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60 posts from November 2011


Cash America to buy seven franchise stores in Arizona

Fort Worth-based Cash America International, the nation's largest pawn shop operator, said today it plans to acquire "substantially all of the assets" of seven Arizona pawn shops operated by a franchisee for between $46 million and $50 million. Cash America once had a number of franchise locations, but now owns nearly all its more than 600 pawn shops. The deal will give it 28 company-owned stores in the state.

Cash America also said it boosted its existing line of credit by $100 million, to $380 million. It said it will use the money to complete acquisitions, buy back shares under an existing share repurchase plan and for other corporate purposes.

-- Jim Fuquay

Black Friday hours, promotions drive sales increase, but average ticket down, First Data says

Extended hours and promotions spurred a big increase in Black Friday retail spending, but average ticket was down over last year, First Data, an e-commerce and payment processing firm, reports today.

In its latest SpendTrend report, which tracks same-store U.S. consumer spending via credit, debit, and electronib benefit transfer cards:

  • Year-over-year dollar volume growth rose 6.3 percent Thursday and Friday, and transactions grew 7.3 percent.
  • Average ticket declined -0.9 percent. Health and personal care stores, general merchandise stores including value retail, and electronics/appliance retailers "drove the declines with heavy promotional activity."
  • On total volume, electronics and appliance retailers "fared particularly well" with dollar volume up 12 percent, as "consumers flocked to bargains."
  • Clothing and clothing accessories merchants also saw "strong" dollar volume growth of 7.8 percent, with new fashion in stores.
  • Regionally, "most regions saw double-digit dollar volume growth...Favorable weather helped spur increased holiday traffic into stores across the country."
  • Online sales on the so-called Cyber Monday were up nearly 20 percent.

- Scott Nishimura

Fed Beige Book: Dallas district activity grew at "modest pace" since last report

The Federal Reserve’s Beige Book, a periodic assessment of economic conditions in the different districts, is out today. Here’s what the Fed had to say about the Dallas District:

The Eleventh District economy grew at a modest pace since the last report. Manufacturing activity held steady or declined, while demand for business services was flat. Activity in the transportation services sector was mixed. Retailers said sales growth moderated. The single-family housing sector saw continued improvement, and activity in the multifamily sector was strong. Office, retail and industrial leasing activity increased, but commercial real estate investment activity remained sluggish. Financial services respondents said overall loan demand was soft during the reporting period. The energy industry continued to expand at a robust pace, while agricultural conditions remained weak. Employment levels were stable at most responding firms and price pressures were mostly subdued.

Price pressures were minimal across industries. Most contacts said prices were stable or down, although prices for new cars rose slightly and staffing and legal services firms noted modest increases in billing rates. The majority of respondents reported that raw materials prices were unchanged or down. The exceptions were producers of paper and of food who noted increased prices for some inputs. Contacts in the agricultural sector said cattle prices rose since the last report.

The price of WTI was near $76 per barrel in early October, and has risen to nearly $100 per barrel. Demand for gasoline has been soft. Diesel demand, in contrast, has strengthened on a year-over-year basis and prices have climbed much faster than gasoline. Prices of petrochemicals and plastics declined due to weak domestic demand and a stronger dollar. Natural gas prices remained low, near $3.50 per thousand cubic feet throughout the survey period.

Labor Market
Most firms reported steady employment levels, although there were reports of slight hiring activity. Staffing firms continued to note high levels of demand. Some oil services firms, primary metals and transportation manufacturers reported moderate employment increases, and said they continue to look for additional workers. Retailers said holiday hiring was ramping up, and one firm noted that they planned on hiring more seasonal workers than last year. Contacts in the auto sales and airline industries noted slight payroll increases. Wage pressures remained minimal, although upward pressure for certain skilled positions was noted by airlines and a few construction-related manufacturers.

Most construction-related manufacturers reported stable demand, although there were reports of stronger sales related to commercial, government and apartment construction projects. Construction-related outlooks were mostly unchanged, but a few contacts said they expect conditions to improve next year.

