KeyPoint Partners Retail RoundUp has moved

We apologize for the inconvenience but we've moved the location of our retail news site. The new address is blog.KeyPointPartners.com. You can subscribe to the new location by clicking here.

Could General Growth Be Sold?

As the credit crisis drags on, debt-ladened General Growth Properties, the nation’s second largest regional mall REIT, may have no other choice than to sell the company. That move, according to some observers, could even happen before the end of the year.

Last week, the Chicago-based firm announced it was exploring financial and strategic alternatives, including possible sale of the company, as it races to retire all of its 2008 loan maturities, which total $2.8 billion. Beyond that, as of Aug. 29, the company had a total long-term debt load of about $27 billion, according to Columbia Capital Services, Inc. Its long-term debt to capitalization ratio is at 72 percent, according to a report from Wachovia Capital Markets.
On Monday, Standard & Poor’s downgraded General Growth’s corporate credit rating to BB from BB+ and put the company on the watch list for further downgrades.

General Growth has already adopted several extraordinary measures as it tries to work with debtors and calm investors. On Sept. 2, it added seven of its properties to the collateral pool to repay $391 million in near term mortgage maturities. On Sept. 17, it increased the initial repayment guarantee to 50 percent of its outstanding $1.5 billion credit facility. On Sept. 20, two days after the company’s stock plummeted to a 52-week low of $19.50, General Growth was added to the short sell ban list by the Securities and Exchange Commission (SEC). It has also doubled its recourse levels with lenders to 50 percent. . . . more

REIT history bodes well for outlook in current volatile market

Prices said to dip and climb before those of commercial property

Even though commercial- property values are decreasing, equity real estate investment trust prices will likely rise if historical trading trends are an indication, some industry observers predict.

"There's a tendency for people to think that if property values are going down and they own REIT stocks, then that means their REIT stocks will go down — and that, historically speaking, is not the case, because REITs lead the rest of the market," said Brad Case, an economist and vice president of research at the National Association of Real Estate Investment Trusts in Washington. "Returns to REITs lead the returns to real properties."

Equity REIT share prices have tended to decline, trough and rebound a year or two ahead of commercial-property prices shown on the NCREIF Property Index, from the National Council of Real Estate Investment Fiduciaries in Chicago.

If this trend holds up during this cycle, equity REITs, which were up about 2% in the first eight months of 2008, should continue ticking up even though commercial-real-estate values will likely be falling, Mr. Case said. . . . more

Kohl's Makes Grab for Market Share

As Holiday Season Nears, Retailer Opens More Stores And Plans Aggressive Discount Pricing

Kohl's Corp. is opening 46 stores Wednesday as part of an aggressive effort to take market share from competitors just as the holiday season gets under way and U.S. consumer spending is stagnating.

"We've been in a period now for over a year where the customer is shopping less," says Kevin Mansell, who became chief executive of the Menomonee Falls, Wis., retailer in August. "You'd better start figuring out how you're going to take more from the other guy."

The middle-market chain, which competes head-on with J.C. Penney Co. plans to open a total of 75 new stores in 2008, Mr. Mansell says. After the new openings this fall, which include one more in November, the total Kohl's store count will be 1,004, or just shy of J.C. Penney's 1,083. . . . more

Food Lion's Bottom Dollar Scales Down with New Prototype

Food Lion is "right-sizing" its Bottom Dollar Food discount concept with a new prototype unit opening today in Mooresville, N.C., about 40 minutes from Charlotte. The new 20,000 square foot store incorporates significant research and experience into the banner's redesign, Paul LaCroix, vp of Bottom Dollar Food told Progressive Grocer on Tuesday.

"When we approached this project, we first wanted to right-size the store with our variety," LaCroix said. "That meant smaller. We were able to eliminate non-sales floor space and allow for efficient assortment based on the square footage. We carry an efficient variety of branded and store brand products that customers purchase most often. The smaller space also allows for a reduction of energy expense.". . . more

Baltimore: Owner says Columbia Town Center project still on tap

Debt-laden mall owner General Growth Properties Inc. plans to follow through with its proposed Columbia Town Center redevelopment, despite recently announced plans to shore up its finances and refinance its debt by selling off some of its properties.

