Anglonautes > English vocabulary > Economy

Wal-Mart, a chain of discount stores started by Sam Walton in 1962,
has become a central figure in scores of social, economic and political debates,
from health care to immigration to gun control.

Supporters contend that the chain's legendary low prices have democratized consumption,
allowing low-income households to afford flat-screen televisions and nine-layer lasagna.
Critics say those low prices have depressed domestic wages
and exported manufacturing jobs to foreign countries,
hurting Americans more than helping them.

http://topics.nytimes.com/top/news/business/companies/wal_mart_stores_inc/index.html

http://www.nytimes.com/2011/12/06/business/global/wal-mart-hears-a-familiar-complaint-in-india.html
http://www.nytimes.com/2011/10/12/opinion/wal-marts-layaway-plan.html
http://www.nytimes.com/2011/01/20/business/20walmart.html
http://www.nytimes.com/2010/11/17/business/17shop.html
http://www.nytimes.com/2009/11/24/business/24shop.html
http://www.nytimes.com/2008/11/22/business/22walmart.html

Rob Rogers

Rob Rogers is the staff cartoonist at the Pittsburgh Post-Gazette.

In 1999 he was a finalist for the Pulitzer Prize.

Cagle

28 November 2011

The Guardian p. 17 17.1.2008
http://digital.guardian.co.uk/guardian/2008/01/17/pdfs/gdn_080117_ber_17_18581524.pdf

Chan Lowe

The South Florida Sun Sentinel

Cagle

1 December 2008

store USA
http://www.nytimes.com/reuters/business/business-us-usa-holidaysales.html

grocery stores USA
http://www.nytimes.com/2008/12/13/business/13private.html

grocer

shop

shop prices
http://business.guardian.co.uk/story/0,,1835625,00.html

shopper USA
http://www.nytimes.com/aponline/us/AP-Wal-Mart-Death.html
http://www.nytimes.com/reuters/business/business-us-usa-holidaysales.html
http://www.usatoday.com/money/industries/technology/2006-12-17-online-retail-usat_x.htm

shopaholic
http://www.guardian.co.uk/film/filmblog/2009/feb/25/comedy-romance

shoplifter USA
http://www.usatoday.com/news/nation/2008-11-30-shoplift_N.htm

shoplifting USA
http://www.nytimes.com/2008/12/23/us/23shoplift.html

shoplifting
http://www.guardian.co.uk/lifeandstyle/2009/jun/13/shoplifting-women

shoplifter
http://www.guardian.co.uk/lifeandstyle/2009/jun/13/shoplifting-women

steal
http://www.guardian.co.uk/lifeandstyle/2009/jun/13/shoplifting-women

shopping
http://www.independent.co.uk/news/uk/this-britain/
it-was-our-national-pastime-ndash-but-now-shopping-is-just-so-over-1026305.html

shopping list
http://www.reuters.com/article/lifestyleMolt/idUSN1744480520080417

shopping spree

free-spending on

shopping errand

go shopping

Christmas shopping 2006
http://www.timesonline.co.uk/article/0,,2-2519812,00.html

holiday shopping season USA 2007
http://www.usatoday.com/money/industries/retail/2007-11-25-holiday-shopping_N.htm
http://www.usatoday.com/money/industries/retail/2007-11-24-holiday-shopping-start_N.htm

holiday shopping season USA 2006
http://www.usatoday.com/money/industries/retail/2006-12-22-post-xmas-sales_x.htm

bargain hunting

Black Friday
the day after Thanksgiving / the first official day of the U.S. holiday shopping season USA
http://www.nytimes.com/2010/11/27/business/27shop.html
http://www.nytimes.com/interactive/2008/11/28/nyregion/20081128_BLACKFRIDAY_VOICES.html
http://www.nytimes.com/2008/12/01/business/01shop.html
http://www.nytimes.com/2008/12/01/business/media/01carr.html
http://www.nytimes.com/reuters/business/business-us-usa-holidaysales.html
http://www.reuters.com/article/newsOne/idUSN2361764120071123
http://www.usatoday.com/money/industries/retail/2006-11-26-black-friday-sales_x.htm

Cyber Monday, the first Monday after Thanksgiving USA
http://www.usatoday.com/tech/news/2008-11-30-cyber-monday-scams_N.htm
http://www.nytimes.com/2007/11/26/technology/26ecom.html

purchase

haggler USA
http://www.nytimes.com/2008/03/23/business/23haggle.html

'Sorry, we're closed'
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5167930.ece

Jeff Stahler

The Columbus Dispatch

Ohio

Cagle

19 November 2010

discount
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/3950030/
Boxing-day-bonanza-sales-promise-record-discounts-for-shoppers.html
http://www.nytimes.com/2008/11/12/business/economy/12leonhardt.html

discount grocers Aldi and Lidl
http://www.guardian.co.uk/money/poll/2012/feb/03/store-wars-aldi-lidl

heavy discounting

discounts and giveaways USA
http://www.nytimes.com/2009/01/03/business/media/03marketing.html

price cuts

price war USA
http://www.nytimes.com/2010/06/22/technology/22reader.html

sale USA
http://www.nytimes.com/2008/11/12/business/economy/12leonhardt.html

firesale
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5293678.ece
http://www.independent.co.uk/news/business/news/woolworths-to-hold-biggest-ever-sale-1053622.html

retail discounting

retail crash
http://observer.guardian.co.uk/business/story/0,6903,1478830,00.html

difficult trading over the crucial Christmas period

annual cost of a child's toys: £715
http://shopping.guardian.co.uk/toys/story/0,1587,1503290,00.html

sales performance

bidding war

trade war

supermarket price war

wallet
http://www.nytimes.com/2008/10/16/business/economy/16data.html

consumers' wallets

value for money

be better off

buying power

compete on price

be competitive on price

half price

knock £5 / 50% off
http://www.guardian.co.uk/business/cartoon/2008/dec/12/woolworths

20% off

£2 off

5p off

price cut
http://www.usatoday.com/money/industries/retail/2006-11-10-walmart-cuts_x.htm

overpriced

be priced out of...
http://www.timesonline.co.uk/article/0,,2-1621174,00.html

be worth ...

great saves

our lowest fares

go on sale

sale

sales
http://www.usatoday.com/money/industries/technology/2006-12-17-online-retail-usat_x.htm

Boxing Day sales
http://www.independent.co.uk/news/uk/home-news/
five-million-shoppers-head-out-for-boxing-day-sales-1215054.html

clearance

offers

deals

great deals

marketers
http://www.nytimes.com/2011/04/21/business/21marketing.html

In These Lean Days, Even Stores Shrink

November 9, 2010
The New York Times
By STEPHANIE CLIFFORD

SANTA ANA, Calif. — A temporary wall slices the Anchor Blue store here in half. On one side are abandoned dressing rooms, a few mannequins and no customers. On the other are racks jammed with clothing and accessories — and more customers than ever coming into the store.

Tom Shaw, the head of Anchor Blue, a clothing chain for teenagers, looked with approval at the 2,500 square feet of empty space that his company still rents. Foot traffic is up more than 7 percent, the chain says, and sales have increased nearly 23 percent since the trial remodeling last year.

“We don’t want a department-store feel,” Mr. Shaw said. “With that much product in that much space you can get lost, not know where to go.”

