PriceSmart Closes Chapter on Restatement
San Diego, PriceSmart has put an end to litigation related to its restatement of financial reports in late 2003. PriceSmart will pay $2.35 million to settle a shareholder lawsuit in federal court in California. The San Diego-based retailer said that about 80% of the settlement payment will be funded by the company’s insurance carrier. The retailer said the settlement does not constitute an “admission of liability” on the part of the company or its former officers. PriceSmart, a warehouse club operator, previously settled a separate federal court securities lawsuit and a state court shareholder derivative lawsuit. The company said the third settlement brings the litigation to a conclusion.
Wal-Mart Canada Store to Vote on Unionization
Windsor, Ontario, Wal-Mart workers in Windsor, Ontario, will soon vote on whether to be represented by a union. The United Food and Commercial Workers Canada (UFCW) today said that it filed an application for certification with the Ontario Labor Relations Board, and an employee vote on unionization is expected to happen as early as next week.
When a Wal-Mart store in Jonquiere, Quebec, unionized early last month, the company closed the store, arguing that union demands were threatening the store’s business. Shortly thereafter, the Quebec Labour Relations Commission told Wal-Mart Canada to stop intimidating employees who wished to unionize. The UFCW has successfully unionized a Wal-Mart branch in Saint-Hyacinthe, Quebec, and said it has 12 other applications for certification pending with the labor board.
May-Federated Merger Could Stress Vendors
New York City, The May-Federated merger, which would create a $30 billion retailer, may put stress on department store vendors, according to analysts. Consolidation may cause store closings and reduce the number of outlets for apparel makers’ merchandise. Additionally, the combined force of May and Federated may leave vendors with less price negotiation leverage.
Fashionable, premium-priced vendors such as Liz Claiborne and Polo Ralph Lauren will likely fare best in the altered department store environment, according to Merrill Lynch analysts. Manufacturer Jones Apparel, which includes Jones New York, Anne Klein, Evan-Picone and Kasper, may be left vulnerable since about one-quarter of its revenue comes from sales to May or Federated stores. Analysts say that manufacturers with distribution channels outside the department store sector will be left less vulnerable to the merger.