Pier 1 Warns of Large Drop in 3Q Sales
Fort Worth, Texas Pier 1 Imports Inc. cautioned late Monday that it expects its third-quarter same-store sales to fall as much as 18% when it reports results next month.
The chain said the nation’s sluggish economy and a substantial slowdown in discretionary spending is behind the 16% to 18% decrease in comparable sales it expects to report for the three months ending Nov. 29. The company expects a loss before interest, taxes, depreciation and amortization of $16 million to $20 million.
Credit terms tightened
Target’s credit card business took a heavy toll on the company’s overall performance in the third quarter, as operating profits in the segment declined 83% to $35 million.
As is the case with other credit card issuers, Target saw delinquency and write-offs increase during the third quarter, as national economic conditions deteriorated.
“This leads to higher than expected bad debt expense both due to write-offs within the period as well as an addition to our reserve of $100 million during the quarter to accommodate anticipated write offs in future periods,” Target cfo Doug Scovanner said.
Based on current trends, Target’s expects a write-off rate for the year around 9% and that figure is expected to increase in 2009, which is why the $100 million addition to the reserve was necessary.
“We continue to tighten all aspects of portfolio underwriting, granting fewer new accounts with lower average credit lines, aggressively reducing open credit lines on many existing accounts and pursuing more proactive collection activities,” Scovanner said.
OfficeMax to bring back ElfYourself campaign
NAPERVILLE, Ill. OfficeMax has teamed up with JibJab Media to bring its popular ElfYourself.com campaign back to the Web for a third year.
OfficeMax and JibJab, best known for online political parodies such as ‘This Land’, began conversations following the 2007 holiday season when the companies scored the number one and number two positions respectively for fastest growing sites on the Web, according to comScore. Over six weeks during the 2007 holiday season, ElfYourself received more than 193 million site visits, and more Americans were visiting ElfYourself.com ( http://www.elfyourself.com/ )than Facebook.com ( http://www.facebook.com/ ), according to Web measurement firm Quantcast.
ElfYourself enables users to create free personalized holiday eCards by uploading their photos and transforming themselves, family and friends into dancing elves. OfficeMax and JibJab have jointly enhanced the ElfYourself experience by increasing the number of elves a visitor can create, from four to five, as well as offering three new dances including a disco dance, country dance and the Charleston.
This year ElfYourself will be running on JibJab’s Starring You Technology platform that not only enables users to create personalized online videos, but also get their personalized elves printed on greeting cards and holiday gifts such as ornaments, mouse pads, coffee mugs, and playing cards. For a small fee, users can also get a downloadable version of their video that they can watch offline, burn to a DVD or watch on their mobile devices.