From:  Retail News

Date:  2/23/09

An often-cited marketing maxim holds that around 80 percent of consumer purchases are driven by women. The figure is often cited to emphasize how women are underestimated and under-served as customers. But the generally-accepted principle frequently leaves retailers and brands guessing at the extent of women’s buying influence within given categories.

The theory bases its high purchasing power on how much a women will buy for herself, how much she buys for others (i.e., husband, boyfriend, kids, nephews, male friends, etc.) and even how much a women will influenceother purchases. Their buying acumen is often backed by stats around the female gender’s growing economic power, their increasing influence in the household, as well as perhaps stereotypical views on their propensity to shop.

The finding is most often quoted from Tom Peters’ Re-Imagine! Business Excellence in a Disruptive Age. In the book published in 2003, the management guru claims that women make up 83 percent of all consumer purchases. The book notes that in category after category, women are “instigators-in-chief” of most consumer purchases.

Breaking out few categories, the book estimates that women determine a whopping 94 percent of home furnishings purchases, 92 percent of vacations, 91 percent of new homes, 80 percent of DIY (do-it-yourself) projects, 68 percent of car purchases, and 51 percent of consumer electronics buys. The book also found that women make up about 89 percent of the spending decisions around new bank accounts and 80 percent around healthcare decisions.

But it’s tough to figure out women’s influence across all categories.

For instance, take the often male-skewed sporting goods industry. In its annual Sporting Goods Market Report, the National Sporting Goods Association (NSGA) finds that women on their own behalf acquire about 55 percent of units sold in 14 categories of athletic footwear (excluding rugged outdoor, hunting boots, cleated footwear and water sport). Including purchases she drove for her husband, sons, and other male friends, purchasing power around athletic footwear could be argued to come close to the 80 percent mark. Falling well short might be the category of sports equipment, in which women make up about a third of sales and where purchasing decisions for children are often driven by the father.

But in his book, Mr. Peters laments on how, given their dominant purchasing power, women are rarely turned to when it comes to marketing and product design. And he predicted in Business Week last year that with women outpacing men in college degrees, they’ll increasingly be leading decision making in Corporate America.

Mr. Peters said, “It’s going to be so extreme in the next 20 years, it’s just eye popping.”

From:  Daily Herald

Date:  3/11/2009

NEW YORK — American Eagle Outfitters Inc. said Wednesday that unplanned markdowns during the weak holiday season and a charge related to the declining value of some investment securities sent its fourth-quarter profit tumbling 77 percent.

Its adjusted results matched Wall Street’s expectations, however, as did the company’s first-quarter outlook.

Teen-focused American Eagle has struggled with its women’s fashion and Chief Executive Jim O’Donnell said in the fourth quarter the company faced “particular softness” in that business.

That and the overall drop-off in consumer spending were factors in pushing the company’s profit down to $32.7 million, or 16 cents per share, in the three months that ended Jan. 31. That compares with $140.5 million, or 66 cents per share, in the same period a year earlier.

Excluding charges and one-time items, the company earned 19 cents per share, which met the estimates of analysts polled by Thomson Reuters. Analysts’ estimates typically exclude one-time items.

Sales fell 9 percent to $905.7 million from $995.4 million a year earlier, below the $911.8 million analysts expected. Sales in stores that have been open at least one year, a key retail metric known as same-store sales, slid 16 percent.

While teens can be notoriously fickle, clothing retailers who have hit the fashion trends they crave — at the right price — have fared better than other specialty retailers.

Rival The Buckle Inc., which also targets teens, said its fourth-quarter profit rose 18 percent as sales jumped 21 percent as shoppers snapped up its trendy jeans and accessories. But J. Crew Group Inc. said it swung to a fourth-quarter loss and AnnTaylor Stores Inc. reported last week that its fourth-quarter loss widened over the year before.

O’Donnell said in a statement that lower demand during the quarter led to a boost in unplanned promotions, which helped clear out some inventory.

