The back-to-school shopping season got off to a sluggish start in July, as retailers reported mixed sales for the month Thursday.
Consumers are continuing to keep tight control of their spending as the economic recovery tugs along at a slower pace than most analysts predicted earlier this year.
Thomson Reuters, which tracks monthly same-store sales for 28 chains including Macy’s (M, Fortune 500), Costco (COST, Fortune 500), Target (TGT, Fortune 500) and J.C. Penney (JCP, Fortune 500), said sales were up 2.9%, just below the 3.1% growth expected by analysts.
July’s numbers were a slight letdown for retailers after June brought a 3.1% increase in same-store sales — a gauge of a retailer’s performance that measures sales at stores open at least a year.
Although discounters and large department stores seemed to fare just "OK," teen stores presented "extremely weak" results, said Eric Beder, managing director of equity research at Brean Murray, Carret & Co.
"We have no real clear signal that the American consumer is becoming more aggressive in spending," he said. "These numbers should not provide a lot of confidence that we’re going to see any sort of turnaround in the second half of the year."
Overall, 17 of the 28 stores reporting results missed analysts’ expectations, 9 beat them and 2 met them.
The weaker-than-expected results came as the high unemployment rate drove shoppers to continue to procrastinate in search of the deepest discounts, said Jharonne Martis, Thomson Reuters’ director of consumer research, who compiles the report.
"No matter how the economy is doing, back to school happens every year," Martis said. "Families are budgeting and they’re going to buy the school supplies they need, but they’re waiting until last minute to find the best deals."
Wholesale discounter Costco reported a 6% increase in sales, slightly higher than the 5.5% that had been expected. But rival discounters Target and BJ’s Wholesale (BJ, Fortune 500) both fell short of estimates.
Teen stores The Buckle (BKE) and Hot Topic (HOTT) were two of the worst performers, reporting deep declines in sales for the month around 9%, and Wet Seal (WTSLA) said its sales dropped off 4%.
Thomson Reuters had expected declines from the teen stores during the month, but not to the extent actually reported.
Meanwhile, two other teen apparel chains - Zumiez (ZUMZ) and Abercrombie & Fitch (ANF) - surprised analysts with much stronger-than-expected sales.
Macy’s, JW Nordstrom (JWN, Fortune 500) and Limited Brands (LTD, Fortune 500) were also among the top performers.
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Big news for the 2010 Dodge Ram's 3500 heavy-duty picky. And I do mean big. For the first time this behemoth of a workhorse is available with a crew cab. That means a full four doors rather than the previous generation's quad-cab mini back doors.
Both the 2500 and 3500 Rams get a complete makeover for this model year with an upgraded interior, revised exterior styling, improved suspension and brakes, increased towing capacity, and new standard features.
Typical of pickups, the new Ram 3500 comes in myriad configurations, starting from $35,630 and shooting up to $51,595. First off, you'll have to select a cab style: regular, crew and mega cab. The latter at 111 inches is longer than a Smart Fortwo stretching interior cargo room, legroom and allowing for reclining rear seats. Dodge is redoing its commercial-grade chassis cab models for the 2011 model year.
Eight-foot and 6-foot-four cargo box sizes are available as are single and dual rear-wheel combinations, rear-wheel and four-wheel drive and five trim levels.
Standard fare under the hood is a 5.7-liter Hemi V-8 gasoline engine, redesigned for 2009 and rated at 383 horsepower and 400 pound-feet of torque.
More heft is available with the 6.7-liter Cummins turbodiesel engine, rated at 350 horsepower and 650 pound-feet of torque. Equipped with the big Cummins, the Ram 3500 can tow up to 17,600 pounds. While you do notice the diesel sound, it's not terribly intrusive.
A six-speed manual is standard with both engines, with five- and six-speed automatics available. The new transmissions feature Electronic Range Select, which enables the driver to limit the highest available transmission gear, allowing manual upshifts and downshifts based on road speed and engine speed.
A tow/haul mode is standard on both five-speed and six-speed automatic transmissions.
EPA fuel usage stats are not available for the heavy duty rig.
Improved suspension tuning and C-pillar hydra mounts help improve ride on the 2010 3500, but absent going over bumpy surfaces, you might be surprised at the Ram's comfortable ride.
Beyond its grunt, the new Ram shines with a revamped interior. Not only are seats super comfy, but door panels, arm rests and such feel soft and easy like those in a family sedan - rather than part of a workaholic truck quick pay day loan.