Anchor Blue is among a growing number of retailers thinking small — chopping off big chunks of stores or moving to more efficient spaces. The change reflects two trends in the retail world: Chains looking for new ways to cut costs in the sour economy, and consumers demanding a less sprawling shopping experience as they spend with greater purpose.

“The customer walks in the door, and often sees a huge selection of stuff in a multibrand store, and can’t figure out what to buy and ends up buying nothing,” said Paco Underhill, founder and chief executive of Envirosell, a Manhattan-based company that advises stores on shoppers’ behavior. “We have reached the apogee of the big box, meaning that we can’t grow the store or the shopping mall any bigger, or get any more time or money out of somebody’s pockets.”

Big chains like Bloomingdale’s and Nike are trying smaller stores, as are specialty retailers like Charlotte Russe. Mr. Underhill said most of his clients are exploring the idea, which can require creative thinking.

The new Bloomingdale’s in Santa Monica, Calif., for example, saves space with dressing rooms that retract into the ceiling. Charlotte Russe uses free-standing glass walls that can be rearranged. At Nike, the cash registers are wired into movable counters.

The smaller stores help clean retailers’ balance sheets. Rents drop, and smaller amounts of inventory cost less. Retailers can also reduce payroll costs because fewer employees are needed. At the Anchor Blue store here in Santa Ana, three employees now work on the floor instead of four.

Retail chains “saw their lives flash before their eyes in the financial crisis downturn,” said John D. Morris, an analyst with BMO Capital Markets, a financial services provider. “When you’re looking at such a severe slowdown as they were in consumption, you worry about the commitment in real estate.”

Mr. Shaw said he reduced the amount of clothing in the Santa Ana store by about 15 percent, removing many slower-moving items like unpopular sizes — and increasing profitability. As leases expire on its 118 stores, Anchor Blue is moving into spaces about half their size .

“You’re placing a sizable bet when you’re buying a lot of inventory and filling up a 6,000-square-foot box,” he said.

The financial success of many smaller stores is simple, retail analysts and the stores say: Smaller spaces are cheaper, and can be easily changed to carry the most profitable, fastest-selling inventory. The stepped-up foot traffic at the Anchor Blue store in Santa Ana, and the sales increase, for example, are both above the chain’s averages.

“It certainly enhances the productivity,” Mr. Morris said of the smaller spaces.

Bloomingdale’s store in Santa Monica, which opened this summer, is about 105,000 square feet on two floors, less than one-eighth the size of the chain’s Manhattan flagship store. The developer packaged in the third floor, but Bloomingdale’s declined the extra room, said Michael Gould, chairman and chief executive of Bloomingdale’s.

Mr. Gould said he wanted a smaller store to move through inventory faster. The Santa Monica store dropped two slower-moving categories, home and children’s, that are often found in other Bloomingdale’s stores. It has also saved space with innovations like a mobile rack, that resembles those dry cleaners use, on the second floor ceiling that moves mannequins and clothes.

“You have a store that’s turning very quickly,” he said.

In addition, Mr. Gould said, many shoppers have responded to a more focused retail experience — stores that have been stripped of the distractions and temptations of unwanted merchandise — as the success of Bloomingdale’s smaller Manhattan store in SoHo, opened in 2004, has demonstrated.

“We can be very specific to a customer and to a marketplace, and that’s what we need to do,” he said.

Nike is also looking at flexible layouts as it experiments with smaller stores. The typical Niketown store is more than 50,000 square feet, while its prototype “brand experience” store, opened in Santa Monica in August, is just 22,000 square feet. Nike has no plans to open more Niketowns, opting instead for smaller options like the “brand experience” store.

The driving force was to make shopping simple, said Tim Hershey, Nike’s vice president and general manager of North American retail. “Customers are always asking us to make it easy,” he said.

Almost all the elements of the new Nike store can be rearranged at a moment’s notice. Each wall contains horizontal slats about six inches apart, and almost every piece of hardware — the circle of metal that holds a soccer ball, the wire cages that contain socks — can be hooked into the wall slats. Freestanding tables and locker-compartmentlike display cases are on wheels. A big orange station where the cash registers are housed looks like the only permanent fixture in the store — but it is not.

“It’s wired to be relocated in multiple places,” Mr. Hershey said. “We like where it’s at but we haven’t been through a holiday. Live and learn.”

Charlotte Russe, which has more than 500 outlets nationally, is also experimenting with a new concept store in Santa Monica that is about 25 percent smaller than the norm.

Jenny Ming, the chief executive, ordered freestanding glass walls to distinguish between types of clothes. “It just makes it more shoppable,” she said. “So many stores now, it’s just big, you throw everything in there,” Ms. Ming said.

For maximum versatility and efficiency, each fixture has been designed for multiple purposes. A metal rod that lies perpendicular to the wall can hold shoes on plastic hooks, underwear looped through a leg hole or hangers.

Ms. Ming tried stacking shoe boxes on the selling floor so customers could select their sizes without waiting for a clerk. But that backfired, she said, as boxes were scattered, requiring extra staff (and money) for cleanup.

The boxes are back in the storage area, the experience pointing to an axiom of the new smaller-is-better movement. “It’s building in as much flexibility as possible,” Ms. Ming said.

In These Lean Days, Even Stores Shrink, NYT, 9.11.2010,
http://www.nytimes.com/2010/11/10/business/10small.html

In Recession, Strategy Shifts for Big Chains

June 20, 2009
The New York Times
By STEPHANIE ROSENBLOOM

Shopping as we know it is on the brink of major change.

Hammered by the recession, some of the nation’s biggest retailers are seizing the moment to reinvent their business strategies. And the impact will mean both sweeping changes in the merchandise on their shelves and subtler alterations, like how many pantyhose to keep in stock.

High-end stores like Neiman Marcus, Saks and Coach will offer more midpriced merchandise. Many chains, including Wal-Mart, will carry less inventory and fewer brands. The likes of Sears and J. C. Penney will put self-service computers in stores so customers can browse collections or buy out-of-stock items. And retailers of all stripes will offer more exclusive merchandise and more attentive customer service.

One of the biggest changes consumers are likely to see is greater personalization and regionalization of merchandise.

An initiative known as “My Macy’s” requires the retailer’s merchandisers and other planners to go into stores each week to learn from the sales staff — who keep logs at the cash registers — what shoppers are requesting, snapping up or complaining about.

For instance, when strapless and bare-shouldered dresses were selling well everywhere except Salt Lake City and Pittsburgh, Macy’s employees in those stores knew the problem was that their customers wanted more modest dresses. So they passed that information on to the merchandisers. Out went the strapless dresses; in came dresses with cap sleeves. And sales went from lackluster to robust.

Under the new system it will not be unusual for a local Macy’s to stock the merchandise customers request, be it wide-width shoes or Sean John suits, and for those offerings to be different from the ones in a Macy’s store 100 miles away.

“I think what Macy’s is embarking on is perhaps the largest transformation in our company in a couple of decades,” said Terry J. Lundgren, president and chief executive.

The Macy’s change is just one example of a wide range of initiatives retailers are pursuing as they struggle to cope with an economy where sales are lower than they were just a few years ago.

At high-end stores, the era of ever-escalating prices on luxury goods appears to be over. In the future, consumers will still be able to buy chic brand names, but at a wider range of prices.

