The Song Remains the Same
When it comes to loss prevention, the more things change, the more they remain the same. That’s one of the insights gleaned from a new study, Winning Trends in Loss Prevention: Benchmark Study 2008, by Retail Systems Research (RSR). Asked to identify the top sources of shrink, survey respondents overall focused on perennial concerns: employee theft of merchandise (70%), customer theft of merchandise (53%) and employee theft of cash (45%).
Organized-crime rings were found to be a growing concern of large retailers (defined as those with revenues of more than $1 billion). Forty-one percent of these respondents highlighted it as one of their biggest sources of shrink (vs. 21% of overall retailers). But they, too, believe employees are a far bigger problem, with 74% identifying them as one of the top three sources of shrink.
“These findings raise a real issue for retailers: How do you create a customer-centric experience when your core belief is that your employees—who are your company’s face to the world—and customers are stealing from you? There are two opposing forces at work here,” said Paula Rosenblum, managing director, RSR, and co-author of the report.
Despite the persistent thread of employee mistrust among survey respondents, the report recommends that retailers work on making in-store employees stakeholders in the business, and educate them on the cost of shrink and how it impacts them. It noted that even as these employees remain a primary source of shrink, they also are a first line of defense against it.
“If you can’t make them part of the solution, take a strong position on deterrence,” Rosenblum said. “Make sure employees know that you have tools in place that can help you catch thieves, from within and outside the organization.”
To obtain a copy of the full report, visit www.retailsystemsresearch.com/_document/summary/398 .
Lampert, the Eli Manning of retail?
HOFFMAN ESTATES, Ill. The New York Giants triumph over the highly favored New England Patriots in the Super Bowl earlier this month, has become an example of coming from the bottom to win it all. Sears Holdings chairman Edward Lampert is one of the latest to use the Giants win, even going as far to compare himself, and the leaders of his company, to quarterback Eli Manning.
The Giants analogy, and Eli Manning comparison, is applied mainly to the company’s Kmart division. In a letter to investors, posted on the Sears Holdings investor relations Web site, Lampert said during Kmart’s bankruptcy in 2002, the unit was “like an undrafted free agent who nobody thought had a chance to play in the big leagues.” Lampert went on to say, “Like Eli Manning, we know what it’s like to be underestimated and questioned, but we intend to keep working on our game to achieve our full potential.”
Sears Holdings reported net income of $426 million, or $3.17 per diluted share, for the fourth quarter ended Feb. 2, compared with net income of $811 million, or $5.27 per diluted share, for the fourth quarter ended Feb. 3, 2007. For the fiscal year ended Feb. 2, 2008, net income was $826 million, or $5.70 per diluted share compared with net income of $1.5 billion, or $9.58 per diluted share, for the fiscal year ended Feb. 3, 2007.
Circuit City investor seeks to replace board
RICHMOND, Va. Circuit City Stores today acknowledged that it has received two proposals from shareholder Wattles Capital Management regarding its board of directors. Wattles holds approximately 6.5% of the outstanding shares of the company’s common stock.
Circuit City reported that Wattles proposed the idea of replacing the company’s Circuit City 12-member board of directors with its own nominees. Circuit City said its board of directors will review carefully the shareholder’s proposals and the qualifications of the nominees in accordance with its fiduciary duties, mindful that the proposal would give the shareholder absolute control of the entire board, which would be disproportionate to its relative ownership of the company’s shares.