Truth: Discounts Hurt Retailers

March 7, 2012

Retailers like Children's Place Retail Stores Inc (PLCE.O) and Brown Shoe Co Inc (BWS.N) are struggling to protect their margins as they continue to discount heavily to drive sales, resulting in weak quarterly profit reports and bleak forecasts.

Apparel and footwear retailers have been trying to cut back on discounts that were used to lure bargain-hungry shoppers in the downturn, but warmer-than-expected weather forced some of them to reduce prices to move winter merchandise.

Children's Place shares were trading down 4 percent on the Nasdaq, while Brown Shoe shares plunged as much as 14 percent, making it one of the biggest losers on the New York Stock Exchange.

Brown Shoe saw boot sales fall 5.7 percent during the quarter, while Children's Place slashed prices of winter apparel like sweaters and cardigans to push sales.

Children's Place, which competes with privately held Gymboree Corp, expects gross margins to decline in the first quarter on higher souring costs for its spring and summer lines.

The kids clothing retailer, which struggled with inventory and merchandise issues in the past, has been heavily discounting at the end of each season to get rid of piled up products.

Meanwhile, footwear retailers like Brown Shoe are also facing sharp declines in sales of toning shoes, a once popular item that was supposed to exercise leg muscles by making the wearer work harder while walking. Brown Shoe said sales of toning shoes fell more than 59 percent in the fourth quarter.

On Wednesday, Brown Shoe projected full-year adjusted earnings of 78 cents to 92 cents a share, while analysts were expecting 78 cents a share.

Children's Place forecast first-quarter profit of $1.03 a share to $1.08 a share, while analysts were expecting a profit of $1.14 a share, according to Thomson Reuters I/B/E/S.

However, department store operator Bon-Ton Stores Inc (BONT.O) bucked the trend with a strong full-year profit, despite reporting weak quarterly results on discounting of winter products, sending its shares soaring 33 percent.

For more information, visit: http://www.reuters.com/article/2012/03/07/us-retailers-idUSTRE8261F220120307

Truth: Discounts Hurt Retailers

March 7, 2012

Retailers like Children's Place Retail Stores Inc (PLCE.O) and Brown Shoe Co Inc (BWS.N) are struggling to protect their margins as they continue to discount heavily to drive sales, resulting in weak quarterly profit reports and bleak forecasts.

Apparel and footwear retailers have been trying to cut back on discounts that were used to lure bargain-hungry shoppers in the downturn, but warmer-than-expected weather forced some of them to reduce prices to move winter merchandise.

Children's Place shares were trading down 4 percent on the Nasdaq, while Brown Shoe shares plunged as much as 14 percent, making it one of the biggest losers on the New York Stock Exchange.

Brown Shoe saw boot sales fall 5.7 percent during the quarter, while Children's Place slashed prices of winter apparel like sweaters and cardigans to push sales.

Children's Place, which competes with privately held Gymboree Corp, expects gross margins to decline in the first quarter on higher souring costs for its spring and summer lines.

The kids clothing retailer, which struggled with inventory and merchandise issues in the past, has been heavily discounting at the end of each season to get rid of piled up products.

Meanwhile, footwear retailers like Brown Shoe are also facing sharp declines in sales of toning shoes, a once popular item that was supposed to exercise leg muscles by making the wearer work harder while walking. Brown Shoe said sales of toning shoes fell more than 59 percent in the fourth quarter.

On Wednesday, Brown Shoe projected full-year adjusted earnings of 78 cents to 92 cents a share, while analysts were expecting 78 cents a share.

Children's Place forecast first-quarter profit of $1.03 a share to $1.08 a share, while analysts were expecting a profit of $1.14 a share, according to Thomson Reuters I/B/E/S.

However, department store operator Bon-Ton Stores Inc (BONT.O) bucked the trend with a strong full-year profit, despite reporting weak quarterly results on discounting of winter products, sending its shares soaring 33 percent.

For more information, visit: http://www.reuters.com/article/2012/03/07/us-retailers-idUSTRE8261F220120307

How Are You Retaining Customers?

February 13, 2012

Love just isn't enough anymore. In brand relationships, good customer service, high customer satisfaction and even professed brand loyalty won't keep consumers from ditching a product for the competition. In fact, more than half of U.S. consumers did so last year.

A global study by Accenture found that even though consumers are more satisfied with customer service than ever before, they are switching brands at a high rate.

