Big Lots Q3 loss widens; to shutter Canadian operations
Columbus, Ohio – Big Lots reported a net loss of $9.5 million for the third quarter of fiscal 2013, up from a net loss of about $6 million in the year-ago period. The retailer also said it will exit the unprofitable Canadian market, which it entered through an acquisition in 2011.
Net sales grew about 2% in the same period, to $1.15 billion from $1.13 billion, and consolidated same-store sales declined about 2.5%.
Higher operating expenses offset the increase in net sales, resulting in the net loss, which came in higher than anticipated by Wall Street. For the full year fiscal 2013, Big Lots is forecasting a consolidated same-store sales decline of 2% to 3% and a total U.S. sales decrease in the range of 1% to 2%.
The retailer said it will close its stores in Canada, where it operates 73 locations. The stores are part of the Liquidation World Liquidation World chain that Big Lots acquired in 2011. Big Lots intends to begin an orderly wind-down process immediately and expect that principal operations will cease during the first quarter of fiscal 2014.
“We acquired a struggling Canadian business in July 2011 with the intention of revitalizing it and using it as the base for bringing extreme value merchandising and the Big Lots brand to customers in Canada,” the company said its earnings release. “Over the last two years, we have invested in this business and our team in Canada has worked diligently to turn it around. However, we have not been able to gain the necessary traction in the Canadian marketplace that had originally been anticipated and believe that the significant further capital investments and execution risk associated with continuing to pursue a turnaround would not be in the best interests of our company and shareholders.”
Big Lots also plans to close down its wholesale operations in the fourth quarter of this fiscal year, at which time it will be treated as discontinued operations.
NRF puts holiday return fraud at $3.4 billion
Washington, D.C. — The retail industry will lose an estimated $8.76 billion to return fraud this year, and $3.39 billion during the holiday season alone, according to the National Retail Federation’s 2013 Return Fraud Survey. Overall, 5.8% of holiday returns are fraudulent, up slightly from 4.6% last year.
“Recent efforts to combat fraudulent activity are slowly starting to work, but criminals are becoming more savvy and technologically advanced in their methods, making it even more difficult for retailers and law enforcement to keep up with the growing problem said NRF VP of loss prevention Rich Mellor.”
In survey results, nearly all (94.8%) retailers polled say they have experienced the return of stolen merchandise in the last year, and 69.0% report that they have experienced the return of merchandise purchased on fraudulent or stolen tender. Additionally, 29.3% have found criminals using counterfeit receipts to return merchandise.
Employee return fraud or collusion with external sources is also a big problem for retailers: nine-in-10 (93.1%) report they’ve dealt with this issue in the past year.
For the first time, NRF asked retailers about their experiences with return fraud and a connection to organized retail crime groups: 60.3% have experienced this in the past year.
One of the biggest issues for retailers is the practice of ‘wardrobing,’ or the return of used, non-defective merchandise like special occasion apparel and certain electronics. Many companies have employed specific tactics to help curb this unethical practice, and are beginning to see the fruits of their labor: 62.1% report having been victims of wardrobing, down from 64.9% last year.
The survey found 15.5% say they have dealt with e-receipt return fraud. And, as online sales continue to grow, 82.5% say they allow customers to return merchandise purchased online in their stores.
The problem of return fraud has forced many retailers to adopt policies which require customers returning merchandise to show identification. Retailers estimate that 13.97% of the returns made throughout the year without a receipt are fraudulent and, as a result, nearly three-quarters (73.7%) now require customers returning items without a receipt to show identification.
When asked about return fraud and the various types of tender, almost half (49.1%) say they have witnessed an increase in gift cards/store merchandise credit fraud in the past year. One-in-five (19.6%) say they have seen a decrease in the fraudulent use of cash, but more than a quarter (26.8%) have seen an increase; half report no change (48.2%).
Additionally, three-in-10 (29.1%) say they’ve witnessed an increase in credit card fraud, 18.2% say those incidents have decreased and more than half (52.7%) say there’s no change from last year.
AmazonFresh may be heading to San Francisco
Amazon’s fresh food delivery service may be expanding to San Francisco, according to published reports.
All Things Digital, a Dow Jones-owned website that reports on technology news, reported on several sightings in San Francisco of AmazonFresh trucks, as well as a recent job posting.
According to the site, Amazon plans to announce the service’s launch on Tuesday. Amazon began offering the service in Seattle and recently expanded it to Los Angeles. AmazonFresh allows users to shop online for produce, dairy products, dry goods and others.