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Retail CFOs expect 3% increase in total 2011 sales, M&A activity rises

BY CSA STAFF

Amid economic uncertainty and low consumer confidence levels, retail CFOs are expecting a 3% increase in total 2011 sales, according to a recent survey by BDO USA. While the number reflects the study’s most optimistic sales forecast since 2007, it is down from the 4.7% sales increase reported by the Commerce Department in 2010.

The report, the fifth-annual BDO Retail Compass Survey of CFOs, also reveals that appetite for M&A deals is on the rise. Nearly all (96%) of the CFOs expect such activity to increase or remain steady in the next year. Most CFOs (66%) expect M&A activity to take place primarily in the United States, followed by the Asia-Pacific region (18%) and Europe (16%). However, the CFOs in the top 100 largest retailers who were included in the sample have greater expectations for the international market. Seventy-five percent of CFOs in the Top 100 expect Europe to see the majority of M&A activity.

Only 11% of the CFOs expect to see an economic turnaround in the next year, up slightly from 2010 (9%). Thirty-eight percent say improved consumer confidence will be most important factor for economic recovery, and another 36% cite lower unemployment as the linchpin.

“Retailers may not anticipate a full recovery in the near future, but we’re not seeing gloom and doom in sales expectations,” said Doug Hart, partner in the retail and consumer product practice at BDO USA. “Despite low confidence levels, macroeconomic conditions are not weighing on the consumer’s wallet as much as expected, and CFOs anticipate moderate spending levels to continue through the holiday season.”

In other survey findings:

  • Retailers are moderately optimistic for sales in the second half of 2011. A majority (51%) expect sales to increase during this period, up from 44% in 2010. Overall, retailers project a 3.5t% increase in comparable store sales for the second half of 2011. For all of 2011, retail CFOs forecast a 2.3% increase in comparable store sales.
  • Although private equity deals have dominated acquisition activity, CFOs are predicting an increase in strategic buyouts this year. The CFOs are split on whether upcoming M&A activity will be primarily driven by strategic buyers (52%) or financial buyers (48%). On average, CFOs say they would expect to see an EBITDA (earnings before income and tax, depreciation and amortization) multiple of 6.5 for an acquisition in the retail and consumer product space.

The BDO survey examined the opinions of 100 CFOs at leading retailers located throughout the country. The retailers were among the largest in the country, including 10% of the top 100 based on annual sales revenue. The survey was conducted in August and September 2011.

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P.Lyons says:
May-13-2013 03:50 pm

This is good news indeed.. It
This is good news indeed.. It will be nice to feel the ripples here in Ireland where we have been pulverized of late.. ____________________________________________________________________ Carpet Cleaning Dublin

P.Lyons says:
May-13-2013 03:50 pm

This is good news indeed.. It will be nice to feel the ripples here in Ireland where we have been pulverized of late.. ____________________________________________________________________ Carpet Cleaning Dublin

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May-05-2013 04:51 am

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C.Sandoval says:
May-05-2013 04:51 am

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MSLO names SVP communications

BY CSA STAFF

NEW YORK — Martha Stewart Living Omnimedia nnounced that Jeanne Meyer has joined the company as SVP communications. In this position, she will work closely with the senior management team to lead, develop and execute a comprehensive corporate communications strategy for the company’s media and merchandising businesses. She will report to president and COO Lisa Gersh.

Meyer joins MSLO from Current Media where she served as EVP corporate communications. Prior to that, she was at major music company EMI, where she was SVP corporate communications for the Americas from 2002 until 2010. Meyer also oversaw communications efforts at Toysrus.com and at pioneering Internet TV company Pseudo Programs. She has worked for a range of media, entertainment, digital and consumer product companies as a SVP at strategic communications firm Robinson Lerer & Montgomery, and as SVP/general manager at Dan Klores Communications. She also held communications roles at Lever Brothers Company and at Dorf & Stanton Communications (now part of Weber Shandwick).

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OPERATIONS

Macy’s to increase holiday hires by 4%

BY Staff Writer

Cincinnati — Macy’s said it plans to hire approximately 78,000 seasonal associates for its Macy’s and Bloomingdale’s stores, call centers, distribution centers and online fulfillment centers nationwide for the 2011 holiday season. The total is up about 4% from the approximately 75,000 seasonal associates the chain hired last year.

“We expect additional hiring this year given the continued sales growth in our business – both in-store and online,” said Terry J. Lundgren, Macy’s, chairman, president and CEO.

The chain estimated that same-store sales for the final two quarters of its fiscal year, which include the holiday period, would rise 4% to 4.5% over last year.

Kohl’s and J.C. Penney are planning to hire about the same number of seasonal workers as last year.

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