This Week's Top Stories in Retail May 30, 2008
Kroger in Partnership with The Little Clinic
Cincinnati (May 29, 2008) The Kroger Co. and The Little Clinic LLC on Thursday announced a partnership aimed at bringing walk-in medical clinics and consumer-health solutions to Kroger stores across the country.The Little Clinic currently operates 26 walk-in medical clinics inside Kroger stores.
Kroger said it has made a significant investment in The Little Clinic to support a substantial clinic rollout. Financial terms of the investment were not disclosed.
Walgreens Expanding to Alaska
Deerfield, Ill. (May 29, 2008) Walgreen Co. will open its first stores in Alaska in 2009, giving the chain a presence in all 50 states, plus the District of Columbia and Puerto Rico.
The first store is planned for Anchorage, with an opening date of summer 2009. Two more locations are expected to open by the end of that year. The company is initially focusing on Anchorage and Southcentral Alaska.
Starbucks Enters Argentina
Seattle (May 29, 2008) Starbucks Coffee Co. is supporting its international expansion with its first coffeehouse in Argentina. The location is set to open Friday.
The store will be a joint venture between Starbucks Coffee International, a wholly owned subsidiary of Starbucks Coffee Co., and Operadora Internacional Alsea, S.A. de C.V., a wholly owned subsidiary of Alsea S.A.B. de C.V. The store will be located at Alto Palermo Shopping Center, one of the country's premiere shopping centers.
Costco's Profit Up 32%
Issaquah, Wash. (May 29, 2008) Costco Wholesale Corp. said Thursday that its quarterly profits jumped 32%, beating expectations. The company credits the increase to consumers who are shopping the stores to take advantage of the chain's discounts on food and gasoline.
Costco reported a net income of $295.1 million for the fiscal third quarter, compared to $224.0 million a year earlier.
Blockbuster Launches In-Store Downloads
Dallas (May 29, 2008) Blockbuster is preparing to pilot in-store kiosks that will allow customers to download movies onto their portable devices within two minutes. James Keyes, Blockbuster's chairman and CEO, revealed the test at the company's annual shareholder meeting Wednesday.
The kiosk, designed for the pilot version by NCR, allows shoppers to search and browse for downloadable films, watch trailers and buy or rent movies with a credit card or pre-loaded Blockbuster card. Over time, it will also allow them to subscribe to kiosk or other service usage.
Barnes & Noble Launches Mobile Site
New York City (May 29, 2008) Barnes & Noble introduced B&N Mobile on Wednesday. This e-commerce site (www.bn.com/mobile) is accessible via any mobile device with a Web browser. However, the application is tailored for Blackberry and iPhone users.
"Our goal is to serve customers from wherever they are, in a multitude of platforms," said B&N chief executive Marie Toulantis.
Sears Blames Slumping Sales for 1Q Loss
Hoffman Estates, Ill. (May 29, 2008) Sears Holding Corp. reported a $56 million first-quarter loss Thursday. It blamed the fact that consumers were spending more of their money to cover the rising costs of gas and food.
These factors affected all of the company's divisions. Sears store sales dropped 9.8% domestically, while Kmart stores sales slumped 7.1%. Total domestic same-store sales declined 8.6%.
Phillips-Van Heusen Shuts Geoffrey Beene Outlets
New York City (May 29, 2008) Phillips-Van Heusen said Wednesday that it will shutter the 100-unit outlet division of its Geoffrey Beene menswear brand.
Approximately 25 of the stores will be converted into Calvin Klein outlets, a brand the company also operates. These stores are expected to generate more traffic and higher profits than the Geoffrey Beene line. The remaining stores will be closed by the end of the fiscal year.
Sweetbay CEO Leaves Post
Tampa, Fla. (May 29, 2008) Shelley Broader is leaving her post as CEO of the Sweetbay Supermarket chain, effective June 15. She will be accepting a position "in retailing outside of the supermarket industry," the Delhaize-owned chain said Wednesday. Broader's successor at the 107-store Sweetbay chain has not yet been identified.
Broader, who joined Sweetbay's sister banner, Hannaford Bros., Scarborough, Maine, in 1991, had spearheaded the conversion of Delhaize's Kash n' Karry chain in Florida to the Sweetbay format during the last four years.