“Our customer loves our brands,” said Stephen I. Sadove, chairman and chief executive of Saks. “They don’t want to trade down to lower brands. But they want more of a range in price within the brands that they love.”

And that is what retailers intend to give them. Burton M. Tansky, president and chief executive of Neiman Marcus Group, told investors on a conference call last week that “we’re working with the designers to try and ease a portion of their collections into a new price range.”

Prices will also be lower at some “affordable luxury” chains, like Coach, which is increasing the proportion of handbags it sells for less than $300. About 50 percent of the company’s handbags will cost $200 to $300, in contrast to about 30 percent of handbags last year.

Another change is that consumers will have fewer brands from which to choose. Wal-Mart, Target, Home Depot, and PetSmart are just a few of the chains winnowing their brands. As Home Depot’s executive vice president for merchandising, Craig Menear, put it: consumers are “time-starved” and “looking for simplification in the entire shopping experience.”

That may delight minimalists, because it will be easier to find items on the shelves. But it also limits choice.

Another potential drawback for consumers is that stores may run out of stock more quickly than in the past because, as Mr. Lundgren of Macy’s explained, “retailers learned that you can’t get out of the merchandise that you ordered months before.”

“Instead,” he said, “you’re more likely to see retailers ordering fewer of each individual size and taking that risk that they’ll sell out and not capture every sale, rather than the risk of having too much inventory left over to mark down.”

Another trend is on the horizon: seasonal transitions for apparel will probably have shorter lead times. With strapped consumers buying only what they need when they need it, it has occurred to retailers that selling swimsuits to New Yorkers in early March is not necessarily a winning strategy. And so chains are beginning to work with suppliers to shorten the time between ordering and delivering merchandise.

Consumers will also see even more of the exclusive collaborations between retailers and prominent designers that are so prevalent today. That will help distinguish stores as well as avoid price wars because the same items will not be sold at multiple chains.

Yet another change will be the obliteration of any remaining divide between online and in-store shopping.

In Sears stores, “appliance research centers” with computers are enabling customers to compare local competitors’ prices. (If Sears does not offer the best price, it will match the lowest offer and hand over 10 percent of the difference.) Four J. C. Penney stores in Dallas are testing “FindMore” machines the size of arcade games, letting customers see every item J. C. Penney sells and find out if the item they want is in the store or online.

Shopping by cellphone will also become widespread.

“Everything we are developing is with a mind-set that it’s going to be running on a handset,” said J. C. Penney’s chief information officer, Thomas M. Nealon.

Despite all the new technology, consumers will be getting more attention from sales staff. During the last few years, retailers did not have to work hard to separate consumers from their dollars.

But those days are over. More middle-market chains are striving for Nordstrom-quality service to win customers. Even Home Depot has adopted its “most extensive customer service training ever,” its chairman and chief executive, Frank Blake, told investors and retailing analysts last week.

Of course, luxury chains have always featured a high level of attentiveness. But the chains say that in this economy, customers have heightened expectations. Saks, for one, has invested tens of millions of dollars in the last year on software that provides its sales staff easy access to information about client purchases and preferences, so that a returning customer might be greeted by a sales representative who recalls the shopper’s suit size and penchant for Christian Louboutin heels.

Economists and analysts forecast that it will take up to 10 years to return to 2007 levels of consumer spending — which makes now a good time for retailers to re-imagine the future. Paul A. Laudicina, chairman and managing officer of A. T. Kearney, the management consulting firm, noted that major consumer innovations like Neoprene and Teflon came out of the Depression.

Mr. Lundgren pointed out that if consumers were still throwing money around, stores might not want to alter strategies that were still working.

But with today’s recession, he said, “now is the time to aggressively rock the boat.”

In Recession, Strategy Shifts for Big Chains, NYT, 20.6.2009, http://www.nytimes.com/2009/06/20/business/20retail.html

Retail Sales Are Weakest in 35 Years

December 5, 2008
The New York Times
By STEPHANIE ROSENBLOOM

The nation’s retailers turned in the worst sales figures in at least a generation on Thursday, starting the holiday shopping season with double-digit declines across a broad spectrum of stores.

For many chains, the precipitous sales drops that took hold in September and October got worse, not better, in November, despite relatively strong sales in the few days after Thanksgiving.

The International Council of Shopping Centers, an industry group, described November’s figures as the weakest in more than 35 years. Declines were recorded in every retail segment the group tracks, with the biggest coming from department stores, with sales down 13.3 percent compared with November a year ago, and specialty apparel retailers, down 10.4 percent.

Some retailers, though, have begun to figure out how to manage in the bleak environment, selling huge amounts of merchandise at steep discounts to generate cash. That will erode profits, of course. Department store profits will most likely plummet 20 to 60 percent in the final three months of the year, said Bill Dreher, senior retailing analyst with Deutsche Bank Securities. But retailers who are unloading merchandise early in the season are at least demonstrating an ability to take control.

“Even if they’re giving away the product, it reduces inventory levels and keeps the problem from continuing,” Mr. Dreher said. “It shows retailers are being disciplined.”

Retail stocks rallied Thursday as investors interpreted the sales report as showing that, with sufficient discounts, goods can be sold in volume despite the poor economy. The Standard & Poor’s retail index rose 1.5 percent.

The discounts being dangled by stores are the biggest retailing analysts have ever seen. “When did you ever see, on Dec. 1, 70 percent off apparel on the high end?” said Claire Gruppo, managing director of Gruppo, Levey & Company, a New York investment bank. “You just don’t.”

Any retailer that refused to trot out jaw-dropping bargains in November paid the price.

For example, Abercrombie & Fitch, the chain that uses sexy bodies in seductive poses to sell clothes to teenagers and young adults, has refused to get on the discount bandwagon. In November, sales at stores open at least a year, an important measure of retail health, fell a whopping 28 percent for the company, in contrast to a 2 percent increase for the period a year ago.

That is a far worse decline than previous months: Sales at Abercrombie & Fitch stores open at least a year were down 14 percent in September and 20 percent in October.

Saks, on the other hand, has driven consumers into shopping frenzies with eye-popping deals on luxury names like the Armani Collezioni and Zac Posen. The tactic worked: In November, Saks had only a 5.2 percent decline in sales at stores open at least a year, clawing its way up from months of double-digit declines.

Other stores that improved their lot in November took a page from the same playbook. Neiman Marcus, for example, has also been selling luxury goods at startling discounts. Sales at Neiman Marcus stores open at least a year fell 11.8 percent in November — better than the 15.8 percent drop in September and the 27.6 percent dive in October.

“If you don’t understand the consumer and his mood right now and you’re doing things as usual,” said Walter Loeb, president of Loeb Associates, a consultant firm, “you’re not going to get any business.”

Stunning declines have become the norm in retailing since sales first plunged in September amid the financial crisis. The November figures indicate the downturn is migrating to some discount and warehouse stores, some of which even had sales growth in October.

Ken Perkins, president of Retail Metrics, a research firm, said either Wal-Mart Stores was stealing market share from its bargain competitors or the whole sector was softening.

At Target, sales at stores open at least a year tumbled 10.4 percent, in contrast to a 10.8 percent increase a year ago. Sales at Target were down 3 percent in September and 4.8 percent in October.

