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Modell’s on Track to Save

BY Marianne Wilson

Modell’s Sporting Goods has reduced its total energy use since rolling out a heating, ventilation and air-conditioning (HVAC) monitoring and control system to its 133 store locations. The system has resulted in significant savings throughout the sporting-goods chain while helping to preserve natural resources.

The technology, eMAC from Lime Energy’s Maximum Performance Group (MPG), is a monitoring, communication and control system designed for natural-gas and electric-heat HVAC systems. The eMAC units were installed on Modell’s existing equipment.

“On average, there are anywhere from two to eight [eMACs] per store, depending on the individual location,” said Dave Fletcher, executive VP, Modell’s, New York City. “We use the technology primarily to monitor the performance of our mechanical units and to set temperatures at a certain level.”

The total dollars saved from the project are expected to exceed $840,000 annually based on “energy cost avoidance” at the average price of electricity in the region (12¢ per kilowatt hour), according to calculations by MPG. The installation, which included a total of 578 eMAC units, has resulted in an energy reduction of approximately 7.4 million kilowatt hours per year, or an estimated 17% energy savings.

There are other benefits, as well. MPG estimates the energy savings translate into the removal of 4,700 tons of carbon-dioxide emissions, believed to be a key contributor to global warming.

“The eMAC technology has been very helpful to us in our operations by cutting our kilowatt-hours usage and maintaining very comfortable shopping environments,” Fletcher said. “And by helping us diagnose problems or potential problems, it has helped us reduce our cost of repairs.”

Fletcher attributed the reduced repair cost to the monitoring done by the MPG group and the sophistication of the system.

“MPG does all our monitoring,” he added.

The eMac technology attaches to the existing HVAC units and uses wireless-control capabilities to access control software developed and operated by MPG. It is connected between the existing thermostat and the HVAC unit and monitors some 140 points of system operation. The points are captured in real time and broadcast over a wireless-paging network to the MPG server, where the data is transformed for Web access.

The project began as a test in a Modell’s store in the Philadelphia area. On the heels of significant electrical savings, the retailer expanded the trial to another 10 locations, whose results were also equally successful. The company then expanded the installation program to include 27 stores as part of a project involving utility incentive funding from the New York State Energy Research and Development Authority. In 2006, Modell’s announced the chainwide rollout of the technology.

“The savings were so good we were able to internally justify the rate of return we need to make a mass purchase,” Fletcher explained. “So we approved installation of the system in all of our existing stores as well as in all new construction. We’re also looking at it for our distribution center.”

Tax Incentive EXTENDED

Congress has extended the “Commercial Building Tax Deduction” for energy-efficient commercial buildings an additional year, to Dec. 31, 2008. The tax deduction, part of the Energy Policy Act of 2005, is for expenses incurred for energy-efficient building expenditures made by a building owner.

The deduction is limited to $1.80 per square foot of the property, with allowances for partial deductions for improvements in interior lighting, HVAC and hot-water systems, and building-envelope systems.

To learn more about the tax deduction, visit www.efficientbuildings.org.

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Sears comps hurt by energy costs

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $216 million, or $1.40 per diluted share, for the first quarter ended May 5, compared with net income of $180 million, or $1.14 per diluted share, for the first quarter ended April 29, 2006.

“In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market,” said Aylwin Lewis, Sears Holdings’ ceo and president. “However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers’ needs and allow us to generate a more reasonable level of profitability even in the face of such challenges.”

Domestic comparable-store sales declined 3.9% during the first quarter of fiscal 2007. Sears domestic comparable-store sales declined 3.4% for the quarter, while Kmart comparable-store sales declined 4.4%. We believe these declines reflect both increased competition and the impact of external factors such as rising energy costs, a slower housing market and poor weather conditions during the latter part of the first quarter of fiscal 2007. Kmart experienced lower transaction volumes across most merchandise categories, most notably within home goods, health and beauty products, and food and consumables. Similarly, Sears domestic recorded comparable-store sales declines across most merchandise categories and formats, with a notable decline in home appliance sales, which we believe reflects both a slower U.S. housing market and the impact of increased competition.

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Big Lots 1Q net sales up 3.4%

BY CSA STAFF

COLUMBUS, Ohio Big Lots today reported first quarter fiscal 2007 income from continuing operations of $29 million, or 26 cents per diluted share, compared to income from continuing operations of $14.5 million, or 13 cents per diluted share, in the first quarter of fiscal 2006. Including the impact of discontinued operations, first quarter fiscal 2007 net income totaled $28.8 million, or 26 cents per diluted share, compared to $13.7 million, or 12 cents per diluted share, in the prior year.

Net sales for the first quarter ended May 5, increased 3.4% to $1.13 billion, compared to $1.1 billion for the same period in fiscal 2006. Comparable-store sales for stores open at least two years at the beginning of the fiscal year increased 4.9% for the quarter.

For the second quarter 2007, the company expects income from continuing operations of 7 cents to 10 cents per share versus income from continuing operations of 4 cents per share last year. Comparable-store sales are expected to increase 2% to 4%, compared to a 5.2% comparable-store sales increase recorded last year.

For fiscal 2007, the company expects income from continuing operations of $1.25 to $1.30 per share versus income from continuing operations of $1.01 per share last year.

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