REAL ESTATE

Nordstrom Rack to open in Bakersfield, Calif.

BY Dan Berthiaume

Seattle — Nordstrom announced plans to open at a Nordstrom Rack at The Shops at River Walk in Bakersfield, Calif. The approximately 35,000-sq-ft. store is scheduled to open in spring 2015.

The new Nordstrom Rack will be the company’s first location in Bakersfield.

"We have a lot of stores in California, but until now we haven’t had the opportunity to serve customers in Bakersfield," said Geevy Thomas, president of Nordstrom Rack. "This additional location will make it more convenient for customers who have been driving over 100 miles to shop with us. We look forward to bringing them a local store that will offer many of the same great brands we carry at Nordstrom but at significant savings."

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FINANCE

CVS to pay $20 million to settle SEC charges

BY Dan Berthiaume

Woonsocket, R.I. — CVS Caremark Corp. agreed to pay $20 million to settle U.S. Securities and Exchange Commission charges that it misled investors in 2009 during a debt offering and by accounting improperly for an acquisition.

The SEC said CVS failed to disclose while marketing $1.5 billion of bonds in September 2009 having recently lost significant Medicare and contract revenue streams in its pharmacy benefits manager business.

After CVS disclosed the problems on November 5, 2009, the company’s share price fell 20%. The company further misled investors by manipulating its "retention rate," thereby inflating its ability to retain business, according to the SEC.

CVS was also accused of having in November 2009 manipulated accounting for its October 2008 purchase of Longs Drug Stores Corp. The SEC said the changes improperly boosted profit by as much as 11.7 cents per share for the third quarter of 2009, enabling CVS to exceed rather than miss analyst forecasts.

CVS did not admit or deny wrongdoing in agreeing to settle, and on Tuesday said it is not restating any financial results.

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FINANCE

NRF: Patent ‘trolls’ must be addressed

BY Dan Berthiaume

Washington, D.C. – In a statement submitted to the House Energy and Commerce Subcommittee on April 8, the National Retail Federation (NRF) urged Congress to address what it sees as an increasing threat to retailers: patent trolls. Patent trolls are entities that purchase overly-broad patents with the sole intent of suing retailers and other end-users of technology that allegedly infringe on those patents.

French’s comments came in a statement submitted to the House Energy and Commerce Subcommittee, which is examining patent trolls’ use of intentionally-vague demand letters — the initial letters legitimate businesses receive accusing them of patent infringement. NRF described how it sees patent trolls as abusing the patent and legal systems, hampering technological innovation, crowding the courts, inhibiting job creation, and driving up costs for retailers and consumers alike.

“Trolls’ claims not only affect e-commerce applications and the everyday use of technology, but also…the storefront operations of traditional brick-and-mortar retailers,” NRF senior VP David French said. “Some real world examples … cover point-of-sale and inventory control equipment, including; scanning barcodes, printing receipts, the sale of gift cards, and the connection of…a computer or printer to an Ethernet network.

“Trolls target retailers because…they are more numerous than manufacturers and suppliers, and therefore are more profitable to the trolls,” French said. “Trolls also know that retailers have less technological expertise to defend the allegedly infringing products [and] operate on thin profit margins and do not have the resources to fight back.”

NRF data shows that retailers often settle trolls’ claims rather than challenge them in court due to the fact that the average case takes about 18 months and costs roughly $2 million to adjudicate. In response to the growing patent troll problem, which the NRF estimates costs the economy $30 billion a year, NRF supports legislative and regulatory proposals aimed at requiring greater transparency and specificity from the trolls, and stopping the trolls’ abusive and costly behavior before the suit ever reaches a court.

French said NRF supports legislative proposals to have the Federal Trade Commission look into patent troll demand letters under its current authority to investigate unfair and deceptive trade practices.

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