RANDOM NOTES: Teen retailer Hot Topic is moving full speed ahead with its new prototype, with plans to open 15 locations and remodel 60 to 80 existing ones in 2007. Designed by JGA, Southfield, Mich. (in collaboration with June Lester Design, Berkley, Mich.), the format is lighter and brighter than Hot Topic’s previous efforts and features exposed concrete floors, galvanized metal slatwall fixtures and a neutral color palette. The music area has been redone with expanded listening stations and a marquee that announces the latest releases.… Wal-Mart Stores has updated the look of its Neighborhood Market concept (for photos, see Picture This on www.chainstoreage.com). The new design, unveiled in a 39,000-sq.-ft. location in Tulsa, Okla., uses earth-toned colors, natural woods and photography to define departments, creating a store-within-a-store feel. The beauty area has been enhanced, with curved fixtures, wider aisles and “tower” fixtures that display the latest items.… Juicy Couture has opened its third location in Manhattan. The two-level, 7,500-sq.-ft. store features the brand’s complete assortment, including men’s wear, children’s wear and even pet apparel. The lower level is separated into three boutique-like rooms, each with its own cash register and dressing rooms. The children’s area has kid-sized furniture for lounging and lower racks and shelving. Juicy, a division of Liz Claiborne, expects to open about 15 more stores this year.… Guess Inc. expects to open some 30 locations under its new Gby Guess banner this year. The moderately priced brand is geared to fashion-conscious (but not cutting-edge) young shoppers. The store interior will have a modern-retro feel.… The hot Japanese luxury-denim brand Evisu is set to open its first U.S. store, a 3,800-sq.-ft. location in Manhattan’s SoHo area. The two-level space combines Eastern details, including origami on every package and mahogany cabinetry, with Americana accents. Evisu stores are known for their quirky mix of art, local memorabilia and antique taxidermy. A stuffed giraffe will take up residence in the SoHo location. Additional stores are planned for other major U.S. cities.
NEW PROJECTS: South Korea-based retailer Lotte has hired FRCH Design Worldwide, Cincinnati, to design a seven-story, 300,000-sq.-ft. luxury department store in Pusan, South Korea. It is slated to open at the end of 2007.
UPCOMING EVENTS:Lightfair International will take place May 6 -10, at the Jacob K. Javits onvention Center in New York City (for details, visit www.lightfair.com).
CORRECTION:R.sole, featured in the January issue of Chain Store Age, was designed by Tobin + Parnes Design Enterprises, New York City.
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.