Tide has turned for credit biz
Consumer trends underlying Target’s credit business may not be improving substantially, but at least they aren’t getting any worse, and that is a good thing in terms of the profitability of the company’s receivables portfolio. Credit-card segment profit increased to $39 million from a year earlier loss of $135 million. Full-year credit card profit increased nearly 30% to $201 million compared with $155 million in 2008.
Despite the improve profitability, delinquency and write-off rates in the January are a source of concern, even though they were stable-to-improved-slightly compared with the prior month, according to information regarding the credit portfolio filed with the Securities and Exchange Commission. Delinquent account balances with two or more late payments represented 8.9% of the company’s receivables at the end of January compared with 8.82% at the end of December and 9.39% at the end of November. Meanwhile, delinquent account balances with three or more late payments represented 6.32% of receivables at the end of January compared with 6.33% at the end of December and 6.57% at the end of November.
Paying late is better than not paying at all, but, when that happens, Target writes off the balance, and in January it did so to the tune of $99.2 million, bringing the fourth-quarter total to $284 million, a 43.2% reduction from $500 million in the prior year’s fourth quarter when the company added substantially to its allowance for doubtful accounts.
Commenting on the January credit trends, William Blair analyst Mark Miller said, “Target should be well positioned to restore profitability in the credit operation as delinquencies and charge-offs improve in an economic recovery. “We believe the credit business, which represented an estimated 7% of net income in 2009, could add several percentage points to Target’s reported earnings growth in coming years.”
B&N named top specialty retailer by customer satisfaction survey
NEW YORK Barnes & Noble announced that it took the top spot among specialty retailers in the American Customer Satisfaction Index (ACSI), research conducted in the fourth quarter, 2009. According to the company, Barnes & Noble earned a score of 84, above the specialty retail category average of 77.
“We are delighted to receive an industry leading score in the fourth-quarter survey, and we owe it all to our customers. Our customers want and deserve the highest quality customer service, which is what our booksellers strive to deliver every single day,” said Steve Riggio, chief executive officer of Barnes & Noble. “People consider Barnes & Noble the ultimate specialty retail destination where they can shop and browse, visit our cafe and enjoy complimentary WiFi, enjoy exclusive in-store content on nook our new eReader device, and meet favorite authors and performers at one of our many community events.”
Office Depot looks to green up retail stores
BOCA RATON, Fla. Office Depot announced that the company will pursue Leadership in Energy and Environmental Design (LEED) for Commercial Interiors (CI) certification from the U.S. Green Building Council (USGBC) for all new Office Depot retail stores, beginning in June. LEED CI is the recognized system for certifying high-performance green interiors that are healthy, productive places to work; are less costly to operate and maintain; and have a reduced environmental footprint.
“As a retailer with store locations opening around the country, we have a great opportunity to make a difference on the overall environmental footprint of today’s businesses,” said Chuck Rubin, president of North American Retail for Office Depot. “Office Depot takes that role very seriously and have therefore decided to LEED CI certify all of our new store locations going forward. We are confident that this initiative will benefit our customers, associates, suppliers and other stakeholders.”
According to Rubin, 14 new Office Depot store locations will be LEED CI certified, starting with the company’s newest location in Austin, Texas, which is scheduled to open in June.
Office Depot’s LEED CI certified stores will include such sustainable features as skylights for harvesting daylight for 90% of the store, a reflective roof, which features a membrane that helps to prevent absorption of the heat from the sun and keeps the interior of the store much cooler and an in-store recycling center, the company reported.
Yalmaz Siddiqui, director of environmental strategy for Office Depot added, “Office Depot has an environmental strategy to increasingly buy green, be green and sell green. By incorporating a leading green building commitment to this strategy, we will continue to lead our industry, and deliver environmental and economic benefits to our company.”