April 9, 2007,
Federated Boosts Direct-to-Consumer
Federated Department Stores will invest about $100 million in 2007 and 2008 in its direct-to-consumer programs macys.com, bloomingdales.com, Bloomingdale's By Mail, macysweddingchannel.com, and bloomingdalesweddingchannel.com. The plan includes a 600,000-square-foot distribution center in Goodyear, Ariz., to serve as the West Coast shipping point for macys.com; completion is set for spring 2008.
Pier 1 Imports Cuts Workforce
Struggling specialty chain Pier 1 Imports has eliminated some 175 positions — about 75 field administrators and 100 slots at its headquarters. The move is expected to result in first-quarter costs of about $5 million; Pier 1 thereafter estimates an annualized savings of approximately $17 million. Alex Smith, Pier 1 president and ceo, said the cost savings will be reinvested, adding, "We know we can return our company to profitability and to that end, we have established clear business priorities."
Wal-Mart Flakes Manhattan
America's biggest retailer may — or may not — someday open a store in America's biggest city. After ceo Lee Scott told reporters NYC was likely too pricey for the discounter, Wal-Mart posted a public relations note that in part said: "We have never tried to get into Manhattan and aren't sure we ever will unless the economics of the specific deal make sense for us. We would like to be in other Burroughs (sic) if we can find the right arrangement, because we know we could serve those communities very well." New York City comprises five boroughs: Manhattan, Bronx, Queens, Brooklyn, and Staten Island. None has a Wal-Mart store.
Dollar General Income Drops
Partly as a result of a major inventory reset and the "substantially higher markdowns" it took to clear out old goods, Dollar General reported a sharp fall in profit, with net income of $137.9 million for fiscal 2006 down 60.6% from net income of $350.2 million a year ago. Sales rose 6.8% to $9.17 billion for the year; comps were up 3.3%. Dollar General will be acquired by Kohlberg Kravis Roberts & Co. for about $6.9 billion; the transaction is expected to close by the third quarter of this year.
Macy's Wants Stock Symbol 'M'
Pending shareholder approval of its corporate identity to Macy's Inc. – simpler than the previously planned Macy's Group, Inc. — Federated Department Stores will trade under the ticker symbol "M" on the New York Stock Exchange, effective June 1. The approval vote is set for the annual meeting on May 18. NYSE had offered "M" to Microsoft in an effort to woo the company away from Nasdaq, where its ticker is "MSFT." Federated has traded under "FD" since 1992.