Respondents in high-tech manufacturing report that sales have been flat since the last report, with the exception of demand for mobile devices, cloud computing and data storage which continues to increase. Several contacts expect strength in demand for mobile and productivity enhancing devices to accelerate, and thus improve overall activity in the high-tech manufacturing sector by mid 2012, even if global output remains sluggish or weakens. Most respondents said employment levels have held steady and inventories are at desired levels.

Overall conditions in the paper products sector were mixed, but all contacts described outlooks as weak. Automobile and aviation equipment manufacturers said sales had softened since the last report but remained significantly up from year-ago levels. Outlooks are optimistic, with contacts expecting sales to remain strong through next year. Food producers reported a seasonal increase in demand, and outlooks were positive, although they are not hiring due to concerns about current economic conditions.

Contacts described demand as seasonally weak for petrochemicals and plastics. Sales in domestic markets continued to be sluggish. The recent rise in oil prices together with lower petrochemical prices is making Texas' natural gas based products more competitive, spurring exports. Refiner margins were strong and over $25 per barrel in October, but have narrowed in recent weeks with the rise in crude prices. Refinery utilization rates were low, as production declined for the fall maintenance period.

Retail Sales
Retail sales growth moderated since the last report but showed continued gains over the comparable period a year ago. Cooler weather spurred winter clothing sales, and one retailer reported strong online sales. Contacts indicated that they are comfortable with level of inventories. Eleventh District retail sales growth trended roughly in-line with the nation over the reporting period, according to two large retailers. Overall, expectations are for modest growth this holiday season.

Demand for automobiles held steady. Vehicle inventories have mostly normalized from the tsunami-related shortage experienced earlier in the year, but some foreign manufactures have been recently affected by the flooding in Thailand. The used car market continued to be tight. Contacts expect sales to slow seasonally through year end, and then to rise moderately in 2012.

Demand for staffing services held steady at high levels. One contact reported engineering, IT and healthcare as strong sectors, and another mentioned solid demand for steel workers. Outlooks remain cautious but were more optimistic than the previous reporting period, with contacts expecting demand to remain flat or improve by mid-2012. Demand for accounting services was flat, and outlooks were unchanged. Legal firms reported steady demand, with a slight pickup in litigation activity and continued strength in intellectual property, energy and some real-estate related services.

Reports from transportation service firms were mixed. Railroad firms reported a broad-based increase in shipments during the reporting period, but said that the numbers were somewhat artificially inflated due to capacity coming back online after the flooding in the northern U.S. Overall container volumes declined during the reporting period, and outlooks were slightly less optimistic than the last report. Small parcel shipments rose in October partly due to growth in retail trade activity. Airlines reported solid and steady demand over the past six weeks. A major airline noted that business travelers were more price sensitive than earlier in the year. Domestic demand and travel to Latin America remained strong, but travel to Europe and Asia was weak. Airline contacts expect to see stable demand through year end.

Construction and Real Estate
Contacts in the housing sector continued to note improvement. Inventories of existing homes fell further since the last report, and new home inventories remained lean. Single-family home sales are better according to contacts, but economic uncertainty is keeping many would-be buyers on the sidelines.

Apartment demand rose even more since the last report, and contacts are very positive in their outlooks. Some respondents noted increased sales of apartment complexes to investors.

Contacts that lease to industrial, retail and business firms noted an increase in demand. However, sales of commercial properties were sluggish given the current financial environment.

Financial Services
Financial firms reported steady but soft demand for loans. National banks noted strong demand from large corporations but flat or declining middle-market lending activity. Regional banks said loan demand was flat, and loan pricing remained somewhat aggressive. The quality of loans outstanding continued to improve, with contacts noting a decline in problem loans. Outlooks are cautious, although contacts were less pessimistic than they have been over the past few months.

Drilling activity remains strong, with 20 new land rigs added in Texas since the last report. Shale-directed activity continues at high levels. Revenues are growing and backlogs remain solid. Activity in the Gulf of Mexico also rose by six rigs, with new permits issued for deep water drilling.