The survey, conducted over the web in September and October 2011, queried more than 10,000 consumers to measure customer satisfaction across key attributes in 10 different industries. It found that while satisfaction increased for all those service attributes, an astounding two-thirds of respondents -- 66% -- reported they switched brands in the past year because of a bad customer experience. While the U.S.-only percentage of switchers was lower in 2011, at 51%, it is still significant and an increase over the previous year.

"Switching is something that's here to stay, said Robert Wollan, global managing director, Accenture customer relationship management. "Consumers have become accustomed to switching when the service or product isn't meeting their needs."

What is new is the big uptick in satisfaction, with increases ranging from 5% to 7% in one year, depending on the category. Consumers are happier, for instance, with shorter wait times (33% are satisfied compared to 27% last year); the ability to solve issues without having to speak to someone (38% satisfied, up from 33%); and the ability to resolve an issue by speaking to just one person (39% compared to 32%).

So what's going on -- shouldn't happier customers mean more loyal customers? Not necessarily. About one-fourth (24%) of consumers characterize themselves as brand loyal, while an almost equal number (23%) describe themselves as having no loyalty at all. As Mr. Wollan pointed out, not only are consumers now used to switching brands, there is a third factor on the increase that may also help explain the trend: the rise in customer expectation.

About 44% said they expect more, or much more, than they did last year from the brands with which they do business. In 2008, 31% said they expected more than the year before.

"We think the attributes we ask about -- wait times and talking to just one person to resolve issues -- have become table stakes," Mr. Wollan said.

Today's savvy digital customers expect polite and knowledgeable employees or convenient customer-service hours. And while they appreciate and are satisfied with those things, it's not going to stop them from taking their business elsewhere.

Also on the rise is partial switching, defined as when a consumer keeps a brand, but also adds another in the same category, such as buying a second mobile phone from a different provider. Partial switching in 2011 increased in all 10 industries Accenture tracks, from retail and consumer electronics to travel and tourism and banking. That's not only lost business, but more importantly, a loyalty lapse that opens a door to a new brand.

For more information, visit: http://adage.com/article/news/brand-love-satisfaction-shoppers-faithful/232680/

How Are You Retaining Customers?

February 13, 2012

Love just isn't enough anymore. In brand relationships, good customer service, high customer satisfaction and even professed brand loyalty won't keep consumers from ditching a product for the competition. In fact, more than half of U.S. consumers did so last year.

A global study by Accenture found that even though consumers are more satisfied with customer service than ever before, they are switching brands at a high rate.

The survey, conducted over the web in September and October 2011, queried more than 10,000 consumers to measure customer satisfaction across key attributes in 10 different industries. It found that while satisfaction increased for all those service attributes, an astounding two-thirds of respondents -- 66% -- reported they switched brands in the past year because of a bad customer experience. While the U.S.-only percentage of switchers was lower in 2011, at 51%, it is still significant and an increase over the previous year.

"Switching is something that's here to stay, said Robert Wollan, global managing director, Accenture customer relationship management. "Consumers have become accustomed to switching when the service or product isn't meeting their needs."

What is new is the big uptick in satisfaction, with increases ranging from 5% to 7% in one year, depending on the category. Consumers are happier, for instance, with shorter wait times (33% are satisfied compared to 27% last year); the ability to solve issues without having to speak to someone (38% satisfied, up from 33%); and the ability to resolve an issue by speaking to just one person (39% compared to 32%).

So what's going on -- shouldn't happier customers mean more loyal customers? Not necessarily. About one-fourth (24%) of consumers characterize themselves as brand loyal, while an almost equal number (23%) describe themselves as having no loyalty at all. As Mr. Wollan pointed out, not only are consumers now used to switching brands, there is a third factor on the increase that may also help explain the trend: the rise in customer expectation.

About 44% said they expect more, or much more, than they did last year from the brands with which they do business. In 2008, 31% said they expected more than the year before.

"We think the attributes we ask about -- wait times and talking to just one person to resolve issues -- have become table stakes," Mr. Wollan said.

Today's savvy digital customers expect polite and knowledgeable employees or convenient customer-service hours. And while they appreciate and are satisfied with those things, it's not going to stop them from taking their business elsewhere.

Also on the rise is partial switching, defined as when a consumer keeps a brand, but also adds another in the same category, such as buying a second mobile phone from a different provider. Partial switching in 2011 increased in all 10 industries Accenture tracks, from retail and consumer electronics to travel and tourism and banking. That's not only lost business, but more importantly, a loyalty lapse that opens a door to a new brand.

