The story used to be, "Take me to your factory," when retailers wanted to bump their U.S. middlemen and go direct to the source, usually in China or India. The result was something out of a soap opera love triangle, with the U.S. supplier in the role of the spurned lover as the retailer and factory hopped into bed together (or bath or windows or whatever). Sometimes it even happened as the supplier watched. The hurt of it all.
While that scene still happens, it has evolved into something out of Desperate Housewives, with off-shore manufacturers who have successful and profitable U.S. retail programs through their relationships with U.S. vendors, appearing at this market all gussied up mostly in temporary showroom space — and looking to sell direct. They were hiding in plain sight, but they acted like none ...Read More
For years, we’ve been writing about the unique challenges faced by an industry in transition. They’ve often been excessively painful, and they’ve certainly been tumultuous. And for months, we’ve been writing about an economy in crisis. No one is even willing to guess where the bottom is.
For retailers, in particular, it’s become something of a siege mentality. When you look at the store closings and bankruptcies — some estimates place the destruction at about 15% of all retail locations just vaporizing by the end of 2009 — you can understand why. (By the way, we’ve...Read More
It was a rare moment, but Lowe’s didn’t have what I was looking for, so I went to Home Depot again today — for the first time in, I don’t know, six months — and of course, I was disappointed again. I’m learning. Sooner or later I will get it right and no matter what the circumstance, I’ll know not to waste my time by going there. It’s not just the out-of-stocks, it’s the HD key guy who calls me “chief” or the department manager who tells me he doesn’t have what I’m looking for before I finish telling him what it is. It’s the all ’round crappy experience. It’s the “forget you” attitude, if you get my drift.
Here’s President-Elect Barack Obama on NBC's Meet The Press this morning:
“Well, I think that the Big Three U.S. automakers have made repeated strategic mistakes. They have not managed that industry the way they should have, and I've been a strong critic of the auto industry's failure to adapt to changing times — building small cars and energy efficient cars that are going to adapt to a new market. But what I've also said is, is that the auto industry is the backbone of American manufacturing. It is a huge employer across many states. Millions of people, directly or indirectly, are reliant on that industry, and so I don't think it's an option to simply allow it to collapse. What w...Read More
It’s the day after Thanksgiving and retailers from sea to sea opened in the dark this morning as they usually do on Black Friday.
Only this year, it’s different.
We’ve been through downturns before, but this economic cycle is promising to be deeper and longer than anything most of us have seen in our lifetimes — worse than anything since the ’30s. And, unless their name is Walmart, retailers are running really scared. These are nervous times for everyone.
Black Friday has always been — symbolically, at least — the day when most retailers begin to turn a profit for the year. ...Read More
History — of monumental proportion — was made last night. Now the work begins, and it is daunting. For many in the business community and its constituent industries, it might also offer an opportunity for renewal and progress.
There are opportunities to be created and realized under the coming administration, so maybe now is a good time to begin a quiet, serious discourse on the real issues that are important to the future. Despite the hyperbole of this campaign, it's difficult to accept the notion that the new president is anti-business. Quite the contrary, it seems almost too obvious to have to say that he needs business.
Last night's victory speech will likely be remembered for its eloquence and inspir...Read More
All right, are you ready for the answers to this edition of Know Your Retailers? Here we go. Among Wal-Mart, Kmart and Target in pre-Father’s Day Sunday FSIs:
The retailer with the lowest average price point (to no one’s surprise, I’m sure) was Kmart, at an average of $46.96 per item. If you got it right give yourself 1 point; if you got it wrong, subtract 20 and consider another line of work. (Well, if you guessed Wal-Mart, only subtract 10 and stick around.)
This is the result of ESL’s — sorry, I meant Kmart’s — continuing and increasingly desperate attempts to drive traffic into its stores with a (fill-in-the-blank yourself) merchandising str...Read More
So you think you know all there is to know about your biggest competitors or customers? Think again.
Some of the big retailers ran Sunday FSIs on the weekend before Father’s Day — not a particularly big holiday for the home textiles industry. Nevertheless, the ads offered the opportunity for some interesting side-by-side comparisons of how these companies position themselves in the marketplace. They might challenge some notions of what they are doing even as they confirm others, and I decided to test some of my observations.
As if to prove that I really don’t have a life, I actually sat down with a spreadsheet —this on a Sunday, mind you — and charted their price points, all 1,141 of them. ...Read More
As Linens 'n Things readies its quarterly report for release tomorow (March 20), the noise surrounding this company is getting louder. During Tuesday's Icahn Enterprises conference call, the WestPoint Home parent answered an analyst's direct inquiry by saying it had limited "balance sheet exposure" to LNT but that it was continuing to monitor the situation.
That, of course, has been what a lot of home textiles companies have been doing since well before winter market when some suppliers — for a moment, at least — found themselves holding the retailer's trade debt, alone, on a mountainside. It made some people uncomfortable, to say the least.
There’s money to be made with WestPoint International — above-market returns to be scratched out as it is cleaned up, refocused and (pick one) spun off or sold off, in whole or pieces. Carl Icahn makes money; that’s what he does perhaps better than anyone else.
Ever the strategist, Icahn trumped the other secured lenders nearly three years ago by taking his junior secured debt, acquiring some senior debt and combining them to win the company out of bankruptcy. He beat the other secureds even after they brought in investor Wilbur Ross to d...Read More
In late June, 2005, when Carl Icahn emerged from bankruptcy court with the free-and-clear remains of WestPoint Stevens in his pocket, the very first question I asked him was, “Now that you have it, what are you going to do with it?”
He answered by talking about the $200 million cash infusion he was going to make in the company and about the possibility of a public offering to bring in an even larger investment. He spoke about turning it into a global sourcer — and, yes, maybe even a global source — for home textiles products. But his victory was then only a few minutes old, so he could be forgiven for dancing a bit and being a little ...Read More
By Brent Felgner
Bank of America has made an investment in Countrywide Financial, the country’s largest mortgage lender that laid off employees last week and reportedly dipped into its credit facility to buck up liquidity. That’s a big vote of confidence for housing and credit markets, which need all the good news they can find.
It’s also one more in a string of contradictions — much like the see-saw volatility we’ve seen lately in the stock markets. Construction credit has tightened, dealmakers are backing off M&As and IPOs and, surprise, hedge funds and other private equity are taking big hits.
So, what of the soft home business? The industry-centric wisdom used to be that when the economy tanked, curtai...Read More