The District remained in drought, although severity lessened slightly in parts of Texas and New Mexico that received some rain in recent weeks. Planting of winter wheat continued at a fairly normal pace but the crop was in poorer condition than last year due to very low soil moisture. Livestock sell-offs continued at a slower pace, as many producers have already liquidated much of their herds. Grain prices fell slightly over the reporting period, largely due to lower export demand. By contrast, cattle prices were higher than six weeks ago and beef exports remained very strong.

Scott Nishimura

Texas service sector activity up in November, Dallas Fed says

Activity in Texas’ service sector increased in November, with measures reflecting higher revenue, “modest hiring,” and an increase in November retail sales, the Federal Reserve Bank of Dallas says.

The Dallas Fed conduicts the survey monthly to obtain a timely assessment of activity in Texas’ service sector, which represents 59 percent of the economy and employs nearly 7 million.

The revenue index “rose sharply” to 14 from 4.7, with 31 percent of respondents “noting revenue increased from October,” the Fed Bank said.

Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.

“Labor market indicators reflect modest hiring and slightly longer workweeks,” the Dallas Fed said. The employment index edged up to 5.5 from 4.7, its best reading in seven months, although “the great majority of respondents noted no change in employment.”

Perceptions of general business conditions improved markedly in November. “The general business activity index showed its first positive reading in seven months,” the Fed said.

The Texas Retail Outlook Survey, which uses information from respondents in the retail and wholesale sectors, showed retail sales increased in November, according to business executives responding to the retail portion of the survey. The volatile sales index rose to 12.8 from 9.2, for four straight months of sales increases. “Inventories rose sharply,” the Fed said.

“Indexes of future retail sector activity remained in solid positive territory in November,” the Fed said.

- Scott Nishimura

Dallas execs provide gift to establish social entrepreneurship contest at TCU

Dallas entrepreneurs Nancy Tartaglino Richards and Lisa Barrentine have provided a gift for an annual TCU Neeley School of Business contest that invites undergraduates to present business plans for “profitable ventures that also create meaning for the organization and/or significantly improves quality of life.”

The amount of the gift is undisclosed, Neeley said. The contest  is renamed the Richards Barrentine Values and Ventures Business Plan Competition. A mattress recycling plan won the first annual contest last April,  with students from six invited universities competing for cash awards. The second contest will be April 2012.

Richards is CEO of First Preston HT, and Barrentine is president. Richards founded First Preston HT in 1988, and it’s now one of the largest U.S. residential asset management companies.  Richards and Barrentine also founded HomeTelos, a technology company that specializes in online real estate sale and offer management.

- Scott Nishimura

Verizon FiOS TV customers can now get the Longhorn Network online

Verizon FiOS TV customers who get the Longhorn Network as part of their video subscription service can now get the same programming live online on their PCs and laptops, Verizon reports today.

“FiOS TV customers who receive Longhorn Network as part of their video subscription service will be able to enjoy the network’s exclusive live events and content on their laptops or personal computers, at home or away, using any broadband connection,” Verizon said.

Verizon FiOS and Longhorn Network said they expect to extend online streaming to tablets and smartphones “sometime next year.”

The live stream is available at www.verizon.com/fiostvonline or LonghornNetwork.com through customers’ Verizon Online user names and passwords, Verizon said.

Asked if it's possible Verizon and Longhorn Network could eventually agree to livestream the content to non-FiOS customers, Stefanie Scott, a Verizon spokeswoman, said "this is for FiOS customers. There are no plans to expand it."

 “No question, Texas Longhorn fans are some of the most enthusiastic in college sports, and we’re providing another option to catch the latest developments on the field – anywhere, anytime,” Terry Denson, vice president, global strategy for Verizon, said in a release.

“It’s a great new way for students, alumni and UT fans everywhere to access Longhorn Network round-the-clock,” David Preschlack, executive vice president, Disney and ESPN Media Networks, said in a release.