For more information, visit: http://adage.com/article/news/brand-love-satisfaction-shoppers-faithful/232680/

E-Commerce on the Rise

February 13, 2012

E-Commerce on the Rise

February 13, 2012

E-Commerce on the Rise

February 13, 2012

American Eagle Outfitters to Expand in Jordan, Morocco, & Egypt

December 27, 2011

American Eagle Outfitters Inc. announced the opening of stores in three new international markets—Morocco, Jordan and Egypt. The company also opened its third store in Saudi Arabia, and has plans for a second store in Lebanon in early 2012. The leading lifestyle brand, with a fleet of more than 1,000 stores worldwide, currently operates in Egypt, Jordan, Kuwait, Lebanon, Morocco, Saudi Arabia, and the UAE through its franchise partner, M.H. Alshaya, one of the most experienced retailers in the world. American Eagle Outfitters opened in Jordan on November 30 in Taj Mall. Morocco’s store opened in Casablanca at Morocco Mall on December 1. The Egypt store is located in Cairo’s City Stars Mall, and opened on December 10. The partnership with Alshaya, signed in May 2009, was AEO’s first foray into bricks-and-mortar stores outside of North America. Since then, AEO has opened stores in Russia, China and Hong Kong, and signed franchise agreements for stores in Japan and Israel as well, working with various franchise partners. “American Eagle Outfitters’ ongoing international expansion is evidence of the success and positive customer response, as well as the expertise of our valued partner, M.H. Alshaya,” said Simon Nankervis, vice president of global business development, American Eagle Outfitters, Inc. " “We are continuously delighted by consumers’ excitement and passion for the American Eagle Outfitters brand as we pursue our international expansion strategy around the globe. We look forward to announcing new stores and additional countries in the coming months.” Even before American Eagle Outfitters began opening stores abroad, customers around the world were fans of the brand. The company’s e-commerce site shipped internationally beginning in 2004, and today ships to 77 countries, with Italy being the latest to join. All American Eagle Outfitters international stores offer a similar product assortment as those in the U.S., which is well known for being high-quality, on-trend fashion at affordable prices. Most stores also feature the company’s Aerie brand, a confident, sexy intimates and apparel line for young women in their twenties. American Eagle Outfitters Inc., through its subsidiaries, (AEO, Inc.) offers high-quality, on-trend clothing, accessories and personal care products at affordable prices.

American Eagle Outfitters Inc

http://www.fibre2fashion.com/news/apparel-news/newsdetails.aspx?news_id=106443

Sears Reduce Expenses By Closing Stores

December 27, 2011

http://www.fibre2fashion.com/news/apparel-news/newsdetails.aspx?news_id=106620

Economic Recovery Not Yet Arriving

June 12, 2009

With a rise in the number of people continuing to receive jobless aid and companies holding off on hiring, analysts warn an economic recovery is still far off.

The Labor Department said Thursday that initial claims for unemployment benefits fell last week by 24,000 to a seasonally adjusted 601,000. That’s below analysts’ estimates of 615,000, reported the Associated Press.

However, the number of people claiming benefits for more than a week rose by 59,000 to more than 6.8 million, the highest on records dating to 1967. The Labor Department also revised last week’s data on continuing claims, replacing what had been a drop of 15,000 with an increase of 6,000.

The Commerce Department said Thursday total retail sales rose 0.5 percent in May, the first advance in three months, lifted by strong gasoline and building material receipts. Consumers also spent more on food and clothing. Sales fell 0.2 percent in April.

The sales report fed optimism that consumer spending would probably be flat to modestly lower in the second quarter, instead of falling sharply as expected by most analysts.

Spending, which accounts for about 70 percent of U.S. economic activity, rose 1.5 percent in the January-March period, after a 4.3 percent dive in the fourth quarter.

Because rising gasoline prices aided last month’s retail sales gain, consumer purchasing could slow in other areas.

Meantime, the number of U.S. households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years, the AP also reported.

Foreclosure filings fell 6 percent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month–18 percent more than a year earlier–but the smallest annual gain since June 2006.

As layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, many economists expect foreclosures likely will remain elevated this year and into 2010.

Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.

The Obama administration announced a plan in March to provide $50 billion from the financial industry rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments.

On Wall Street, investors welcomed the better-than-expected report on jobless claims and growth in retail sales, pushing stocks higher Thursday morning. Rising interest rates have recently become a concern and had sent stocks lower on Wednesday.

For further information, visit: http://www.pbs.org/newshour/updates/business/jan-june09/economy_06-11.html