Staff -- Home Textiles Today, 6/24/2002 12:00:00 AM
Ames attains more financing
Ames Department Stores, a bankrupt Northeast discounter headquartered in Rocky Hill, CT, said it has cut a deal with its debtor-in-possession lenders to allow the sale and leaseback of some of its properties, a move which will make an extra $25 million in financing available to the retailer.
The new agreements, filed with a U.S. bankruptcy court, will provide Ames with unrestricted use of the additional $25 million, increasing liquidity for its retail operations.
Signing off on the deal were GE Capital, lead agent on the financing pact, and KRC Acquisition Corp., an affiliate of Kimco Realty Corp., which would acquire the Ames properties. The deal must still be approved by a bankruptcy court judge.
Joe Ettore, Ames chairman and ceo, said, "These two agreements and the resulting increase in availability show the significant impact of the actions that we, together with our lenders, have taken to improve liquidity. Together with our continued reductions in SG&A expenses, this new funding substantially improves our financial position and provides our vendor partners with the comfort level they need to continue extending credit and merchandise shipments."
Sears missing its mark in June
Sears, Roebuck & Co. said last week that its same-store sales fell during the first two weeks of June and fell shy of the retailer's expectations.
The retailer, based in Hoffman Estates, IL, said same-store sales were trending beneath its original projection of a monthly decline in the low single-digits.
Sales, the company said, were strongest in hardlines categories, including appliances, lawn and garden and electronics. Women's apparel was also strong, the retailer reported.
Fewer workers are producing more
In the midst of an economic recession — and following the terrorist attacks of Sept. 11 — U.S. companies have been laying off workers at a rapid pace. And at the same time, they have been reaping productivity gains, with retailers not the least of the gainers, reported Challenger, Gray & Christmas, the outplacement company that tracks job cuts nationwide.
"The strong correlation between productivity gains and job-cut announcements is a testament to the role of technology in companies' ability to gain more output from fewer workers. It may also provide clues as to which areas of the economy are poised to flourish when the recovery is complete," said the company.
"From 1997 through 2001, productivity in the manufacturing sector has increased at an average annual rate of 4.3 percent in each quarter," said Challenger. "Companies in this sector boosted their productivity another 9.4 percent in the first quarter of 2002, despite the slow economy, according to the latest data from the Bureau of Labor Statistics."
Manufacturers posting the biggest productivity gains — electronics, computers and telecommunications — were also the biggest job cutters during the same period, said the firm.
Manufacturers aren't alone in making gains, said Challenger. "Non-farm business, such as retail, increased productivity by an average of 2.4 percent annually between 1997 and 2001 and has seen it jump by 8.4 percent in the first quarter of 2002. Retailers — specifically apparel stores, electronic appliance stores and used-merchandise stores — greatly increased productivity between 1997 and 2000, increasing it at an average rate of 18.2 percent annually."
But, Challenger pointed out, "these productivity gains, probably aided by the implementation of inventory technology, may have come at the expense of employees' jobs. Between 1997 and 2000, retailers announced 238,940 job cuts. Since then, they have announced an additional 147,819 job cuts."
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