Counter Culture

Howard Davidowitz is one of our favorite people to interview. The retail analyst, who is chairman of NYC-based consulting firm Davidowitz & Associates, is always fun to talk to because of his strong and animated opinions, many of which are too “colorful” to add to a news article.

In this MarketWatch audio clip, he is pretty tame, probably because he knows he’s on radio. But there are still a few things he says that are gems, like: “The consumer is underwater.” And there is also a reference to rebate checks “flying out of helicopters.” Fun aside, Davidowitz’s outlook for the industry is pretty bleak right now.

AnnTaylor Stores surprised investors yesterday forecasting a better-than-expected first quarter, with management saying that earnings per share could come in between 45 cents and 47 cents, up from a previously predicted 35 cents to 40 cents. The outlook rose shares 10%.

Granted, Q1 same-store sales were down 4.3%, plunging 11.5% at Ann Taylor units and inching up 0.7% at Loft, but this is favorable news during a time when we aren’t hearing too many good things about the apparel sector.
Continue reading ‘Ann Taylor Gets Lift…Will Apparel Follow?’

A Standard & Poor’s report (via BusinessWeek) doesn’t have a lot of faith, like many commenters on this blog, in US consumers paying off debt and buying groceries with their rebate checks. It says they are more likely to go on a spending spree at Best Buy…even if some credit card debt gets paid down.

“Americans may say that they are going to save the money or use it to pay down debt, but even those who do pay down their credit card balances are likely to build them back up rapidly, in our opinion,” says David Wyss, S&P’s chief economist.
Continue reading ‘Forget Paying Debt, Rebates Going to Best Buy’

This year’s International Council of Shopping Centers RECon convention later this month is coming at an interesting time. According to a Newsweek article, gaming revenues are down, room rates have dropped and the number of conventions has fallen by 10.4%.

Additionally, Tropicana Entertainment just filed for bankruptcy, and Wynn and Las Vegas Sands both had rough quarters.
Continue reading ‘It’s an Interesting Time to Visit Vegas.’

Today we report on Home Depot’s decision to abandon the opening of 50 new stores and close 15 stores. That might not seem like much considering that the chain has more than 2,200 stores, but we would image that few people would have predicted this a couple years ago.

It seems like every chain is pulling back from their ambitious expansion plans, from Starbucks to Kohl’s. We’re in an environment where store closures and bankruptcies are expected.
Continue reading ‘Is This Just the Beginning For Home Depot?’

Myron Ullman, J.C. Penney’s CEO and chairman, sees a tough retail environment that could lead to more bankruptcies, according to this Dallas Morning News article. There could be 10 to 20 chains that could fall victim, especially regional outfits, he said speaking recently at a Lehman Brothers conference.

Ullman says the stimulus checks that many taxpayers have started receiving might help retailers but concedes that high gas prices might have already sucked up those funds. He also says he is “cautiously optimistic” about the holiday season for his company.
Continue reading ‘Penney Chief Forecasts More Bankruptcies’

Msnbc.com interviews some of our favorite analysts about the state of apparel in today’s retail environment, and it’s not pretty. Apparently, consumers just aren’t buying clothes because they NEED to buy food and gas, which are both rising in cost and taking precedence over the newest Abercrombie T-shirt.

A quote by C. Britt Beemer, an analyst at America’s Research Group, is telling. “I’ve done research for 29 years, and what I’m seeing today I can’t compare to anything I’ve seen before,” he said.

Ouch.
Continue reading ‘Is Apparel Doomed This Year?’

Sharper Image has seen better days. The company filed for bankruptcy earlier this year after quarters of dismal sales.

Now the retailer has put itself up for sale. This brings us to the question: Who would find Sharper Image attractive right now?
Continue reading ‘Is There a Buyer For Sharper Image?’

So it’s really starting now. Sears, Kroger and others are vying for the rebate checks the government will issue consumers next month as part of a $168 billion economic stimulus plan to get the economy back on track.

The Kroger plan would allow customers to exchange their rebate checks for gift cards valued higher than the government-issued money. A $300 check would turn into a $330 gift card, $600 would bring in $660 and $1,200 gets the shopper $1,320.
Continue reading ‘Retailers Line Up For Rebate Checks’

An article in the Wall Street Journal (via Reuters) reports that General Growth Properties is looking at placing some of its marquee malls in joint-venture deals to pay off the REIT’s $18.7 billion of debt.

High-end assets that the company owns outright, such as Fashion Show Mall and the Grand Canal Shoppes in Las Vegas and Ala Moana Center in Honolulu, could end up as candidates, the article says. Bernie Friedbaum, General Growth’s CFO is quoted saying that the firm is approaching life-insurance companies and pension funds.
Continue reading ‘General Growth Looking At JV Sales?’