FINANCE

Gap CEO draws ‘line in the sand’

BY CSA STAFF

Gap Inc. CEO Art Peck is refocusing the 3,000-store company on the areas with the biggest potential for driving growth — and they do not include its oldest divisions.

“We’re certainly not giving up on Gap or Banana [Republic], but we’re acknowledging the world continues to change,” Peck said in an interview with Bloomberg. “And those are the two most mature brands in the portfolio.”

Going forward, Peck is emphasizing Gap's newer brands, Old Navy and Athleta. He is not giving up on the company's namesake division as much as he is pruning it.

“I want fewer, better Gap stores,” he said in the report.

Old Navy contributes about three-quarters of the company’s profit, compared with Gap’s 7%, according to Jefferies LLC analyst Randal Konik.

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REAL ESTATE

Herberger’s backfills Macy’s hole in LaCrosse

BY Al Urbanski

Herberger’s has moved to a new location at the Valley View Mall in LaCrosse, Wisconsin, “right-sizing” to a 100,000-sq.-ft. space in a spot recently vacated by Macy’s. Herberger’s was the sixth tenant to backfill vacant department store space at a PREIT-owned mall this year.

“Right-sizing Herberger’s to meet the high-traffic shopping behaviors of the La Crosse region is another key milestone in our ambitious plan to replace closing anchor stores and better serve local consumers,” said PREIT CEO Joseph F. Coradino.

Valley View is one of the malls PREIT has retained in its strategic move to winnow out properties not meeting set sales-per-sq.-ft. goals. The company says the mall continues to draw from a 50-mile radius with a lineup including Francesca’s, Apricot Lane, Victoria Secret, Build-a-Bear Workshop, Express, Zumiez, Ulta and Texas Roadhouse.


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FINANCE

Summer sales slump

BY Marianne Wilson

Consumers were cautious in their spending during the summer months.

Retail sales in August decreased by 0.2% from July on a seasonally adjusted basis, according to the National Retail Federation. (The NRF numbers exclude automobiles, gasoline stations and restaurants. Also, the Commerce Department said data for July was revised to show sales increasing 0.3% instead of the previously reported 0.6% jump.

Among the biggest surprises of the data for August was that the biggest decrease was in online and non-store sales, which fell 1.1%. Sales at apparel stores fell 1%.

“Retail sales for August were truly a mixed bag, with monthly gains in July reversed in August,” NRF chief economist Jack Kleinhenz said. “The bottom line is that consumer spending is uneven but remains resilient and the key contributor to U.S. economic growth. While it is too early to assess the impact Hurricanes Harvey and Irma have had on the economy and retail sales, there’s no doubt that they will impact consumer spending – particularly in certain sectors – as Florida and Texas work to rebuild.”

Year-over-year growth was up 3.4% on a three-month moving average. Specifics from August sales include:

• Online and other non-store sales decreased 1.1% seasonally adjusted from July but increased 8% unadjusted year-over-year.

• Clothing and accessories stores decreased 1% seasonally adjusted from July but increased 1.5% unadjusted year-over-year.

• General merchandise stores increased 0.2% seasonally adjusted over July and increased 3.1% unadjusted year-over-year.

• Electronics and appliances stores decreased 0.7% seasonally adjusted from July and decreased 3.3% unadjusted year-over-year.

• Furniture and home furnishings stores increased 0.4% seasonally adjusted over July and increased 5.9% unadjusted year-over-year.

• Building materials and supplies stores decreased 0.5% from July but increased 8.2% unadjusted year-over-year.

• Sporting goods stores decreased 0.1% seasonally adjusted from July and decreased 1.7% unadjusted year-over-year.

• Health and personal care stores increased 0.1% over July and increased 0.3% unadjusted year-over-year.

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