January 27, 2003,
Kmart pays bonuses to bankruptcy execs
Bankrupt Kmart Corp. said it will pay Julian Day, its new ceo, a base salary of $1 million a year, plus a $1 million bonus when the company emerges from bankruptcy, possibly as early as April.
Day had been president of Kmart until James Adamson abruptly resigned as ceo earlier this month. While stepping down as ceo, Adamson will stay on board as non-executive chairman until the retailer exits bankruptcy.
Under the terms of his severance package, Adamson will receive a $3.6 million payout when the company emerges from Chapter 11 and he steps down as non-executive chairman.
Williams-Sonoma gets "buy" rating
Zacks.com, a unit of Zacks Investment Research, has put out a "buy" rating on Williams-Sonoma stock, parent of The Pottery Barn, citing the company's strong growth in an otherwise lackluster retail environment. "Many analysts still believe this retailer can continue its consistent earnings growth," said a recent Zacks research report.
"The company followed up a +50 percent fiscal second quarter earnings per share surprise with a remarkable +30 percent surprise for its fiscal third quarter. Holiday 2002 net revenues for the eight weeks ended Dec. 29 increased 14.5 percent, to $620.0 million, including $31.1 million of shipping fees, vs. $541.7 million on a comparable basis for the eight weeks ended Dec. 30, 2001, which included $25.4 million of shipping fees."
Zacks noted that the company revised its fourth-quarter earnings per share guidance downward by $0.02, to $0.64 to $0.65 because of a one-time charge stemming from unplanned costs tied to the departure of the company's ceo.
BJ's rated a 'sell'
Shares of BJ's Wholesale Club Inc. were knocked down to a #5 "sell" rating by Zacks.com, a division of Zacks Investment Research, which pointed to the warehouse retailer's weak sales and lowered earnings expectations as the reason for the downgrade.
Zacks noted that since the inception of its rankings in 1980, #5 rated stocks have underperformed the S&P 500 by 89.8 percent.
"On the bright side, December's comparable-club sales rose 0.8 percent, beating the Street's estimate of a 0.8 percent decline," said Zacks. "However, the company lowered its fourth-quarter earnings guidance to $0.69 to $0.71 a share, from $0.80 to $0.82 a share. The company cited a weak and unfavorably mixed sales trend. Besides cutting this quarter's estimate to $0.70, analysts have been busy cutting fiscal 2003 and 2004 by $0.07 and $0.06, respectively over the past month. Once the economic uncertainty lifts and consumer confidence returns, BJ should be reporting better business. But the market hasn't been cooperative for a while now, and investors may want to consider waiting on a position in BJ for conditions to improve and for analysts to jump back onboard."
Jobs in jeopardy through first half
With widespread job cuts expected to continue through the first months of the year, Chicago-based workplace specialist Challenger, Gray & Christmas, an international outplacement company, said it sees no turnaround in the U.S. job market until well into 2003.
"Planned job-cut announcements give us a fairly good idea of the hiring landscape six months out and, right now, job cutting is still relatively heavy."
Related Content By Author
Live From New York: Fashion Comes Across the Pond
Home & Textiles Today eDaily