Upcoming programming includse men’s and women’s basketball games; the Horns’ nationally-ranked women’s volleyball program; and studio and original programming such as “Longhorn Extra,” “Game Plan with Mack Brown,” “Texas All-Access,” “Texas GameDay” and “Texas GameDay Final.”

FiOS, Verizon’s fiber optic TV offering, has more than 540 all-digital channels including more than 130 HD channels and 30,000 monthly video-on-demand titles. In Texas, FiOS TV Prime HD, Extreme HD and Ultimate HD subscribers can watch the Longhorn Network on Channels 79 (standard definition) and 579 (high definition).

ESPN has a 20-year deal to own and operate the Longhorn Network, the 24/7 channel dedicated to athletic programming related to the University of Texas.

- Scott Nishimura


West 7th development to add more retail space, apartments

Cypress Equities, developer of the West 7th project near downtown Fort Worth, said Tuesday it received a $14.5 million loan from OmniAmerican Bank and Southwest Bank to build 32,000 more square feet of retail space and another 96 apartments. Cypress will add what managing director Mike Holsomback called “the third and final phase” of the development, which already has 254,000 square feet of retail space, 103,000 square feet of offices and 441 multifamily units. The company said the new construction will be at the southeast corner of West Seventh Street and University Drive.

Cypress launched West 7th in 2007 on a site along the south side of West Seventh Street that previously included the Acme Brick Co. headquarters and other industrial buildings. It completed the initial phase in 2009 and last year added a second phase consisting of additional retail space and apartments. Cypress said the construction loan from the two locally based banks has an initial term of three years and a variable interest rate.

-- Jim Fuquay


RadioShack reviewing creative agency account

RadioShack said it’s launched a formal review of its creative agency of record for the U.S. general market.

“The search will focus on identifying world-class agencies capable of delivering transformational creative concepts in a highly competitive retail landscape,” RadioShack said, adding it had total reported advertising expenses of about $206 million for calendar 2010.

Butler, Shine, Stern and Partners of Sausalito, Calif., has served as creative advertising agency of record for RadioShack since April 2009. BSSP led the development, implementation and evolution of the brand-creative platform, “The Shack,” conceived to “contemporize” the RadioShack brand.

“We are tremendously proud of the progress we've made in collaboration with our partners at BSSP, energizing our iconic retail brand and igniting fresh conversations with consumers about RadioShack and mobility,” said Lee Applbaum, executive vice president and chief marketing officer for RadioShack.

“Although our brand transformation is far from complete, the needs of the business and demands of the competitive and macroeconomic landscape require a different approach to our creative strategy and execution,” Applbaum said. “Consequently, we must ensure that we are aligned with a partner who can develop and execute retail-centric creative focused ultimately on driving consideration and traffic.”

RadioShack said it expects BSSP to participate in the review process.

RadioShack said it has again hired Select Resources International, an agency-review consulting firm based in Santa Monica, Calif., to help the company in the account review.

RadioShack said it expects to appoint its creative agency of record in March.

RadioShack said “the scope of the creative assignment will include strategic and creative development across all marketing channels, including digital, social, mobile, broadcast and print media. Advertising media planning and buying fall outside of the scope of the assignment and are not in review.”

Mindshare, a Chicago-based unit of communications-services firm WPP, is RadioShack's media buying agency of record.

- Scott Nishimura


Icahn bids for Irving-based Commercial Metals Co.

Carl Icahn said today he wants to buy Irving-based Commercial Metals Co. for about $1.73 billion and combine parts of it with metals recycling businesses that he already owns. The billionaire investor, who already owns almost 10 percent of Commercial Metals, which makes, recycles and markets steel and metal products and has facilities around the world, including two Fort Worth locations.

