Business briefs

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.

In another big perk, Day, whose contract runs through Jan. 31, 2006, gets a 10-year option for a 1.5 percent equity stake in the company once it exits bankruptcy. In addition, Day's contract provides for a bonus of as much as four times his base salary, or $4 million, if the retailer can beat performance targets outlined in the company's plan of reorganization, which was expected to have been filed last Friday, Jan. 24.

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, 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, 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."

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!