“Looking ahead, we cannot accept this kind of performance, recession or not. We know that our customer responds when we have the right fashion at the right price,” he said.

The Pittsburgh-based company hired Roger Markfield in January to a new position of vice chairman and executive creative director to revamp its merchandise selection. O’Donnell said his presence will begin to be fully felt with the back-to-school collections.

American Eagle also means to offer more planned promotions — such as a February event when all jeans were under $30 — rather than unplanned markdowns during the year and has improved its women’s collection, including adjusting fits in women’s jeans and expanding its dress offerings from less than 10 choices to 40 styles in the spring.

It is cutting capital spending by half, to $110 million to $135 million, and trimming other costs.

In the first quarter, American Eagle expects a profit of 4 cents to 7 cents per share, while analysts expect 6 cents per share.

Full-year net income sagged 55 percent to $179.1 million, or 86 cents per share, from $400 million, or $1.82 per share, in the previous year. Revenue fell 2 percent to $2.99 billion, while same-store sales fell 10 percent.

American Eagle shares rose 14 cents to $9.71 in midday trading, while Buckle Inc.’s shares rose $1.35, or 5.7 percent, to $25.22.

From:  Canadian Business Magazine

Date:  2/10/2009

NEW YORK (AP) – Apparel maker J. Crew Group Inc. on Tuesday reported a fiscal fourth-quarter loss on lower demand, but results were better than analysts had predicted, sending shares up 10 percent in aftermarket trading.

Losses for the three months ended Jan. 31 totaled $13.5 million, or 22 cents per share, compared with a year-ago profit of $25 million, or 39 cents per share, last year. Excluding impairment charges, the latest-quarter loss totaled 20 cents per share.

Revenue fell 3 percent to $388 million from $399.9 million last year.

But the results topped expectations of analysts polled by Thomson Reuters, who on average predicted a wider loss of 27 cents per share on revenue of $372.8 million. Analyst estimates typically exclude one-time charges.

The company itself had forecast a wider loss between 24 cents and 29 cents per share.

Demand for J.Crew’s preppy clothing has dropped amid the recession and consumer spending pullback. Late last month the company said it would cut jobs, eliminate merit-based wage increases and suspend its 401(k) matching contribution plan through the rest of the year to shore up costs.

Millard Drexler, company chief executive, said in a statement J. Crew is adjusting to the “new, not fun, retail reality.”

For the year, profit fell 44 percent to $54.1 million, or 85 cents per share, from $97.1 million, or $1.52 per share, a year ago. But revenue rose 7 percent to $1.42 billion from $1.33 billion last year.

The company forecast first-quarter adjusted earnings between 7 and 12 cents per share, down sharply from last year’s 48-cent profit but still in range of analysts’ average forecast of 10 cents per share.

Shares rose 36 cents, or 3.9 percent, to close earlier at $9.72, and jumped 98 cents to $10.70 in after-hours electronic trading.

From:  KHQ-TV

Associated Press – March 11, 2009 8:45 PM ET

WILLIAMSPORT, Pa. (AP) – North-central Pennsylvania clothing manufacturer Woolrich Inc. is dropping its trademark infringement lawsuit against specialty retailer Eddie Bauer Inc.

A document filed recently in federal court in Williamsport says Woolrich is dismissing “all claims asserted in the complaint” filed in January. It doesn’t say why.

The earlier complaint said Woolrich had been using the slogan “The Original Outdoor Clothing Company” since 1997. It said that Bellevue, Wash.-based Eddie Bauer’s slogan, “The Original Outdoor Outfitter,” was too similar. Woolrich said in the earlier complaint that Eddie Bauer began using its slogan in October.

Woolrich was started in 1830 by English immigrant John Rich. It is based in the small town that bears its name, about 90 miles north of Harrisburg.

From: MRketplace.com

Fashion and lifestyle firm Tommy Hilfiger is merging its operations in the U.S. and Canada, the company confirmed on Friday, March 6, in a move that will create a new business unit called Tommy Hilfiger North America.

