Bebe Stores confirms breach
Brisbane, Calif. — It’s been a little while since the last report of a major retail data breach, but that period of tranquility is over. Bebe Stores Inc. has confirmed that a cyberattack “focused on and limited to” data from payment cards swiped in its U.S., Puerto Rico and U.S. Virgin Islands stores occured between Nov. 8-26, 2014.
This data may have included cardholder name, account number, expiration date, and verification code. Purchases made through the Company’s website, mobile site/application, or in Canada, or its international stores were not affected.
“Our relationship with our customers is of the highest priority and we recognize the importance of protecting their information,” said Jim Wiggett, CEO, Bebe. “We moved quickly to block this attack and have taken steps to further enhance our security measures.”
Bebe said it has engaged a leading computer security firm and worked with them to block the attack from continuing. The retailer will credit monitoring services for one year at no cost to customers who made a purchase using a payment card at a U.S., Puerto Rico or U.S. Virgin Islands store during the breach time frame.
According to the security blog Krebs on Security, numbers for cards that had been used at Bebe stores in the U.S. between Nov. 18-28 were being offered for sale on an underground website called Goodshop in a “Happy Winter Update” on Dec. 1. Card prices ranged from $10 -$27.
Feuding continues in the Family Dollar affair
As the acquisition of Family Dollar moves closer to resolution, would-be acquirers Dollar Tree and Dollar General maintain widely differing views on the superiority of their respective offers and the opinion of federal regulators.
The latest developments in the ongoing Family Dollar affair occurred Dec. 5 when Dollar Tree and Dollar General took shots at each other in sharply worded press releases that offered differing views on competition, competitive overlap and store divestiture scenarios. Both companies said they have been actively involved in conversations with the Federal Trade Commission as a Dec. 23 vote on the deal with Dollar Tree looms for Family Dollar shareholders.
“We believe that the FTC staff appreciates that Dollar Tree and Family Dollar are different retailers with complementary business models,” according to a statement by Dollar Tree indicating a small number of stores would need to be divested to secure regulatory approval. Conversely, Dollar Tree contends the FTC may require Dollar General to divest far in excess of the 1,500 stores Dollar General offered to divest in its tender offer for Family Dollar.
“Dollar Tree stores sell everything for $1 or less. Our product mix is constantly changing and includes a balance of things the consumer needs and things the consumer wants such as seasonal items, party goods, and other discretionary products,” Dollar Tree said in a statement. “Our shopping experience is fun, fast, and friendly with surprising products engendering a thrill of the hunt atmosphere. Family Dollar sells primarily branded consumable products at multiple price points up to $20 or more. Their customers expect Family Dollar to carry the same assortment of products week in and week out.”
Based on the view that Dollar Tree and Family Dollar are distinct competitors and therefore only a small number divestitures would be required, according to Dollar Tree, which said it would be in a position to complete the deal by February 2015.
Not so fast was the response from Dollar General shortly after Dollar Tree issued its statement. Dollar General looks past its similarities with the Family Dollar business model to assert its chief rival is Walmart.
“Dollar General’s documents and data tell a very different story from that contained in the press release issued today by Dollar Tree,” the company said. “Walmart, not Family Dollar, is the primary driver regarding Dollar General’s strategic pricing decisions, and more than 90% of Dollar General’s SKUs are nationally priced. Dollar General is confident that its approach to strategic and pricing decisions is both correct and superior to that of Family Dollar and Dollar General has no intention of adopting a flawed strategy – either now or after an acquisition of Family Dollar – that it believes would impair its ability to compete with Walmart and lead to inferior financial performance.”
The coming weeks promise even more drama in the merger saga. Dollar General said it will continue to work with the FTC and expects to provide an update in sufficient time to allow Family Dollar shareholders to review information prior to the meeting scheduled for Dec. 23.
Meanwhile, Dollar Tree continues to portray its rival’s offer as a risky and uncertain proposal due to overlap issues. As a result, Dollar General may spend many months advocating and negotiating with the FTC with significant uncertainty as to the outcome and its bid may ultimately fail because the scope of an unprecedented FTC-required divestiture would lead to an unacceptable loss of value, according to Dollar Tree.
Genesco lowers outlook, names new CFO
Genesco detailed succession plans for its CFO on a day that the company also reported weaker-than-expected earnings for the fiscal third quarter and lowered its outlook for the full year.
Genesco reported third-quarter earnings of $30.3 million, or $1.28 per diluted share, for the third quarter, compared to earnings from continuing operations of $33.8 million, or $1.43 per diluted share, for the prior-year quarter. Analysts estimated earnings of $1.44 per share. Sales for the latest third quarter rose by 8% to $722.92 million from $666.33 million a year ago with same store sales, including same store sales and comparable e-commerce and catalog sales, rising 3%. Analysts estimated revenue of $716.58 million.
The company also announced that James S. Gulmi plans to retire from the role of chief financial officer at the end of the fiscal year and that he will be succeeded as chief financial officer by Mimi E. Vaughn, currently the company's SVP of strategy and shared services.
Robert J. Dennis, chairman, president and CEO of Genesco, said: "We delivered solid top-line growth in the third quarter, driven by better than expected sales in the Journeys Group. At the Lids Sports Group, lower than planned sales caused negative expense leverage and lower gross margins, resulting in a shortfall in earnings that was not offset by the other divisions' performance. The fourth quarter has started off well, with consolidated comparable sales up 9% through December 2, 2014.”
Dennis added: "Based on our third quarter performance and expectations for additional margin pressure in the Lids Sports Group in the fourth quarter, we are revising our full year outlook. We now expect adjusted diluted earnings per share to be in the range of $4.75 to $4.85, compared to fiscal 2014's adjusted earnings.”
The Nashville-based specialty retailer sells footwear, headwear, sports apparel and accessories in more than 2,670 retail stores and leased departments throughout the United States, Canada, the United Kingdom and the Republic of Ireland, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Underground by Journeys, Schuh, Schuh Kids, Lids, Locker Room by Lids, Lids Clubhouse and Johnston & Murphy.