Pertinent data is displayed for quick assessment on the six-ring dash readout and the center stack keeps other controls handy. Storage bins and pockets are abundant. Options include a giant center console with an upper bin large enough for a laptop and a lower been that can house hanging file folders.
Dodge describes exterior changes as giving the heavy duty Ram "a tougher more capable look with improved aerodynamics." Without old and new side by side, I wasn't wowed by those changes, but Ram has always turned a bolder profile than pickups from Ford and General Motors.
Standard features run from the basic ST with air conditioning, cruise control and CD player to the loaded Laramie. The Ram Power Wagon model is equipped with electric-locking
front and rear differentials, electronic disconnecting sway bar, Bilstein shocks, 32-inch BF Goodrich off-road tires, underbody skid-plate protection, 4.56 axle ratio for hill climbing, a 12,000-pound winch, two-tone paint scheme and graphics.
Luxuries available include heated and cooled seats, Sirius backseat TV, 10-speaker surround sound, 30-gigabyte hard drive and navigation. On the safety front, antilock brakes, side air curtains and tire-pressure monitors are standard.
There isn't much competition when it comes to heavy-duty trucks, it's an all-American show with Ford, GM and Chevy the only other choices.
Heavy duty pickup
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Tampa Bay Sports and Entertainment LLC is officially the new owner of the Tampa Bay Lightning.
Jeff Vinik, a Boston-based asset manager, avid hockey fan, and minority owner of the Boston Red Sox, controls the company.
Terms of the deal that closed Wednesday were not disclosed. The purchase also includes the lease to the St. Pete Times Forum and ownership of adjacent real estate, the club said in a release.
Vinik becomes the Chairman of the Lightning and the club’s Governor on the National Hockey League’s Board of Governors. Earlier Wednesday, the NHL Board of Governors approved the acquisition of the team unanimously. A purchase agreement to buy the team on Feb. 4, 2010
“The Lightning is a great franchise in a terrific community,” said Vinik in a prepared statement. “We thank [former owner] Oren Koules and his partners for beginning the turn-around of the Lightning hockey club. Our goal now is to build a world-class organization, on and off the ice.”
Vinik, 50, is the founder and chairman of Vinik Asset Management free credit score online. Prior to forming Vinik Asset Management, he managed Fidelity’s Magellan Fund, at that time the world’s largest equities mutual fund. A Phi Beta Kappa graduate of Duke University with a Bachelor of Science degree in Engineering and Economics, Vinik went on to earn his Masters of Business Administration degree from the Harvard Business School.
The team has scheduled a press conference March 5 to discuss the sale.
The Lightning was founded in 1990 by NHL Hall of Famer Phil Esposito and began play in 1992. The team won the Stanley Cup in 2004. Previous owners of the Lightning include Kokusai Green Ltd (1992-1998), Art Williams (1998-99), Palace Sports & Entertainment (1999-2008) and Lightning Enterprises LP (2008-2010).
The team currently has 20 games remaining in the 2009-10 regular season and it sits in 11th position in Eastern Conference, just two points removed from a playoff position.
Germany’s Lufthansa and the airline industry’s representative body provided a gloomy outlook for the sector as carriers around the world struggled to make a profit amid a fierce battle for business.
“Initial signs of a stabilization in volumes are far away from making up for the enormous and unrelenting pressure stemming from the massive fall in price levels,” the German flagship carrier said on Thursday.
Industry body IATA echoed Lufthansa’s warning, saying it was still too early to talk about a recovery. IATA has said it sees the world’s airlines losing $11 billion this year as consumers tightened their purse strings and companies cut travel budgets.
“The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising,” IATA said.
Airlines around the world have been crippled by a toxic mixture of reduced spending on travel, a drop in global trade and rising oil prices. To cut their bloated cost bases, many have grounded planes and canceled or deferred plane orders.
Lufthansa has rescheduled some aircraft deliveries to save 1 billion euros ($1.5 billion) over the next three years. Plane makers Boeing and Airbus are headed for their worst annual order tally in at least 15 years.
Demand has suffered especially this year in the highly profitable business class segment as companies ask staff to book cheaper seats.
Finnish national carrier Finnair said earlier that it saw third-quarter sales fall sharply due to declining demand for business travel, adding it would continue to make losses during the rest of the year cash till payday advance.
Russian flagship carrier Aeroflot said its first-half net profit fell five-fold to $14.4 million as lower passenger numbers hit revenue, which fell 30 percent to $1.46 billion. The airline said lower jet fuel prices pushed up its margins on pretax earnings to 12 percent from 10 percent.
