FINANCE

Wet Seal urges shareholders to reject Clinton efforts to gain control of board

BY Marianne Wilson

New York — The Wet Seal Inc. encouraged its shareholders on Wednesday to reject efforts by its third-largest investor, Clinton Group, to gain control of the board, Reuters reported. The company’s board has eight seats, of which one is vacant.

Clinton, which holds approximately 7% of Wet Seal, said retailer earlier in the day backtracked on an offer, made via an investment banker, for four directors to resign in exchange for the activist investor ending its move, according to the report.

Clinton has argued that Wet Seal’s performance over the last five years has been unnecessarily poor, and that the board has made missteps in its hiring and strategy.

"We strongly urge our shareholders to revoke or withhold their consent to allow Clinton Group to replace six of the seven current members of our board, including our two recently added members, with five of their own candidates," Wet Seal chairman Hal Kahn said in a statement. "We believe that maintaining a degree of stability and continuity on our board is critical as we approach the holiday season.”

Wet Seal on Tuesday reported a 12.7% decline in September same-store sales. Clinton has argued that Wet Seal’s performance over the last five years has been unnecessarily poor, and that the board has made missteps in its hiring and strategy, Reuters said.

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OPERATIONS

Kroger transforms headquarters for breast cancer awareness

BY Staff Writer

Cincinnati — Throughout the month of October, Kroger is lighting up its Cincinnati headquarters with pink spotlights and 150-ft. banners, celebrating breast cancer awareness month.

The text campaign is an added element to Kroger’s annual company-wide campaign, Giving Hope a Hand, which, in partnership with key suppliers like General Mills and Yoplait, generates $3 million to support local breast cancer initiatives in communities across the country served by the Kroger Family of Stores. The building banners announce a new text-driven donation campaign: each time someone texts PINK to 80404, Yoplait will donate $1 – up to $75,000 – to Susan G. Komen for the Cure.

“Adding the text-to-donate channel lets customers lend their support to the cause, wherever they are,” said Keith Dailey, Kroger spokesman. “We’re pleased to be adding this additional option to support the fight against breast cancer.”

The Giving Hope a Hand program features Kroger associates who are breast cancer survivors on customized packages of Kroger and national brand items sold exclusively in the Kroger Family of Stores. This year, 48 Kroger women share their stories of survival and hope on these specially marked packages, and on a special interactive website: Sharingcourage.com.

In addition, Kroger will feature some of these associate survivors on local market billboards in select Kroger family towns including: Atlanta; Indianapolis; Detroit; Phoenix; Salt Lake City; Denver; Columbus, Ohio; Louisville, KY; Nashville, Tenn; Houston; and Cincinnati.

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FINANCE

Mixed bag for apparel retailers and department stores in September

BY Marianne Wilson

New York — Apparel retailers and department stores reported monthly revenue results for September that were mixed, as Gap Inc. and Limited Brands posted gains that beat Wall Street estimates, while Macy’s and Kohl’s missed expectations.

However, many analysts said spending was fairly strong for the month.

“This should set up to be a good holiday season," said Ken Perkins, president of Retail Metrics LLC, in an Associated Press report. "Consumers needed to take a breather once the back-to-school season is over."

Gap Inc. reported that its September same-store sales increased by 6%, ahead of analysts predictions for a 5.4% increase. By division, Gap North America reported a 5% increase; Banana Republic North America reported a 4% increase; and Old Navy North America reported a 10% increase. International sales were down 3%.

"In September, strong customer response to trend-right product across all brands helped us deliver continued positive performance in North America," said Glenn Murphy, chairman and CEO of Gap Inc.

Limited Brands’ same-store sales in September rose 5%, better than the 4.3% forecast by analysts. The chain said net sales for the five weeks ended Sept. 29 fell to $773.6 million, from $818.6 million. Net sales for the five weeks ended Sept. 29 rose to $1.45 billion, from $1.35 billion.

Macy’s reported that its September same-store sales rose 2.5%, short of analysts’ predictions for 3.3% increase. Online sales (Macys.com and Bloomingdales.com combined) were up 39.0% in September and 35.8% year-to-date in 2012, compared with 2011. (Online sales are included in the same-store sales calculation for Macy’s.)

The chain said combined August-September sales rose 3.6% and "were consistent with our positive year-to-date trend," said Terry Lundgren, the company’s chairman, president, and CEO. Total sales rose 2.7% to $2.36 billion for the five weeks that ended Sept. 29.

“We continue to feel good about the remainder of our fall season as we begin to ramp up receipts of fresh inventory for the cooler weather ahead,” Lundgren said.

Kohl’s Corp. said its September same-store sales fell 2.7%, bigger than the 0.2% drop analysts had predicted, hurt by lower demand for accessories and women’s clothing. Total sales decreased 1.4% to $1.6 billion

In other September results:

  • The Buckle’s sales slipped 0.8%, missing Wall Street’s expectations for a 1% increase.
  • Cato Corp. reported a 4% decrease, and said its third-quarter earnings will be at the low end of its guidance.
  • Nordstrom’s sales rose 4.4% in September, below analysts’ expectations of a 5% increase. The company said sales suffered in early September because returns increased due to the later start this year of the department store chain’s big anniversary-sale event. Nordstrom said stores in the South and Midwest performed best, and the strongest categories were children’s wear, handbags and men’s shoes.
  • The BonTon’s sales increased 0.6%. Total sales increased 0.7% to $288.9 million in the current year compared with $286.9 million in the prior year period.
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