Syms, Filene’s Basement file for bankruptcy, plan to liquidate
Secaucus, N.J. — Syms Corp. and its Filene’s Basement subsidiary said Wednesday that they have filed for Chapter 11 bankruptcy and will liquidate all stores and assets over the coming several months. Syms acquired the century-old Filene’s out of bankruptcy in 2009 for $63 million.
“This has been a challenging time for Syms and Filene’s Basement,” said Marcy Syms, CEO. “We have been faced with increased competition from large department stores that now offer the same brands as our stores at similar discounts; a proliferation of private label discount chains; a decline in buying opportunities as brand name labels have reduced overruns by improving their supply chain management – all combined with the worst economic downturn in our lifetimes.”
According to Syms, Tuesday’s filing comes after several months of examining strategic alternatives. The company said it received no “viable bids” from anyone willing to operate the business.
“A bankruptcy filing and liquidation is the best way of maximizing value for all stakeholders,” said Syms.
The liquidation of Syms and Filene’s stores is expected to run through approximately January 2012. Syms and Filene’s Basement are seeking court approval to retain an agent to handle the liquidation of merchandise and for authorization to conduct going out of business sales.
The company listed assets of $236 million, including $97.7 million in real estate inventories, and liabilities of $94 million, according to a statement filed with the Chapter 11 petition on Tuesday in U.S. Bankruptcy Court in Wilmington, Del.
Syms operates 25 namesake stores and 21 Filene’s Basement locations.
JCPenney eases giving to needy with enhanced online program
PLANO, Texas —JCPenney announced that it has launched a new, customizable feature on its website for its annual Angel Giving Tree Online partnership with The Salvation Army.
"In our third year of presenting the Angel Giving Tree Online, we wanted to offer the ability for individuals, families and groups to make adopting a Salvation Army Angel an annual holiday tradition," said Jodi Gibson, divisional vice president of community relations for JCpenney. "By incorporating new enhancements to the adoption experience, supporters now have the means to come together and significantly impact more families in need this season."
Created in collaboration with Infosys, Akamai Technologies, SapientNitro and Usablenet, the Angel Giving Tree Online enables supporters to adopt an Angel anywhere in the United States, making it easier than ever to buy and ship clothing, toys or other wish list items from the convenience of their home, office or almost anywhere in the world, JCpenney said. For added convenience, the Angel Giving Tree Online program will also be accessible via a mobile browser at m.jcp.com/angel as well as a new app available for iPads starting Nov. 14. In conjunction with UPS, Angel gifts purchased through jcp.com can be shipped free of charge to a Salvation Army collection center.
Walmart head merchant shares view
BENTONVILLE, Ark. — Walmart chief merchandising officer Duncan Mac Naughton expressed optimism about the retailer’s prospects for the holiday season and beyond late Tuesday during comments at a Bentonville Bella Vista Chamber of Commerce function, which attracted more than 500 people.
Those in attendance were predominantly Walmart suppliers eager to gain the latest insights from the company’s top merchant regarding a strategy he referred to as “refreshingly simple,” which is producing results. Mac Naughton prefaced his remarks on a wide range of topics by noting that the company is two weeks away from the release of third-quarter results on Nov. 15, and he would need to be careful about what he said. Some of his comments were a recap of previously disclosed financial details about how the company produced positive same-store sales the last month of the second quarter and the first two months of the third quarter and is continuing to gather momentum going into Christmas.
He also laid out the reasons for that momentum and how it is the result of a renewed commitment to offer everyday low prices on the broadest assortment of merchandise while maintaining tight expense control so the savings can be reinvested in price to deliver on the company’s value proposition of saving people money so they can live better.
“We are quite focused on rededicating ourselves to these three pillars of our business model,” Mac Naughton said.
A key driver during the past year was Walmart’s decision to add back roughly 10,000 items to its product assortment. The addition of items, especially in categories shopped by core customers, such as sporting goods and automotive, has helped the company regain traffic and is yielding results in categories that had previously be de-emphasized. Same-store sales in the hunting category are up 16% and the tire category is up 7% thanks to expanded assortments and the addition of brands, according to Mac Naughton. He also noted the company is interested in winning in categories even though they may be in decline, highlighting a sharp reversal in thinking with his predecessor John Fleming. As an example, Mac Naughton pointed to dump bins filled with $5 DVDs and CDs located in Walmart aisles that generate $300 million in annual sales. “Our core customers are doing head dives into these bins,” Mac Naughton said.
In addition, the emphasis on expense control is expected to enable the company to reduce prices by $2 billion in the next two years, and Mac Naughton said those cuts would come across the board as opposed to the type of “atomic rollbacks” undertaken 18 months earlier when prices were slashed on a handful of select items, and he said Walmart violated trust with shoppers.
Mac Naughton made sure to remind suppliers that the future price investments would come primarily from productivity improvements and increased efficiency. Walmart has lowered its new store construction and remodel costs, is focused on improving store productivity and leveraging its distribution network to ship more cases even though trucks travel fewer miles.
The other key factor in sales improvements to date and the anticipation of more gains going forward is increased on shelf availability of product. Walmart earlier this year introduced the metric of OSA (on-shelf availability) to its lexicon. Previously, the company had deluded itself to believing it was in stock if perpetual inventory systems showed merchandise was in the store. It may have been, but if it wasn’t on the shelf and available for sale from the shoppers perspective it was out of stock. Thanks to an emphasis in this areas and physical audits every week by third parties, Mac Naughton said between March and September Walmart has moved the OSA needle 570 basis points to where it is now above 93%.
“I think this is a big deal and we are not done yet,” he said.