FINANCE

Good news for retailers in March

BY Marianne Wilson

Unseasonable weather didn’t deter consumers in March.Unseasonable weather didn’t deter consumers in March.

Retail sales in March increased 0.3% seasonally adjusted over February and 5% year-over-year, according to the National Retail Federation said today. The NRF numbers exclude automobiles, gasoline stations and restaurants.

“This is a healthy spending report despite market volatility, unseasonable weather and uncertain economic policies,” NRF chief economist Jack Kleinhenz said. “Consumers continue to show resiliency in spending, and these numbers reflect how the economy is performing with a strong job market, gains in wages, improvements in confidence, rising home value and judicious use of credit.”

Kleinhenz noted that the biggest risk to spending is in market fluctuations that could affect confidence, “but we expect these basic improvements in economic fundamentals to continue.”

The three-month moving average was up 4.8% over the same period a year ago. NRF’s numbers are based on data from the U.S. Census Bureau, which said overall March sales – including automobiles, gasoline and restaurants – were up 0.6% seasonally adjusted from February — the largest increase since November — and up 4.5% year-over-year.

Specifics from key retail sectors during March include:

• Online and other non-store sales were up 7.6% year-over-year and up 0.8% over February seasonally adjusted.

• General merchandise stores were up 6.3% year-over-year and up 0.3% from February seasonally adjusted.

• Clothing and clothing accessory stores were up 6.1% year-over-year but down 0.8% from February seasonally adjusted.

• Grocery and beverage stores were up 5.9% year-over-year and up 0.2% from February.

• Furniture and home furnishings stores were up 4.1% year-over-year and up 0.7% from February seasonally adjusted.

• Building materials and garden supply stores were up 3.8% year-over-year but down 0.6% from February seasonally adjusted.

• Electronics and appliance stores were up 1.6% year-over-year and up 0.5% from February seasonally adjusted.

• Health and personal care stores were up 0.4% year-over-year and up 1.4% from February seasonally adjusted.

• Sporting goods stores were down 0.9% year-over-year and down 1.8% from February seasonally adjusted.

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FINANCE

Vote on future of True Value extended

BY HBSDealer Staff

As members of True Value consider an offer to sell 70% equity of the company to Acon Investments, Chicago-based True Value Company has added a week to the voting deadline.

On Friday, the company announced to members that the special meeting of the board on April 20 will share the voting results with the members. The original vote deadline was April 12, just before midnight. It’s now April 19, just before midnight.

So far, votes have been largely in favor of the proposal announced March 15 that would dramatically change the structure of the True Value, sell a majority stake to a private equity company and unlock dealers investment. The company said 72% of the proxies have been counted, and 85% have voted for the proposal.

In an announcement to dealers on Friday, the co-op said: “based on the massive vote support, our plan remains to close the transaction on or around April 20 following the Special Meeting.”

The additional week was described in a statement as related to a lawsuit brought by a member who sought more information.

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Toy tycoon submits bid to save Toys ‘R’ Us

BY Marianne Wilson

It’s still a longshot, but some Toys “R” Us stores may live to see another day.

Isaac Larian, the billionaire founder and CEO of MGA Entertainment, whose products include Bratz dolls, Little Tikes and LOL Surprise, put in a formal bid of $675 million to buy 274 U.S. Toys “R” Us’ stores. He also put another $215 million to buy Toys “R” Us’ 82 stores in Canada. The bid comes as the chain is in the process of liquidating its U.S. operations.

The funds to purchase the stores will come from Larian’s own coffers, additional investors and bank financing, the privately held MGA stated. It added that the bid amounts were determined after careful due diligence by Larian, speaking with multiple investors and third-party experts.

Larian’s bid faces several challenges, not the least of which is whether toy brands would want to work with a retail chain that is owned by the CEO of another toy brand. According to the Wall Street Journal, Larian has said he would not be involved in the day-to-day operations of Toys “R” Us if his bid succeeds.

Larian previously had started a campaign on the crowdfunding website GoFundMe to raise $1 billion to save the bankrupt chain. The longshot effort brought in pledges for about $200 million.

“Every day that goes by, the value of Toys “R” Us declines and more people lose their jobs,” Larian said. “I did my part and now it’s up to the other side to accept this offer. If they do, the real work will begin.”

Larian shared his vision for the embattled toy retailer, saying the stores would be like a “mini-Disneyland.”

“We will make Toys “R” Us an experience in and of itself; a fun and engaging place where families can spend an entire day,” he said.

In other Toys “R” Us news, the company received a commitment from its Taj noteholder group for $80 million in incremental debtor-in-possession financing to strengthen its liquidity and support the working capital needs of its stores in Asia and Central Europe.

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