Aeroflot gave no outlook for the second half but analysts said they expected performance to improve only slightly as better sales from renewed passenger growth at the airline is offset by rising fuel costs.
Air cargo is in even worse shape than passenger demand as global trade remains at low levels, IATA said. Lufthansa, which operates Europe’s biggest air cargo fleet, said revenue in the sector was still falling steeply due to declining prices.
Lufthansa ended the session up 2.6 percent, while Finnair was down 1.3 percent and Aeroflot was up 0.26 percent.
CASH IS KING
“What we have seen so far does not indicate at all that the tough times for the airline industry will be over soon. The environment will remain challenging for some time and we still do not expect significant positive newsflow in the short term,” said MM Warburg analyst Michael Bahlmann.
Japan Airlines, Asia’s largest airline by revenue, is asking the government for a “huge” bailout as it heads for its fourth annual loss in five years, weighed down by $15 billion in debt and crippling pension costs.
American International Group is to sell its Taiwan life insurance unit for $2.15 billion, marking the largest disposal since a U.S. government bailout saved the insurer from collapse last year.
The sale of Nan Shan Life on Tuesday was another step in AIG’s effort to repay U.S. taxpayers after the government injected $80 billion into the company, but the insurer faces two more sales processes in Asia and others across the globe.
The sale is to two little-known buyers — a start-up financial group run by a former Citigroup banker and an obscure, publicly traded Hong Kong holding company with a market value of $111 million.
“It (deal) has to be approved by Taiwan’s investment commission first,” said Lee Chi-Chu, vice chairperson of the Financial Supervisory Commission, adding the regulator has not received an application from AIG. “We have told AIG that we do not welcome investors backed by China fund,” she said.
Taiwan’s business ties with China have picked up since President Ma Ying-jeou took office last year.
The agreement will likely to bring a sigh of relief to the AIG camp as, at one point, it looked liked the process would not succeed.
Primus Financial, the firm founded by Citi’s former Asia investment banking head, together with China Strategic Holdings, are to buy Nan Shan Life, ending a five-month auction that involved private equity firms and local financial groups.
Nan Shan, a top three Taiwan insurer, has assets of $46 savings account payday loans.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10 percent with its 4 million customers.
Primus will own around 20 percent of the business and China Strategic 80 percent, according to the companies.
The sale allows AIG to check one business off its list of units to sell in fund-raising efforts.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering and sources said American Life Insurance Co, which generates half its revenue in Japan, could fetch $5 billion in an IPO. [ID:nN08285471]
Both companies have also attracted acquisition interest, though nothing has materialized yet.
China Strategic, whose businesses include battery production and securities investments, had said it planned to raise about HK$7.8 billion ($1.0 billion) to fund a possible joint acquisition.
“The deal priced Nan Shan at about 1 time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and 1 time for smaller rival Shin Kong Financial,” said Dexter Hsu, an analyst at JP Morgan in Taiwan.
An executive from Deutsche Bank, which is Primus’s financial advisor, told Reuters that Primus would be using bank loans to pay up to 35 percent of the $2.15 billion.
Robert Verrone, one of the most prolific commercial mortgage makers during the real estate boom, is finding himself in high demand again.
This time around, however, borrowers and lenders are tapping Verrone to help restructure loans at risk of default.
A severe lack of credit and falling revenue from office, retail and apartment buildings are upending fundamentals in the $700 billion market for commercial mortgage-backed securities, a major source of financing during the real estate boom. With few options in terms of refinancing, borrowers are increasingly seeking to extend existing loans to avoid defaults or forced property sales in a distressed market.
That is where Verrone, 41, comes in.
Verrone’s Ironhound Management Co. has ramped up its restructuring business since February, juggling negotiations on more than 30 loans at a time.
Some loans he helps restructure are the same ones he made while a 14-year rainmaker at Wachovia Corp.
When working on deals that he helped engineer, some parties in restructuring negotiations have been critical, Verrone said. But he won’t be singled out as a player in a market where fiercely competitive lenders were all loosening standards to boost volume and finance leveraged buyouts.
“I definitely hear it,” Verrone said during a rare interview in his Madison Avenue office this week. “We all made loans that we thought would work. People bought loans they thought would work.”
Signaling he’s moved on, he’s downsizing his nickname of “Large Loan” Verrone, earned for his penchant for the biggest deals free instant credit report. “Call me ‘No-Loan’ Verrone,” he quipped.