DSW President Rejoins Limited Brands
Columbus, Ohio (May 29, 2008) Limited Brands said Thursday that Peter Horvath is rejoining the company as executive VP of business integration, effective at the end of June. He will report to Martyn Redgrave, executive VP and chief administrative officer for Limited Brands.
In this role, Horvath will spearhead a number of operational strategies and initiatives, according to the company.
Timberland Opens Franchised Store in Brazil
Stratham, N.H. (May 29, 2008) Outdoor apparel and footwear company Timberland has opened its first franchised store in Brazil. The unit is located at Guarulhos International Airport, in Sao Paulo.
The unit is being operated by local license partner, Sao Paulo Alpargatas.The company plans to open three more shops this year. Two of them will also be through franchising.
Coach to Acquire Asian Retail Businesses
New York City (May 29, 2008) Coach Inc. said Thursday that it will acquire its domestic retail businesses in Hong Kong, Macau and Mainland China from its current distributor, the ImagineX Group. Besides giving Coach control of its distribution in this region, the company said that the acquisition will enable it to directly manage a significant growth opportunity among Chinese consumers.
There will be a phased buyout of the current Coach retail businesses in Hong Kong, Macau and China over the next year. Thibault Villet, Coach's president, Greater China, will lead the operations of these businesses.
Finlay Losses Widen in 1Q
New York City (May 28, 2008) Jewelry chain Finlay Enterprises announced Wednesday that its losses widened in the first quarter as same-store sales fell and the company's recently acquired Bailey Banks & Biddle stores failed to meet expectations.
The loss for the period ended May 3 totaled $11 million, compared with $7.6 million a year ago. Finlay closed its Parisian stores in fiscal 2007. Excluding those discontinued operations, the loss for the prior-year period totaled $7.8 million.
Target to Carry New Hayek Line
Minneapolis (May 28, 2008) Target has teamed with designer Sami Hayek-brother to actress Selma Hayek-to carry a new line of home furnishings and accessories.
Target said on Tuesday that it would launch Sami Hayek for Target, a limited-edition collection including items such as bedding, furniture and stationery.
Sears' Lampert Ups AutoNation Stake
Ft. Lauderdale, Fla. (May 28, 2008) Sears Holdings Corp. chairman Edward Lampert has brought his stake in AutoNation to about 39%, according to an article in the South Florida Business Journal.
According to Securities and Exchange Commission filings on Tuesday, Lampert bought about 521,000 shares on May 22 for between $15.44 and $16 each. He now holds about 69.6 million shares.
Tennessee Withdraws From Wal-Mart Energy Partnership
Nashville, Tenn. (May 28, 2008) After having been selected as one of 19 states to partner with Wal-Mart Stores in an energy audit program for state capitols, Tennessee announced that it has changed its mind about participating.
The announcement came from the Tennessee governor's office. According to Wal-Mart spokesman Dennis Alpert, "The governor's office notified us that they were withdrawing from the program, and that's all we know."
Borders Group Loss Narrows in 1Q
Ann Arbor, Mich. (May 28, 2008) Borders Group Inc. said its losses narrowed in the first quarter although its same-store sales fell, and Wall Street greeted Tuesday's relaunch of the bookseller's retail Web site with a sell-off of its shares.
Borders Group said it lost $31.7 million in the three months ending May 3, compared with a loss of $35.9 million for the comparable period of 2007.
Senior VP Named for Macy's Regional HQ
St. Louis (May 28, 2008) Macy's Inc. has named Betsy Zeino as senior VP, regional director of stores for the Midwest region. She will be based in St. Louis, according to the St. Louis Post-Dispatch.
Zeino, who joined Macy's in 1998, most recently served as regional VP of stores based in Houston.
Chico's 1Q Profit Falls on Economic Conditions
Fort Myers, Fla. (May 28, 2008) Chico's FAS Inc. said Wednesday its first-quarter profit dropped 73% as sales of its core apparel brand dropped and expenses increased.
The women's apparel retailer reported earnings fell to $12.7 million compared with $47.2 million a year earlier.
Polo Ralph Lauren Profit Rises
New York City (May 28, 2008) Polo Ralph Lauren Corp. reported a higher quarterly profit on Wednesday, helped by strong sales, a lower tax rate and acquisitions. Net income rose to $103.5 million in the company's fiscal fourth quarter, ended March 29, from $73.2 million a year ago.