Sales at Kohl’s stores open at least a year sank 17.5 percent, in contrast to a 10.2 percent increase last year. Sales at Kohl’s stores dropped 5.5 percent in September and 9 percent in October. Sales at Costco were down 5 percent in November after a 7 percent increase in September and a 1 percent dip in October.

Even some stores with October sales increases lost their edge in November. Children’s Place, which had a 4 percent sales increase in October, sank 7 percent in November. Aéropostale, which was up 1 percent in October, was down 5 percent in November.

Of all the major retailers, only Wal-Mart and BJ’s Wholesale Club, two of the country’s best-known discount chains, thrived, in part because of robust grocery sales. Wal-Mart, in fact, enjoyed the biggest grocery sales spike in its history.

With new lines of brand-name merchandise from makers like Sony and Samsung, and with rock-bottom prices and an ability to move high volumes of merchandise, Wal-Mart seems to have cornered the market on Christmas this year.

The company began the critical holiday season by exceeding expectations. Sales at stores open at least a year increased 3.4 percent in November, not including fuel, compared with a 1.5 percent increase a year ago.

(The company made a point of being subdued in its sales announcement, noting its sadness that a worker, Jdimytai Damour, had been trampled to death at a Wal-Mart in Valley Stream, N.Y., when rowdy shoppers burst through the doors on Black Friday.)

Sales at BJ’s Wholesale Club stores were up 4.1 percent in November, not including fuel, compared with a 7.7 percent increase a year ago.

Many retailers were buoyed by sales over Black Friday weekend, which increased about 0.9 percent, compared with a 6.5 percent increase last year, according to ShopperTrak, a research firm. Yet the weekend after Thanksgiving did not account for the majority of retailers’ November sales. Results for the month were weakened, many people in retailing said, by the calendar — a later Thanksgiving this year meant fewer post-Thanksgiving shopping days in November.

“The Thanksgiving weekend improvement was not enough to significantly alter the month’s outcome,” Linda M. Farthing, president and chief executive of Stein Mart, said in a statement on Thursday. “We expect to continue aggressive promotional activity through the remainder of the year.”

It was a plan echoed on Thursday by other retailers, like American Eagle Outfitters and Kohl’s.

John D. Morris, an analyst with Wachovia whose Holiday Sale Rack Index tracks promotions at specialty mall retailers, said discounts were up 12 percent compared with last year. That may not sound like much, but it is the biggest jump in the decade-long history of the index. Usually, a big promotional period sends the index up 5 percent.

“It’s a terrible story for retailers and their margins,” said Michael Unger, a principal with Archstone Consulting. “But if you’re a consumer looking for a good deal, you will find it.”

Retail Sales Are Weakest in 35 Years, NYT, 5.12.2008, http://www.nytimes.com/2008/12/05/business/economy/05shop.html?hp

Wal-Mart Employee Trampled to Death by Customers

November 29, 2008
The New York Times
By JACK HEALY and ANGELA MACROPOULOS

A Wal-Mart employee in suburban New York was trampled to death by a crush of shoppers who tore down the front doors and thronged into the store early Friday morning, turning the annual rite of post-Thanksgiving bargain hunting into a Hobbesian frenzy.

At 4:55 a.m., just five minutes before the doors were set to open, a crowd of 2,000 anxious shoppers started pushing, shoving and piling against the locked sliding glass doors of the Wal-Mart in Valley Stream, N.Y., Nassau County police said. The shoppers broke the doors off their hinges and surged in, toppling a 34-year-old temporary employee who had been waiting with other workers in the store’s entryway.

People did not stop to help the employee as he lay on the ground, and they pushed against other Wal-Mart workers who were trying to aid the man. The crowd kept running into the store even after the police arrived, jostling and pushing officers who were trying to perform CPR, the police said.

“They were like a stampede,” said Nassau Det. Lt. Michael Fleming. “Hundreds of people walked past him, over him or around him.”

The employee, who was not identified, was taken from the Wal-Mart to nearby Franklin Hospital, where he was pronounced dead at 6:03 a.m., the police said. His exact cause of death has not been determined. The police said that three other shoppers were injured and a 28-year-old woman who was eight months pregnant was taken to the hospital for observation.

One shopper, Kimberly Cribbs, said she was standing near the back of the crowd at around 5 a.m. on Friday when people started rushing into the store. She said several people were knocked to the ground, and parents had to grab their children by the hand to keep them from being caught in the crush.

“They were falling all over each other,” she said. “It was terrible.”

Crowds began building outside the Wal-Mart at 9 p.m. Thursday and grew throughout the night, as eager shoppers queued up in a line that filled the sidewalk and stretched toward the boundary fence of the Green Acres Mall.

At 3:30 a.m., store employees called the Nassau police to report that the crowd was growing quickly, the police said. Officers came by to try to organize the line, but were called away to a Circuit City, a Best Buy and a B.J.’s Wholesale Club nearby, to deal with crowds there.

A half-dozen Wal-Mart employees lined up in the entryway trying to hold back the crowd by pushing against the locked sliding doors, but they were overwhelmed by the force of the crowd, Lieutenant Fleming said.

As the doors snapped open and people streamed in, several people fell on top of one another. The 34-year-old employee who died was at the bottom of the pile, the police said.

On Friday, Wal-Mart released a statement saying that the man who was killed had been working for Wal-Mart through a temp agency. The company called the death “a tragic situation,” and said it was working with police.

“The safety and security of our customers and associates is our top priority,” Wal-Mart said in a statement.

Lieutenant Fleming said that the store “could have done more” to prevent the melee.

“I’ve heard other people call this an accident, but it’s not,” he said. “This certainly was foreseeable.”

Wal-Mart Employee Trampled to Death by Customers, NYT, 29.11.2008, http://www.nytimes.com/2008/11/29/business/29walmart.html

Mega-mall: Is this the future of shopping?

He's built a global empire of malls.
Now, in London, Frank Lowy is about to unveil his boldest project yet
– just as recession hits.
Does he know something we don't?
Rob Sharp reports on a £1.7bn gamble

Thursday, 23 October 2008
The Independent

On a building site in west London, 8,000 contractors are crawling across a gargantuan, soon-to-be-finished shopping centre. Lifts raise builders in hi-vis jackets as they finish painting restaurant exteriors. Droves of stone masons hurriedly shift huge granite slabs into their final resting places. Sparks from welding torches cascade to the floor. Rivers of polythene wrapping snake as far as the eye can see.

When Boris Johnson opens its doors on Thursday next week, Westfield London will be Britain's largest urban shopping centre. Sprawling across 43 acres just north of Shepherd's Bush Green, it will house 265 shops, with Tiffany & Co, Louis Vuitton, Gucci, Prada and De Beers offering glitz alongside Waitrose, Russell & Bromley, Marks & Spencer and other familiar high-street names. There will be dozens of restaurants, a library, and two new London Underground stations to bring in the masses. Those who drive will have the option of employing the services of a 70-strong team of valets. Needless to say, this is no ordinary shopping centre. Its makers are marketing it as the cutting edge of "retail experiences".

