Wal-Mart Up Against iTunes
Wal-Mart Stores Inc. has debuted a test version of its new video-download service, pitting the retailer against Apple Inc.’s iTunes service.
The service, available on Wal-Mart’s Web site, lets users download movies or television episodes to their computers or portable media players. By partnering with Hollywood’s biggest studios, Wal-Mart’s download service includes more than 3,000 titles from 20th Century Fox, Disney, Lions Gate, MGM, MTV Networks, Paramount Pictures, Sony Pictures Entertainment, Universal Studios Home Entertainment and Warner Bros., and television networks including Comedy Central, Fox and Nickelodeon.
Downloads range from $1.96 per television episode up to $19.88 for new movies. Movie releases will be available for download the same day the DVD is released, according to Wal-Mart.
The service is powered by technology from Palo Alto, Calif.-based Hewlett-Packard Co.
Victoria’s Secret Chooses On-Demand Platform
In the second half of 2007, Victoria’s Secret Direct will power its $1.3 billion direct-to-consumer business with Cambridge, Mass.-based n2N’s on-demand software, the industry’s first cross-channel, on-demand e-commerce technology platform designed to service large multichannel retailers.
n2N’s cross-channel platform integrates e-commerce, call-center and order-management applications. By weaving Web 2.0 technology and personalization tools, n2N enables retailers to craft branded consumer experiences across channels, using straightforward configuration instead of expensive customization.
n2N conducted research with 20 of the large-scale multichannel retailers, including Victoria’s Secret, finding that while most have homegrown their current systems, there is a demand for a viable on-demand cross-channel e-commerce offering.
Home Depot Projects Lower Profit in 2007
Atlanta, The Home Depot Inc. said Wednesday it will pump $2.2 billion into improving its business this year even as it expects lower earnings and slim sales growth. Home Depot said that for fiscal 2007 it expects sales growth in the range of flat to an increase of 2%, a decline in comp-store sales in the middle single digit percentages and an earnings per share decline of 4% to 9%.
Including the effect of a 53rd week in its fiscal year, consolidated sales are expected to increase by 1% to 2%, and earnings per share are expected to decline by 3% to 8%, Home Depot said.
CEO Frank Blake told investors at Wednesday’s conference that like last year, “2007 also will be a difficult year.” But he said it will be a year of focus on Home Depot’s priorities and a year with “hopefully less noise.”
The “noise” was apparently a reference to the investor furor over former CEO Bob Nardelli’s hefty compensation in light of the company’s lagging stock price. Nardelli resigned in early January after six years at the helm of the company. He took with him a severance package valued at $210 million.
To improve its business, Home Depot said it will invest $2.2 billion this fiscal year in key priorities, including the opening of 115 stores. The investment includes $1.6 billion in capital spending and $600 million in expense.
Home Depot said it will recruit master trade specialists, simplify its staffing model, use more technology to aid customer service, and redesign employee compensation and reward plans. It also will invest in new merchandise and review its pricing strategies. Additionally, the chain will spend money on customer loyalty programs, direct-ship programs, credit programs and other specialty sales initiatives.
Federated Plans Name Change
New York City, Federated Department Stores on Tuesday said it would ask shareholders to approve changing the company’s corporate name to Macy’s Group Inc. A vote to amend the corporation’s charter to accommodate the new name will be held in conjunction with Federated’s annual meeting on May 18. If approved, the company will be known as Macy’s Group Inc., effective June 1. The move comes on the heels of the company changing most of its store nameplates to Macy’s.
“Macy’s Group is the appropriate name for our company, given that about 90% of our sales involve the Macy’s brand. That said, Bloomingdale’s is—and will remain—a very important part of our company,” said Terry J. Lundgren, Federated’s chief executive. Federated Department Stores also said stronger sales at established stores and lower costs drove a 5% rise in fourth-quarter earnings. For the quarter ended Feb. 3, net income rose to $733 million from $699 million the prior-year period. Sales fell 4% to $9.16 billion from $9.57 billion, as the company shuttered 80 “duplicative” store locations. Comp-store sales rose 6.1% in the quarter.
During the quarter, Federated lowered its selling, general and administrative costs 11% to $2.31 billion.
The company also announced a $4 billion increase to its stock buyback program and said it will immediately repurchase 45 million shares for $2 billion under the plan.