The company, whose brands include Polo, Chaps and Club Monaco, said net revenue increased to $1.24 billion from $1.03 billion a year ago, as higher wholesale and retail sales offset a decline in licensing revenue.
Dollar Tree 1Q Profit Rises 14%
Chesapeake, Va. (May 28, 2008) Strong sales and a lower tax rate led discount retailer Dollar Tree Inc. to report Wednesday that its fiscal first-quarter profit grew 14%.
For the quarter ended May 3, net income jumped to $43.6 million from $38.1 million in the prior year quarter.
Wegmans to Expand Headquarters
Chili, N.Y. (May 28, 2008) Wegmans Food Markets is expanding its corporate headquarters in Chili, N.Y. The company has made an application to be heard at the town's upcoming planning-board meeting.
The plan calls for creating a 400,000-sq.-ft. office building at their Fisher Road location. If approved, 600 to 800 current employees could relocate to the new facility, with plans to expand by 200 to 300 new positions in the coming years.
American Eagle Profit Falls
New York City (May 28, 2008) American Eagle Outfitters said on Wednesday quarterly net profit fell, hurt by greater markdowns resulting from lower-than-expected sales.
The company said net profit in the first quarter was $43.9 million compared with $78.8 million a year earlier. As previously disclosed, sales rose 5% to $640.3 million in the quarter, which ended on May 3, but same-store sales fell 6%.
Big Lots Names Exec
Columbus, Ohio (May 27, 2008) Big Lots announced on Tuesday the appointment of Christopher Chapin as senior VP of store operations, effective immediately. Chapin will report to CEO Steve Fishman and will oversee store standards, field operations, customer service, process development and program implementation for the company's 1,300+ closeout retail stores in 47 states.
Previously, Chapin was with Limited Brands as VP/store operations and YUM Brands as national director of operations.
Save Mart Names COO
Modesto, Calif. (May 27, 2008) Save Mart Supermarkets on Monday appointed Steve Junqueiro COO of the chain.
The company also named Mike Silveira chief administrative officer, and Steve Ackerman acting CFO.
Sears to Partner with LL Cool J
Hoffman Estates, Ill. (May 27, 2008) Sears Holdings said Tuesday it plans to launch in its Sears stores an exclusive apparel line by the rapper and film celebrity LL Cool J.
Irv Neger, senior VP, apparel, Sears Holdings Corp. said the move is part of "an ongoing commitment to increase our relevance in the apparel industry, and bring fashions to our customers that are both on-trend and affordable."
Gap Integrates Web Sites
San Francisco (May 27, 2008) The Gap Inc. announced Tuesday it would integrate its four Web sites-Gap, Banana Republic, Old Navy and Piperlime-in order to allow the company's customers to move more freely among the brands' sites.
As part of the integration, customers will fill one virtual shopping bag and pay just one shipping fee. Until now, shoppers had to visit the company's four concept sites separately to make purchases.
Mistrial Denied to Former CVS Execs
Woonsocket, R.I. (May 27, 2008) A judge has denied a mistrial for two former CVS executives, the company said on Tuesday. The judge, presiding in the federal corruption trial of Carlos Ortiz and John R. Kramer-former VPs who are accused of paying former state senator John Celona to advance CVS's legislative agenda-formally denied the mistrial but will allow defense lawyers to question the government's star witness again about what they believe were his lies under oath.
Lawyers for Ortiz and Kramer have argued that Celona offered false testimony last week that contradicted previous statements he made before a grand jury investigating the case and at an earlier corruption trial.
A&F in Anti-Counterfeiting Raids
New Albany, Ohio (May 27, 2008) Abercrombie & Fitch announced on Tuesday that the company has embarked on a series of search-and-seizure efforts throughout Ireland, as part of its global anti-counterfeiting initiative.
During the last few months, the company said numerous raids have been conducted, including several within Dublin. The retailer indicated that shops across the Irish capital will receive cease-and-desist letters notifying owners they are selling fakes illegally.
Cato Details Expansion
Charlotte, N.C. (May 27, 2008) The Cato Corp. will add 40 new Cato stores and 30 new It's Fashion units this year, company chairman, president, and CEO John Cato said during the company's annual shareholders' meeting.
"Our plans for this year are to accelerate It's Fashion store openings primarily through the development of our It's Fashion Metro concept," Cato said.
