FINANCE

Blockbuster fires back at activist investor seeking board seat

BY CSA STAFF

New York City Blockbuster responded Thursday to activist investor Gregory S. Meyer for trying to take a seat on its board by urging shareholders to vote instead for Blockbuster’s own candidate.

Blockbuster told shareholders in a letter that Meyer, “is not qualified to serve on your board and … if elected, he would pose a significant risk to the future of our company, ” according to the Associated Press.

The shareholders are to vote on board nominees at Blockbuster’s annual meeting June 24. Meyer wants to replace director Gary J. Fernandes, the chairman of a real estate investment company called FLF Investments.

Meyer founded a DVD rental kiosk business in 2001 called DVDXpress and later sold it to Redbox operator Coinstar, which has emerged as a major competitor for Blockbuster. It rents DVDs from vending machines for $1 a night.

Blockbuster’s letter said Meyer has not been as successful in the DVD-rental business as his credentials might imply. The company pointed out that Meyer is no longer an executive at Coinstar and said that DVDXpress was heavily indebted when he sold it.

Meyer said in an interview that Blockbuster was trying to smear him. He said he has never taken credit for the success of Redbox and finds it “laughable” that Blockbuster would criticize another company for having debt.

 

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Pier 1 Q1 comps up 14.3%

BY CSA STAFF

FORT WORTH, Texas Pier 1 Imports reported that comparable-store sales for the first quarter ended May 29 increased 14.3%. Last year’s comparable-store sales declined 7.5% for the first quarter ended May 30, 2009. Total sales for the quarter improved to $306 million compared with $281 million in the year ago quarter.

Alex Smith, president and CEO said, “We are extremely pleased with our first quarter sales increases. Comp-store sales continue to be driven by consistent increases in conversion rate, average ticket and traffic. As previously reported, March sales benefited from the earlier Easter holiday but business was solid throughout April and May ending with a strong Memorial Day weekend. All major merchandise categories performed well during the quarter and the variations in the performance geographically were much less than last year. We look forward to discussing our first quarter results in detail during our upcoming conference call.”

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Report: Consumer spending slows in Q2

BY CSA STAFF

PURCHASE, N.Y. According to the lates report from MasterCard Advisors’ SpendingPulse, this month, more retail sectors showed a respite in year-over-year growth, as slow economic recovery appeared to weigh on the U.S. consumer’s spending behaviors.

Michael McNamara, VP research and analysis for SpendingPulse, observes, “The momentum in consumer spending that was building through the first quarter, seems to be taking a breather in the second quarter of 2010, at least so far.  Financial volatility in the capital markets and ongoing macroeconomic issues could account for this shadow cast over the recovery in consumer spending.  Some sectors seem to be responding to specific disruptive events, such as the expiration of the Federal housing tax credits, where previously we’d noticed a beneficial “echo” effect on housing related categories such as Furniture and Furnishings. In addition, Memorial Day occurring a week later than it did last year, could have pushed some spending into June, 2010.  Nevertheless, we continue to see strength in pricing, and in most categories, we are registering solid increases in the SpendingPulse Price Index, indicating that inventories continue to be aligned to demand, and retailers have not had to return to steep discounting.”

According to the report, May was another strong month for e-commerce, with the channel seeing sales increase 13.7% over May 2009. The best performing sub-categories of e-commerce were children’s apparel and family apparel, growing 30.4% and 26.2% respectively, on a year-over-year basis.

 

Electronics and appliances sales were down 0.7% from last year. Consumer electronics sales fell by 0.8%, while appliance sales were flat. SpendingPulse reported that the appliance category’s flat sales could be explained by expiration of the Federal Housing Credit at the end of April, while the lack of new product launches in the consumer electronics sector could account for any weakness in this usually strong sub-category.

 

In a second month of decline, total U.S. apparel decreased 3.7%, with declines in all sub-categories except children’s apparel, the report found. Steepest declines were in men’s apparel, down 10.4%, the usually strong footwear category, down 7.3%, and women’s apparel, down 6.1% .  However, pricing continued to hold firm for the category as a whole, showing a healthy 5.4% increase in the overall apparel pricing index, on a year-over-year basis, SpendingPulse reported.

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