Some jobs will be lost in the merger, a spokesperson for Tommy Hilfiger confirmed this morning. “A few staff positions will be made redundant but it is close to nothing,” he said.

The changes come after a review of Tommy Hilfiger’s operations identified synergies between the two units which have both shifted their focus onto their retail businesses in recent years.

The new consolidated business will be headed by Gary Sheinbaum, group president of North American Retail.

Colleen Kelly, group president of North American Wholesale, will oversee U.S. and Canadian wholesale activities.

Sheinbaum and Kelly will continue to report directly to Fred Gehring, CEO of the Tommy Hilfiger Group.

Once the integration is complete in June 2009, Howard Starr, CEO of Tommy Hilfiger Canada, will resign.

The changes come after a period in which the company has been expanding its retail business in Canada where it operates more than 50 retail locations.

Under Tommy Hilfiger North America, the Montreal office will remain the Canadian corporate office with regional offices in Toronto and Vancouver.

“The unprecedented economic crisis around the world has led us, like all other companies, to review the business structure and identify areas of consolidation and efficiency,” said Fred Gehring in a statement mailed to just-style.

“The business profiles of Tommy Hilfiger USA and Tommy Hilfiger Canada have many parallels, including a recent shift to a primarily retail business, creating an opportunity to maximize alignment and synergy.

“The integration is in line with our strategy to consolidate brand management and enhance our international presence by approaching markets in a globally coordinated effort.”

Tommy Hilfiger has been making a major push to expand its retail presence in the U.S., and is seeing significant growth from its partnership with Macy’s — which has been the exclusive department store retailer of its men’s and women’s sportswear since last autumn.

In its most recent financial update, the firm, which is owned by private equity firm Apax Partners, said its U.S. sales rose 16.7% to $356m in the six months to 30 September. U.S. same-store sales were up 6.0%. However, sales in Canada were 1.9% below last year.

From:  Reuters

CHICAGO (Reuters) – Teen clothing retailer Abercrombie & Fitch (ANF.N) beat Wall Street profit expectations on Friday and said it is optimistic about international expansion, lifting its shares more than 13 percent.

Abercrombie also said it is reviewing its operating expenses, has already started to cut costs and plans significantly less in capital expenditures this year.

Management is “actively managing expenses, while at the same time protecting the brand for the long term,” Credit Suisse analyst Paul Lejuez said in a research note.

Once a high-flyer in teen apparel retail, Abercrombie has seen a protracted sales slump as rivals such as Aeropostale (ARO.N) take market share by cutting prices.

Net profit fell sharply to $68.4 million, or 78 cents per share, in the fourth quarter that ended January 31 from $216.8 million, or $2.40 per share, a year earlier.

Excluding impairment charges and costs tied to a new employment agreement that extends CEO Mike Jeffries’ contract until 2014, Abercrombie’s profit of $1.10 per share topped analysts’ average forecast of $1.01, according to Reuters Estimates.

Sales fell 19 percent to $998 million. Sales at stores open at least a year fell 25 percent.

Abercrombie’s strategy of keeping prices higher than competitors to increase its cachet has put off many U.S. shoppers looking for bargains, although the retailer has discounted clearance items.

On Friday, the company stood by its strategy.

“We are not promotional and will not be promotional, and by promotional I mean 50 percent off a category, buy one, get 17 free, or somebody whispering to you about a secret sale; we don’t do stuff like that,” Jeffries said during a morning conference call.

The company has cut some prices at its Hollister and abercrombie kids chains, but said the changes were not significant.

OVERSEAS MARKETS

Abercrombie is “very bullish” on the potential it sees in international markets, while it is “not bullish on U.S. malls at this point,” Jeffries said.

The retailer said it is committed to opening some stores, such as its namesake ones in Milan and Tokyo in 2009, but would postpone opening its namesake store in Copenhagen and an abercrombie flagship in New York to 2010.