Costing £1.7bn, it is also the biggest venture – in monetary terms – that the development company, Westfield, has ever undertaken. Back in 2004, when Westfield bought the site, it must have seemed an irresistible way to ride the consumer boom. Given the current economic climate, it feels like an even more audacious move than the company may have intended. Household budgets are under pressure; consumer confidence is far from buoyant. Earlier this week, The Ernst & Young Item Club, an influential forecasting agency, predicted that consumer expenditure on everything from food, clothes, holidays, household bills, home improvements and entertainment will fall by 1.2 per cent in 2009. This compares with an average annual growth of 3.5 per cent over the past decade.

One would think such statistics would send a shiver down the spine of even the most hardened of businessmen. But Westfield's chairman Frank Lowy, who turned 78 yesterday, is no ordinary corporate suit. According to Australian media reports, he boasts a fortune of £2.4bn, making him the richest man in Australia. Born in Slovakia, he arrived in Australia in 1953 after spending a period shortly after the Second World War in a refugee camp in Cyprus. After founding Westfield in 1959 with business partner John Saunders (who died in 1997 aged 75), Lowy has grown his company into the biggest publically listed retail property group in the world. It is valued at more than £26bn, and leases 10 million square metres of retail space to 23,000 retailers in 119 centres around the world. In the company's homeland, as many people speak of "going to Westfield" as they do of "going shopping".

But pulling off this audacious development is more than just a question of battling economic forces. Local residents are far from pleased about the effects of bus routes imposed by Hammersmith and Fulham council to serve the new centre. Writing in the London Evening Standard this week, the novelist Sebastian Faulks slammed the new routes planned for areas close to the development for running through some of the capital's historic conservation areas. He also described how the council's consultation over the new routes was radically under-resourced, and how new buses will add unnecessary pollution and congestion to already busy and dirty streets. In addition, the scheme – located just three miles from London's West End – will draw customers away from already cash-strapped Oxford Street shops. For years, Westfield London has been spoken of as the nail in the coffin of Oxford Street.

Meanwhile, tax authorities in Australia are investigating Lowy amid claims by the US Senate that he hid £42m from the Australian Taxation Office. But this is all in a day's work for a man who obtained a shrapnel scar on his forehead when fighting for the Israeli army. Westfield London, experts say, will still manage to bring a smile to his lips.

Lowy was born into a Jewish family in 1930 in Fil'akovo, a rural town in what was then Czechoslovakia. According to the official biography on the Westfield website, at an early age he helped his mother to run the family grocery shop. When the Second World War broke out, his family sold their shop and fled to Budapest. Here, Lowy helped his older brother, John, run a metalware business, but the family was soon hit by tragedy. When the Nazis invaded Hungary in March 1944, Lowy's father was captured and sent to Auschwitz, where he eventually died. Without the family's main breadwinner, Lowy supported his mother by foraging for food.

When the war ended, Lowy left Europe for Israel. On his way, he was picked up by the British Army and spent several months in a refugee camp in Cyprus. After his release, he reached Israel, aged 17, to join the nation's Golani Brigade, an army unit fighting in the 1948 Arab-Israeli war.

When the war finished the same year, Lowy spent a brief time working in a bank, and studying to become an accountant at night school. Eventually, he decided to go to Australia, to where many members of his family had already moved. He arrived there on 26 January 1952, carrying a small suitcase, and possessing only a basic knowledge of English. "All those events shaped my life," Lowy said in an interview earlier this month. "It's a requirement to have some sort of paranoia. You have to think of what can go wrong even when times are good. So you can never enjoy your success fully."

In Sydney, the man who would become a property magnate managed to scrape together enough cash to buy a van. He began work as a deliveryman, and it was then that he met Saunders, another Holocaust survivor, who had set up a small shop in the outskirts of Sydney. The pair's first business venture together was running a delicatessen. They soon realised that along with salami and rye bread, newcomers from Europe needed a wider array of goods. They borrowed from a local bank manager and used profits from the deli to buy farmland out of town. The pair read about the popularity of American shopping malls, and in 1959 built their first shopping centre on that land. Westfield Investments was listed on the Australian stock exchange in 1960. Over the next two decades, the pair built up their company to become one of the best-known shopping centre providers in Australia, where Lowy now owns 44 malls.

In 1977, the company bought its first US shopping centre, in Connecticut, but it was not until 2000 that the company gained its first foothold in the UK market. In March of that year it bought the Broadmarsh centre in Nottingham, in partnership with the investment house Hermes. The same year it also acquired shopping centres in Tunbridge Wells, Guildford, Derby and Northern Ireland.

Now, Lowy runs his worldwide empire – across Australia, New Zealand, the United States and Britain – with his two sons, group managing directors Steven and Peter. Frank Lowy is based on the top floor of the 24-storey Westfield Towers in Sydney, which his company built in 1974. The company founder's own floor has uninterrupted views of Sydney's Opera House and Harbour Bridge, near to which Lowy's 74-metre yacht, named Ilona IV after his mother, is berthed. It was here that the Australian executive worked on his plan to enter the UK market – a plan that took his three decades to perfect.

The company developed its first UK shopping centre, after demolishing an existing mall in Derby. The £340m Westfield Derby project opened in October of last year. It was the biggest shopping centre to open in Britain that year. Now, Westfield hopes its west London development – located in an area known as White City – will move shopping centre development in the UK to the "next level".

"All our projects are about evolution," says Westfield UK and Europe managing director Michael Gutman. "In the White City project we are trying to bring together all the knowledge we have gathered from our 118 centres in four countries around the world. This will be our 119th. It is a unique trading area and demographic in terms of the power and disposable income of the people who live nearby. It is unparalleled in terms of connectivity. It contains some phenomenal public spaces both inside and out."

The story of how Westfield created Westfield London goes back four years. It involves a complicated series of acquisitions and joint ventures, but essentially involved Westfield taking control of an existing scheme being developed by fellow property firm Chelsfield in 2004.

Westfield bought out its partners in that acquisition, the Reuben brothers, billionaire private investors, and Multiplex, the Australian construction firm. In 2006 Westfield also took control of the project's construction from the Australian construction firm Multiplex, which at the time was dealing with negative press surrounding the late delivery of Wembley Stadium, which it was also contracted to build. Westfield currently owns a half stake in Westfield London, with the other half being owned by the property arm of the German financier Commerzbank.

Before Westfield's acquisition of the development, the acclaimed British architect Ian Ritchie had designed a concept for the shopping centre. He had suggested a number of features, which included the interior of the centre being covered by a fabric roof. When Westfield took control, it decided not to continue its relationship with Ritchie and brought its own in-house designers on board, who collaborated with out-of-house architects on specific elements of the scheme. These external designers included a young firm of London architects, Softroom, who designed a futuristic-looking café court called "The Balcony". Acclaimed New York designer Michael Gabellini took charge of blueprints for "The Village" – the separate area of the centre where the luxury brands such as Tiffany & Co are housed.

Westfield's own architects scrapped the fabric roof in favour of a glass version that would allow more light to enter the centre's interior. They also introduced a street of bars and restaurants that will be open around the clock – the "Southern Terrace" – at the centre's south-east corner, at the suggestion of superstar architect Richard Rogers, who at that point was acting as an adviser to former London mayor Ken Livingstone. Rogers felt the street would improve the area's public space.