Macy's Expands CE Kiosks
New York City (May 27, 2008) Macy's announced the rollout of its consumer-electronics kiosk units to more than half of its full-line department stores around the country. The announcement comes on the heels of a two-year pilot with ZoomSystems.
Macy's new e-Spot automated shops offer the latest consumer electronics with touchscreen technology that processes the transaction and completes the sale. The machines will offer widely demanded brands including Apple, Sony, Canon and MyVu.
Vons Enters Small Store 'Market'
Long Beach, Calif. (May 27, 2008) Vons has launched a new concept store The Market in Southern California.
Vons said that it had been working on the format for more than a year, according to the OC Register. The Market opened a 15,000-sq.-ft. location in Belmont Shore and offers a scaled-down selection of groceries and a large variety of ready-to-eat meals.
Borders to Offer E-Commerce After Seven Years
Ann Arbor, Mich. (May 27, 2008) Borders Group is jumping back into online retailing with a Web site after a seven-year partnership with Amazon.com. The new site is designed to evoke the feeling of browsing at a neighborhood bookstore.
Tuesday's launch of Borders.com comes more than two months after Borders announced it might put itself up for sale. Just last week, Barnes & Noble Inc. confirmed it put together a team to study the feasibility of a deal. But Borders Group Inc. president and CEO George Jones told the Associated Press that pushing forward with Borders' return to Web retailing is key-regardless of whether a sale materializes.
Impairment Charge Hurts Foot Locker 1Q Results
New York City (May 23, 2008) Foot Locker Inc. on Thursday said fiscal first-quarter profit fell, hurt by an impairment charge and nearly flat sales. Profit for the quarter ended May 3 fell 82% to $3 million compared with $17 million a year ago. Sales were nearly flat at $1.31 billion.
The impairment charge is related to a note receivable due from the purchaser of the company's former Northern Group operation in Canada, which the company sold in 2001.
S&P Names CVS Drug Store of Choice
New York City (May 23, 2008) Standard & Poor's has named CVS the drug store of choice, citing the chain's growth opportunities in retail and pharmacy benefit management. As reported in BusinessWeek, S&P said that it believes CVS Caremark is "well positioned for market-share gains, following the acquisition of Caremark Rx in March 2007, and the continued turnaround of recent drug store acquisitions."
S&P also said that it has a positive outlook on the future of the U.S. drug store industry, as an aging population will mean an increase in demand for prescription medications.
Books-A-Million 1Q Profit Drops, Cuts Jobs
Birmingham, Ala. (May 23, 2008) Books-A-Million Inc. reported that its net income dropped by more than 57% in the first quarter of 2008.
Net income for the company's first quarter dropped to $900,000 compared to $2.1 million in its first quarter last year.
Giant Eagle Expands Generic Drug Program
Pittsburgh (May 23, 2008) Giant Eagle Inc. said Thursday that, effective immediately, it will begin offering a 90-day supply of more than 400 generic drugs for $10. The program is available at 205 Giant Eagle pharmacy locations in Pennsylvania, Ohio, West Virginia and Maryland.
The program expands on Giant Eagle's success in offering 30-day supplies of some 400 generic drugs for $4, launched in November 2006.
Kroger Extends Gas Discounts
Cincinnati (May 23, 2008) Kroger Co. has expanded its gas discount program across its regions.
Most of the regional fuel-discount programs in the Kroger Co.'s chain give regular shoppers 10? off per gallon at company gas stations for every $100 they spend in a Kroger store. But the programs previously weren't carried over between regions, so a vacationing shopper at a Kroger-owned Ralphs store in California, for instance, didn't get the spending credit for the discount back home in Cincinnati.
Report: Consumers View Economy in Worst Condition
Columbus, Ohio (May 23, 2008) About 3 in 5 Americans (62.3%) believe the economy is in the worst shape they have experienced in their lifetime, according to the May American Pulse Survey.
About 77.1% of Democrats and people between 18-34 years old (65.8%) are most likely to echo this sentiment, the report said.
Dillard's 1Q Profit Drops 94%
New York City (May 23, 2008) Dillard's Inc. said Thursday its fiscal first-quarter profit tumbled 94% on a sharp decline in same-store sales, fueled by a weak economic environment.
For the period ended May 3, the company reported income of $2.7 million compared with $42.9 million in the year-ago quarter.
