The latest information from leading market research company, The NPD Group, Inc.’s (NPD) Economy Tracker shows consumer sentiment is on the rise and concern regarding job security is decreasing.
NPD’s General Economic Perception Indicator rose from 36.5 points in March to 40.8 points in April. The indicator measures consumer concerns regarding the economy on a scale between 0 and 100, with 0 being “Very Concerned” and 100 being “Very Confident.”
“These results are encouraging and indicate that the consumer is feeling more positive about the state of our economy,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc.
The survey also showed a 7% decline in the number of consumers who are “very concerned” about the security of their jobs. “How consumers feel about the security of their incomes has an impact on how they respond at retail,” noted Cohen.
This decreasing concern regarding job security may have been a factor in the up-tick of the Retail Response Indicator, which increased almost four points from 35.9 in March to 39.5 points in April. “Consumers are telling us they are still buying only what they need and that they are motivated to purchase by sales and special promotions.” said Cohen. The Retail Response indicator measures consumer spending intentions on a 0 to 100 scale, with 0 representing “Reduce or Spend Less” and 100 representing “Spend More.”
“As news of our economy continues to improve and reach the ears of consumers, we will see that they are starting to move beyond just purchasing necessities. This movement is critical as we begin to progress through this period of stabilization," concluded Cohen.
The Economy Tracker is based on online surveys completed by 1,000 respondents each month. The sample is nationally representative. Results are delivered in 12 monthly reports, quarterly summaries and a year-end analysis.
Showing posts with label local lifestyle. Show all posts
Showing posts with label local lifestyle. Show all posts
Wednesday, May 27, 2009
Wednesday, May 20, 2009
Economic downturn may have lasting effect on consumer behavior
The economic struggles of the last year that have taken a heavy toll on retail may have a lasting effect on how consumers shop and buy – one every retailer and supplier will have to deal with.
According to a new report from Information Resources Inc., research suggests that most shoppers will continue with their current mindset for a long time – even after the economy recovers. The IRI research compares the thinking to that of the children of the Depression and says it is a basic “rewiring of behavior (that) that will have long-term effects on shoppers’ bargain-hunting habits, where they get their information and the number and types of stores they will frequent.”
At the same time, Nielsen reported at its recent Consumer 360 Conference that the Dollar Store and similar stores are thriving, attracting new customers and are not just for low-income shoppers anymore.
“As consumers respond to the economic downturn by simplifying their lives, the dollar channel is providing convenience, value, and a new level of shopping consistency,” said Jeff Gregori, vice president of retail services for Nielsen in his presentation, "Rise of the Dollar Channel."
Nielsen research has shown consumers of all income levels are coming to the channel but that the most growth is among higher-income shoppers – up 10 percent compared to a year ago – and that the growth accelerated in the last half of 2008.
No matter whether you side with the forecasts that the economy will recover later this year or not until late in 2010, experts are taking a look at its effect on shoppers not only today, but in a decade or two. Experts are saying they think the American consumer has begun to rethink the so-called American Dream of buying a house that rises in value, an easy availability of credit, and a better future. Meanwhile they are willing to pay money for some items, such as “affordable indulgences,” but are looking to find more and more bargains too.
In addition, they are looking at such practices as pooling resources with friends and family, for example by sharing yard equipment.
In the study, 71 percent (up from 64 percent) said they would look at store flyers before going to a store or while at the store, and 82 percent (up from 63 percent) said they would bring coupons, while 44 percent (down from 48 percent) said they would make additional unplanned purchases in-store.
“The Downturn Generation will take significant convincing before they believe it is safe to open their wallets and purses again,” said research author IRI president of consulting and innovation, Thom Blischok. “This group has less long-term optimism and a much more cautious outlook for the future than their predecessors.”
The research, titled, “Dissecting the Downturn Generation: Recognizing and Leveraging Permanence In Today's Transformational Economy,”, also shared nine tips for consumer goods manufacturers and retailers:
Shift merchandising out of the store and into the home – Shoppers are doing more research about products at home where they also are downloading coupons.
Increase Emphasis on Online and Social Media Presence – Many are embracing less traditional media in favor of websites, blogs and social media sites, and research often becomes a viral, collaborative effort.
Recognize and Assist with Changing Rituals – Where applicable, manufacturers should try to make it easier for consumers to “stock up” on some items by offering larger quantities, and retailers can put them in special areas.
Focus on Familiar Products – Line extensions rather than new products may be more successful for the short-term.
Understand that "Good Enough" is Good Enough – Re-engineering an existing product to make it cost less compared to introducing or selling a higher-priced item may be more worthwhile.
Realize That Shoppers Will Travel for a Deal – A good deal will prompt consumers to drive farther while brand and retailer loyalty may erode.
Collaborate to Find Common Ground – Retailer margins may continue to erode so trading partner will need new strategies to collaborate effectively and successfully.
Adapt to the Rapid Pace of Change – If the recession continues, businesses should be prepared and ready for shoppers to cut more items out of their closets, houses, medicine cabinets and diets.
Prepare for the New Conservative Consumer – Optimism is not long-term and most of this generation will remain cautious about the future.
“Change creates opportunity,” Blischok wrote, “and today’s economic environment reflects more change than any time since the 1930s. While the opportunities are somewhat different,… ample opportunities exist to collaborate and improve product offerings, assortments and layouts, as well as pricing and promotions.”
The entire white paper can be downloaded from Retailwire by clicking here (registration is required)
According to a new report from Information Resources Inc., research suggests that most shoppers will continue with their current mindset for a long time – even after the economy recovers. The IRI research compares the thinking to that of the children of the Depression and says it is a basic “rewiring of behavior (that) that will have long-term effects on shoppers’ bargain-hunting habits, where they get their information and the number and types of stores they will frequent.”
