OPERATIONS

Joe Fresh and J.C. Penney partnership to end

BY Marianne Wilson

Toronto — Canada’s Loblaw Companies Ltd. said it will pull its Joe Fresh brand from J.C. Penney stores in the United States at the beginning of next year as it looks to concentrate on freestanding Joe Fresh stores and e-commerce.

Former Penney CEO Ron Johnson launched the value-oriented edgy fashion brand amid much fanfare in some 700 Penney stores in 2013 as part of his broader effort to transform the venerable department store chain. But it has been scaled back recently, and is currently available in only about 200 Penney locations. Some industry experts countered that the brand's cheap chic fashions were not a good fit for Penney customers.

According to a report by The Globe and Mail, the agreement to sell Joe Fresh clothing at Penney stores is due to expire on Jan. 30, 2016, and will not be renewed through mutual agreement.

Joe Fresh has six stores in the New York area, including a large, multi-level flagship on Manhattan’s Fifth Avenue, and a smaller, 7,500-sq.-ft. store in Soho. According to the report, the chain is evaluating its existing U.S. locations as it looks to determine its optimum store size for future U.S. expansion.

“The U.S. is a big market and we would like to have a successful business there over time," Loblaw president Galen Weston said at the company's annual meeting.

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OPERATIONS

Report: Judge won’t block Target-MasterCard settlement

BY Dan Berthiaume

New York – Despite some reservations, a federal judge is reportedly refusing to block a proposed settlement between Target Corp. and MasterCard related to the retailer’s 2013 data breach. According to Reuters, U.S. District Judge Paul Magnuson in St. Paul, Minnesota declined a request from a group of banks and credit unions to rule against the $19 million settlement.

In his ruling, Magnuson said he could not prove that the settlement has any misleading or coercive settlements, even while he acknowledged it does not seem “entirely fair or reasonable.” However, before the settlement can take effect, at least 90% of the banks issuing MasterCard accounts impacted by the breach have to sign on.

The banks and credit unions protesting the deal estimate total losses from fraud and issuing new credit cards total $160 million.

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OPERATIONS

Study: Human error causes data breaches

BY Dan Berthiaume

New York – Human error was the number one cause of data security incidents in 2014. According to a new report released by the Privacy and Data Protection Team at BakerHostetler, in the incidents that the firm worked on in 2014, employee negligence was responsible 36% of the time.

That was followed by theft by outsiders (22%), theft by insiders (16%), malware (16%) and phishing attacks (14%).Incidents were self-detected 64% of the time. Of the incidents reported by a third party, 27 % were due to theft.

For incidents that involved identifiable dates of detection and notification, the average amount of time that elapsed from incident occurrence to detection was 134 days.

Among the other notable statistics in the report are:

• Not all security lapses involved the theft or hacking of electronic records. Of the incidents included in the report, 21% involved paper records.

• 58% of the incidents required notification of affected individuals – based on state breach notification laws.

• Credit monitoring was offered in 67% of the incidents.

• In 75 incidents where notification letters were mailed, only five of the companies faced litigation by potentially affected individuals.

• Attorneys General were notified in 59 cases, resulting in inquiries 31% of the time. Multi-state inquiries were initiated less than 5% of the time.

• For incidents involving stolen payment card data, PCI Data Security Standards fines for non-compliance ranged from $5,000 to $50,000 per matter. Initial demands for operating expense and fraud assessments ranged from $3 to $25 per card involved.

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