FINANCE

Survey: Retail CFOs more optimistic about economic growth; investments back on table

BY Katherine Boccaccio

New York — Retail financial chiefs are increasingly optimistic about economic prospects over the next 12 months and plan to pivot toward expansion and adding jobs, according to a survey by American Express.

The fifth annual American Express/CFO Research Global Business & Spending Monitor, a survey of 541 senior finance executives from the United States, Europe, Canada, Latin America, Asia and Australia, revealed that investments in expanded operating capacity, research and development, and mergers and acquisitions are once again on the table.

Hiring is also on the rise, the research found, with a majority of finance executives planning to increase headcount over the next twelve months.

“Finance executives are looking for ways to stimulate growth, in part by deploying some of the cash that has built up on corporate balance sheets in recent years,” said Janey Whiteside, senior VP global corporate payments, American Express. “Finance executives also report they’ll be keeping a sharp eye on the bottom line, while spending selectively on activities that will drive revenue like sales and marketing and new product development.”

Specifically, the study found that, this year, 64% of CFOs foresee modest to substantial expansion over the next twelve months, but that’s lower than in 2011 and 2010 (when 75% and 71% of all respondents anticipated economic expansion, respectively).

Worldwide, the outlook for economic expansion among the countries covered by this study was brightest in India (86%), followed by the United States (78%), Germany (74%), Mexico (73%), Argentina (70%), Australia (69%), and Canada (67%).

In terms of when the global economy will gain greater strength, nearly half of the world’s finance executives (46%) believe that “robust” economic growth will return in their countries by the end of 2012.

Three-quarters of U.S. finance executives (75%) and 58% of U.K. finance executives see robust growth returning to their own countries at some point after the close of 2012.

Three in five (60%) finance executives have set more aggressive growth targets compared with 2011. Although a quarter of respondents report that they are “very confident” that their companies will meet their growth targets in 2012, most respondents are only “somewhat confident” that their companies will meet their targets (56%), while 16% are “not very confident” in their companies’ ability to meet their targets.

After amassing large cash reserves as a buffer against the economic uncertainty of the past few years, many finance executives say their companies intend to deploy these resources in 2012. Around the world, respondents who say their companies are likely to spend down some portion of their cash reserves in the course of 2012 (45%) outnumber those who say they are not (34%). This is an important change from last year, when a sizeable majority of all respondents (62%) were pursuing a deliberate cash preservation strategy.

Many finance executives say they are likely to use this cash to fund ongoing operations (74%). Other frequently cited cash destinations include activities focused on energizing growth, such as: expanded operations and headcount (70%); increased capital spending (69%); increased research and development (68%); and mergers and acquisitions (66%).

U.S. respondents are even more willing than their peers working elsewhere to dip into their cash stockpiles (52%). Almost two-thirds of U.S. finance executives (63%) are likely to use these funds for M&A activity—topping their list of eventual destinations for their cash reserves.

Also, with improving economic conditions, a majority of finance executives worldwide (53%) plan to increase headcount over the next twelve months. Fewer than one in three (30%) plan to reduce jobs. In the United States, the hiring picture is slightly more positive compared with other participating countries, with 56% of respondents planning to add jobs and just 22% planning to cut positions.

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REAL ESTATE

Macy’s to anchor new full-price wing at Gurnee Mills

BY Marianne Wilson

Gurnee, Ill. — Construction has begun on a 140,000-sq.-ft. full-line Macy’s that will anchor a new full-price wing at Gurnee Mills, in Gurnee, Ill.

With the addition of the department store, which is expected to open in late summer 2013, Gurnee Mills said it will be distinguished as the first hybrid shopping destination of its kind, combining full-price, outlet and value retail all under one roof.

Macy’s is the perfect fit for Gurnee Mills as we transform this already successful property with the addition of a full-price retail wing,” said Gregg Goodman, president of The Mills.

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OPERATIONS

Selfridges named Best Department Store in the World

BY Staff Writer

London — The British department store Selfridges received the “Best Department Store in the World” award at the Global Department Store Summit in Paris.

Selfridges took the top slot amongst finalists from around the globe, including Macy’s and Woolworths (South Africa). The U.K. retailer also won the award, which is given out every two years, in 2010.

“The Selfridges brand has gone from strength to strength worldwide, and this prestigious retail award recognizes its true value as a performer and innovator,” said Galen Weston, owner of Selfridges. “The award criteria represents our highest priorities: a strong profile, successful development and execution of products, stores and service innovation strategies, delivery of outstanding in-store experiences, excellent customer service and strong financial performance.”

Selfridges operates four stores, with locations in London, Birmingham and Manchester, as well as an online business.

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