Greg Hamm, general manager of the Columbia project for General Growth, said the company hopes to submit documents to Howard County outlining its plans for the project.

“We have every intention of moving forward,” Hamm said. “It’s a wild world out there, but we’re very excited about the project.”

Bill Mackey, project manager for Howard County’s planning and zoning department, said General Growth has said it will provide the county with the plans next month. . . . more

Ciena Capital Declares Bankruptcy

NEW YORK CITY-Ciena Capital, a local provider of commercial real estate financing and factoring services, has filed for chapter 11 relief in the US Bankruptcy Court for the Southern District of New York, according to a statement by its major investor, Washington, DC-based Allied Capital. Although it will continue to operate its servicing business and, shielded by bankruptcy will be able to dispose of its assets in an orderly fashion when the markets improve, Ciena Capital joins the growing credit-market-freeze body count--and by extension, Allied Capital will be feeling some heat as well. Ciena did not return a call to GlobeSt.com in time for publication. Allied Capital declined to comment beyond its press release.

Allied Capital’s "unconditional guaranty of the obligations outstanding under Ciena's revolving credit facility may become due," it said in the release. The company intends to pay approximately $320 million to the lenders in connection with Ciena's revolving credit facility and will continue to guarantee a remaining balance of approximately $10 million. To fund the payment, Allied Capital will tap some $150 million it has in cash and may borrow an additional $170 million on its unsecured revolving line of credit. In essence, Allied Capital will become a senior secured lender to Ciena. . . . more

True Religion Opens New Branded Retail Store on Walnut Street in Philadelphia, PA

True Religion Apparel, Inc. (Nasdaq: TRLG) today announced the opening of a new branded retail store in the Center City district of Philadelphia, Pennsylvania. Located at 1604 Walnut Street, the 1,600 square-foot branded store will offer shoppers the entire True Religion collection for men, women and kids, including its signature jean styles, its expanding denim and sportswear collection, and a full range of licensed product, such as footwear, swimwear, headwear and handbags.

Located in the heart of Philadelphia, Center City is the downtown and Central Business District of Philadelphia, Pennsylvania. Encompassing a population of approximately 90,000, Center City is the third most populous downtown in the United States. Additionally, the area is largely recognized as one of Philadelphia’s premiere tourist and shopping destinations and attracts an estimated 5 million visitors annually. Walnut Street in particular, offers a mix of national and local luxury businesses, including Polo, Tiffany & Co., MAC Cosmetics, Diesel, Coach, Cole Haan and Burberry. . . . more

Vacancies On Rise In Small Commercial Spaces

When the mortgage company in the storefront next to Michel Moran's framing shop in Cromwell went out of business, she thought there would be a new tenant in a month or two.It's now going on six months, there's still no new neighbor and Moran is starting to feel some ill effects.

Customers are no longer going in for mortgage business, noticing her shop and maybe coming back when they have a picture or mirror they need framed."That counts for something," Moran said.Over the past 20 months, there has been a rise in vacancies at small retail spaces in Greater Hartford, especially those of 10,000 square feet or less. That points to how the slowing economy is affecting "mom and pop" stores. Smaller locations like that account for nearly half of the region's retail space.

The trend has emerged even as the overall retail real estate market in the region remains relatively healthy when compared with other areas of the country.

According to a new report from KeyPoint Partners, a commercial real estate services firm, the biggest increase in vacancies over the past 20 months occurred in spaces of 5,000 to 10,000 square feet, which rose nearly two percentage points, to 9.7 percent. The report also found that vacancies among the smallest spaces — 2,500 square feet or less — rose nearly a full percentage point, to 10.7 percent.. . . more

Circuit City hires restructuring firm -- is bankruptcy on the horizon?

More bad news for Circuit City (NASDAQ: CC). After the resignation of its CEO followed by disappointing quarterly results and the company's decision to withdraw its guidance, the company has hired turnaround specialist FTI Consulting Inc. as an adviser on restructuring. Stifel Nicolaus & Co. analyst David Schick wrote that "The risks of bankruptcy are very real [...] Vendors will have to decide how they plan to do business at Circuit City.

