Redcats Buys United Retail
Rochelle Park, N.J., Women’s fashion apparel retailer United Retail Group Inc. said Tuesday it would sell itself to Redcats USA, Inc., a subsidiary of Redcats Group, the world’s third-largest catalog and online group in apparel and home products operating in 28 countries, for $193.6 million. Redcats is part of France-based PPR whose holdings include Gucci Group, Yves Saint Laurent, Puma, Bottega Veneta and Stella McCartney.
United Retail, which operates 483 Avenue stores, said the deal has been approved by the boards of directors at both companies and chairman and chief executive Raphael Benaroya has signed an agreement to tender all of his shares to Redcats USA.
The retailer said Benaroya and vice chairman and chief administrative officer George R. Remeta will remain at the company for at least one year after the deal is completed. The company said the acquisition is expected to close by the end of 2007.
In other news, United Retail Group said Tuesday its second-quarter profit fell 56% due to increased promotions and slightly lower same-store sales, but the results still surpassed analysts’ estimates.
Earnings for the period ended Aug. 4 dropped to $2.2 million from $5 million a year ago. Quarterly revenue climbed 1% to $122.3 million vs. $120.9 million in the previous year, meeting Wall Street’s expectations. Same-store sales dipped 1%.
Eco-friendly clothes gain steam
LAS VEGAS —To ignore the environmental movement means suicide for businesses, especially in the upcoming years. According to Bureau Veritas, over 50% of top executives identify risk to reputation as the single biggest risk facing organizations today.
Not only did the government put restrictions on several hazardous substances used in the production of apparel and footwear, but non-governmental organizations are saturating the market with Green information and changing the competitive marketplace.
Levi’s introduced recycled cotton jeans in 1994, but the production faired poorly because customers were not interested in environmentally friendly apparel. Today, the Levi’s eco line has developed a fan base that appeals to a range of consumers, thanks to the $60 to $250 price range. Times are changing and retailers must either get on the bandwagon or get left behind.
Companies like Levi’s, Nike and Patagonia are prime examples of environmentally conscious businesses. Consumers are increasingly demanding products with a health angle, meaning that they want apparel and footwear that protects them from harmful chemicals. The companies have ties to the Bureau Veritas’ Restricted Substance Program, which helps brands, retailers and manufacturers identify hazardous substances and, in turn, improve social, economical and environmental issues.
The leader in the group, Patagonia, has environmental preservation embedded in its mission statement. The founders of the company, nature lovers themselves, centered it on catering to customers who wanted to be surrounded by nature. They ensured the products did not harm the very thing they loved.
Some may say that environmental consciousness is in Patagonia’s DNA. As a result, the company takes risks to make sure their values continue. “We trust that if we make a decision it will work out,” said Randy Harward, director of fabric development, quality and environmental research and development. “Going in this direction will take us to higher levels with our customers.”
The future of sustainability is not precise, but it will certainly grow with vigor. The phrase ‘carbon neutral’ has been buzzing around, which alludes to manufacturers investing in alternative energy projects to offset their own carbon dioxide emissions created as a result of production, including fabrication of textiles and shipping methods. Live it Green has created the Carbon Neutral Clothing trademark that will be exclusively distributed to manufacturers who follow this practice.
Mitigating the negative effects is not the same as minimizing the environmental damage created, but the Institute of Business Ethics reported that public commitment to ethics increases profits by 18% on average.
COUGHLIN MAY GET HARSHER SENTENCE
BENTONVILLE, ARK. —Former Wal-Mart vice chairman Thomas Coughlin may receive a harsher sentence from the U.S.Court of Appeals for the Eighth Circuit. His sentence of 27 months of home detention and 33 months of additional probation for five counts of wire fraud and one count of filing false tax returns was deemed too lenient. Coughlin spent 28 years at Wal-Mart, eventually becoming chairman. After his retirement in January 2005, Wal-Mart accused him of using company money and gift cards to finance approximately $500,000 in personal expenses.
TWEETER NAMES GRANOFF AS NEW CEO
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HOME DEPOT AGREES TO LOWER HD PRICE
WAL-MART IMPLEMENTS TOY SAFETY PROGRAM
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SEARS OPENS NEW DC IN GEORGIA
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