OPERATIONS

Study: Amazon ranks as America’s favorite retailer

BY Marianne Wilson

New York – Amazon.com, Trader Joe’s and Costco Wholesale Corp. came out on top with consumers in a survey by global strategy firm OC&C Strategy Consultants, Boston. Rounding out the top five were Zappos and iTunes.

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Respondents in the study, the OC&C Proposition Strength Index, rated retailers they had shopped at on the overall strength of their offer, and also on the following individual elements: low prices; value for money; fashionability; quality of products; wide choice of products; products that are suited to me; service; trust, and store look & feel (or, if online only, quality of website).

Amazon not only ranked first in the Index overall, but also came out on top in the following individual elements: value for money; wide choice of products; products that are suited to me,and online shopping. The online retail powerhouse was rated number one across all consumers, regardless of gender, household income or price sensitivity.

In addition, Amazon topped the index in the United Kingdom, Germany and France, and ranked in the top 10 in China and the Netherlands.

When it comes to low prices, Dollar Tree came out on top, followed by Aldi and Ross Dress for Less.

In fashionability, the leader was Zappos, followed by Zara and Forever 21.

In store look & feel, Williams Sonoma was rated highest, followed by Crate & Barrel and Nordstrom.

Williams-Sonoma also claimed the top spot in quality of products, followed by Whole Foods Market and Apple Store.

Trader Joe’s was the leader in service, followed by Zappos and Bath & Body Works. Zappos ranked as the most trusted retailer, followed by Amazon and Costco.

Of the retailers covered in past years by the survey, J. Crew saw the most improvement. The retailer improved its scores across all the elements assessed.

For more information and a presentation containing a more detailed overview of the data and survey methodology please email [email protected].

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P.Lopez says:
Apr-10-2013 07:12 pm

Chatrandom.com
The online retail powerhouse was rated number one across all consumers, regardless of gender, household income or price sensitivity. Chatrandom.com

P.Lopez says:
Apr-10-2013 07:12 pm

The online retail powerhouse was rated number one across all consumers, regardless of gender, household income or price sensitivity. Chatrandom.com

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REAL ESTATE

Receivership Sales: How Lenders Can Protect Their Security and Minimize Liability

BY CSA STAFF

By James H. Donell, CPM CCIM, [email protected]

When a commercial real estate property goes into foreclosure, the effects can be damaging for all parties involved – not only for the owner of the property who has defaulted, but also the lender and any additional creditors who may have a lien on the property.

Unfortunately, distressed properties are a fact of life within the real estate industry, particularly with the current sluggish economic climate. Lenders who find themselves faced with the prospect of commencing foreclosure proceedings on a loan secured by real property may think their options are limited to common remedies such as workouts, deeds in lieu of foreclosure and foreclosure sales. Yet perhaps the most effective way to minimize costs, save time, preserve the value and the income being generated from the property and minimize potential exposure to liability, is to ask the court to appoint a rents and profits receiver to take possession and control of the property and to sell it through the receivership with final court approval.

Unlike equity receivers who are typically appointed over an individual or an entity, rents and profits receivers are typically appointed by the court to take custody and control of one or more properties, collect the income, maintain adequate insurance coverage, address health and safety issues, and manage, maintain and pay all necessary operating expenses of the property until the default is cured or the foreclosure is completed.

Appointing a rents and profits receiver provides the lender with the assurance that the security for its loan is not being allowed to deteriorate during the foreclosure process; then several months later when the foreclosure sale is finalized, the lender can take ownership and control of the property and start to begin the process of marketing and selling the property as the owner.

An alternative to this, however, is to have the Receiver sell the property with court approval as well as the consent of the lender, borrower and any junior lien holders. Although the law concerning a sale of real property by a rents and profits receiver is subject to different interpretation, the courts are continuing to approve these sales on a regular basis. This process can save a considerable amount of time, preserve the value of the property, reduce costs, and eliminate potential future liability for the lender and the borrower. Borrowers and junior lien holders will generally agree to a sale by a receiver if there is little or no equity in the property to satisfy any junior lien holders.

Also, if there are existing valid personal guaranties and the lender and borrower come to an agreement concerning the guaranties, the borrower will generally cooperate and not object to a sale of the property by the Receiver.

The power to sell the real property can be made a part of the appointing court order, subject to notice to all parties involved – buyer, lender/owner and all known creditors – which ideally will lead to a sale wherein a specific sales price is agreed upon by all. Careful negotiations and open communication between the receiver and the parties in question will help ensure that any objections are dealt with early on and not later in the process when such controversy could delay or derail the sale.

Receivership sales also effectively absolve lenders from liability when it comes to the sale of the property since a receivers sale should be “as is” and “where is” with no representations and no warranties. Essentially this means that the buyer’s only remedy to assert future claims involve going back to the court that approved the sale and asserting those claims against the receivership, rather than the owner or lender.