"Normally we design all of our own buildings. But when we acquired the property, its design had already won planning permission from the council and it was under construction," says Gutman. "On a major retail development, the planning and circulation requires knowledge and experience. So we needed to bring on board some specialists, which we got through Softroom and Michael Gabellini."

On a private tour with the developer late last week, two weeks before the completion of construction, things appeared to be in impressive shape. Approaching Westfield London from the south-east, where a new bus terminal and specially designed, sleek-looking Shepherd's Bush Tube station sit, shoppers ascend the shallow granite ramp or "shopping street" of "Southern Terrace". This street is already lined with finished restaurants, outside which diners will sit on terraces overlooking the thoroughfare. The façades of the restaurant are of various sizes and designs to give each its own character. Overhead, various canopies, each again of unique size and material, offer protection from the elements. The red Westfield logo is affixed at key points to the street's façade.

Entering through a huge glass entrance, customers encounter a massive central space. Above this, one gets a look at the distinctive, undulating glass roof, through which daylight streams to cast triangular patterns on perfectly white walls.

This central space contains a large central "well" surrounded by the centre's three floors. On the uppermost of these, a 14-screen cinema, due to open next autumn, will allow film-goers to take a beer, wine or cocktail to the newest film releases as well as to reserve special "VIP" areas.

On the floor beneath this, the clothing store Timberland has turned the front of its shop into what appears to be a large wooden box, in line with the company's "rugged and outdoor" branding. A short distance away, Apple has finished its unit with typical white minimalism. To one side, Softroom's "Balcony" stretches for some 50 metres. Its futuristic, capsule-like appearance is contained within a façade that appears to be divided into a series of wooden slats. Here, an array of dedicated restaurants such Crocque Gascon – who will serve modern French cuisine like "duck burger classique" – and Vietnamese street food restaurant Pho, will serve to customers who will then sit at a shared seating area.

On the lowest floor, DKNY and Russell & Bromley have leased units. Gabellini's "Village" lies to the north-east of this central space. Here, the ceiling is shaped into soft ovals of plastic from which chandeliers hang.

Such features seem to have gone down well with retailers. At the time of opening, Westfield says the centre will be more than 96 per cent leased. Around 90 per cent of the tenants locked into 10 to 15-year contracts before the full extent of the current economic crisis was known. Unless the shops go out of business, Westfield will get their money.

It may sound worrying for the retailers concerned, but signing on Lowy's dotted line may well prove to suit them as much as Westfield. It's impossible to know the details of each deal, but industry experts believe that they may not have to part with any cash for the first year or two. So they can take their places in this glittering cathedral to the future of shopping, and pay for it when (they hope) the economy, and consumer confidence, is in an altogether better place.

And many believe that Lowy will prosper despite the current economic gloom. "Rather than being troubled by the financial crisis, Westfield has almost landed on its feet," says Retail Week editor Tim Danaher. "In fact, far from being unenthusiastic about the development, retailers don't want to be left out. While the details of the deals they have struck are mired in secrecy, Westfield, like all developers of new shopping centres, will have made concessions – such as rent-free periods and contributions to the shops' fit-outs, which have helped to persuade people to come on board. While some of the smaller retailers might go bust, the big guys won't come unstuck. Westfield has got the stomach to cope."

It has not all been plain sailing for Lowy and his empire, however. The business news agency Bloomberg reports that the billionaire is embroiled in a bout with tax authorities. The Australian Taxation Office is investigating claims that he hid £42m from tax officials. A US Senate panel had alleged in July that the Lowy family and LGT Group, a bank owned by Liechtenstein's royal family, had used a foundation and companies registered in Delaware and the British Virgin Islands to conceal the fact that the Lowys owned the money in question. This is something Frank Lowy has vehemently denied.

On a more local level, the White City scheme has encountered a degree of opposition. Nigel Kersey, director of the London branch of the Campaign to Protect Rural England, tried unsuccessfully to take the local council to court in 2000 for failing to ask for an environmental damage assessment over the initial Chelsfield scheme. "Had the planning authority played by the rules, it would have shown that the impact would be substantial," he said at the time.

Since then, Westfield says it has conducted broad consultations and that local groups now welcome the project. Indeed, the company is so confident that it is pressing on with plans to build a £1.45bn, 175,000sq m centre in Stratford, east London, to be completed in time for the 2012 Olympics. "The current slowdown is only likely to be relatively short-term compared with the planning process and the active life of a shopping centre," says Richard Dodd, a spokesperson for the British Retail Consortium, which represents British shopping centres. "Now, when retailers are competing more fiercely for customers' every pound, investing in your premises can be a good thing to do. Shopping centres offer great access and investment in retail."

Certainly, Michael Gutman feels the company has done enough to make sure that it is not hit by any forthcoming economic crash. "Most definitely we are in this for the long haul," he concludes. "We have a history of being long-term owners. We are beginning our relationship with Londoners and we hope to be embraced as a new icon on the landscape, like Covent Garden or the O2.

"We have opened projects in recessions before and in booms before. These buildings are built for long-term and they take several years to settle. The retailers who have taken stores are our customers and we are in a partnership with them to maximise their performance. The ability to effectively come in the morning to do grocery shopping and have a coffee and maybe go to the gym and go back home as well as doing fashion shopping surpasses anything you currently see in the high street."

In an interview last month, Frank Lowy, Gutman's ultimate boss, divulged that a few times a month, he plays poker. The billionaire says he gambles for stakes high enough to be painful if he doesn't win. "It has to hurt you a little bit when you lose," he said, declining to say how much someone with his finances might actually bet. "And I don't like to lose, period."

This time, with the ante at £1.7bn, you can bet that losing would cause Lowy considerable pain.

Mega-mall: Is this the future of shopping?, I, 23.10.2008,
http://www.independent.co.uk/news/uk/this-britain/megamall-is-this-the-future-of-shopping-969624.html

Cost of a shopping basket soars in the 'phoney' supermarket price war

Saturday, 12 July 2008
The Independent
By James Thompson and Sam Kriss

British supermarkets have introduced massive price hikes over the past year, shattering the myth of a so-called price war in which grocers are bending over backwards to help hard-pressed consumers.

Tesco, Asda and Sainsbury's have ramped up the price of many products by between 22 and 32 per cent over the past 13 months, hitting customers at a time when the cost of living is soaring, The Independent can reveal.

The soaring figures illustrate the level of food inflation heaped on consumers, as they face spiralling petrol prices, rising utility bills and stagnating house prices. The revelation comes at a time when grocers are as active as ever in claiming that they are delivering millions of pounds of price cuts to consumers.

On a sample of 17 products, Sainsbury's has hiked prices by 31.6 per cent, Tesco by 27.5 per cent and Asda by 21.6 per cent between 11 June 2007 and 11 July 2008, according to grocery price comparison site, mysupermarket.co.uk.

The Independent tracked 17 products including thick-sliced white bread (800g), six pints of semi-skimmed milk, English butter (250g) and garden peas (1kg).

Tesco has raised the price of white bread from 54p to 72p; Sainsbury's has hiked the price of Basmati rice (1kg) from 90p to £1.89p; and Asda has increased English butter from 58p to 94p, as have its other two rivals.

These figures dwarf the estimates of the British Retail Consortium, which this week said that food cost 7 per cent more in British supermarkets in June than it did in the same month last year.

