Crocs names Reebok exec VP of North America retail
Niwot, Colo. — Claire Fahie-Conley, VP of U.S. retail for Reebok, has been appointed Crocs’ VP of retail for North America. In this role, Fahie-Conley will be responsible for overseeing all aspects of the retail footprint in North America, including the entire fleet of full-price and outlet stores.
Prior to joining Crocs, Fahie-Conley spent 20 years at Reebok. During the past five years, she served as VP of U.S. retail for Reebok and Rockport, where she was responsible for more than 150 retail stores and helped lead the development of the new Reebok FitHub store concept launched earlier this year.
Moody’s: RadioShack may run out of cash
Fort Worth, Texas – Financial woes continue for RadioShack, which was recently notified it is in danger of being delisted by the New York Stock Exchange. According to a new report from Moody’s Investor Service, RadioShack is likely to run out cash by the end of October 2015.
Although RadioShack has no debt maturities coming due in the next year, the company’s cash balance at the end of its fiscal first quarter 2014 was $62 million, compared to $180 million at the end of calendar year 2013. Moody’s expects RadioShack to rely increasingly on its unrestricted cash balances as operating losses will likely continue for the rest of the year and free cash flow remains negative during the next 12 months.
Unless RadioShack can orchestrate a successful turnaround in the next 12-18 months and improve customer traffic in its stores, Moody’s says the company’s liquidity will continue to deteriorate and it will start to lose vendor support. Under Moody’s base case scenario, sales will fall 7.4% in 2014, leading to RadioShack burning approximately $401 million of cash in fiscal 2014 (ending Feb. 1, 2015). Under this scenario, barring any infusion of additional cash, the company will run out of liquidity at the end of third quarter fiscal 2015 in October 2015).
Under a second, more optimistic scenario, with sales falling 4.6% in 2014, cash flow from operations will still not be sufficient to cover capital expenditures and will result in a cash burn of $267 million in 2014 and about $142 million in 2015. The company’s liquidity will be around $338 million for fiscal 2014 and $196 million for fiscal 2015. Even in this optimistic scenario, earnings before interest, taxes, depreciation and amortization (EBITDA) remains negative through fiscal 2015.
RadioShack had planned to close about 1,100 stores in the U.S. as part of an attempt to improve profitability. However, the terms on which its lenders were willing to provide the consent for its store closure program were not acceptable to the company and it is therefore scaling back the closures. Moody’s rates RadioShack Caa2, with a negative outlook.
"The company’s deteriorating liquidity profile and dismal earnings give very little cushion to RadioShack to execute its turnaround strategy over the next several quarters," said Mickey Chadha, a Moody’s VP and senior analyst. "Absent a credible turnaround strategy to improve sales growth and increase earnings, RadioShack will be hard pressed to remain relevant in the increasingly competitive mobile phone and consumer electronics business."
Survey: Parents to increase back-to-school spend, use physical stores
New York – A majority of parents plan to spend more on their children’s back-to-school shopping this year, driven by rising costs or necessity rather than greater spending power. According the Accenture Back-to-School Shopping Survey, which polled 500 U.S. parents of children entering kindergarten through college, nearly all (89%) plan to do most of their back-to-school shopping in a physical store, though many will still use online to browse and search, or "webrooming."
According to the survey, two-thirds of parents (67%) plan to spend between $100 and $500 and 41% plan to spend $500 or more for back-to-school shopping this year. Compared to last year, just more than half (52%) of the parents said they will spend more on back-to-school shopping than last year, 37% plan to spend the same and only 11% expect to spend less. One-third (33%) of parents spending more plan to increase their spending by $250 or more. Among the reasons given for the spending increase, 71% cited higher prices and 56% cited increased school requirements. Nearly one-in-five parents (19%) said they will spend more in order to help their children "keep up with their friends."
The survey results demonstrate the growing importance of the seamless shopping experience. For example, nearly eight-out-of-10 (79%) plan to participate in "webrooming" – browsing online and then going to a store to make their purchase. The top reasons respondents cited for webrooming were: to check if an item is in stock before going to a store to make a purchase (47%); to touch and feel the product before buying (43%); to avoid shipping costs (43%); and to ask the store to match a better price found online (33%).
Other notable findings include:
• The parents of college children expect their spending increases to be higher than the parents of younger children: 28% of parents of college students believe they will spend $500 or more than last year compared to only 6% of parents of K-5 students.
• Among parents expecting to spend less this year, 58% plan to decrease spending by $100 or less than last year. More than half (55%) of these parents said they will reduce their spending because they have less discretionary income and 28% say they will reduce spending because of higher living costs.
• Discount / mass retailers are the number-one shopping destination by far for back-to-school shopping (90%), followed by office supply stores (63%) and department stores (49%).
• Pricing, quality of items and a broad selection to get all or most items at one store are the most important factors for parents when choosing a retailer for back-to-school. Offerings such as loyalty programs, flexible returns and price-matching ranked much lower on the back-to-school shopping priority list.
• Nearly one-quarter (23%) of parents had already done most of their back-to-school shopping by the end of June and 58% of parents plan to do most of their back-to-school shopping between July 16 and Aug. 15. A large majority (81%) of parents will be finished with the bulk of their back-to-school shopping by mid-August.
• Four-out-of-10 parents said that retailers’ advertisements and commercials influence their decision-making on when to do their back-to-school shopping. However, they had mixed opinions about the best time to shop for the best deals: 40% spread out their shopping throughout the summer and school-year; 35% shop early in the season; and 23% shop late in the season to get the best discounts.
• The top items on back-to-school shopping lists this year are: general school supplies (88%), clothing and shoes (87%), accessories such as backpacks (71%) and computers, tablets, phones, gadgets and electronics (60%). Food and grocery spending also rang in at 41% and big-ticket furniture, mainly for college students, at 13%.
• For those parents planning to shop online, most will use their home computer (89%), but nearly one-third (30%) will use a smartphone or tablet (31%).
• When asked why they choose to shop online, searching for deals and the best price are the top reasons, above convenience: 65% expect to save money or find better discounts by shopping online; 59% want to spend more time researching the best prices; 44% prefer the convenience of having everything they need shipped to their doorstep; and 22% hope to avoid a boring shopping trip for the children.
• Half of respondents (51%) said they are likely to use a subscription service from a retailer for school-related purchases.