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BY CSA STAFF

METRO Spurs RFID Efforts

To prepare for its UHF RFID expansion this year, Germany-based METRO Group is evaluating results from a test it conducted at its Hamm, Germany-based distribution center (DC). With the help of Checkpoint Systems, Thorofare, N.J., METRO’s test is on par to improve RFID tag-read performance in high-density reader environments, including the depot’s dock doors.

METRO’s RFID efforts date back to 2003, however those early deployments had their share of challenges.

Even recently, Dr. Gerd Wolfram, managing director of METRO’s information technology group, indicated that the chain found it difficult to pull tagged pallets through all 36 doors of one warehouse at the same time.

The chain hopes to use findings from its latest trial to improve these efforts.

During the trial, which was based in its DC in Hamm, Germany, in September, METRO worked with a variety of RFID suppliers across Europe and North America. Checkpoint served as hardware integrator for the trial. In this role, Checkpoint helped with the design, procurement, configuration and installation of the warehouse’s 36 RFID-enabled dock doors.

Wolfram reported that the hardware installation and testing went smoothly, especially as it monitored pallets filled with 62 individually tagged cases moving through the depot’s doors. (The cases contained RFID-unfriendly materials, including cans, liquids and metals.)

The equipment recorded approximately 4.5 million individual reads during the trial. Further, METRO achieved better than 98.5% read rates among multiple pallets as they were wheeled through the dock doors.

“Checkpoint Systems has been a partner from an early stage and has worked closely with us specifically on solving the UHF technical challenges at the METRO Innovation Centre at Düsseldorf since early 2006,” said Wolfram. “Together, we are working toward enhancing our customers’ shopping experience, and improving our supply chain efficiencies.”

These successful results are pushing Checkpoint and METRO to closely collaborate on the next stage of planning for METRO’s rollout in 2007. Both companies declined to comment on details of this plan.

Tire Factory Prepares for Enterprise POS Rollout

Tire Factory, Portland, Ore., is upgrading its enterprise’s front end with the help of Lincolnshire, Ill.-based Junction Solutions.

Operating more than 180 stores in 11 Western states, Tire Factory needed a point-of-sale system that could be integrated with its enterprise-resource-planning (ERP) system to better manage its financial data, trade agreements, warehouse and distribution activities.

Tire Factory chose Junction Solutions’ JunctionISS POS system, a browser-based, touchscreen, graphical-user-interface (GUI) POS and back-office application. Designed on standards, JunctionISS uses XML/XSLT Web technologies and integrates to Microsoft Dynamics AX to deliver a rich set of store-management functions, provide control and manage the entire retail business.

“This solution will enable us to streamline our POS processes and offer superior customer service,” said Anthony Showen, COO at Tire Factory.

The chain will implement the system in 10-store increments. The first stores, located in Portland, Ore., will go live this summer.

Understanding the ERI eXchange

Newton, Mass.-based Retail Systems Alert Group (RSAG) is preparing for the debut of ERI eXchange—The Conference & Expo for the Extended Retail Industry. ERI eXchange will replace the 17-year old Retail Systems Conference & Exposition. According to Brian Kilcourse, president and CEO, RSAG, the new conference “is a dramatic change from past years.”

Moving beyond the traditional trade-show format, ERI eXchange promises to be an executive conference that will deliver strong content and networking opportunities.

The event, which will be held June 4-7, at the new Boston Convention & Exhibition Center (BCEC) in Boston, will feature four tracks: Expansion, Collaboration and Trade; Making the Right Solutions Decisions in an Age of Choice; The Perfect Customer Storm, plus a series of panel discussions on industry trends. On the Expo floor, tabletop exhibits will replace large, costly booths. Retailer-only advisory boards and roundtable luncheons will round out the event.

“There are winners and losers in retail. Content will illustrate how winning companies effectively use their information assets and partners to build and improve business operations,” Kilcourse concluded.

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FINANCE

Home Depot Projects Lower Profit in 2007

BY CSA STAFF

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.

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Federated Plans Name Change

BY CSA STAFF

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.

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