In a rents and profits receivership, the only assets are generally the net cash flow generated by the property and the property itself. Once a sale is confirmed by the court and the escrow is closed, the receivership is terminated by court order and any cash is distributed as determined by the court, leaving the buyer with no assets to assert claims against – and protecting the owner and lender from a potentially hazardous legal situation since they were not the seller of the property.

Another advantage of a rents and profits receiver sale is that trustee’s fees are minimized since a foreclosure sale of the property is not necessary. Depending on the value of the property, this cost savings can be considerable.

There are some precautions, however, that receivers must take in order to properly complete a sale through the receivership, including careful coordination with the title company. This is particularly important when there are disputed liens on the property – a variable that can severely delay a sale or the distribution of the sale’s net proceeds. It is also absolutely vital to make sure that the title company is willing to issue a policy of title insurance based upon the order approving the sale and the recording of the receiver’s deed; failure to do so may preclude the receiver’s ability to close the sale.

Similarly, giving notice of the motion to approve the sale to any and all parties with potential claims against the property – including any creditors, lien holders, agencies, or government or municipal bodies who may have any sort of claim, however obscure – is the other main precaution that must be taken by a receiver tasked with selling a distressed property.

Distressed properties may be unavoidable, but receivership sales offer an ideal alternative for lenders who find themselves with no other alternative but to foreclose. By carefully choosing a reputable and experienced receiver, lenders can protect themselves and their property and ensure the best possible outcome for everyone involved.

James H. Donell is a state and federal court-appointed receiver and CEO of FedReceiver, Los Angeles. He can be reached at [email protected] or 310.207.8481.


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News

Big Lots big disappointment

BY CSA STAFF

The nation’s leading closeout retailer offered a bleak outlook for the remainder of the year following worse than expected second quarter results and announced the departure of its top merchant.

Big Lots on Thursday morning said EVP merchandising Doug Wurl had resigned from the company and John Martin had been promoted to the EVP and chief merchandising officer role. Martin had previously served as EVP merchandising after joining the company in 2003, but last April the company moved him into an EVP administration role when Wurl joined the company from Sears Holdings where he served as a VP and general merchandise manager.

Filling Martin’s administration role is Charles W. Haubiel II. He will continue to serve as general counsel and corporate secretary with responsibility for legal and real estate while adding responsibility for human resources and loss prevention. He joined Big Lots in 1997.

In other moves, Lisa Bachmann was elevated to the role of EVP and COO after previously serving as chief information officer. She will retain her CIO responsibilities and add stores operations to her duties. Bachmann has been with Big Lots since 2002 when she joined the company as SVP merchandise planning and allocation. She became CIO in 2005.

The company also named Timothy Johnson CFO. Johnson joined Big Lots in 2000 and previously served as SVP finance.

The personnel moves were announced in advance of the release of disappointing second quarter financial results that saw the company reduce its outlook for the full year. During the second quarter ended July 28, Big Lots said profits from continuing operations declined to $22.1 million, or 36 cents a share, from $35.7 million, or 50 cents as share, the prior year. Sales for the period increased to nearly $1.218 billion from $1.167 billion the prior year as the opening of 18 new stores added sales volume that was offset by a 1.9% U.S. same-store sales decline.

Net sales for U.S. operations for the second quarter increased 7% to $1,183 billion, compared to $1,163 billion while income from continuing U.S. operations totaled 42 cents a share compared to 52 cents.

The performance of company’s recently acquired operations in Canada was more difficult to gauge.

“As a reminder, we acquired our Canadian operations on July 18, 2011, therefore, prior year results include only our 12 days of ownership in the second quarter of fiscal 2011,” the company said in a statement. “Based on materiality to our total operations, we are not required to and have not provided pro-forma information for Canadian operations.
The company did say sales from Canadian operations totaled $35 million and incurred a net loss of $3.3 million that added five cents a share to the total profit decline, compared to the prior year’s sales from the 12 day period of $3.9 million and net loss of $1.2 million or two cents a share.

Based on the company’s performance during the first half of the year, Big Lots reduced its full year profit forecast to a range of $2.80 to $2.95 from earlier guidance that envisioned profits between $3.25 and $3.40 as a worse than expected U.S. performance is partially offset by a better than expected showing in Canada.

Looking at the U.S. business, the company said it expects same-store sales to decline in the low single digit range and profits from continuing operations to range from $3.05 to $3.15 compared to prior guidance of $3.50 to $3.60. Conversely, sales in Canada are expected to range between $152 million and $158 million, compared with prior expectations of sales between $142 million and $152 million. As a result, the operating loss is expected to range from $13 to $15 million, or 22 cents to 26 cents a share, figures that are slightly less worse than earlier expectations for an operating loss in the range of $14 to $16 million, or 23 cents to 26 cents a share.

Big Lot’s is the largest operator of closeout stores in North America with 1,463 Big Lots stores in 48 states and 81 Liquidation World and LW stores in Canada.

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