Report: Retailers Expected to Post Scant May Sales
Chicago U.S. retailers are expected to post lackluster May sales this week, as consumers spent tax rebate checks on gas and food or used them to reduce debt, rather than buying discretionary items like clothes and jewelry, according to a Reuters report.
Apparel retailers are expected to see sales at stores open at least a year fall 3.1% and department stores are expected to see same-store sales fall 4%, continuing a trend that has been in place much of the past year.
With consumers hammered by soaring food prices, gasoline near $4 a gallon or more, and the continued slump in the U.S. housing market, weak retail sales show no sign of abating.
Consumers began receiving tax rebates in late April as part of the $152 billion economic stimulus package passed by Congress. But it does not appear that those checks have done much so far to stimulate sales at most retailers, according to Reuters.
In addition, May was the coldest since 2002 and the 10th-coldest since 1961, which didn’t help matters, according to preliminary data from Planalytics, Wayne, Pa
Even shares of Wal-Mart Stores Inc., which has attracted customers with lower prices on consumer staples, are flat. When most retailers share their sales on Thursday, Wal-Mart and other discounters are expected to be better than the industry as a whole because they cater to cash-strapped consumers, the report said.
Discounters on average are expected to post a 2.1% same-stores sales increase, with Wal-Mart up 1.5%, according to Thomson Reuters. BJ’s Wholesale Club Inc. is expected to top discounters with an 8.1% increase, while Target Corp. is expected to have a 0.1% decrease, according to Thomson Reuters data.
Staples to offer no-return DVD rentals
FRAMINGHAM, Mass. Staples, according to reports, is offering a new service that allows customers to rent DVDs at its stores without having to return them.
Starting in mid June, customers will be able to rent a limited selection of titles, which are on Flexplay DVDs that automatically erases the content after 48 hourse from opening the inner package. Customers can recycle the DVDs with other plastics.
Linens ‘N Things approved for DIP financing
CLIFTON, N.J. Linens ‘N Things reported that the United States Bankruptcy Court for the District of Delaware entered a final order approving the company’s $700 million Debtor-in-Possession (DIP) financing by General Electric Capital. The approval, granted during a Wednesday, May 28 hearing before Judge Christopher Sontchi, provides LNT with access to the capital necessary to meet its ongoing obligations during the restructuring process.
“We are pleased with the Court’s approval of our financing as it is an important step in our restructuring efforts,” said Michael Gries, chief restructuring officer and interim ceo. “It reinforces our commitment to the vendor community and to providing our guests with the assortment of merchandise and quality of service they have come to expect from Linens ‘N Things.”
Linens ‘N Things filed to reorganize under Chapter 11 on May 2 in the United States Bankruptcy Court for the District of Delaware. Interim approval of the DIP financing was granted on the same day.