Orchard Supply swings to loss in Q2; on track with opening/remodeling program
San Jose, Calif. — Orchard Supply Hardware Stores Corp. reported Tuesday a loss of $26.7 million for the quarter ended July 28, compared with net income of $3.9 million in the year-ago period. The results include write-offs and charges related to real estate sale-leaseback transactions.
Sales dipped to $194.1 million from $196.4 million, and same-store sales edged up 0.9%.
According to Mark Baker, president and CEO, Orchard Supply is on track to open three stores in fiscal 2012, as well as remodel six. He expects to have 12 new and remodeled locations operating under a new format by the end of fiscal 2012.
Politics and the Holidays
With the political conventions coming to an end, it’s clear now that election season is in full swing. And, while I don’t pretend to know what the long-term implications of an Obama re-election or a Romney win would mean for our economy or our country, I do think that what happens on Nov. 6 will almost certainly have an impact on our industry — particularly, shopper sentiment and ultimately holiday sales.
Just to be clear, before I continue with my thoughts on the subject, I’m not endorsing any one candidate over another. I’m simply making a prediction about how the election will likely affect consumer confidence, which will, in turn, shape the way retailers plan for the holidays.
Based on what I know about consumers and what triggers their confidence levels, I believe that the election of someone new (particularly someone who is perceived by many as having a strong business background and a willingness to take some new and concrete steps to boost the economy) has the potential to lead to a modest but measurable bump in consumer confidence — ultimately, boosting spending for the last month of the holiday shopping season. Even though the holiday shopping season will be half over by the time we know the election results, the outcome will likely have an impact on the intensity of a reaction at the register.
I’m certainly not saying that an increase in consumer confidence/spending would be based on anything substantive. We all know that perception is reality when it comes to such things. And, let’s face it, no matter what kind of election results we see, the job market isn’t going to change overnight, and the housing market isn’t going to magically take off. But, human nature is fairly predictable. And with polls showing that there is a good deal of economic malaise/concern regarding a continuation of an economy that is essentially treading water, the notion that a change in leadership might translate into higher consumer confidence doesn’t seem too far-fetched to me.
So what should retailers be thinking about? They need to absolutely be thinking about the political ramifications on their bottom lines, and how they might respond depending on who wins the election. I’m guessing that retailers will gauge the post-election mood, assess the early returns from the first part of the holiday shopping season and react accordingly. Where political fallout is likely to have the biggest impact is with regard to discounts: an Obama win would likely lead to deeper discounts in an attempt to counteract a potential dip in confidence and spur holiday spending; while retailers might respond to a Romney victory by limiting discounts in the expectation that higher consumer confidence will lead to higher sales volumes, making those discounts unnecessary. Again, I think because of the length of the shopping season these days, we won’t necessarily see a big change in spending patterns (early shoppers will still shop early). But, if there is a spike, it will be in the second half of November and on through December.
Another area where the election will likely impact our industry is in 2013-2014 expansion plans. Again, without the support of consumer confidence and the expectation that the economy will not just bump along as it has, but actually get a boost, I think we could see some retailers pulling back their plans for opening more stores. The holidays are always a good indicator for the year ahead.
Whether you lean left, right or somewhere in between, there’s no denying this is an important election for our industry.
What do you think? Please make a public comment below or feel free to e-mail me privately at [email protected].
Click here for past columns by Jeff Green.
Nicole Richie collection debuts at Macy’s
NEW YORK — Macy’s on Sept. 12 will debut a new fashion line from Nicole Richie. The Nicole Richie for Impulse collection will include 1960s and 1970s influenced silhouettes, prints and fabrications and be sold at approximately 100 Macy’s stores and on Macys.com/impulse.For the first time, Macy’s Facebook fans will be the very first to shop the collection at facebook.com/macys before it hits stores Wednesday.
“Macy’s is an iconic American retailer and I have been thrilled by the opportunity to partner with them on this limited collection,” said Richie. “Each item is a nod to the modern American woman whose fashion is always evolving. By mixing prints and fabrics and playing with proportions, my capsule allows the Macy’s ‘Impulse’ customer to experiment with her personal style in an effortless and affordable way.”
Ranging in price from $39 to $129, “Nicole Richie for Impulse” offers an eclectic mix of prints, colors and silhouettes that speak to the fashion-forward customer who is looking for pieces that transition easily from day to night.