''Reports of a company hiring a restructuring specialist are almost never good for shareholders, but it may be a sign that Circuit City is finally being realistic about just how dire its situation is. To date, the company has explored a bizarre strategy of opening new stores in the face of devastating sales declines as it loses traffic to better competitors like Best Buy (NASDAQ: BBY) and Wal-Mart (NYSE: WMT).. . . more

Boston Home Prices May Have Bottomed

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 16.3 percent in July from a year earlier, extending declines that have plagued the housing market for two years, according to the Standard & Poor's/Case-Shiller Home Price Indexes.

The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement on Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.

S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent.

The pace of home price declines since May has slowed to about a third of the rate of the two previous three-month periods, however, S&P said.. . . more

Kohl's opens 1,000th store(s): Sizing up the shopper

Kohl's Corp. has opened its 1,000th store this week in Burlington. And in Manitowoc, and at 44 other locations around the country. You can take your pick. Like a good parent, Kohl's is refusing to play favorites by designating any one of the 46 stores to open as the official 1,000th in the Menomonee Falls-based chain.

Though the stores opened without fanfare Sunday, grand opening ceremonies are scheduled for Wednesday at all 46 stores. The new locations will put the company at 1,003 stores in 48 states. Another store will open in November.

"One thousand stores is generally kind of a marker for us," said chief executive officer Kevin Mansell. "What it says is that we have a concept that works."

. . . more

Saladworks Reaches Milestone with Mount Laurel Opening on October 1

Twenty-two years after openingits first store in the Cherry Hill Mall, Saladworks will open its 100thlocation on October 1, just over seven miles away in Mount Laurel.

To celebrate their major milestone, Saladworks will offer $1 salads at theMount Laurel location throughout the day with 100 percent of the proceedsgoing to benefit Alex's Lemonade Stand Foundation. This also marks the firstlocation with Saladworks' "fanatic'ly fresh" new store design.

The store is located in the newly-named Bank of America Plaza on Route 38and Larchmont Road in Mount Laurel.

"This is a landmark day in the history of Saladworks," said founder andCEO John Scardapane. "The formula has been a mix of fanatical customerexperience along with a remarkably fresh product. Saladworks will soon be ahousehold name across the country as we continue our turbo-charged growth to1,000 stores by 2012, but we'll always be true to our South Jersey roots." . . . more

Franchisers Sweeten Pot to Woo Buyers

Franchise companies, facing what many say is the toughest economic environment they've seen, are offering two-for-one deals, reduced fees and financing help to woo new buyers. They are also paying existing franchisees to help spread the word.

The economy has made many would-be franchisees wary of taking big financial risks, while others simply can't get the necessary loans. Meanwhile, competition among franchisers is growing, giving investors a lot more choices. There are now about 3,000 different franchise concepts, according to the International Franchise Association.

Emerald City Smoothie gives franchise buyers a kiosk in addition to a store.

In a survey released last week of some 150 franchise companies, respondents said their franchise sales were about 72% below their 2008 goals, with inquiries from prospective franchisees down about 48%, according to Franchise Update Media Group, San Jose, Calif.

But even as "closing deals is becoming more of a challenge," says Harold Kestenbaum, a franchise attorney in Uniondale, N.Y., franchise companies have to be careful not to alienate existing franchisees when they offer discounts and other incentives to new buyers. "How does it look for the guys who pay the higher price when they see the price is getting lowered?" he asks. Making the situation more sensitive, existing franchisees, especially in the retail and home-service sectors, are being hit by cutbacks in consumer spending. . . . more

Circuit City Halts 2010 Store Openings

RICHMOND, VA-Circuit City Stores plans zero growth beyond existing commitments for fiscal 2010 and is examining store openings for the second half of this year (fiscal 2009) as it looks to improve the performance of its current business, the company said at its second quarter conference call.

The company current plans between 45 and 55 domestic store openings in the current fiscal year, of which 24 have already opened.

“Our current store base doesn’t support the customer or associate experience we want to deliver," said James A. Marcum, vice chairman and acting president/CEO. "We expect to dramatically reduce our store openings, other than those fulfilling existing commitments, which are limited."

Previously, the company had announced a review of strategic alternatives. But the current market has made it prudent to focus on improving the existing business, Marcum said. . . . more

During an uncertain time, thrift stores doing brisk business

With the economy running on fumes, there is at least one industry reporting that business is thriving: thrift stores. Shoppers looking for bargains are shunning retail stores and heading to shops run by the Salvation Army and Goodwill Industries, store managers said.

