Spotlight on Savings
Achainwide lighting retrofit is expected to significantly reduce energy consumption at Mervyns. The new lighting design is projected to provide significant cost savings (the energy savings alone are estimated at 28,995,471 kwh per year for a projected savings of $4.3 million annually) while advancing the department store retailer’s goals of environmental sustainability.
“Recognizing the important role we play in the community, we believe it’s our responsibility to ensure we’re operating as efficiently and productively as possible,” said Rob Lucacher, environmental and energy manager, Mervyns, Hayward, Calif., which operates 176 stores in the West and Southwest.
In undertaking the project, Mervyns also was looking to enhance the shopping experience by improving the quality of its in-store lighting. The retrofit has proved a major success in that regard, creating a friendlier environment for customers and associates alike, according to Lucacher.
“The impact has been tremendous,” he added. “Our stores are brighter and more cheerful. Everyone who comes in notices the difference.”
Mervyns partnered with Sylvania Lighting Services (SLS), a subsidiary of Osram Sylvania, on the retrofit. To start the project, SLS reviewed the existing lighting system in place at Mervyns and then made recommendations for a system that would better suit the range of applications within the stores. SLS collaborated with Studio Three Twenty One, a lighting design firm with expertise in energy-efficient lighting.
The design utilizes high-performance, long-life T8 fluorescent lamps (Sylvania Octron FO32/XPS) and high-efficiency electronic ballasts (Sylvania Quicktronic QHE). The equipment is being installed by SLS to standardize lamp types throughout all facilities. Existing four-lamp fixtures are being de-lamped to save energy while maintaining light output and distribution using new reflectors and louvers.
In addition, existing fixtures are being cleaned to restore reflectivity, and light-control sensors (from The WattStopper, Santa Clara, Calif.) are being installed to turn lights out when not in use. The equipment upgrades and other improvements ensure maximum efficiency for what is typically one of the largest users of electricity in a retail facility.
The initial investment for the project was $11.5 million. But with an anticipated annual savings of approximately $6 million, Mervyns can expect a simple payback in less than two years. Along with the projected $4.3 million in energy savings, utility rebates will save an estimated $1.2 million.
In addition, as a result of new equipment and SLS lamp and ballast warranties, the retailer will benefit from a projected annual maintenance savings of $1.7 million. Finally, the reduced energy usage will allow Mervyns to take advantage of the Energy Policy Act of 2005 tax benefit for an estimated tax savings of more than $2.9 million.
“This was a project without any downside,” Lucacher said. “There was something for everyone—for every department—to revel in. From the energy cost savings to the improved store environment to the reduced repair and maintenance schedule, it was a win-win project where everyone comes out with something.”
The retrofit, which began in fall 2006, is expected to be finished by yearend. Upon completion, the environmental benefits will be significant. The new system requires 73,200 fewer lamps to light the stores, resulting in more than 2 million linear ft. of lamps kept out of landfills. It also will eliminate 65 million lbs. of carbon dioxide and 1.8 million milligrams of airborne mercury emissions.
“We have launched a green initiative and will be looking across the organization and supply chain to see how we can improve our environmental performance and business at the same time.”
Sears Holdings ceo unhappy with 2Q
HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $176 million, or $1.17 per diluted share, for the second quarter ended Aug. 4, compared with net income of $294 million, or $1.88 per diluted share, for the second quarter ended July 29, 2006. The company attributed the decline in its second quarter results from the same quarter last year to lower operating results at both Sears Domestic and Kmart, which were partially offset by improved operating results at Sears Canada.
“We are disappointed with our second quarter results. Our gross margins came under pressure from sales declines and increased promotional activity, and as a result, our net income was significantly below last year and our expectations,” said Aylwin Lewis, Sears Holdings’ ceo and president.
Sears Domestic’s comparable-store sales declined 4.3% for the quarter, while Kmart’s comparable-store sales declined 3.8%. Total domestic comparable-store sales declined 4.1%. The company reported lower sales across most merchandise categories at both Kmart and Sears Domestic, partially offset by increased sales of women’s apparel at both Kmart and Sears Domestic, as well as within consumer electronics and footwear at Sears Domestic. For the quarter, total revenues declined $0.6 billion to $12.2 billion in fiscal 2007, as compared to $12.8 billion for the second quarter of fiscal 2006.
Lane Bryant pres. joins Christopher & Banks
MINNEAPOLIS Former Lane Bryant president Lorna Nagler will join Christopher & Banks as president and ceo effective Aug. 31. She will replace Matthew Dillon, who resigned from his position as president and ceo and as a member of the board of directors today. Nagler has also been elected as a member of Christopher & Banks’ board of directors effective Aug. 31.
Nagler most recently served as president of Lane Bryant, a division of Charming Shoppes. Before joining Charming Shoppes in April, 2002, Nagler served as a senior vp and general merchandising manager for apparel and jewelry at Kmart Corp.