Looking into the Lion’s Mouth
If you’re peeking at the news between slats in your fingers, scared to see where the S&P 500 sits or what’s happening with the NASDAQ, the Dow and the price of oil, you’re quite obviously not alone. Each day is a frightening new one, and no one – not even economists – are quite sure what’s going to happen next.
As the retailers began reporting quarterly results over the last day or two, it was clear that current events hadn’t yet made their presence known. Most of the expected categories – discount, warehouse – performed better than expected, with both sales and profits up year-over-year. But a thread of caution ran through every report. “We’re concerned about the months ahead” was the underlying theme.
I talked to Andy Graiser, co-president and CEO of DJM Realty, about what to expect over the next few months as back-to-school plays out and holiday shopping begins. (If his name sounds familiar, Andy has been in the news a great deal of late, as Gordon Brothers’ DJM and Hilco Real Estate dispose of all the Borders locations.)
I asked Andy what we can expect, from a real estate perspective, through the rest of this year and early into 2012.
“I still expect healthy retailers to continue to cleanse the bottom 5% to 10% of their portfolios,” he told me, “as well as to continue to move into box sizes which are more efficient.” He said that he is seeing good demand in the outlets as well as solid demand for 12,000-sq.-ft. -to 15,000-sq.-ft. locations in strip centers. Expect the restaurants to continue to struggle, he cautioned, while discount food operations and the dollar sectors enjoy continued strength. “That said, I am still concerned with consumer confidence going into back-to-school and Christmas,” he added. Amen.
No comments found
Estée Lauder CFO to retire in 2013
NEW YORK — The Estée Lauder Companies announced that Richard Kunes, EVP and CFO, plans to retire effective on or about June 30, 2013. Kunes intends to continue to serve the company as CFO until June 30, 2012, or such earlier time as his successor begins to serve as CFO. Thereafter, he will continue his relationship with the company as EVP, senior advisor to the CEO, and work on special projects through June 30, 2013. The company will begin to assess internal personnel as well as external candidates for CFO. Kunes will work closely with his successor as needed to ensure a smooth and orderly transition until his retirement.
“I admire Rick’s long-standing commitment to The Estée Lauder Companies and on behalf of the company, I am thankful for his contributions and efforts,” said William Lauder, executive chairman. “As CFO, Rick has been an important member of our leadership team and has been instrumental in helping our company reach record financial highs. Through his leadership and expertise, Rick instilled the financial discipline that has helped us achieve our industry leadership position. I am sorry to see Rick leave us, but regrettably I understand his choice to retire and spend more time with his family.”
Kunes joined the company in 1986 as international manufacturing controller. Since then, he served in increasingly important roles at the company, including regional finance director for Asia, VP operations finance worldwide and corporate controller until his appointment to CFO in 2000. As CFO, he is responsible for the finance functions, including internal and external reporting, treasury, taxation, risk management, operations finance and investor relations. In addition, Kunes is responsible for the corporate strategic planning and mergers and acquisitions department and the global information systems group, as well as the administrative aspects of the internal control department. He is also chairman of the fiduciary investment committee.
No comments found
The Big Chill
Sprouts Farmers Market in Westlake Village, Thousand Oaks, Calif., has joined an elite club: It is only the third store in the nation to achieve the Environmental Protection Agency’s GreenChill Partnership higher honor, Platinum Level Certification.
Sprouts, which specializes in natural and organic foods at affordable prices, joined the EPA program in 2010 and, since then, eight of its stores have earned GreenChill awards. (GreenChill works with food stores to reduce refrigerant emissions and adopt green refrigeration technologies and practices.) With the construction of its Westlake Village store, the grocer wanted to raise the bar and meet the stringent Platinum standards. The Platinum level of certification requires, among other things, the use of only non-ozone depleting refrigerants, and a storewide annual refrigerant emissions rate of no more than 5%.
“The main goal at Thousand Oaks was to reduce the risk of leaking harmful HFC into the atmosphere, and to reduce the cost of our initial refrigeration charge, said Jerry Stutler, VP construction and facility engineering for Sprouts Farmers Market, Phoenix, which operates some 100 stores throughout Arizona, California, Texas and Colorado.
The company also wanted to reduce its potential exposure to costly catastrophic leaks in its systems.
Sprouts selected Hill Phoenix, Conyers, Ga., to design a system that not only would be eco-friendly and energy-efficient, but also cost-effective to install and maintain. The system also had to reduce the store’s use of refrigerants to meet the Platinum certification standards.
In collaboration with Sprouts’ construction and facilities engineering team, Hill Phoenix designed and manufactured an innovative new refrigeration system that met Sprouts’ criteria. Installed in April, the system uses CO2, considered a natural refrigerant with very low global warming potential, as a coolant.
“Before we got involved with GreenChill, we were averaging about 2,000 lbs. of refrigerant in our system,” Stutler said. “We reduced that (amount) by about 60% to 65% with our stores that are GreenChill Gold certified. But this new CO2 design yields an even more significant reduction in HFCs.”
The new solution features a full CO2 cascade system for both low-temperature and medium-temperature applications (the Second Nature MT2LX). It is made up of two independent refrigerant systems that share a common cascade heat exchanger. The upper-cascade system is a reduced charge HFC system that cools the CO2 in the lower-cascade.
The advantages of a cascade system include reduction in the refrigerant charge and a reduced carbon footprint. And since the HFC is confined to the primary system located in the machine room, the total refrigerant charge and the potential for leaks are both greatly reduced.
According to Stutler, it’s not easy to put a dollar value on the potential payback for the Second Nature system.
“If we had a catastrophic leak in our old system, we could have leaked 2,000 lbs. of refrigerant — multiply that by $10 per pound to recharge the system,” he said. “With today’s system, we only have the potential to leak 235 lbs. of refrigerant.”
Stutler added: “Certainly, we’re hoping to save money over the years. But how do you put a dollar amount on the value of being green, reducing your carbon footprint and improving the overall system performance?”