This weeks retail stories

Philip Downer, who previously served as managing director for the company, will replace him.

Borders U.K. reported a same-store sales increase of 2.9% for the period between Dec. 2, 2007 and Jan. 5.

Dennis Abramczyk, also an executive VP, will remain in his position until a replacement is named. He served in the post for nine years.

Sources close to the situation said the $100 million deal would put Fortunoff merchandise in all 47 Lord & Taylor stores, and even open a Fortunoff boutique in the Lord & Taylor Fifth Avenue flagship.

Purchase, N.Y.-based NRDC Equity Partners, the private equity firm that owns Lord & Taylor, hasn’t commented directly on the matter, but it is said to be nearing a deal. People close to NRDC have warned, however, that Fortunoff has drawn interest from several bidders that could outmaneuver NRDC.

The proposed acquisition comes on the heels of a report that the company is considering Chapter 11 bankruptcy, and observations from retail experts that its stores are struggling to keep up its inventory.

Should the acquisition by NRDC take place, sources briefed on the negotiations said NRDC had no plans to close any Fortunoff stores and would like to expand the number of its full-line stores, from four to perhaps dozens.

The company plans to save $50 million annually by 2010 with the plan, and save $20 million to $25 million in fiscal 2008.

It will close the stores between 2008 and 2010, including 64 in 2008, and open fewer Ann Taylor and LOFT stores in 2008.

It will also delay a planned new concept until 2009 and focus on off-price factory stores.

The 180 jobs are in the company's headquarters and represent 13% of its corporate staff.

In a filing with the Securities and Exchange Commission, Aeropostale said it will pay Geiger a base salary of $1 million per year, with eligibility for an annual bonus capped at $3 million.

Ullman was also quoted in the interview, published on Thursday, as saying the company may scale back its plans to open new stores, cutting 10 of the 50 stores it planned to open each year in 2008 and 2009.

“The precipitous drop in sentiment in the fall is what we feel we need to deal with going forward. We’re assuming no improvement in the trend in 2008,” he said in the interview.

A slowdown in the U.S. housing market, as well as high energy prices and turbulence in the credit market, have hit Penney'’s predominately middle-income shoppers.

Representatives at Wal-Mart were not immediately available for comment. The report, citing an internal statement, said the company would close its product-development and sourcing divisions.

Wal-Mart is aiming to strip excess costs and promote low prices as its core, lower-income shoppers are being squeezed by a deteriorating housing market, higher food and fuel costs and a credit market crunch.

In other news, Wal-Mart is set to announce a partnership with Disney for more than 150 products based on the Disney Channel’s popular series “Hannah Montana.” The show has transformed its star Miley Cyrus, 15, into a real-life pop star.

Wal-Mart plans to offer a line of licensed Hannah Montana goods, from clothing to food, that will target girls ages 6 to 14. The chain will set up in-store “Hannah Montana Shops” in about 750 locations.

At its annual shareholders meeting in Bellevue, Wash., on Jan. 29, Costco chairman of the board Jeffrey Brotman said the company plans to “open in Australia sometime next year,” when asked about the chain’s plans for international expansion.

Costco executive VP and CFO Richard Galanti later confirmed that Costco is searching for sites in Sydney, Brisbane and Melbourne.

During his presentation, CEO Jim Sinegal said Costco increased the number of stores powered by solar energy to 13 and that the company is considering solar panels for 25 more locations.

Sinegal also confirmed the 531-store chain plans to open 29 new locations this year and estimates Costco could eventually open 1,025 stores worldwide with more than 700 warehouses in the United States.

According to the EPA, Kohl's is buying 236 million kilowatt-hours of green power a year.

Kohl's has been installing rooftop solar photovoltaic systems on more than 60 of its stores in California. In total, more than 138,000 solar panels generating more than 25 megawatts of renewable energy are expected when Kohl’s solar installations are complete in 2008.

Barington Capital Group and Clinton Group, which together accumulated a stake of approximately 5.3% in Dillard's, also sent a letter dated Tuesday to the Little Rock, Ark.-based company’s board outlining recommendations for strategic and operational improvements.

"If the company were more effectively managed, it would be worth substantially more than its current stock price," the letter from the investment group said. "The vast value potential of the company is not being realized. Dillard's is an undervalued asset with tremendous opportunity for improvement.

The investment group proposed that the retailer reduce its cost base—including better buying—tighten its assortment of offerings and vendors, and update its private-label merchandise that will set it apart from its department store peers, the group said.

"The disappointing financial performance of Dillard's must be addressed," the letter said. "While we acknowledge that the market conditions in the department store sector have been challenging over the past few quarters due to concerns with a weakening U.S. economy, the magnitude of Dillard's recent weak results cannot be attributed to the economy alone."

The letter also said Barington has tried to reach out to Dillard's board and chief executive William Dillard II several times during the past six months, though it said that hasn't been met with any response from the company.

Turf has spent the majority of her career partnering with Segal in the leadership and strategic direction of the company. Though Segal will no longer direct Crate and Barrel's day-to-day operations, he will assume the title of chairman and will continue as a key advisor and counselor.