“We’ve got a lot of customers coming in," said John Everett, manager of the Salvation Army store in Cambridge. "They can’t go to the stores and get the stuff they really wanted, and they come here and it’s cheaper.”

At the Salvation Army store in Hudson, manager Elaine Schwartz has seen a 20 percent increase in sales in the last few months.
. . . more

Foot Locker to buy Delias brand for $102 mln

NEW YORK, Sept 29 (Reuters) - Athletic shoe and clothing chain Foot Locker Inc (FL.N: Quote, Profile, Research, Stock Buzz) said on Monday it plans to buy Delias Inc's (DLIA.O: Quote, Profile, Research, Stock Buzz) CCS business for $102 million, as it seeks to boost its appeal with teenage skateboarders.

Delias also said its core brands, dELiA*s and Alloy, should generate positive earnings before interest, depreciation and amortization in the fourth quarter of fiscal 2008 and fiscal 2009, helping to send its shares up 25 percent.

The all-cash deal for CCS is expected to close within 60 days.

CCS is a direct-to-consumer business that sells skateboard shoes, clothes and accessories through catalogs and the Internet. It is expected to have revenue of $80 million in 2009 and add to Foot Locker's earnings in the first full year of operation, the company said.

Barclays Capital advised Foot Locker while Financo advised Delias on the deal.

Delias, whose main customers are teenagers, said it will not decide how to use the proceeds from the sale until after the end of its fiscal year, in 2009.

Delias shares were up 63 cents, or 25 percent, at $3.13 on Nasdaq.




Source: Reuters

Personal income tops forecasts

Government report shows American incomes rose 0.5% last month, but personal spending weakened.

NEW YORK (CNNMoney.com) -- Personal income rose unexpectedly in August after a sharp decline in the previous month, while personal spending was sluggish, according to government figures released Monday.

The Commerce Department reported that personal income increased by 0.5% in August after a revised 0.6% decline in July. Economists surveyed by Briefing.com were expecting income to have grown by 0.2% last month.

After adjusting for taxes and certain price changes, however, real disposable income contracted 0.9%, according to the report.

Personal spending, meanwhile, was virtually unchanged in August. Economists had forecast a 0.2% increase in personal spending. Spending has not been this weak since February when it was also flat. . . . more

What's In The Bailout Deal

Key U.S. legislators released the compromise draft of the $700 billion bailout proposal early Sunday evening ahead of the opening of markets in Asia, and now have one final hurdle to clear: convincing the rank-and-file of their parties to support the legislation when it comes to a vote, likely on Monday.

In a press conference before meeting with House Democrats, Speaker of the House Nancy Pelosi, D-Calif., said the bill was a bipartisan piece of legislation. "If we don't pass it we shouldn't be a Congress," said Sen. Judd Gregg, R-N.H., who told reporters that he was confident the bill would pass without a further round of changes.

Under the legislation Treasury will be granted $700 billion in phases to acquire bad mortgage assets from financial institutions at a price it determines or through auction with a market price. If the Treasury decides to take the first option it will have some authority to determine the executive compensation structure of the firm.

If firms sell more than $300 million in assets in the auction, they will lose the ability to deduct the salaries of their top five individuals that have exceeded $500,000. For participating firms there will also be a surtax of 20% on retirement packages of top executives who are involuntarily terminated from their firms, or lose their jobs as a result of the firm's failure. . . . more

AutoZone buying back $500M in common stock

AutoZone Inc. is buying back $500 million of its common stock, the company announced Sept. 24.

The repurchase is part of an aggressive repurchase program by the Memphis-based auto parts retailer that now totals $6.9 billion in share repurchases since 1998.

Repurchasing stock is a common strategy for well-capitalized companies and is a way to boost the company’s earnings per share by reducing the number of outstanding shares.

The company also announced the election of Luis P. Nieto to the company’s board of directors. Nieto is president of consumer foods for ConAgra Foods Inc., one of the largest packaged foods companies in North America.

Also, board members N. Gerry House and Charles M. Elson have said they will not stand for re-election at the company's annual stockholders meeting on Dec. 17.

