Fortunoff Acquired by Equity Firm
New York City, Jewelry and home-furnishings retailer Fortunoff will sell its business to private-equity firm Trimaran Capital Partners in a deal valued at $280 million, according to a report in The New York Times. The leading factor behind the sale, insiders say, is to finance an expansion of the chain. Fortunoff currently operates six stores and a discount center, along with some seasonal furniture outlets. According to the report, the growth plan includes new stores in Miami and Palm Beach, Fla. The Fortunoff family will retain a 25% stake in the business.
Wal-Mart Breaks Q3 Records
Bentonville, Ark., Wal-Mart Stores posted record third quarter sales and earnings for the quarter ended Oct. 31. Net income rose to $2.29 billion, up from $2.03 billion in the same quarter last year. Net sales were $68.5 billion, an increase of 9.7% over the third quarter of fiscal 2004. Income from continuing operations for the quarter was $2.3 billion, an increase of 12.7% from $2.0 billion in the third quarter of fiscal 2004. Total U.S. comparable sales for the quarter increased 1.7 percent, which is represented by a 1.3 percent comp increase for Wal-Mart Stores and a 4.0 percent comp increase for Sam’s Club.
Lee Scott, President and CEO said, “I am pleased to report another record quarter of sales and earnings. The economy continues to improve and we are well positioned for the holidays.”
Luxury Shopping Index Declines
Stevens, Pa., Luxury consumers’ confidence in the economy took a hit in the third quarter. After rising to 102.7 in the second quarter, the Luxury Consumption Index declined to 96.0, down 6.7 points, according to Unity Marketing’s latest tracking study of the luxury market.
The Luxury Consumption Index measures the luxury consumers’ feelings and attitudes about their financial well-being. The majority of luxury consumers (53%) felt their financial position was the same and no better than during the previous three months. Further, nearly 40% said the country as a whole was less well off in the third quarter.
“The market for luxury goods and services is driven by consumers’ feelings, certainly not needs,” says Pam Danziger, president of Unity Marketing and author of the new book Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes. “Luxury consumers (average income $136.5k) with their surfeit of material wealth have no pressing need to go shopping when things don’t look promising. Luxury consumers are in a unique position to wait it out when times are tough and that is just what they did in the third quarter.”