Report: Consumer Anxiety Up in 2008
Charleston, S.C. About 24.5% of American consumers postponed a major purchase this April, up from 22.9% last year, citing different concerns from those noted in the previous year period, according to a Consumer Mind Reader survey conducted by America’s Research Group (ARG). The report cited major ticket items as those above $500.
About 23.5% of those who postponed major purchases in April 2008 said they just didn’t want to spend the money, while only 31.4% cited the same reason in 2007. Only 17% said high gas prices deterred spending money on big-ticket items in 2007, while 26.5% cited high gas prices in 2008.
Zero percent of those holding off on major purchases in 2007 said they were waiting for a tax refund in 2007, while 26% cited tax refund as a reason for postponing purchases. And although 9.7% of those waiting to make purchases cited credit-card debt in 2008, zero percent cited that reason in 2007.
In addition, only 5.2% in April 2007 worried about job security, while 11.2% expressed concern in 2008.
Meanwhile, consumers in 2007 said that big-ticket items cost more than what they wanted to spend (15.3%), while some couldn’t find what they wanted (11.4%) and others didn’t have the time to shop (11.4%). However, in 2008, 0% cited any of those reasons.
Earnings to face extra scrutiny
Look for first-quarter financial results due out tomorrow from Target to be scrutinized even more closely than normal, as undecided investors in the company’s proxy contest get a new set of numbers on which to base their vote.
Swing voters may be disappointed, however, as the company already revealed it would beat analysts’ estimates of earnings per share of 52 cents that were in place at the time the company reported a slight uptick in April same-store sales. Analysts’ now project the company will earn 59 cents a share. The company’s top line challenges are well documented, as such discretionary categories as home and apparel remain under pressure, and monthly results for the quarter have already been reported. Improvements in profitability therefore will come largely as a result of expense control. That’s not as good as driving profits through sales, but it could be enough to persuade swing voters to side with the company’s existing slate of directors.
Court approves sale of Sharper Image
SAN FRANCISCO The United States Bankruptcy Court for the District of Delaware has approved the sale of Sharper Image. The court agreed to allow the company to sell all or part of its assets at an auction to be held on May 28.
In connection with those procedures, the court also authorized the company’s entry into an asset purchase agreement and an agency agreement, each dated May 13, with a joint venture of Gordon Brothers Retail Partners, GB Brands, Hilco Merchant Resources, and Hilco Consumer Capital. Hilco/GB Joint Venture will serve as a stalking horse bidder for the purposes of the auction.
On April 24, Sharper Image reported that it has decided to pursue a sale of its business and assets pursuant to the provisions of the bankruptcy code and will solicit indications of interest from potential acquirers.