Author: Helen Thomas

Major retailers, trade groups and politicians gave an outpouring of congratulatory remarks last week following the introduction of trade legislation with potentially large implications for the retail industry and US economy.

The trade promotion authority (TPA) legislation, titled the “Bipartisan Congressional Trade Priorities and Accountability Act of 2015” is a necessary precursor for the President to negotiate and finalize free trade agreements such as the Trans-Pacific Authority Agreement and the Environmental Goods Agreement, both of which are seen as benefitting to the retail industry.

The TPA is designed to provide clear negotiating objectives for trade agreements that create new opportunities for American business and its global competitiveness. The most important issues for retailers in the agreement, which covers 14 Asian countries except China, are the elimination of duties and creation of workable rules on high-tariff items, such as apparel and footwear.

The Retail Industry Leaders Association (RILA) issued a statement in January when the trade policy was introduced to the agenda. “Trade is crucial to the retail industry and to breaking down barriers to provide open access to products and markets around the world. Trade Promotion Authority (TPA) could create tremendous new opportunities for generations of American workers.”

Sources: RILA, Retailing Today

US consumer sentiment, which measures Americans’ assessment of their personal finances, rose higher than expected in April, based on a University of Michigan survey released Friday. Analysts were hoping to see a rating of 94 in April, after a March rating of 93. Preliminary results for April rises the rating to 95.9. The survey did a reading of consumer expectations, and it rose, as well, to 88 from 85.3 in March.  “Although the leading economic index still points to a moderate expansion in economic activity, its slowing growth rate over recent months suggests weaker growth may be ahead,” said Ataman Ozyildirim, Economist at The Conference Board, in a statement.

However, this is the second-highest level of consumer confidence in more than eight years. The report “is encouraging given that the March payroll report was a little bit weaker and some of the other data around the consumer has been softer,” said Michelle Meyer, deputy head of U.S economics at Bank of America Corp. in New York. “The fact that consumers are feeling better hopefully will translate into greater expenditures over time and that’s been a missing link to the economic recovery this year.”

Sources: CNBC, MarketWatch, Bloomberg

The US Environmental Protection Agency and Department of Energy will be hosting its annual Energy Star Partner of the Year awards in Washington, DC, on April 20. Of the approximately 16,000 companies who partner with the EPA on their broad-based energy efficiency program, 128 companies are being recognized as Energy Star Partners of the Year.

Retailers among the 128 winners include Home Depot, Sears, Best Buy, Kroger, Kohl’s, Food Lion, Staples and JC Penney. “Energy Star Partner of the Year Award winners are delivering advanced energy efficiency solutions that help American families and businesses save money by saving energy. Their efforts play an important role in protecting the environment by reducing greenhouse gas emissions, while also moving our nation closer to a clean energy future.” said Department of Energy Secretary Ernest Moniz. Adds EPA Administrator and event key note speaker Gina McCarthy, “Our Energy Star Partner of the Year award winners demonstrate that energy efficiency is a smart business decision that supports their bottom line, and helps their customers save money and energy.”

Source: Retailing Today

The National Retail Federation conducted a Tax Return Survey to determine where refund money will be spent by consumers. Two-thirds of the shoppers surveyed were expecting a refund. 47% of shoppers will put their refund into savings, 39.1% will pay down debt and 25.1% will use their refund for daily expenses.

Among consumers surveyed between the ages of 18 to 24, 54.9% plan to put their refund into savings and 34.4% will pay down debt. “Americans are thinking of the future, and remaining financially secure is a big part of that,” said NRF president and CEO Matthew Shay.

However, a survey conducted by the International Council of Shopping Centers found that 47% of consumers would spend their refunds on goods and services including apparel, electronics and convenience items.

Retailers are vying for tax refund dollars with specials and marketing campaigns. Banana Republic is conducting email marketing that states “the antidote to taxes is a click away” and Amazon is urging customers to “take a break from filing taxes and scoop up new spring footwear”. Other online retailers, such as Foot Locker, Babies R Us, Bon Ton, The Gap and Ann Taylor are offering deals on Tax Day with percentage-off specials.

Sources: Forbes, International Business Times, Huffington Post

The Home Depot kicks off the Spring season with a variety of omnichannel shopping features. Online shoppers can have purchases sent directly to their home or shipped to their nearest store for pick up. In 2014, 40% of online orders on Homedepot.com were picked up in a local store. Online tools and calculators, such as a Pest Problem Solver and Grass Seed calculator help solve customer problems and assist them in purchasing the right products and the right amounts.