Before the last weekend in June, Tesco said it would reduce the price of 3,000 items by up to 50 per cent, while Asda promised to sell 10 staple items, including bread, eggs and butter for only 50p until end of trading on 29 June. However, industry experts say the current activity on price does not compare to previous battles, and is more about PR than helping consumers.

Greg Lawless, an analyst at Blue Oar, says: "I don't think there is a price war. This is a price skirmish. The last proper price war we had was in the early 1990s ... It's not in Tesco and Asda's interests to launch a price war as it would suck profits out of the sector."

Retailers themselves agree. Malcolm Walker, chief executive of the frozen food specialist Iceland, said successful retailers would not do anything to jeopardise their profit margins. He said: "No retailer can afford to drop more than one point – one-tenth of 1 per cent – on the gross margin and anything they do on price is tactical." He added: "It is all marketing and spin."

Bryan Roberts, global research director at Planet Retail, made the point that price cuts and promotions were often funded by suppliers. He said: "Effectively, promotions cost the retailers nothing because it is the suppliers who are often asked to invest in these 'price promotions'."

The big three grocers say that while the price of commodities, such as wheat, meat and dairy products, have risen sharply over the past year, they try to cut prices for products that are not affected by the same inflationary pressures.

A spokeswoman for Sainsbury's, which claimed last month that its food price inflation was about 3 per cent, said: "The increases in the cost of commodities such as wheat and dairy have had an impact on the price of foods." An Asda spokeswoman said: "We disagree that supermarkets are unfairly passing on costs to customers.

A Tesco spokeswoman said: "We know customers are tightening their belts and wherever possible we look at cutting prices to help them.

"The 7 per cent [price rise] figure from the BRC is realistic. It's easy to skew figures by only choosing a certain basket of items for price comparison."

Cost of a shopping basket soars in the 'phoney' supermarket price war, I, 12.7.2008, http://www.independent.co.uk/news/uk/home-news/cost-of-a-shopping-basket-soars-in-the-phoney-supermarket-price-war-865803.html

Retailing Chains Caught in a Wave of Bankruptcies

April 15, 2008
The New York Times
By MICHAEL BARBARO

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable.

Retailing is a business with big ups and downs during the year, and retailers rely heavily on borrowed money to finance their purchases of merchandise and even to meet payrolls during slow periods. Yet the nation’s banks, struggling with the growing mortgage crisis, have started to balk at extending new loans, effectively cutting up the retail industry’s collective credit cards.

“You have the makings of a wave of significant bankruptcies,” said Al Koch, who helped bring Kmart out of bankruptcy in 2003 as the company’s interim chief financial officer and works at a corporate turnaround firm called AlixPartners.

“For years, no deal was too ugly to finance,” he said. “But now, nobody will throw money at these companies.”

Because retailers rely on a broad network of suppliers, their bankruptcies are rippling across the economy. The cash-short chains are leaving behind tens of millions of dollars in unpaid bills to shipping companies, furniture manufacturers, mall owners and advertising agencies. Many are unlikely to be paid in full, spreading the economic pain.

When it filed for bankruptcy, Sharper Image owed $6.6 million to United Parcel Service. The furniture chain Levitz owed Sealy $1.4 million.

And it is not just large companies that are absorbing the losses. When Domain, the furniture retailer, filed for bankruptcy, it owed On Time Express, a 90-employee transportation and logistics company in Tempe, Ariz., about $30,000.

“We’ll be lucky to see pennies on the dollar, if we see anything,” said Ross Musil, the chief financial officer of On Time Express. “It’s a big loss.”

Most of the ailing companies have filed for reorganization, not liquidation, under the bankruptcy laws, including the furniture chain Wickes, the housewares seller Fortunoff, Harvey Electronics and the catalog retailer Lillian Vernon. But, in a contrast with previous recessions, many are unlikely to emerge from bankruptcy, lawyers and industry experts said.

Changes in the federal bankruptcy code in 2005 significantly tightened deadlines for ailing companies to restructure their businesses, offering them less leeway.

And the changes may force companies to pay suppliers before paying wages or honoring obligations to customers, like redeeming gift cards, said Sally Henry, a partner in the bankruptcy law practice at Skadden, Arps, Slate, Meagher & Flom and the author of several books on bankruptcy.

As a result, she said, “it’s no longer reorganization or even liquidation for these companies. In many cases, it’s evaporation.”

Several of the retailers that filed for Chapter 11 bankruptcy protection over the last eight months, like the furniture sellers Bombay, Levitz and Domain, have begun to wind down — closing stores, laying off workers and liquidating merchandise.

In most cases, the collapses stemmed from a combination of factors: flawed business strategies, a souring economy and banks’ unwillingness to issue cheap loans.

Bombay, a chain with 360 stores, was considered a success in the furniture world, after its sales surged from $393 million in 1999 to $596 million in 2003.

Then the chain decided to move most of its stores out of enclosed malls into open-air shopping centers. It started a children’s furniture business, called BombayKids. And it started carrying bigger items, like beds and upholstered couches, with higher prices than its regular furniture.

Consumers balked at the changes, hurting Bombay’s sales and profits at the same time that its expenses for the ambitious new strategies began to grow. The timing was unenviable: By early 2007, the housing market began to falter, so purchases of furniture slowed to a trickle.

The company was running out of money, but banks refused to lend more. “They did not want to take the chance that we might not repay the loans,” Elaine D. Crowley, the chief financial officer, said in an interview.

In September 2007, Bombay filed for bankruptcy protection. The highest bid for the company came from liquidation firms, who quickly dismembered the 33-year-old chain. Bombay, which once employed 3,608, now has 20 employees left. “It is very difficult and sad,” Ms. Crowley said.

The bankruptcies are putting a spotlight on a little-discussed facet of retailing: heavy debt.

Stores may appear to mint money by paying $2 for a T-shirt and charging $10 for it. But because shopping is based on weather patterns and fashion trends, retailers must pay for merchandise that may sit, unsold, on shelves for long periods.

So chains regularly borrow large sums to cover routine expenses, like wages and electricity bills. When sales are strong, as they typically are during the holiday season, the debts are repaid.

Fortunoff, a jewelry and home furnishing chain in the Northeast, relied on $90 million in loans to help operate its 23 stores, using merchandise as collateral.

But by early 2008, as the housing market struggled, the chain’s profits dropped, meaning its collateral was losing value and the amount it could borrow fell.

In better economic times, the banks might have granted Fortunoff a reprieve. But with a recession looming, they refused, forcing it to file for bankruptcy in February. In filings, the chain said it was “facing a liquidity crisis.” (Fortunoff was later sold to the owner of Lord & Taylor.)

Plenty of retailers remain on strong footing. Arnold H. Aronson, the former chief executive of Saks Fifth Avenue and a managing director at Kurt Salmon Associates, a retail consulting firm, said the credit tightness and consumer spending slowdown have only wiped out the “bottom tier” companies in retailing.

“This recession dealt the final blow to these chains,” he said. But several big-name chains are looking vulnerable. Linens ’n Things, which is owned by Apollo Management, a private equity firm, is considering a bankruptcy filing after years of poor performance and mounting debts, though it has additional options, people involved in the discussions said Monday.

Whether more chains file for bankruptcy or not, it will be hard to miss the impact of the industry’s troubles in the nation’s malls.