"I have relished every moment of the last 45 years," Segal stated. "However, I also recognize that transition and change are key to the growth of any retail business, and I want to give Barbara Turf and other talented members of our executive team their well-deserved opportunity to take Crate and Barrel into the future.”

Prior to becoming president of Crate and Barrel in 1996, Turf held the post of executive VP of merchandising and marketing for many years, maintaining responsibility for all aspects of product selection and branding.

Traditional gifts, such as candy, flowers and jewelry will see a slight decrease in popularity this year with more consumers preferring gifts of experience and gift cards. Almost half (48.2%) of all consumers plan to celebrate Valentine’s Day with a special night out, compared to 45.3% last year, and 12.3% will give a gift card, compared to 11.3% last year.

Greeting cards still remain the most popular choice, though the number of people planning to purchase one is down from last year (56.8% vs. 62.8% last year). Nearly 48.0% of consumers will buy candy, 35.9% will buy flowers and 11.8% will buy clothing.

Men will again dish out the most this year, spending an average of $163.37 on gifts and cards, compared to an average of $84.72 spent by women.

“We all know economic times are tough so our plan is to help with added savings throughout the year, focusing especially on what people want, when they need it," said John Fleming, chief merchandising officer, Wal-Mart.

The retailer will reduce prices by 10% to 30% on a range of products, particularly Super Bowl snacks, groceries, fitness items and home products. The company said it will offer no interest for 18 months on purchases of $250 or more with a Wal-Mart credit card.

In addition, Wal-Mart plans to include a $100 gift card with the purchase of a $1,296 Phillips 42-in. LCD HDTV.

The company said the latest price cuts will be detailed in its latest home circular.

John P. Mackey, 54, received a base salary of $93,500 in the fiscal year that ended Sept. 30. He did not receive a bonus or awards of stock options.

However, he did get $68,363 in non-equity incentive plan compensation, along with $297 in matching funds from a company 401(k) program.

Mackey's salary fell by more than two-thirds from the prior fiscal year, but the pay cut was self-imposed. He announced in late 2006 that beginning the next calendar year, he would take a salary of $1, but he was paid his old salary for the first three months of the fiscal year that had already begun.

Whole Foods will hold its annual meeting March 10 in Austin, Texas. Six of the seven directors, including Mackey, are running for re-election. The seventh is retiring and won't be replaced immediately.

Investors also will vote on a shareholder resolution to split the chairman and CEO jobs, which Mackey, a co-founder of the chain, has held since 1980.

The board opposed the resolution, saying Mackey is uniquely qualified to lead the company.

Lewis will be succeeded by W. Bruce Johnson, an executive VP of supply chain and operations who will fill the role on an interim basis. The company said Monday that Lewis will also resign from Sears' board.

"We are entering a new phase in Sears' evolution as a multichannel retailer, as reflected by the new operational structure we recently announced, and the board has determined that now is the right time to put in place new leadership to take the company forward," Sears chairman Edward Lampert said in a statement.

Johnson joined Kmart in 2003 as senior VP of supply chain and operations. He was named to the office of the chairman in 2005 and took on store operations in 2006.

Prior to joining Best Buy, Roberts spent more than 18 years at Accenture, most recently as a senior partner in their Global Retail Practice.

Roberts will lead Best Buy’s international information-systems team to create “Best Buy-in-a-box,” a suite of off-the-shelf IT packages. In addition, one of his primary initial focuses will be to create an e-commerce platform as part of the multichannel strategy to support the company’s international growth.

The survey found that consumers plan to purchase 3.9 million televisions for Super Bowl Sunday, up more than 50% from 2.5 million last year. In addition, viewers plan to purchase 1.8 million pieces of furniture, up from 1.3 million last year.

Consumers intend to spend an average of $59.90 on Super Bowl-related merchandise, up from last year’s $56.04. Total spending for the Feb. 3 Super Bowl is expected to reach $9.5 billion.

Super Bowl spending isn't limited to increases in entertainment products. Food, beverages and apparel are also expected to see growth. According to the survey, of those that will be watching the game, 67.4% will be purchasing food and beverages and 6.0% will buy team apparel and accessories.

The elimination of these media markets will allow the company to increase its brand presence in outperforming markets.

The company plans to open 17 new stores during the next 12 months in existing states, confirming its previously announced intent not to increase store count in fiscal 2008.

Additionally, the company will reduce its corporate work force by approximately 10% through the consolidation of functions and the automation of certain activities.

Cost Plus anticipates these cost reductions will result in annual savings of approximately $8 million beginning in fiscal year 2008.

Diane von Furstenberg Studio LP, in a lawsuit filed in federal court in Manhattan, alleged the retailer is selling a style of dress that bears a print nearly identical to her trademarked "Spotted Frog" design.

The lawsuit said Furstenberg’s company sent a notice to Target on Friday and the dress was removed from the retailer’s Web site on Wednesday. However, the dress is still being sold at Target retail stores, the complaint said.

Henry joined the company in September 2000 as controller. He has served as VP, controller since February 2006.

The change lowers the overall price Catterton will pay in the deal to $179 million from $267 million.

Restoration Hardware said “increased pressure” in the retail sector led it to agree to the new deal.

Catterton has loaned $25 million to Restoration Hardware for working capital.