Wal-Mart Rolling Out Holiday Price Cuts on Toys
Bentonville, Ark., Wal-Mart Stores on Monday launched the first salvo in the holiday price wars. Starting this week, the company will announce price cuts each week on its “Top 12 Toys of Christmas.” Industry reports say Wal-Mart will slash prices by 10% to 50% on select toy items.
“We’re starting early and aggressively with unbeatable prices on the items we know are on [childrens’] lists,” Wal-Mart’s chief toy officer Laura Phillips, said in a statement.
The retailer said it will announce new discounts every week through the holiday shopping season.
Last week, Lowe’s Cos. Inc. issued an earnings warning, while Target Corp. slashed its September sales forecast, fueling concerns that the holiday shopping season will be one of the weakest in years.
The National Retail Federation has already forecast that U.S. holiday sales will rise at their slowest pace in five years.
The price cuts also come after millions of toys bearing the “Made in China” label were recalled in recent months mainly due to unsafe levels of lead paint. Lead paint has been linked to health problems in children, including brain damage.
Wal-Mart has already asked its suppliers to resubmit testing documentation for the toys it sells in its stores and has hired independent laboratories to conduct an average of 200 additional tests each day. It also is looking to stock its shelves with more products made closer to home.
Winn-Dixie team honored for turnaround
JACKSONVILLE, Fla. The team that lead Winn-Dixie Stores’ successful turnaround initiative is being honored by the Turnaround Management Association for the best ‘Mega Company Turnaround’ for 2007. Comprised of financial experts from The Blackstone Group, Skadden, Arps, Slate, Meagher & Flom and Smith Hulsey & Busey, the team helped Winn-Dixie regain the market share and profits it started to lose in the mid 1990s and early 2000s to competitors Publix and Wal-Mart.
Winn-Dixie filed for Chapter 11 bankruptcy in early 2005 after reporting year-to-date losses of $552.8 million or $3.93 per share of common stock and a decline of 4.9% in identical-store sales in its second fiscal quarter over the same period in 2004.
Despite the difficulty of achieving a succesful turnaround, Winn-Dixie began its reorganization effort, while still continuing to operate its core business and preserving jobs. According to the Turnaround Management Association, it created new common stock for five classes of unsecured creditors, with recoveries ranging from about 96% to 53%. The company emerged from bankruptcy on Nov. 21, 2006.
For its fiscal year ended June 27, Winn-Dixie reported adjusted EBITDA of $85.9 million compared to a loss of $27.8 million last year and an identical-store sales increase of 1.6%
Sears ends deal with maternity retailer
PHILADELPHIA Sears and Mothers Work, the world’s leading maternity apparel retailer, will not be renewing their agreement, Mothers Work announced today. Under their current agreement, Mothers Works operates the maternity apparel department in 502 Sears stores through the sale of its Two Hearts Maternity branded merchandise.
Mothers Work said it expects its partnership with Sears to end on June 20, 2008, when it current deal with the company is expected to expire.
Rebecca Matthias, president and ceo of Mothers Work, noted, “While we are disappointed about the end of our relationship with Sears, we feel the decision not to proceed with a renewal is in the best interest of our stockholders since we were unable to reach terms on a renewal which would be favorable for Mothers Work and our stockholders. “