Source: Aftermarket Business

Circuit City loss widens; company reviews business

NEW YORK (MarketWatch) -- Electronics retailer Circuit City Stores Inc. said Monday that its quarterly loss widened, hurt by charges to write down the value of its fixed assets and a significant decline in traffic that led to worse than expected sales.

The company withdrew its previous fiscal 2009 outlook as it said it's reviewing all aspects of the business ahead of the holiday season, its biggest selling period.

Circuit City shares fell 11% in pre-market trading.

Net loss widened to $239.2 million, or $1.45 a share, from $62.8 million, or 38 cents, a year earlier. Sales in the quarter ended Aug. 31 fell 9.6% to $2.39 billion from $2.64 billion, the Richmond, Va.-based company said in statement. The decline was worse than expected by analysts. Same-store sales dropped 13%, led by a drop in the U.S. . . . more

TJX, Costco best positioned to buy competitors

NEW YORK (Reuters) - Discount retailers, including TJX Companies Inc (TJX.N: Quote, Profile, Research, Stock Buzz), are best positioned to buy distressed competitors, assume leases or expand into new concepts as the weakening economy takes its toll on several troubled retail companies, said Hilco's Nina Kampler on Wednesday.

"TJX is great, Burlington Coat is great, Costco Wholesale Corp (COST.O: Quote, Profile, Research, Stock Buzz)is great," said Kampler, an executive vice president in liquidator Hilco's real estate division. "These retailers that I'm naming are an example of the value retailers who are in a position to assume some of these more distressed, troubled retailers and perhaps they become part of their different concepts.". . . more

Toys'R'Us Announces 2008 Hot Toy List for the Holiday Season

The Toy Authority Reveals 36 New Toys Guaranteed to Top Christmas Wish Lists and Selects the "Fabulous 15" Representing the Best of the Season

WAYNE, N.J., Sept. 25 /PRNewswire/ -- With the official start of the holiday shopping season only weeks away, today Toys"R"Us announced its 2008 Hot Toy list, representing the definitive selection of toys that will top kids' wish lists this holiday season. The company's predicted list of the biggest holiday "must-haves" features 36 new toys that are sure to delight and excite kids across the country when they open their Christmas presents. Carefully selected after a comprehensive review process, items on the list are organized by age from "Baby's First Christmas" to "Big Kids" and serve as a starting point to help parents, friends and family find the perfect gift for any child. From the overall list, the "Fabulous 15" were selected to represent the very best toys of the season. All items featured on the list are available at Toys"R"Us stores nationwide and at www.Toysrus.com/HotToys

"After a thorough evaluation of all new toy introductions throughout the year, and consultations with our global merchandising team in 34 countries, Toys"R"Us has the unique ability to provide our guests with THE ultimate list of items certain to bring big smiles to kids' faces - the Toys"R"Us Hot Toy list," said Karen Dodge, Senior Vice President, Chief Merchandising Officer, Toys"R"Us, U.S. "With new toy shipments arriving in our stores daily, customers will have a better chance of finding the hottest toys, in stock, at Toys"R"Us than anywhere else." . . . more

Rite Aid 2Q loss doubles on Eckerd struggles

Drugstore operator Rite Aid shook up its management ranks Thursday after posting a higher second-quarter loss because of disappointing results at stores acquired from Brooks Eckerd and heavy promotional spending.

The company hired two former Pathmark Stores Inc. executives, including rehiring John T. Standley as president and chief operating officer, and three top Rite Aid executives left the company.

The company also cut its expectations for full-year results.
Rite Aid, the third-largest U.S. drugstore chain, said its loss swelled to $222 million, or 27 cents per share, compared with $78.2 million, or 10 cents per share, a year ago. Revenue slipped 1 percent to $6.5 billion from $6.57 billion.. . . more

Memo To Retail Execs: Load Up On Tums

Times are tough for CFOs everywhere, but those in the retail industry are really suffering. A new survey from BDO Seidman reports that they are worried about how everything will affect holiday sales this year.

Some 57% of the executives at leading retailers included in the survey say that while high fuel costs have done the most to hurt consumer confidence so far this year, going forward they see the main threats to consumer spending in the critical months ahead as being gas prices (47%), the housing market (28%), the pending Presidential election (13%) and inflation (11%).