Inside stores, The Home Depot mobile app identifies where products are on the shelves, and offers “expanded aisles” connecting customers to a variety of product options available online.

The Home Depot also has tools in place to help shoppers plan and design their outdoor living space. The Garden Club features tips and expert advice tailored to a customer’s gardening region. The Fencing Project Planner and Decking Project Planner guide additions, upgrades and restorations.

Source: Chain Store Age

The latest Survey of Consumer Expectations from the New York Fed stated that as of March consumers expect their spending will increase by 4.5% over the next year. This is a big change from February findings, when consumers thought spending would be just 3.8%. The February decline is attributed to the poor weather conditions.

Retail sales are expected to show a 1% increase in March, after declines in January and February.

Source: Business Insider

Belk Inc., founded in 1888 by William Henry Belk and in the third generation of Belk family leadership, has hired Goldman Sachs to help it evaluate strategic alternatives, including a potential sale. Belk is the largest family owned department store chain in the US, valued at as much as $4 billion.

In fiscal year 2014, ending January 31, 2015, Belk posted net sales of $4.1 billion, up 1.8% compared to the previous year. After Reuters reported on the potential sale, Belk issued a statement that it had hired Goldman Sachs to help them explore all options and expect to conclude its analysis in the next several months.

US consumer spending has been slow moving this year despite lower gas prices, due to weather conditions and consumers’ desire to save. This has affected department store sales, prompting chains to resort to smaller store models and aggressive discounting.

The last major acquisition in the department store sector was Canadian chain Hudson’s Bay Co, owner of the Lord & Taylor chain, which acquired Saks in 2013 for $2.9 billion. Major department stores like Macy’s and Nordstrom are expected to be contacted by Belk to solicit their interest in a deal. Neither Goldman Sachs, Macy’s nor Nordstrom responded to requests for comment.

Belk operates 297 stores in the southern US and is based in Charlotte, North Carolina.

Source: Reuters.com

Belk, with 297 stores in 16 Southern states, announced several key strategic initiatives for this year, to include increasing their store count, remodeling other stores and improving its e-commerce fulfillment center in Jonesville, S.C.

After reporting a holiday season sales increase of 5.2%, Belk finished its fiscal year on January 31 down 7.8% in net income to $146.1 million versus $158.5 million last year. “Despite challenges early in the year, we ended FY15 with strong holiday sales and are pleased to report our fifth consecutive year of positive comparable store sales,” CEO Tim Belk said. “Although our annual earnings continue to be impacted by additional expense associated with key strategic initiatives, fourth quarter net income rose 8.3 percent on a sales increase of 5%. We are encouraged by the recent trends and believe we are well positioned for the year ahead.”

Net sales totaled $4.11 billion, up 1.8% from $4.04 billion the year before. Same store sales climbed 1.5% and saw the highest growth rate in activewear, ladies contemporary, resort and bridge fashions. Ladies suits, men’s sportswear and juniors.

Source: Retailing Today

The Army and Air Force Exchange Service (AAFES) conducted a workshop in Dallas, detailing the Exchanges’ go to market strategy, with over 50 AAFES representatives and an audience of manufacturers, brokers, distributors and service providers. The goal of the workshop was to simplify the process of selling to AAFES.

AAFES representatives discussed store repositioning strategies and individual category breakouts including hard lines, soft lines, consumables and e-commerce. They also covered legislative and policy issues affecting military resale. The average company can take two to four years to navigate the military resale environment, but a workshop such as this one can help shorten that to a six to twelve month learning curve.

The workshop was led by AAFES Chief Merchandising Officer Ana Middleton.

Resource: Retailing Today

Swarovski is the centerpiece of Las Vegas’ newest retail destination, Grand Bazaar Shops. To keep with the Grand Bazaar theme, Swarovski has opened their first-ever “bartering window”, allowing shoppers to negotiate the price they pay for select items. Most items to be found in the bartering window are limited edition items such as crystallized Beats Headphones and black and pink skulls. Inside the store is a large video screen with scenes from exotic bazaars, alongside specially crafted panels as platforms to display their jewelry and décor.

Outside, the store is designed to look like a cut crystal. Towering above the store is a 14 foot diameter starburst made of 911 custom-cut Swarovski crystals. The tower puts on a three minute light show every night at midnight, choreographed to music.

Source: Chain Store Age