REAL ESTATE

Westroads Mall begins mall-wide renovation

BY Michael Fickes

Omaha, Neb. — Westroads Mall has begun work on a major, two-phase renovation and remodeling of the three-level, enclosed, 1.2-million-sq.-ft. super-regional shopping center in Omaha, Neb.

Phase I is underway with mall-wide painting plus interior and exterior LED lighting installation. Phase I will also upgrade the malls energy management system. Plans call for Phase I to finish before the holiday season.

Phase II will begin work in early 2014 and focus on replacing the mall’s flooring and enhancing shopper amenities. The work will include new tile flooring throughout all three levels, lighting enhancements and upgrades and several soft seating areas.

The Food Court will undergo a major renovation, too.

The restrooms will be expanded and renovated. In the center court, plans call for new energy efficient escalators and a fresh new aesthetic for the elevator.

Both entrances on the south side will receive a new look with new finishes and equipment.

Additional work will replace the trash receptacles and add new planters, interior signage, updated benches and WiFi.

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Target’s 2Q profits solid, but outlook softens

BY CSA STAFF

Target produced solid profits on tepid second quarter sales growth butjoined the growing list of retailers to express reservations about the health of the consumer during the back half of the year.

Target said its U.S. stores produced a 1.2% same store sales increase during the second quarter ended August 3, and total sales increased 2.4% to $16.8 billion from $16.5 billion during second quarter last year. Operating profits grew at a meager 0.4% rate to $1.33 billion from $1.32 billion.

Sales at the 68 stores Target now operates in Canada following entry into that market earlier this year totaled $275 million.

Total company profits, excluding start-up cost related to entry into Canada, increase 6.1% to $1.19 from $1.12 during the second quarter last year. Including the costs related to Canada, earnings declined to $611 million, or 95 cents a share, compared to $704 million, or $1.06 a share last year.

“Target’s second quarter financial results benefited from disciplined execution of our strategy and strong expense control, offsetting softer-than-expected sales,” said Gregg Steinhafel, Target’s chairman, president CEO. “For the balance of this year, our U.S. outlook envisions continued cautious spending by consumers in the face of ongoing household budget pressures. In Canada, where we are only five months into our market launch, we continue to learn, adjust and refine operations in our existing stores as we prepare to open another 56 stores by year-end.”

Concerns regarding the consumer spending outlook prompted the company to forecast full year adjusted profits toward the low end of earlier guidance that ranged from $4.70 to $4.90.

Target ended the quarter with 1,788 stores in the U.S. and 68 stores in Canada.

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Persistent weakness at Staples reflects lingering economic challenges

BY CSA STAFF

A 3% same store sales decline at Staples North American retail units contributed to weaker than expected second quarter results and prompted the company to reduce its full year financial forecast.

Total company sales for the quarter ended August 3, declined 2% to $5.3 billion with the closure of 103 stores in North America and Europe responsible for about half the decline. Profits for the period declined to $104 million, or 16 cents a share, two cents worse than analysts forecast, compared to $125 million, or 19 cents a share the prior year.

"We continue to make progress on our strategic plan to reinvent Staples," said Ron Sargent, Staples’ chairman and CEO. "We drove online sales growth and aggressively managed expenses during the second quarter, but this progress was offset by weakness in our retail stores and international businesses."

Same store sales at North American stores fell 3% during the period and total sales fell 2.3% to slightly more than $2.4 billion. The division’s operating income dropped to $100 million from $131 million. Contributing to the weakness were categories such as business machines and technology accessories, ink and toner, and computers. Partially offsetting those declines was growth in tablets, facilities and breakroom supplies, and copy and print services. Staples.com sales grew 3% during the second quarter.

Staples North American commercial division fared slightly better. Sales there fell just 1.3% to slightly more than $1.9 billion while operating income declined to $128 million from $143 million.

Staples international division was its worst performer. Sales declined 8.3% in U.S. dollars and local currencies and the operating loss grew to $20 million from a prior year loss of $15 million. The sales decline was said to reflect broad-based weakness in Europe and Australia. For example, same store sales at European retail units dropped 6% with reduced traffic responsible for most of the decline.

As a result of the weaker than expected results, Staples reduced its full year profit forecast to a range of $1.21 to $1.25 a share, well below the $1.32 analysts had forecast.

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