The poll, which included executives at chains with sales greater than $100 million, found balance sheets are in bad shape: Only 36% say sales increased when comparing the first halves of 2008 to 2007, which is down from the 56% who cited an increase last year. And 44% say comparable-store sales in that period declined.

"Overall, the CFOs estimate that the average comparable-store sales growth for 2008 will be virtually flat, averaging 0.72% growth," it says in its analysis of the poll results. "Retailers may remain wary for the rest of the year." . . . more

Finish Line posts 2Q profit, reversing loss

Indianapolis-based sporting goods retailer The Finish Line Inc. said it swung to a second-quarter profit as growing sales helped the company post better-than-expected results.

For the three months ending Aug. 30, the well-known mall retailer earned $13.1 million, or 24 cents per share. That compares with a loss of $1.8 million, or 4 cents per share, during the same period last year.

Revenue climbed nearly 4 percent, to $353.3 million, up from year-ago sales of $340 million.. . . more

Blockbuster sticks to the bricks

The instant gratification of video-on-demand and the novelty of movies by snail mail may get many a consumer more excited than an old-fashioned trip to the corner store, but for Blockbuster Inc., the store is still the thing.

The Dallas-based video rental and retail chain, which closed hundreds of stores over the last year, plans to revamp many of its remaining outlets, expand its movie and game offerings, and add more rental and download kiosks.

But it’s still keeping an eye toward increasing Internet-based downloads through Movielink, the digital movie site it acquired last year, and attracting more movie-thru-mail subscribers. Critics say stores are passé, but Blockbuster notes that its mail customers also have the convenience of returning or trading-in their mail-ordered movie at stores — something which Netflix can't do because it doesn't have brick-and-morter outlets (just in case an Ingmar Bergman flick showed up in the mail when you were more in the mood for "Sex and the City").. . . more

Commercial-Property Players Find Their Pressures Growing

As Crisis Spreads, Market Seizes Up; Capital Preservation

For the commercial-real-estate players that were in hot water before the capital-markets crisis of the past two weeks, the temperature is rising.

Retail giant Centro Properties Group, New York developer Macklowe Properties, office-building investor Broadway Real Estate Partners LLC and others are now facing an even rougher ride in the wake of Lehman Brothers Holdings Inc.'s bankruptcy, the collapse of American International Group Inc. and the buyout of Merrill Lynch & Co. by Bank of America Corp.

After these and other market crises, cash-flow projections for properties are being scaled back in anticipation of a greater economic slowdown. The sales market -- long considered the last hope of many distressed players -- has virtually ground to a halt.

Even creditors that were willing to make real-estate loans before the upheaval are pulling back, having witnessed the spectacle of some of the biggest names in finance and banking vanishing in a period of days. . . . more

General Growth Among 9 Added to Short-Sale Ban List

U.S. regulators added nine companies including General Growth Properties Inc. and the government-sponsored enterprise known as Farmer Mac to the list of stocks temporarily protected against short sales.

The additions today bring to 926 the number of protected companies, exchange data show. General Growth is the second- largest owner of U.S. malls, and Federal Agricultural Mortgage Corp. provides financing to farmers, ranchers and rural homeowners. At least two companies, Diamond Hill Investment Group and "boutique'' investment bank JMP Group Inc., have opted off the list. . . . more

Trader Joe’s Readies New Stores in New York, Virginia

MONROVIA, Calif. — Trader Joe’s this week will open doors to new locations in Brooklyn, N.Y.; Richmond, Va.; and Williamsburg, Va., the company said. The stores, all of which are scheduled to open Friday, represent the first Trader Joe’s stores in their immediate markets, although the Brooklyn store follows other New York City locations in Queens and Manhattan. The Brooklyn store, at 14,000 square feet, is located in a landmark former bank building in the Cobble Hill neighborhood.

Source: Supermarket News

Rite Aid replaces chief financial, chief operating officers

Rite Aid Corp. today announced a corporate shake-up that will replace the drugstore company's chief financial and chief operating officers.

The company said John T. Standley is returning to the East Pennsboro Twp.-based company to serve as president and chief operating officer, effective immediately.

He is replacing Robert J. Easley, who the company said is leaving to pursue other interests.