Icahn said he has no confidence in the company’s board and management and will nominate three of his associates to be directors at next year’s shareholder meeting. The company, which has been hurt by weak construction demand, said last month it plans to sell or close a pipe manufacturing plant in Croatia and lay off 350 more workers related to closing five fabricating shops. CMC also said it is closing eight locations that service the construction industry. No affected U.S. sites were identified.CMC’s website lists a construction services location in Fort Worth on Interstate 35W and a recycling yard at 601 N. Throckmorton St., which the Tarrant Regional Water District bought for Trinity River Vision.

 A spokeswoman for Commercial Metals said the company had no immediate comment. On Sunday, the company urged its shareholders to support the reelection of three of its directors at next year’s shareholder meeting. 

-- Jim Fuquay



It's time for Cyber Monday

Exhausted after hitting the malls this weekend? Time for Cyber Monday today, the traditional start of the holiday online shopping season.

With an uncertain retail outlook this holiday season, more shoppers are expected to go to the web, to research products, find gift ideas, and compare prices, industry people say. The National Retail Federation estimates the “average person” will do 36 percent of this legwork online this year, up from 33 percent last year, based on annual surveys. The typical online shopper spends 20 percent more in a web transaction than a shopper at a store, the NRF estimates.

Given all that, not only are more shoppers online, more retailers are meeting them there, boosting free shipping offers, beginning online promotions earlier this holiday season, and boosting their social media and mobile platforms. U.S. online shopping is expected to increase 12-15 percent this holiday season compared to last.

“Retailers who can capture the hearts and minds of consumers before leaving home put themselves in better position to capture the sale,” Dean Tarpley, head of the retail practice for Alvarez & Marsal, a Dallas consulting firm, told reporters during a recent Dow Jones call on the holiday outlook.

Even though the Monday after Thanksgiving represents the cyber kickoff – the NRF estimates 107 million Americans shopped online on Cyber Monday last year - more retailers were out in front by Halloween this year.

In a Shop.org survey of retailers earlier this fall, 52.9 percent said they planned to start online promotions by Halloween, up from 40 percent last year. Another 37.2 percent said they expected to begin online marketing by mid-November.

Nine in 10 online retailers said in the survey they expected to offer free shipping at some point this holiday season, up from 84.8 percent in 2010. Nearly one third – 31.4 percent – said they expected to begin free shipping offers earlier this holiday season than last, and 56.3 percent said their free shipping budget was at least somewhat higher this holiday than last.

At The Container Store, the popular 53-store chain, shoppers get free shipping on $100 orders of stocking stuffers. “We’ve had great success with that in the past, so we have continued it,” Catherine Davis, the company’s director of direct marketing, said.

The company also has installed a calculator on its web site that customers can use to determine how much of an item – ribbon, jars – they need to complete a project. Partners also provide recipes on the site.

The site also includes a Click & Pickup feature that allows customers to buy online and pick up at the store. Fifty percent of web transactions are now for pick up in store, Davis said.

Brick-and-mortar stores increasingly have been offering features such as the ability to order online and pick up at the nearest store, as well as the ability to return merchandise at the store that they bought online.

“The consumer will buy something online, and they want the ability to return it at the store,” said Ed Tauriac, Mid-America regional leader for the consumer business practice at Deloitte.

Eleven percent of shoppers in a Deloitte poll of more than 5,000 consumers in September said they expected to spend more online this holiday season than they did last year. Fifty seven percent said they expected to spend the same, and the remainder, 32 percent, less.

Among shoppers in the shop.org survey who said they planned to spend more online this holiday season, 43.2 percent of shoppers said 24-hour convenience is a main consideration, 36.3 percent said they’ll shop online if shipping is free, 37.2 percent cited lack of desire to fight crowds, and 29.6 percent cited ease of comparing prices.

Scott Nishimura, (817) 390-7808, snishimura@star-telegram.com


Convenience ranked No. 1 among consumers who said in a poll they expected to spend more online this holiday season than last year.

  • Convenience, 72%
  • Better prices, 63%\
  • Easier price comparisons, 54%
  • Better selection, 48%
  • More free shipping offers, 46%
  • Save on gas, 42%
  • Have better technology to shop online, 22%

Source: 2011 Deloitte Annual Holiday Survey


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