent drop in quarterly sales as it cut prices to try to keep consumers from going to stores like Walmart.
 
Economists are looking for “green shoots” everywhere these days, but the consumer still doesn’t seem to be buying it … or anything.
 
Also in the basket:
 
CIT courts creditors, plans large debt exchange
 
Under Armour posts surprise second-quarter profit
 
PepsiAmericas Q2 profit beats estimates, ups FY outlook
 
Italian group makes offer for Christian Lacroix (N.Y. Times)
 
(Reuters photo)

Check out what’s happening in apparel retail, according to UBS analyst Roxanne Meyer.
 
There were lower promotional levels last week as fall items hit stores, Meyer said in a  research note.
 
Retailers are focusing on plaid woven tops, scarves, skinny and boyfriend denim, leggings, artsy graphic tees,  flutter sleeves, boyfriend blazers, ruffles and chunky necklaces. Oh, and skirts are making a comeback.
 
Meyer said she is starting to see some “more reasonable” price points at Abercrombie & Fitch, which has tried to avoid aggressive promotions that other retailers have used for months to clear excess inventory during the recession.
 
But she also said demand for $180 blazers, $80 super skinny jeans, $98 boyfriend jeans and $80 beaded silk tank tops at the store will be limited.
 
Also in the basket:
 
CIT Group on cusp of $3 billion rescue
 
Hasbro profit beats, Discovery deal to hurt less
 
Jarden sees profit, sales meeting or topping view
 
RVC buys Ellen Tracy collections (WWD, subscription required)
 
Barnes & Noble consolidates publishing (Wall Street Journal)

(Photo: Reuters)

Japan is back in deflation, and price falls look like gathering pace as shoppers' bargain-hunting leads stores to cut prices further to weather the worst retail slump in decades.

Retailers large and small reported hard falls in quarterly profits last week, and the few bright spots were focused on those drawing in thrifty shoppers with their cheap but well-made goods.

Fast Retailing tops the list, as its Uniqlo stores thrive in tough times by selling T-shirts for $10 -- that's cheap here -- and other clothing at similar bargain prices. The company is also seeing strong sales growth at its other basic apparel chain g.u.

g.u., the cut-rate sibling of already-cheap Uniqlo, had a low profile for years but shoppers started flooding in after it slashed prices across the board and started flogging $11 jeans and $5 T-shirts this year.

Shoe retailer ABC Mart, which also saw solid growth in its quarterly profits, said its sales of heeled sneakers jumped three-fold after it lopped almost 50 percent off the price-tag back in spring.

Even convenience stores, which had been thought to be pretty well immune to price competition, are starting to cut prices. Seven-Eleven, Japan's largest chain, has marked down some household items like shampoo recently.

The trend is likely to intensify.

Japan's second-largest retailer, Aeon Co Ltd, said it planned more markdowns to plug a hole in its sales. The operator of Jusco supermarkets is one of the most aggressive in expanding cheap in-house brands and marking down national brands.

This is deflation in action. The stores hope that by dangling cheap price tags, they will raise their total sales as customers flood in and buy more items each. This puts added pressure on suppliers like food makers and household goods companies, already pushed hard by retailers to bring down their prices. And then shoppers hold back spending in the hope of even cheaper prices.

All this gives the central bank and the government major headaches as they try to break the downward spiral in prices that has dire consequences for businesses, employment and the economy as a whole.

They've got their work cut out though, and some retailers aren't that sympathetic.

An executive at one major retaling group told me he didn't think his firm's demand for further price cuts would hurt its suppliers.

"Look at how much profit they make," he said rather grudgingly.

The recession hammered U.S. holiday sales last year and new research suggests that it also drove up ”shrink” — a retail industry term for shoplifting, employee theft, and administrative errors.

An estimated $36.5 billion was lost to “shrink” in 2008, according to preliminary findings from the latest National Retail Security Survey released today.

That figure is up from $34.8 billion in 2007, an increase of nearly 5 percent.

The survey, conducted by the National Retail Federation and the University of Florida, also showed that retail shrink averaged 1.52 percent of retail sales in 2008, up from 1.44 percent in 2007.

“Criminals have found a way to manipulate and corrupt the retail industry,” said Richard Hollinger, lead author of the report and professor of criminology at the University of Florida.

Retailers grappling with the worst recession in decades have been forced to cut spending on everything from security to labor in a bid to protect profits. That scenario ”leaves new opportunities for thieves to take advantage of companies,” Hollinger said.

According to the survey, 44 percent ($15.9 billion) of the 2008 retail losses were due to employee theft. 14 percent of those cases involved collusion with outsiders.

Shoplifting accounted for 35 percent ($12.7 billion) of the losses. Administrative error and other losses were blamed for 15 percent ($5.4 billion) of the total, while vendor fraud came in at 4 percent ($1.4 billion).

The data came on the heels of a study released June 10th on organized retail crime, in which 92 percent of retailers said they were victims of retail crime, and 73 percent said the problem was getting worse.

(Photo: Reuters)

Sweethearting (v.) the act of a store employee giving a friend or family member free merchandise by pretending to scan items at the register or by ignoring items in shopping carts.

It is one of the oldest tricks in the book and a big problem for retailers. So big, in fact, that some estimates suggest that “sweethearting” and other types of employee theft account for almost half of all annual retail theft, or $19.5 billion out of $41.6 billion overall.

Massachusetts-based StopLift Inc. says the answer is just waiting to be liberated from all of the security camera tape that retailers typically don’t monitor until something goes really, really wrong.

We’ve all seen the video of outrageous things that can happen in grocery stores, convenience shops, and retail outlets, but the reality is that watching the security feeds from cameras mounted above every register is time-consuming — so most of that video information goes unused.

StopLift’s computer software analyzes camera feeds by reading certain body motions and other signs that tip off sweethearting. From there, it’s up to managers to decide whether training or  termination is the right response.

You can see actual “sweethearting” caught by the software on StopLift’s homepage, here.

StopLift said its clients include Big Y and Safeway grocery stores.

(Picture and video: StopLift.com)