Frank G. Vitrano was named today as chief financial officer and chief administrative officer, effective immediately. He takes over positions held by Kevin Twomey and Pierre Legault. . . . more

Soaring prices force women to tighten budgets

If royalty was based on frugality, Helen Braun would be Jackson's reigning queen. The 78-year-old "blond bomber," as friends call her, can sniff out a sale quicker than a bloodhound and separate treasure from trash at garage sales with uncanny ease.

These days, Braun is more than a model of frugality. She and others like her may hold the key to surviving the economic downturn. Between the sagging economy and soaring food and gas prices, Americans are increasingly feeling financially squeezed.

"I'm Dutch, so saving money comes naturally to me," says Braun with a twinkle in her blue eyes. "But with gas around $4 a gallon and rising, I have extra incentive to get the most mileage possible out of every dollar." So she switched to generic medical prescriptions, targets movie matinees at discount prices, and occasionally checks out garage sales. Most importantly, she remains faithful to her No. 1 rule: "Never buy anything unless it's on sale!"

Braun's example reflects an interesting national trend. Moody's Economy.com, an independent provider of economic analysis, reports that although consumer spending has not risen as much as hoped, it has risen a little every month this year, thanks in part to the $50 billion in economic stimulus checks from the federal government. Even though our economy is in a downturn, shoppers — 80 percent of whom are women — have not stopped spending money: They're just spending it differently. . . . more

Bargain Hunting: Luxury Retailers Find an Outlet

With sales at their main locations sagging, Saks, Nordstrom, and others are tapping budget-conscious shoppers by expanding their outlet stores

On a recent morning at the Woodbury Commons Outlet mall an hour north of New York City, Carissa Nava is looking over a red wraparound dress by Diane Von Furstenberg at the Saks Fifth Avenue Off Fifth store. The dress retails for $365 at Saks' main store on in New York, but here it is selling for $126.99.

Nava, a pharmaceutical sales rep who lives in Manhattan, makes regular trips to Saks' flagship store on Fifth Avenue—sometimes to buy, but often just to check out the selection of big-name apparel. Then, at the earliest chance, she drives up to the Saks outlet to pick those items up at a significant discount. "I only wear Seven or True Religion jeans, and I get them here for $149," she says. "Why would I pay $216 for the same exact ones at the main store?"

There's a certain snob appeal that attaches to luxury retailers like Neiman Marcus, Saks (SKS), or Nordstrom (JWN). Which is why, even though almost all of them have operated discount outlet stores for years, they never talked much about them. Saks went to the extent of keeping its name off the outlets, calling them "Off Fifth."

Out of the Shadows

But today, with the economy stalled and consumer spending in free fall, snobbery is a bit harder to pull off. Even the most upscale shoppers are hunting for bargains. So luxury retail executives are taking their off-price operations out of the shadows and launching their most aggressive expansion plans in years. Increasingly, the outlets also are offering not just discontinued or leftover inventory from a previous season, but many items currently available at the mainline stores.

"Only stores that scream value are getting consumers in," says Erin Armendinger, managing director of the Jay H. Baker Retailing Initiative at the Wharton School at the University of Pennsylvania. . . . more

Lehman, Merrill Assets Expected To Be Sold

With the credit markets seized, the avalanche of bad news surrounding investment banking giants Lehman Brothers and Merrill Lynch and insurance provider AIG has caused a state of panic in the commercial real estate industry.

Merrill was exposed to about $18 billion between whole loans, conduits and direct real estate investments. Lehman, meanwhile, continues to hold $32.6 billion in commercial real estate between whole loans and CMBS bonds. About 11 percent of its portfolio is devoted to retail. AIG’s exposure is harder to pin down. The company built up a $60 billion position in the credit default swaps market—some of which is tied to CMBS. The company also has $16 billion in international real estate assets.

The question now is, with Lehman in bankruptcy, Merrill Lynch in the process of being acquired by Bank of America and AIG sold off in parts by the government, what’s going to happen to all those holdings?

In the case of Lehman and Merrill Lynch, their commercial real estate assets will likely end up on the auction block, according to David Akeman, director in the capital markets group of Stan Johnson Company, a Tulsa, Okla.-based commercial real estate investment firm. Before filing for bankruptcy last week, Lehman had planned to spin off its commercial real estate portfolio into a stand-alone, publicly-traded entity, Real Estate Investments Global, which would allow the bank to avoid a forced fire sale. But after its September 14 bankruptcy filing, Lehman will not likely be allowed to spin off one of its divisions, says Adam B. Weissburg, partner with Cox Castle Nicholson LLP, a Los Angeles-based real estate law firm. . . . more

Cabela's plans to open smaller stores

CHICAGO - Executives at outdoor supercenter Cabela's Inc. told investors Tuesday that they plan to open slightly smaller retail locations in the future.

