House votes to expand tax break for store remodels
Washington, D.C. — The House has passed legislation broadening a federal tax law that makes it cheaper for retailers to remodel their stores, the National Retail Federation said.
Lawmakers voted 258-160 today to make “bonus depreciation” permanent, and granted NRF’s request that it be expanded to include stores that are owned rather than just those that are leased. The measure now heads to the Senate.
Bonus depreciation lets retailers write off half the cost of a remodeling project or other improvements immediately, saving them a significant amount of money that can sometimes make the difference in whether a project is financially feasible. Without it, the full amount would have to be depreciated over 39 years (although a law reducing it to 15 years that expired at the end of 2013 is expected to be renewed).
“The depreciable life for improvements to retail stores is too long” even at 15 years,” wrote NRF senior VP for government relations David in a letter to the House, noting that most retailers update their stores every five to seven years. “Bonus depreciation provides a very important incentive for making these investments on the more rapid timetable needed to address competition in the marketplace.”
Expanding the law to include owned stores is important because it is unfair to restrict its benefits to leased stores, French said. About half of stores are owned, many of them by small retailers who find it difficult to afford leased space in malls or who chose to buy their buildings as a retirement investment, he said.
Bonus depreciation also applies to other capital investments made by both retailers and other industries. It was first passed as an economic stimulus measure after the September 11, 2001, terrorist attacks and has been renewed off and on since then with a number of variations.
Report: Sycamore in early discussion to acquire Fred’s
New York — Sycamore Partners is in early discussion with Fred’s about a potential takeover, Reuters reported.
In January, Fred’s disclosed it had hired Bank of America Corp. and Peter J. Solomon Co to explore strategic alternatives after disappointing holiday sales.
According to the report, at least one other party in also in talks with Fred’s.
Strong spring painting season propel Sherwin-Williams
A strong spring painting season drove a near 10% increase in same store sales at Sherwin-Williams and fueled record sales and profits for the operator of 4,100 stores.
The company’s total sales increased 12.1% to slightly more than $3 billion due primarily to higher sales in the company paint stores group. Acquisitions were said to have increased net sales by 4.6%. Profits grew at an even faster pace, with earnings per share increasing 19.5% to $2.94 from $2.46.
The increases in second quarter profits was due primarily to improved operating results in the company’s paint stores and consumer business units. Sales in the paint store group increased 17.2% to nearly $1.9 billion due to architectural paint sales volume growth across all end market segments and acquisitions, according to the company. Acquisitions increased net sales 6.5% in the quarter.
Sales in the company’s consumer group, which includes brands such as Krylon, Minwax and Thompson’s Water Seal, increased 10.1% to $433 million in the quarter due to higher sales to retail customers and acquisitions which accounted for about half of the growth.
"We are pleased with the continued strong positive sales and earnings per share momentum. Our paint stores group continues to lead with sales volume and operating results,” said Christopher Connor, chairman and CEO of Sherwin-Williams. "We are continuing to invest in our business. In the first six months, (the) paint stores group opened 33 net new stores. For the year, we expect our paint stores group to open 80 to 90 new stores.”