Jeffries said he sees the opportunity for 30 Hollister stores in the United Kingdom. There are currently three Hollister stores in London. 

Abercrombie had warned last month that its fourth-quarter earnings would be significantly below the outlook of $1 to $1.05 per share that it had previously issued.

The company said it expected a difficult selling environment to continue in 2009 and did not issue an earnings outlook for the fiscal year, citing volatile sales levels.

Abercrombie expects capital expenditures of $165 million to $175 million in the fiscal year that began this month, a major portion of which is tied to new stores and remodeling.

The company spent about $370 million on capital expenditures last year.

Its shares were up 13.3 percent at $23.46 on the New York Stock Exchange.

(Additional reporting by Aarthi Sivaraman in New York and Alexandria Sage in San Francisco; Editing by Lisa Von Ahn, Dave Zimmerman)

From:  Lethbridge Herald

February 20, 2009

TORONTO – Sears Canada (TSX:SCC) has laid off 300 employees to prepare for what a company spokesman calls a “tough” year.

That represents less than one per cent of the company’s workforce of 38,000. About half the laid off workers are at the company’s Toronto headquarters, while the rest are at Sears repair centres across the country.

Sears Canada spokesman Vince Power says the cuts will have no impact on customer service either in the stores or at Sears’ repair business.

“We made these job cuts to prepare for what’s widely known to be a year with a tough economic climate,” Power said Friday.

The impact of the global slowdown has been felt unevenly, with some retailers or retail sectors feeling more pain than others.

Hudson’s Bay Co., whose Bay department stores compete with many Sears stores, announced this month it was cutting 1,000 jobs or about five per cent of its full-time Canadian workforce.

Shoppers Drug Mart Corp. (TSX:SC), on the other hand, reported last week that it expects to open between 120 and 130 new stores in 2009. The pharmacy chain increased its fourth-quarter revenue by 14 per cent to $173 million, partly as a result of adding 142 stores.

Analysts have noted that retailers who sell must-have goods, such as pharmaceuticals and groceries, often do well during recessionary times while others that depend on customers’ discretionary spending see a decline.

Clothing and furniture sales, two department store staples, have struggled this year as home sales have plunged, prompting cautious consumers to shift their spending to such basics as food.

Sears Canada shares traded at $19.46, up 21 cents, on the Toronto Stock Exchange.

From:  KHOU HOUSTON

Associated Press, February 20, 2009

NEW YORK — J.C. Penney Co. reported a 51 percent drop in fourth-quarter profits as customers sharply cut spending on clothing and other more discretionary purchases as the recession deepened. The department store chain also said that losses in the first quarter would be wider than analysts had predicted amid a deteriorating environment.

The Plano-based retailer said Friday that earnings for the three-month period ended Jan. 31 were $211 million, or 95 cents per share. That compares with $430 million, or $1.93 per share in the year-ago period.

Sales dropped almost 10 percent to $5.76 billion from $6.39 billion in the year-ago period.

Analysts surveyed by Thomson Reuters expected 92 cents per share on revenue of $5.76 billion.

Same-store sales or sales at stores opened at least a year fell 10.8 percent in the quarter.

Same-store sales are considered a key performance indicator because they measure growth at existing stores rather than newly opened ones.

“Throughout the year, we took steps to significantly reduce our inventories and operating expenses in order to withstand the impact of the economic conditions,” said Myron E. Ullman III, chairman and chief executive in a statement. “At the same time, we stepped up the style we offer and focused on effectively communicating the newness, excitement and value in our merchandise.”

Penney said that as of Jan. 31, the company had cash and cash equivalents of $2.4 billion and long-term debt of $3.5 billion. Merchandise inventories totaled $3.3 billion and were about 13.5 percent lower than last year on a same-store sales basis. Capital expenditures were approximately $970 million in 2008, moderately lower than the company’s $1 billion plan.

