Moody’s: U.S. apparel earnings to improve this back-to-school season
New York — Lower cotton costs will boost the earnings of US retail apparel companies during the coming back-to-school season, according to a report by Moody’s Investors Service.
The report, "Back to School: Lower Cotton Costs, Gas Prices Set Stage for Higher 3Q Earnings,” notes that for the third quarter overall, Moody’s expects the apparel-makers’ growth in earnings to outpace their growth in sales.
"The benefits of lower cotton costs will be evident in the second half of 2012, and this should enable apparel companies to recapture a meaningful portion of the gross margin lost last year when input costs were higher," said Scott Tuhy, a Moody’s VP and senior credit officer. "We expect to see positive operating-earnings trends starting in the back-to-school season, with those companies with meaningful sales in the children and young adult categories benefiting most, along with companies that sell cotton-intensive products."
Apparel-makers likely to benefit most include The Gap, Ascena Retail Group Inc., Hanesbrands Inc. and Levi Strauss & Co. Moody’s also expects the discounters Target Corp. and Wal-Mart Stores Inc. to benefit as consumers remain cautious and look to save.
Moody’s expects a 2% to 3% increase in third quarter sales for the apparel and specialty-apparel companies that it rates but an 8% to 10% growth in operating earnings.
In the third quarter of 2011, Moody’s-rated apparel retail companies saw their sales rise about 10% compared with third quarter 2010, but operating earnings were essentially flat, as operators were unable to pass through higher input costs, most notably cotton.
Cotton prices peaked at over $2 a pound in 2011. Since then they have fallen over 60% and cotton prices are currently trading at about 70 cents a pound.
Lower gasoline prices will also help back-to-school sales, giving consumers a few more dollars to spend on their children’s clothes, says Moody’s.
The back-to-school season, which lasts from late July to early September, is an important time for apparel retailers. August is the third largest month for sales of clothing and related products, trailing only November and December, which benefit from holiday sales.
Panasonic launches major brand awareness campaign
SECAUCUS, N.J. — Panasonic Corporation of North America has launched a new communication campaign designed to bring attention to the brand’s broad scope of products and solutions designed to meet consumer, business-to-business, and industrial needs. The campaign will also underscore Panasonic’s global commitment to becoming the electronics industry’s leader in green innovation by its 100th anniversary in 2018.
The multi-faceted campaign will showcase a series of print, on-line advertising and TV commercials featuring the theme, "Just another way we’re engineering a better world for you." The combined marketing effort, which began July 27, represents Panasonic’s highest advertising investment in a sports event in its history. At the center of the campaign are three TV commercials – 30- and 60-second spots — including an anthemic commercial highlighting the brand’s extensive range of products and solutions for consumers and business, as well as a commercial spotlighting Panasonic’s comprehensive business solutions and a Smart VIERA HDTV commercial featuring US Women’s National Soccer Team player Alex Morgan.
The anthemic commercial will spotlight both products the company is well known for, including Viera flat-panel internet and 3D-enabled TV’s, and Toughbook computers, as well as its Lithium Ion batteries to power electric and hybrid vehicles, in-flight entertainment and communications systems and energy-saving solar panel arrays at stadiums and other sports centers. It also profiles an entire planned eco-smart community called Fujisawa Sustainable Smart Town, which Panasonic is developing in Japan to demonstrate a model for sustainable living.
"Surprisingly, even today many people are not aware of the broad scope of the Panasonic products and solutions that touch literally every part of our daily lives," said Betty Noonan, VP marketing and brand management, Panasonic Corporation of North America. "Panasonic’s founder, Konosuke Matsushita, was deeply committed to contributing to society and improving people’s lives. This is where our long-time brand promise ‘Ideas for Life’ comes from. The new campaign is designed to complement and be true to that legacy by communicating Panasonic’s intention to engineer ways for people to enjoy better and more sustainable lives around the world."
Safeway, Bozeman, Mont.
Safeway has opened the first LEED for Retail certified store in the state of Montana, in the town of Bozeman. The $12 million, 58,000-sq.-ft. store is one of approximately just 200 LEED certified grocery stores in the United States.
The original project site consisted of an abandoned car dealership. The site was redesigned with pedestrian walkways, bike-friendly spaces and enhanced landscaping. The building design reflects the community’s traditional brick detailing with vertical corrugated panels and steel canopies. MulvannyG2 Architecture, Bellevue, Wash., served as design architect and architect of record.
About 97% of the construction waste associated with the project was diverted from landfills and sent to recycling plants in the area. In fact, so much of the waste stream was diverted from landfills during construction that Safeway earned exemplary performance credit through USGBC.
In addition, about 25% of the materials used to construct the new store contained recycled content, and about 50% of the building materials came from within 500 miles of Bozeman.
Safeway has two other LEED-certified stores — one in Santa Cruz, Calif., and one in Washington, D.C. It also has nine stores registered for the process.