Ironhound — which is affiliated with hedge fund Scoggin Capital Management — and a similar restructuring firm led by former Lehman Brothers CMBS chief Kenneth Cohen have advantages because of their personal connections and intimate knowledge of dealmaking, he said. Some boutique investment banks are also in on the action, as well as junior CMBS players, he added.
Verrone on Friday oversaw the restructuring of a $230 million loan for the Setai building, a swank condominium, spa and restaurant complex in the financial district of New York. As with many loans, more equity was needed to get it extended, and to cover cost overruns, he said. He started that workout process in January.
Such work has rounded out Verrone’s experience, after dealmaking at Bear Stearns and Wachovia, he said.
Wachovia, which was purchased by Wells Fargo & Co in December 2008 several months after Verrone’s departure, contributed $24.2 billion in loans to U.S. commercial mortgage-backed deals in 2007. It exceeded the No. 2 Bank of America Corp. and No. 3 Lehman Brothers by more than 35 percent, according to Commercial Mortgage Alert.
Volume plunged in 2008, and remains virtually nil.
“There are things that I am learning now that I should have known as a lender, and anyone that would tell you otherwise” about themselves isn’t truthful, he said.
As signs grow that the worst of the global slowdown is passing, fears are being voiced that world trade could hold back the recovery.
The answer depends on whether trade is seen as a reflection of the broader economy or a transmission belt for the downturn. The links between finance and trade are still little understood.
World trade has experienced its biggest contraction since the 1930s — much sharper than the fall in economic output.
Some economists argue that damage to trade finance and global supply chains, and a series of open and furtive protectionist measures in the meantime, could hamper the recovery in trade, and with it the rebound in output.
“There is good reason to fear that trade growth will lag rather than lead any recovery, and that this will itself constrain the pace of recovery,” consultants PFC Energy said.
Globalization — the integration of the world economy — could go into reverse as national self-interest takes priority over the promotion of trade, they said in a recent note.
REBOUND
Yet behind the continuing headlines of contracting trade, the first signs of a recovery are also evident.
Of 18 countries reporting trade data for June so far, almost all show a rise in imports and exports over the previous month, said World Bank senior economist Caroline Freund faxless payday loan online.
“Although trade was still 25 percent lower than in June last year, this is the first generalized spark in trade flows since the beginning of the crisis,” she said in a blog last week.
A study by Freund on the policy portal VoxEU.org concluded that trade would contract overall by 12-20 percent this year.
But, like many economists, she forecasts a powerful bounce.
“In terms of the rebound in trade I think it will be fast — that’s what’s happened in previous episodes, so that trade falls fast but it also comes up really fast,” she told Reuters.
Why trade has contracted so sharply in the current downturn is still being debated.
It seems the financial crisis that triggered the downturn delivered a triple blow to trade, Ronald McKinnon, emeritus professor of economics at California’s Stanford University, told a recent symposium in the magazine International Economy:
I have enough. I hope you find you do, too, when you consider what’s really important in your life.
I’ve pondered the question of how much is enough after receiving a perceptive e-mail from a reader and copies of two thought-provoking books.
The e-mail, from a longtime reader in Wisconsin, embodies the philosophy guiding my own semi-retirement.
"Many of my 50-something friends are wasting some invaluable time that they’ve been given on Earth," this reader said. They are caught up in an "earning and spending cycle" (must keep working hard so they can keep buying things they don’t really need) while worrying they’ll need to save a lot of money to retire.
"I can’t believe the number of smart, talented friends I have who are not particularly happy doing what they are doing," the reader said. But they believe "they must continue so they can stop working at (fill-in-the-blank age) to play golf or sit by the pool."
I must agree. What a waste, doing something you don’t like so eventually you can stop and do … nothing?
Why not pursue your passions even if the pay is less? (This reader did, returning to school for a degree in a different field.) If you love what you do, you may never feel the need to totally retire, or at least won’t mind working a few more years. "Retirement," as this reader said, would be a time to work for joy and learn new things.
That’s what I did in 2000 when I quit my full-time job at age 55, even if half a dozen online calculators I checked estimated I was as much as $250,000 short of what I needed to retire.
And yet, I’ve done just fine. By phasing down my writing rather than stopping completely, I’ve remained active, earning income doing something I enjoy but without the stresses of a 24/7 newspaper job business card templates. I’ve found more time for family and friends, for hobbies and community. I’m taking music courses and volunteer as a chess teacher at two elementary schools, activities I enjoy immensely but had no time to do before.
