OPERATIONS

Starbucks acquires full ownership of select stores in China

BY CSA STAFF

Seattle — Starbucks Corp. announced it has acquired full ownership of Starbucks stores in the China provinces of Guangdong, Hainan, Sichuan, Shaanxi and Hubei in an agreement with Maxim’s Caterers Ltd., the coffee company’s joint-venture partner. As a result, Starbucks said now has full control of more than half of the Starbucks retail stores in Mainland China as it looks to accelerate growth in the future.

“Full ownership of our stores in Central, South and Western China is part of our broader strategy to build China as our second home market outside of the U.S. and allows us to accelerate growth as we look to achieve our goal of having 1,500 stores across the country by 2015,” said John Culver, president, Starbucks Coffee International.

As part of the agreement, Maxim’s has acquired Starbucks’s remaining equity stake in the Hong Kong and Macau markets.

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News

Luxury leads the way in May

BY CSA STAFF

NEW YORK — A sluggish economy, cool weather and high prices at the pump tempered retail sales in May, as retailers reported mixed results for the month. Retail Metrics projected an increase of 5.1% for the 25 chains tracked, which would mark the 21st straight monthly gain from September 2009.

Retailers who turned in strong performances in May included Macy’s, with a 7.4% rise in same-store sales when a 5.6% increase was expected. The company lifted its full-year same-stores sales estimate.

"The consumer is still in slow recovery mode," said FBR Capital Markets analyst Liz Dunn. "They are being selective … and really consolidating purchases around places where they feel like there is better fashion."

The luxury segment continued to show signs of a strong recovery as both Saks and Nordstrom outdid expectations. Saks’ same-store sales climbed 20%, easily topping the consensus estimate calling for a 6.5% increase. Strong categories at Saks Fifth Avenue stores for the month included women’s designer apparel, shoes, handbags and accessories; men’s clothing, shoes and accessories; jewelry; cosmetics; and fragrances.

Nordstrom reported a 7.4% increase, better than analysts had expected.

Lower-priced department stores did not fare as well. Both JCPenney and Kohl’s turned in disappointing performances. JCPenney Co.’s same-store sales fell 1%. Analysts had forecast a 3.3%. The chain said bad weather, shifting some promotions and eliminating others weighed on its sales and traffic. Stronger categories included children’s and women’s clothing and accessories and the in-store Sephora beauty boutiques.

Kohl’s Corp.’s same-store sales rose 0.8%, compared with analysts’ forecasts for a 2.8% increase. The retailer said its best performing categories were accessories, home and children’s. The strongest regions included the Mid-Atlantic, Northeast and Southeast.

In the specialty apparel segment, Zumiez continued on its hot streak, reporting a slightly better-than-expected rise of 7.8%. The Buckle also outdid expectations, as sales increased 8.8%.

Gap’s same-store sales fell 4% in May, missing analysts’ estimates for a 1% decline. North America, sales fell the most at Banana Republic stores — a 6% decline, compared with a 4% decline at Gap and a 1% decline at Old Navy. International revenue fell 9%.

Limited, operator of the Victoria’s Secret chain, posted an increase of 6%, below the analysts’ average forecast of 7%. Wet Seal also fell short of analysts’ expectations, with a 2.9% increase.

Hot Topic said its same-store sales edged up 0.4%, as revenue dropped at its Hot Topic stores.

TJX Cos. reported a 2% increase in same-store sales, in line with its expectations.

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FINANCE

Pier 1 Q1 sales up, raises earnings forecast

BY CSA STAFF

Fort Worth, Texas — Pier 1 Imports said Thursday its same-store sales rose 10.2% in the first quarter, helped by better traffic, more purchases being made and a higher average receipt. The retailer also gave a first-quarter earnings forecast above Wall Street’s expectations.

Total revenue for the period ended May 28 climbed 10% to $335 million from $306 million.

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