Liz Claiborne wins dismissal of investor lawsuit
New York City — A Thursday Reuters report said that Liz Claiborne has won the dismissal of a shareholder lawsuit that accused the company of misrepresenting its relationships with Macy’s and J.C. Penney.
U.S. District Judge Richard Holwell said Thursday that the investors failed to show that Liz Claiborne intended to mislead them about the relationships.
The class period ran from Jan. 16 to April 30, 2007, the day before Liz Claiborne reported much lower-than-expected profit and sales at department store chains.
NRF: Swipe fee cut will save merchants and consumers billions
Washington, D.C. — Retailers and their customers will save billions of dollars when new Federal Reserve regulations cutting debit-card swipe fees roughly in half take effect this weekend, the National Retail Federation said.
“Retailers across the nation are developing a wide range of innovative ways to pass these savings along to their customers with lower prices and better value,” NRF senior VP and general counsel Mallory Duncan said. “Change won’t come overnight, but consumers will definitely benefit. Reducing these fees will put billions of dollars back into the Main Street economy, helping American families stretch their paychecks and ultimately preserving and creating local jobs to keep America on the road to recovery.”
Under Fed regulations made final this summer, the “swipe” fees the nation’s largest banks charge merchants to process debit card purchases will be capped at no more than 21 cents per transaction – plus 0.05% of the purchase price and, in most cases, an additional 1 cent for fraud prevention – beginning on Saturday. That compares with 1%-2% of the transaction – about 44 cents on the average retail purchase but several dollars on bigger-ticket items – under current fees. Debit-card swipe fees currently total about $20 billion annually, and analysts have estimated the cap will save merchants and their customers about $7 billion. Small- and mid-size financial institutions with less than $10 billion in assets are exempt.
While the cap will produce considerable savings for retailers and their customers on most purchases, some merchants are upset that fees could actually go up on small-ticket purchases. The cap amounts to 27 cents on a $100 transaction, or about one-sixth the $1.50 collected under the current fee schedule. But the cap comes to 22 cents on a $2 soda or cup of coffee, for example, that currently carries a fee of only 8 cents. The regulations would allow banks to charge less than the cap for small purchases, but recent news reports indicate that Visa and MasterCard banks plan to instead charge the maximum allowed.
“Even as these regulations are about to go into effect, banks are trying to turn what is supposed to be a ceiling on these fees into the floor for small transactions even though those fees were already grossly out of proportion to the amount of the purchase,” Duncan said. “Unfortunately, this is all too typical of what we’ve come to expect from the card companies and their banks.”
A number of banks have also threatened to raise other fees in retaliation for the swipe fee cap, but Duncan criticized their behavior,
“Every time Congress takes a step to protect consumers, the banks use it as an excuse to raise fees,” Duncan said. “That doesn’t mean Congress shouldn’t pass consumer protection laws. It speaks more to the nature of the card industry than to whether swipe fee reform should have been passed.”
Lumber Liquidators makes strategic supplier acquisition
Toano, Va. — Flooring retailer Lumber Liquidators said Friday it will acquire certain assets of Sequoia Floorings in order to strengthen its mill-direct relationships and shore up its long-term sourcing strategies.
Sequoia, a trading company, had provided product quality and development services on approximately 40% of Lumber Liquidators’ 2010 merchandise purchases, primarily those in Asia.
As part of the transaction, the company will be opening a representative office in Shanghai upon approval of its application to the Chinese government, expected to occur in October.
Terms of the transaction include $5 million in cash, plus other considerations totaling an $8 million deal
Lumber Liquidators’ 2011 outlook has been revised from 40 to 44 planned new store locations for the fiscal year to 40 to 42 new locations.