FINANCE

Consumers cut back on spending in August

BY Marianne Wilson

American shoppers reined in their spending in August, but just a bit.

Retail sales inched up 0.1% in August over July and 5% year-over-year as the economy continued to grow despite concerns about the growing trade war, the National Retail Federation reported. (The numbers exclude automobiles, gasoline stations and restaurants.).

The August gain was the smallest increase in six months. Economists polled by Reuters had forecast retail sales increasing 0.4% in August.

“Consumers are still in the driver’s seat,” NRF chief economist Jack Kleinhenz said. “Clearly, household spending is resilient and a contributor to third-quarter GDP growth, however, uncertainty over tariffs is creating anxiety and could fuel material changes in consumer spending.”

NRF’s numbers are based on data from the U.S. Census Bureau, which released overall August sales – including automobiles, gasoline and restaurants – that were down 0.1% seasonally adjusted from July but up 6.6% year-over-year.

Specifics from key retail sectors for August include:

• Online and other non-store sales were up 9.3% year-over-year and up .7% over July seasonally adjusted.

• Clothing and clothing accessory stores were up 6.2% year-over-year but down 1.7% from July seasonally adjusted.

• Health and personal care stores were up 5.4% year-over-year and up 0.5% from July seasonally adjusted.

• Food and beverage stores were up 4.9% year-over-year and zero change from July seasonally adjusted.

• General merchandise stores were up 4.6% year-over-year and up 0.1% from July seasonally adjusted.

• Electronics and appliance stores were up 4.1% year-over-year and up 0.4% from July seasonally adjusted.

• Furniture and home furnishings stores were up 3.9% year-over-year but down 0.3% from July seasonally adjusted.

• Building materials and garden supply stores were up 2.6% year-over-year and zero change from July seasonally adjusted.

• Sporting goods stores were down 4.0% year-over-year and up 0.2% from July seasonally adjusted.

The three-month moving average was also up 4.9% over the same period a year ago. The August results build on improvement seen in July, which was up 0.4% monthly from June and 4.9% year-over-year.

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Done deal as Jamba Inc. goes private

BY Marianne Wilson

Focus Brands is officially juiced up.

The food service and restaurant company announced it has completed its purchase of Jamba, the parent company of Jamba Juice. Jamba agreed in August to be acquired by Focus Brands in a deal put at $200 million. Jamba has more than 800 locations worldwide.

With the completion of the deal, Jamba is now a wholly-owned subsidiary of FBI, and ceased trading prior to the open of the market on Sept. 13. It will no longer be listed on NASDAQ.

“We are excited to officially welcome Jamba, a leader in the smoothie and juice category with strong franchise operators and an iconic heritage, into our family of well-known and highly loved ‘fan favorite’ brands,” said Steve DeSutter, CEO of Focus Brands. “We look forward to what lies ahead for this great brand, especially the continued growth that will benefit Jamba guests, franchisees, and employees.”

Owned by private equity firm Roark Capital Group, Atlanta-based Focus is a leading developer of global multichannel foodservice brands, including Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, Auntie Anne’s, McAlister’s Deli and Jamba Juice, as well as Seattle’s Best Coffee. With the Jamba acquisition, Focus, through its affiliate brands, is the franchisor and operator of more than 6,000 locations throughout the U.S. and in over 50 foreign countries.

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Staples makes $996 million deal

BY Marianne Wilson

Staples has won the battle for office and workplace supplies company Essendant Inc.

Staples and Essendant have entered into a definitive agreement under which an affiliate of Staples will acquire all of the outstanding shares of Essendant common stock for $12.80 per share in cash, or a transaction value of $996 million including net debt. Essendant is a Deerfield, Ill.-based supplier of office, workplace and industrial products that it sells to a diverse group of customers, including independent resellers, national resellers and e-commerce businesses.

The agreement comes after Staples raised its bid for the office supplies reseller, having previously offered $11.50 per share. The higher officer caused Essendant to jettison a prior merger proposal with Genuine Parts Co., which said it does not expect to make any counterproposals. In connection with the termination, GPC is entitled to a $12 million break-up fee, which Staples is paying as part of its agreement with Essendant.

“We are excited about the opportunity to move forward with this agreement, and to work with the Essendant team to complete the partnership of these two great companies, which will ultimately deliver significant value to independent resellers and end customers across the U.S.,” Staples said.

Private-equity firm Sycamore Partners, which acquired Staples over a year ago, already owns about 11% of Essendant.

“After carefully evaluating Staples’ revised offer, including taking into account the extended regulatory process and risks associated with the S.P. Richards transaction and the continued challenges presented by the rapidly changing industry dynamics on our ability to realize value in combination with S.P. Richards, we are confident that the Staples transaction is in the best interest of Essendant shareholders,” said Charles Crovitz, chairman of Essendant. “While our agreement to merge with S.P. Richards presented an attractive opportunity, we believe the Staples transaction provides superior and immediate value to our shareholders.”

Essendant provides access to a broad assortment of over 170,000 items, including janitorial and breakroom supplies, technology products, traditional office products, industrial supplies, cut sheet paper products, automotive products and office furniture.

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