J. C. Penney, Lowe’s and Office Depot are scaling back or delaying expansion. Office Depot had planned to open 150 stores this year; now it will open 75.

The International Council of Shopping Centers, a trade group, estimates there will be 5,770 store closings in 2008, up 25 percent from 2007, when there were 4,603.

Charming Shoppes, which owns the women’s clothing retailers Lane Bryant and Fashion Bug, is closing at least 150 stores. Wilsons the Leather Experts will close 158. And Pacific Sunwear is shutting a 153-store chain called Demo.

Those decisions were made months ago, when it was unclear how long the downturn in consumer spending might last. If March was any indication, it is nowhere near over. Sales at stores open at least a year fell 0.5 percent, the worst performance in 13 years, according to the shopping council.

Retailing Chains Caught in a Wave of Bankruptcies, NYT, 15.4.2008, http://www.nytimes.com/2008/04/15/business/15retail.html

Retailers Report Weak January Sales

February 7, 2008
Filed at 12:31 p.m. ET
The New York Times
By THE ASSOCIATED PRESS

NEW YORK (AP) -- The nation's retailers delivered more evidence of a stumbling economy Thursday, as merchants reported their weakest January performance in nearly four decades, extending a malaise that has deepened since the holiday shopping season.

The sales figures made it clear that consumers wrestling with high gas and food prices, a slumping housing market, an escalating credit crisis and a weakening job market retrenched further, buying mostly necessities even when redeeming their holiday gift cards. The disappointments cut across all sectors including discounters like Wal-Mart Stores Inc., teen retailers including Pacific Sunwear of California Inc. and mall-based apparel chain Limited Brands Inc. Even affluent shoppers are pulling back, hurting stores like Nordstrom Inc.

''Clearly, this is a reflection of a very difficult environment for the consumer,'' said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. ''It looks like consumer spending is stalling.''

Nonetheless, shares of a number of retailers rose as many either backed their earnings forecast or even raised guidance, signaling that they were able to control their inventories. Hot Topic Inc. and Wal-Mart stuck with their earnings forecast, while Pacific Sunwear, Wet Seal and Gap Inc. raised their profit outlooks despite sales drops.

The UBS-International Council of Shopping Centers preliminary sales tally of 43 retailers rose 0.5 percent in January, well below the original 1.5 percent forecast. The results followed an anemic 0.7 pace in December and were below last year's same-store sales average gain of 2.1 percent. Michael P. Niemira, chief economist, said January's performance was the weakest ever, according to records that go back to 1970. It is based on same-store sales, or sales at stores open at least a year.

Thursday's results extended a streak of news that showed more signs of consumer strain. Consumers' spending accounts for two-thirds of economic activity, and their outlays appear to have stalled from an already slowing pace seen over the past year. Wal-Mart noted in its release Thursday that gift card redemptions were below expectations and that customers appear to be holding gift cards longer and ''using them more often for food and consumables rather than discretionary purchases.''

While consumers have had to contend with rising gas and food prices and a slumping housing market, there are signs that the job market is becoming a concern as well. On Friday, the Labor Department reported that U.S. employers sliced payrolls by 17,000, the first decline in more than four years. And on Thursday, the department said jobless claims fell last week by 22,000, but the decline was smaller than expected.

And while investors are hoping the Federal Reserve can avert a recession with a series of rate cuts, some economists say the moves may be too little, too late. Analysts also say that while the government's proposed economic stimulus package, which offers rebate checks for more than 100 million Americans, could help reignite spending, the lift would only be temporary.

As Perkins said, if the job market continues to deteriorate, ''all bets are off.''

Janet Hoffman, managing partner of the North American retail division of the consulting firm Accenture, agreed, noting she expects ''some relief'' but nothing ''radical.''

''Consumers have exhausted all the avenues to get access to credit,'' she added.

Retailers are expected to offer a better picture of the impact of slower sales when they report fourth-quarter earnings over the next few weeks. The retail fiscal year ends in late January.

What might salvage earnings for some retailers is their efforts to control inventories; they're also expected to pare merchandise offerings further in the coming months to respond to slowing demand. Still, Wall Street profit expectations have been lowered in recent weeks -- Perkins noted that fourth-quarter earnings growth for the 130 retailers he tracks is expected to be down 5.4 percent, compared to a 1.2 percent growth expected at the beginning of December.

Wal-Mart, the world's largest retailer, reported a 0.5 percent gain in same-store sales. Analysts surveyed by Thomson Financial had expected a 2.0 percent increase. The company said it continues to do well with staples like groceries but that home furnishings remain weak. Wal-Mart noted in its news release that gift card redemptions were below expectations and that customers appear to be holding gift cards longer and ''using them more often for food and consumables rather than discretionary purchases.''

Rival Target Corp. reported a 1.1 percent decline in same-store sales in January, worse than the 0.6 percent analysts expected.

Costco Wholesale Corp., however, reported a 7 percent gain in same-store sales, surpassing the 6.6 percent estimate.

Within the department store sector, J.C. Penney Co. had a 1.9 percent decline in same-store sales at its department stores, though the results were better than the 6.3 percent Wall Street expected.

Upscale Nordstrom suffered a 6.6 percent same-store sales decline, much worse than the 0.7 percent decrease expected. Saks Inc., which operates Saks Fifth Avenue, said same-store sales rose 4.1 percent, better than the 2.2 percent estimate. But in a release, the luxury retailer said shoppers continue to shift more of their spending to sale merchandise amid a challenging economic environment.

Macy's Inc. on Wednesday reported a 7.1 percent decline in same-store sales, worse than the 5.9 percent decrease. The company also said it was cutting about 2,300 management jobs as the department store operator consolidates three regional divisions and decentralizes buying to reduce costs and boost sales.

Limited Brands reported an 8 percent drop in same-store sales in January, worse than the 6.9 percent forecast.

Gap Inc. posted a 2 percent decline in same-store sales, better than the 6.5 percent decline projected by analysts.

Among teen retailers, Abercrombie & Fitch Co. had flat same-store sales, matching Wall Street expectations. Pacific Sunwear suffered a 7.4 percent drop in same-store sales; analysts expected a 1.2 percent rise.

Wet Seal's January same-store sales fell 5.7 percent as its Arden B chain continued to slump. The results were worse than the 1.5 percent decline expected by analysts.

Retailers Report Weak January Sales, NYT, 7.2.2008,
http://www.nytimes.com/aponline/business/AP-Retail-Sales.html

industry, energy

commodities

commodities > coal

commodities > oil > gas

commodities > gold

economy

economy > capitalism

economy > currencies, credit card, money

economy > currencies > euro

economy > business > companies / firms / corporations

economy > inflation, deflation, stagflation

economy > consumer

economy > consumer > e-commerce, online shopping / retailers

economy > consumer > bills

economy > auction, bid

economy > lottery, gambling

economy > debt, deficit, borrowing

economy > U.S. federal budget

economy > taxes

economy > banks > Bank of England

economy > banks

economy > markets / stocks / stock markets

economy > down

economy > bailout

economy > downturn / recession / depression / recovery

economy > jobs

economy > jobs > unemployment

economy > jobs > pensions

economy > housing market

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Histoire > USA > Economie

Caricatures > Riches / pauvres

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