Speaking at the Thomas Weisel Partners Consumer Conference in New York, Cabela's Chief Executive Dennis Highby said new stores being developed by the Sidney, Neb.-based chain will follow three size formats ranging from 80,000 square feet to 125,000 square feet.

Cabela's current stores average about 140,000 square feet, although its largest location is a massive 245,000 square foot store.. . . more

Mohegan Sun's Expansion Put on Hold

UNCASVILLE, CT-The Mohegan Tribal Gaming Authority is planning to delay a large capital spending component in the Project Horizon expansion of Mohegan Sun. A statement cites the ongoing economic recession affects on regional gaming markets as the cause of the interruption.

The components that will be suspended are the Earth Expansion and the adjacent parking garage. The complex consists of Casino of the Earth, Casino of the Sky, Casino of the Wind, Sunrise Square, the Shops at Mohegan Sun, along with a 10,000-seat arena, a 350-seat cabaret theatre and 100,000 sf of meeting and convention space. There is also a 1,200-room Sky Hotel Tower. The Project Horizon project included costs spent on different parts of the complex with $17 million to Sunrise Square, $116 million for Casino of the Wind, $58 million for Property Infrastructure and $75 million has already been spent on Earth Expansion and $5 million on the parking garage. By halting the expansion now, the project will save $734 million. . . . more

Real estate investor shoring up purchase of former Yoken's site

PORTSMOUTH, NH — A local real estate investor is in the process of finalizing a purchase-and-sale agreement to buy the former site of Yoken's restaurant on Route 1 from Shaw's Supermarkets Inc.

Anthony DiLorenzo, owner of several commercial properties in Portsmouth, entered into an agreement with Shaw's on April 21, according to a published report in the Portsmouth Herald.

DiLorenzo is the owner of the former Meadowbrook Inn, which was recently demolished to make room for a large multipurpose development on the Route 1 Bypass. He is president of Portsmouth Chevrolet, as well as principal of Key Auto Group.. . . more

Will change at top jolt Circuit City?

RICHMOND, Va. — A change at the top may not be enough to jump-start Circuit City Stores Inc., after the head of the nation's No. 2 consumer electronics retailer abruptly resigned amid plummeting stock prices and calls for his ouster.

Four months ago, Chief Executive Philip J. Schoonover asked shareholders for more time to turn around the company amid talks of a possible sale, despite some acknowledged missteps. This week, Circuit City's board decided more needed to be done.

But the move did little to inspire investors or analysts, and the company's shares dropped more than 4 percent.

Circuit City, which has seen only one profitable quarter since the second quarter of 2007, "still faces a mountain of challenges," JPMorgan analyst Chris Horvers told investors in a report following the change of command.

Schoonover stepped down Monday as chief executive, chairman and president of the Richmond, Va.-based company. Schoonover had joined the company in 2004 from rival Best Buy Co., where he was executive vice president of customer segments. . . . more

Lowe's cuts store growth plan for 2009

ATLANTA — Lowe's Cos. Inc. backed its 2008 full-year profit forecast Wednesday, but said it would open fewer stores next year as the soft U.S. economy and housing slump hampers demand.

The second-largest home improvement retailer behind Home Depot said it would open 75 to 85 new stores in 2009, down from about 120 it expects this year.

“While a pullback in the pace of our expansion is appropriate given the pressures in many markets, we continue to see opportunity for new store growth in the years ahead,” Gregory Bridgeford, Lowe's executive vice president for business development, said in a statement.

Lowe's, which is holding an analyst meeting Wednesday, reiterated an August forecast calling for profit of $1.48 to $1.56 (U.S.) a share for this year. That would be down from $1.86 a year earlier.

For 2009, Lowe's forecast profit of $1.40 to $1.65 a share.
Analysts currently expect profit of $1.53 a share for 2008 and $1.57 a share for 2009, according to Reuters Estimates.. . . more