Other things my wife, Georgina, and I find most gratifying — simple things such as daily walks on the beach — cost little or nothing. We are certain we have enough, not just enough money to live on, but enough time to do the things we like and enough balance in our lives.
BOOKS EXPLORE SUBJECT
That’s the point in the book "How Much is Enough? Making Financial Decisions that Create Wealth" by Arun Abey and Andrew Ford. The question "how much is enough?" is not simply about money but about "how much is enough to balance all areas of your life to achieve fulfillment," the authors say.
About the book, first published in Australia, "I was a bit skeptical, as I’m not a big fan of ‘touchy-feely’ planning," said Harold Evensky, a respected certified financial planner in Coral Gables, Fla., who sent me a copy. "Surprise! I thought it was terrific." Evensky liked it so much he wrote the foreword for the American edition.
Another worthwhile book is "The Secret Language of Money: How To Make Smarter Financial Decisions and Live a Richer Life" by David Krueger. Krueger, a clinical psychiatrist and business coach, wisely advises that money "must be balanced with family, work, health, friendships, leisure, making a difference in your community, and taking care of yourself."
Microsoft Corp’s Bing search engine won more market share from rivals last week, according to new industry data released on Wednesday, but still trails Google Inc and Yahoo Inc.
Challenging market leader Google — which in turn is looking to break into Microsoft’s core software market — is a long-term project, said Microsoft chief executive Steve Ballmer.
"We have had some very good initial response," Ballmer said at a conference in Detroit. "I don’t want to over-set expectations. We are going to have to be tenacious and keep up the pace of innovation over a long period of time."
Microsoft (MSFT, Fortune 500) grabbed 12.1% of U.S. Internet searches for the work week June 8-12, according to data released by industry tracker comScore earlier on Wednesday.
That is up from 11.3% in the June 1-5 period — the week in which Bing was launched — and up from 9.1% the week before that.
For comparison, Google (GOOG, Fortune 500) got 65% of U.S. searches in May, the last full month for which figures are available, followed by Yahoo (YHOO, Fortune 500) with 20.1% and Microsoft with 8%.
Analysts and investors are keenly awaiting data for all of June to see if Microsoft can hold onto early gains.
Ballmer acknowledged the tough task of beating Google, which he referred to as "a big dog competitor".
The world’s largest software company has long been determined to play a major role in the lucrative Web search market after watching upstart Google take a stranglehold.
At the same time, Google is looking to take advantage of its popularity to launch software that competes with Microsoft’s, which has created a new source of tension between the two companies cash loans.
Microsoft ratcheted up that tension on Wednesday by claiming that Google’s new Apps Sync for Microsoft Outlook software — which allows users to share data between their Outlook e-mail and Google’s online offerings — disables a key function in Outlook.
"The installation of the Google Apps Sync plugin disables Outlook’s ability to search any and all of your Outlook data," Outlook product manager Dev Balasubramanian wrote on a Microsoft blog. "It is also important to note that uninstalling the plugin may not fix the issue."
The problem, though relatively unimportant to users, represents a crucial struggle between Microsoft and Google for e-mail customers.
Google’s new product allows business users to continue using Outlook for email and other tasks, but the back-end functionality and data storage moves to Google, instead of residing on a company’s internal servers running Microsoft software.
Google acknowledged the Outlook problem identified by Microsoft, and several other issues where its software does not mesh well with others.
"We’re working with Microsoft and other partners to help fix these issues and support additional Outlook features like multiple calendars," said Google Apps senior product manager Chris Vander Mey in a blog post. "We’ll keep you posted on our progress."
Microsoft shares closed up just less than 1% at $23.68, while Google’s fell 0.2% to $415.16, both on Nasdaq.
DETROIT — A former CEO and chairman of telecommunications giant AT&T Inc. will lead General Motors Corp.’s board after the automaker emerges from bankruptcy protection, GM said Tuesday.
Edward Whitacre Jr., 67, eventually will replace Kent Kresa, who will remain GM’s interim chairman until the reorganized automaker emerges as a new company that’s majority-owned by the U.S. government.
Whitacre was chairman and chief executive of AT&T and its predecessor companies from 1990 to 2007. During his tenure, he led the company through several acquisitions and sales.
Whitacre sits on the boards of Exxon Mobil Corp. and the railroad company Burlington Northern Santa Fe Corp.
Whitacre also was a director of Anheuser-Busch Cos. from 1988 to 2008, when the company was purchased by InBev of Belgium. He is not on Anheuser-Busch InBev’s board.
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