Penney said that it expects a per-share loss of anywhere between 20 cents to 30 cents in the first quarter. Analysts expect a loss of 19 cents, according to Thomson. Penney also said total sales would decline anywhere from 10 percent to 13 percent and that same-store sales would drop between 12 percent and 15 percent in the first quarter.

Retailers such as Ann Taylor, Sears and Talbots face store closings, bankruptcies, takeovers in 2009

From:  New York Daily News

This holiday season hit retailers hard.  As a result, many are facing mass store closings and bankruptcies.

Retailers will close 12,000 stores in 2009, Howard Davidowitz, chairman of retail consulting and investment-banking firm Davidowitz & Associates Inc. told Bloomberg News. 

Retailers such as Ann Taylor,Talbots and Sears are among the many retailers expected to close underperforming stores, Bloomberg News reported.

Britt Beemer of America’s Research Group dubbed this ”the worst holiday retail season in four decades.”  He predicted a 2.8% drop in sales nationwide from last Christmas season.

Citywide, the number of shoppers in stores Friday through Sunday fell 15% from a year ago, he said. Due to Wall Street woes and tight-fisted tourists, the amount of money spent could easily be down 30%.

Many retailers such as Circuit City, Linens ‘n Things and Sharper Image have already sought bankruptcy protection. The abysmal holiday sales may spur consolidation and further bankruptcy filings, Gilbert Harrison, chief executive officer of retail advisory firm Financo Inc, told Bloomberg News.

“You’re going to see deals that you never thought you were going to see before because of the necessity of both parties,” Harrison said in a Bloomberg Television interview Dec. 26.

The International Council of Shopping Centers tracking survey found that 6,387 stores had closed this year as of Decemeber 10, and that this number would likely hit  6,600 for the year, as reported by Bloomberg News. 

“The situation is not going to right itself in January, it’s going to be a long while that discounting’s going to be around,” Patti Freeman Evans, an analyst at Jupiter Research in New York told Bloomberg News. “Consumers are going to get used to it and it’s going to very difficult for retailers to move forward in a full-price mode.”

From:  FOX News

LONDON —  A rare blue diamond handed down through generations of German royalty sold for a record-breaking $24.3 million at auction Wednesday in London, Christie’s said.

The Wittelsbach Diamond, a 35.56 carat cushion-shaped gem, has often had its color and clarity compared to the famed Hope Diamond, now on display at the Smithsonian Institution in Washington.

The rare gem was snapped up by billionaire diamond-dealer Laurence Graff for about $24.3 million, including buyer’s premium, Christie’s spokeswoman Alexandra Kindermann said.

Kindermann said the price — nearly double its pre-sale estimate — was the most ever paid for a diamond at auction, beating the $16.5 million commanded by a 100-carat diamond at a Swiss auction in 1995.

Christie’s said the diamond was purchased by King Philip IV of Spain in 1664 and included in the dowry for his teenage daughter, the Infanta Margarita Teresa. Although she died relatively young, the diamond remained with her husband, Leopold I of Austria, and passed through a succession of heirs.

The gem got the Wittelsbach name after 1722, when Leopold’s granddaughter married Charles of Bavaria, a member of the Wittelsbach family.

“Der Blaue Wittelsbacher,” as it was then known, made its way through a succession of Bavarian rulers — Maximilian IV Joseph von Wittelsbach, Bavaria’s first king, included the diamond in his royal crown. The diamond made its last state appearance in 1918 in the aftermath of World War I. It was offered for auction in 1931, but failed to sell and vanished from the public eye.

“What happened to it after 1931 is a little mysterious — there’s been lots of speculation,” Christie’s spokeswoman Hannah Schmidt said. “But what exactly happened is unknown.”

The diamond only resurfaced in 1962, when a jeweler recognized its significance and refused a request to re-cut it.

Auctioneer Francois Curiel said Christie’s was thrilled to reach “an historic price for an historic diamond.”

Colored diamonds often fetch high prices at auction. Christie’s sold a much smaller 13.39-carat blue diamond for $8.9 million in May.