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Report: Department Stores Losing Their Edge With Luxury Shoppers

BY CSA STAFF

Stevens, Pa., Although Federated Department Stores continues to transition the May Department Store chain into the Macy’s brand, shoppers are turning away from traditional department stores in droves, according to the Luxury Report 2006 from Unity Marketing. Total retail sales in traditional department stores have dropped 13% in the last five years, from $96.3 billion in 2000 to $84.1 billion in 2005. Wal-Mart and other discount stores have siphoned off sales from lower-income customers, while the luxury shoppers, long the most loyal customers of department stores, are turning to other shopping destinations.

The report also revealed that Bloomingdale’s and Neiman Marcus ranked as luxury shoppers’ favorite department stores. Macy’s ranked as the No. 1 department store shopping destination, used by the largest percentage of luxury shoppers in 2005 (23%), followed by Nordstrom with 18% of luxury shoppers, then Dillard’s with 12%. Bloomingdale’s and Neiman Marcus, however, ranked 49% more popular than the average department store for luxury shoppers, and Nordstrom as 40% more popular. Even though the largest percentage of luxury consumers shopped at Macy’s, the retailer also has the largest number of stores nationwide.

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Rite Aid Rumored to Be Eying Eckerd

BY CSA STAFF

Harrisburg, Pa., According to a Credit Suisse analyst, Rite Aid Corp. could be considering a purchase of some of Jean Coutu Group Inc.’s Eckerd stores if the chain decides to divest the mid-Atlantic and southeastern U.S. units.

Analyst Edward Kelly estimates the probability of such a deal at 25%. Further deterioration of Longueuil, Quebec-based Jean Coutu’s financial situation could increase the odds, according to Kelly.

Although neither Jean Coutu or Rite Aid has responded to the speculation, Rite Aid has said it will participate in ongoing industry consolidation.

Kelly estimated that the 729 Eckerd stores could be sold for $700 to $800 million.

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Retailers Get Ready for Father’s Day

BY CSA STAFF

New York City, Major retailers are turning their attention to Father’s Day (June 18).

By expanding shopping hours and advertising earlier and more aggressively for dad’s special day, which has lagged behind Mother’s Day in the past, merchants are hoping to give the day a big sales boost.

According to the National Retail Federation’s survey of 7,000 consumers, shoppers plan to spend $9 billion on Father’s Day gifts, up from a planned $8.2 billion a year ago. Among the retailers actively promoting Father’s Day this year is Sears, Roebuck and Co. The company dispatched caroling dads who sang holiday jingles with Father’s Day themes at malls in the New York and Chicago area. It broke its Father’s Day ad campaign three weeks earlier than a year ago and is offering a special Father’s Day gift card for the first time.

Home Depot Inc. has also expanded its Father’s Day advertising beyond circular advertising this year, launching a television and on-line advertising campaign. Additionally, J.C. Penney Co. is opening its doors at 8 a.m. on June 17, an hour earlier than a year ago. This is a part of an effort to expand sales beyond ties and shirts to such items as iPod accessories and hand-held games.

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