Talbots profit up 17% on cost-cutting
Hingham, Mass. — The Talbots on Tuesday said its third-quarter profit rose 17% on cost-cutting. But its revenue fell and the retailer offered weak fourth-quarter guidance and cut its full-year outlook.
"Our customer traffic and sales demand from Thanksgiving through Cyber Monday improved greatly, however, we believe the challenging and promotional environment will continue," said CEO Trudy Sullivan. "To that end, we will stay nimble and have appropriately enhanced our promotional activity to best position ourselves for the remainder of this holiday season."
Talbots said its net income rose to $17 million, from $14.6 million a year ago. Revenue fell 3% to $299.1 million, from $308.9 million last year. Same-store sales fell 7.1%.
Talbots is in the midst of a turnaround plan. After struggling with weak sales during the recession, Talbots earlier this year arranged a deal that let it reduce its debt and buy out its largest shareholder, Japanese retail company Aeon (U.S.A.), which held a 54% stake. The retailer has also updated its clothing to appeal to younger, more style conscious shoppers.
NRF supports extension of Bush-era tax cuts
Washington, D.C. — The National Retail Federation has announced its support of a tentative bipartisan agreement that would temporarily extend Bush-era tax cuts for all taxpayers regardless of income in return for extending unemployment benefits.
“Failure to renew these tax cuts would result in a massive tax increase at a time when our nation’s economy is still struggling to recover,” said NRF president and CEO Matthew Shay. “Higher taxes would stand in the way of creating the jobs that are vital to achieving economic recovery and would threaten to plunge us back into the recession that many consumers aren’t convinced is really over yet. Keeping current tax rates in place will allow retailers and other sectors of the economy to push forward with job creation. Adding a payroll tax cut to the mix will help with that effort while boosting consumer spending as well.”
“While many disagree on whether the tax cuts should be extended for those seen as wealthy, we cannot afford to subject all taxpayers to an increase while that debate continues,” Shay said. “Extending the cuts on a temporary basis is a prudent move that will allow our economy to regain stability while policymakers seek to settle that question. Many of the ‘wealthy’ taxpayers who will benefit from this agreement are small business owners whose business income is taxed as personal income and who are working every day to create jobs.”
Shay urged Congress to adopt the agreement by the end of the month, noting that employers will be obligated to increase workers’ tax withholdings beginning in January if legislation renewing the Bush cuts is not enacted by then.
NRF also welcomed a provision of the agreement that would set the federal estate tax rate at 35% on estates of $5 million and higher beginning in January. The estate tax was temporarily eliminated at the beginning of 2010 but returns to the Clinton-era level of 55% on estates of $1 million or more in January if Congress does not act. High estate taxes in the past have made it difficult for family-owned retail businesses to be passed from one generation to the next, according to NRF.
Lowe’s execs unveil digital moves
Mooresville, N.C. — Sales at Lowes.com are running about 35% ahead of last year, according to CEO Robert Niblock, who spoke to analysts during the retailer’s recent Analyst and Investors Conference. Still, the Mooresville, N.C.-based home improvement giant has ideas on how to improve its digital business.
During the event, Niblock explained an important part of the retailer’s vision: "Whenever, wherever the customer wants to interact with us, we’re going to try and make it convenient for them."
Among the projects to advance that goal are a mobile app to help customers buy product from their mobile devices. Lowe’s executives said the company is adding at least 1,200 additional SKUs to the site each week. (It has more than 110,000 SKUs online currently.)
In early 2011, the company will launch "ask and answer" functionality for all product categories on lowes.com. With this feature, according to Stone, customers asking product specific questions will "receive answers from a variety of sources — the lowes.com community, Lowe’s employees and manufacturers."
The company has also enhanced its lowes.com in-store pickup guarantee — instead of 30 minutes, orders will be ready in 20 minutes. To promote the change, the company’s website promotes the slogan: "Shop. Click. Pick up. 20 minutes guaranteed."
"We cannot operate as independent sales channels because customers are not shopping that way," said Stone. "They’re shopping at Lowe’s, wheter that includes a single store, multiple stores, lowes.com, over the phone or an in-home selling expericence."