At the same time, Nielsen reported at its recent Consumer 360 Conference that the Dollar Store and similar stores are thriving, attracting new customers and are not just for low-income shoppers anymore.
“As consumers respond to the economic downturn by simplifying their lives, the dollar channel is providing convenience, value, and a new level of shopping consistency,” said Jeff Gregori, vice president of retail services for Nielsen in his presentation, "Rise of the Dollar Channel."
Nielsen research has shown consumers of all income levels are coming to the channel but that the most growth is among higher-income shoppers – up 10 percent compared to a year ago – and that the growth accelerated in the last half of 2008.
No matter whether you side with the forecasts that the economy will recover later this year or not until late in 2010, experts are taking a look at its effect on shoppers not only today, but in a decade or two. Experts are saying they think the American consumer has begun to rethink the so-called American Dream of buying a house that rises in value, an easy availability of credit, and a better future. Meanwhile they are willing to pay money for some items, such as “affordable indulgences,” but are looking to find more and more bargains too.
In addition, they are looking at such practices as pooling resources with friends and family, for example by sharing yard equipment.
In the study, 71 percent (up from 64 percent) said they would look at store flyers before going to a store or while at the store, and 82 percent (up from 63 percent) said they would bring coupons, while 44 percent (down from 48 percent) said they would make additional unplanned purchases in-store.
“The Downturn Generation will take significant convincing before they believe it is safe to open their wallets and purses again,” said research author IRI president of consulting and innovation, Thom Blischok. “This group has less long-term optimism and a much more cautious outlook for the future than their predecessors.”
The research, titled, “Dissecting the Downturn Generation: Recognizing and Leveraging Permanence In Today's Transformational Economy,”, also shared nine tips for consumer goods manufacturers and retailers:
Shift merchandising out of the store and into the home – Shoppers are doing more research about products at home where they also are downloading coupons.
Increase Emphasis on Online and Social Media Presence – Many are embracing less traditional media in favor of websites, blogs and social media sites, and research often becomes a viral, collaborative effort.
Recognize and Assist with Changing Rituals – Where applicable, manufacturers should try to make it easier for consumers to “stock up” on some items by offering larger quantities, and retailers can put them in special areas.
Focus on Familiar Products – Line extensions rather than new products may be more successful for the short-term.
Understand that "Good Enough" is Good Enough – Re-engineering an existing product to make it cost less compared to introducing or selling a higher-priced item may be more worthwhile.
Realize That Shoppers Will Travel for a Deal – A good deal will prompt consumers to drive farther while brand and retailer loyalty may erode.
Collaborate to Find Common Ground – Retailer margins may continue to erode so trading partner will need new strategies to collaborate effectively and successfully.
Adapt to the Rapid Pace of Change – If the recession continues, businesses should be prepared and ready for shoppers to cut more items out of their closets, houses, medicine cabinets and diets.
Prepare for the New Conservative Consumer – Optimism is not long-term and most of this generation will remain cautious about the future.
“Change creates opportunity,” Blischok wrote, “and today’s economic environment reflects more change than any time since the 1930s. While the opportunities are somewhat different,… ample opportunities exist to collaborate and improve product offerings, assortments and layouts, as well as pricing and promotions.”
The entire white paper can be downloaded from Retailwire by clicking here (registration is required)
Thursday, May 7, 2009
Did you hear?...Economy negatively affecting vacation plans but silver lining for outdoor
According to a recent BIGresearch American Pulse Survey, conducted in April 2009, just under 59 percent of Americans say the economy has affected their vacation plans this summer. Many are making changes to their travel behaviors this summer, the survey indicated. Most frequently cited as a cost-cutting measure was reducing the number of days spent in a hotel (30.5 percent), while cutting back on the quality of a hotel registered just over 20 percent. Just over 27 percent said that the solution to save money on travel was to look for a local getaway that did not require long drives or air travel.
The survey question asked, "As a way of coping with the current economic environment, are you making any of the following changes to your vacation travel behaviors?" The survey had 4,023 respondents.
BIGresearch's blog provides a bit more insight and reason for optimism for the outdoor community. One response stated, "My husband and I are trying to regain money we lost in the stock market, so we definitely will not be going on vacation. We plan to take a few days for hiking in the Smokies where we live." Another stated, "The only vacation plan I have will be a picnic at the local park!" Yet another responded, "We are hoping to plan a camping trip to the UP of MI sometime, but that is as far as we are going to get unless the economy picks up."
The survey question asked, "As a way of coping with the current economic environment, are you making any of the following changes to your vacation travel behaviors?" The survey had 4,023 respondents.
BIGresearch's blog provides a bit more insight and reason for optimism for the outdoor community. One response stated, "My husband and I are trying to regain money we lost in the stock market, so we definitely will not be going on vacation. We plan to take a few days for hiking in the Smokies where we live." Another stated, "The only vacation plan I have will be a picnic at the local park!" Yet another responded, "We are hoping to plan a camping trip to the UP of MI sometime, but that is as far as we are going to get unless the economy picks up."
Wednesday, March 18, 2009
Retail - Recession a Good Time for Retailers
If ever there was a time for guerilla marketing this is it. As the focus has shifted to conserving cash, retailers and brands alike have cut their marketing budgets. One survey taken late last year showed 33% of national advertisers, including some of the nation’s biggest brands, were planning on cutting their advertising spend in 2009. Dick’s Sporting Goods told analysts last week it would reduce its advertising spend as a percentage of sales in Q3.
Marketing professionals argue that’s why a recession is the best time to boost your marketing activity. As other brands and retailers dial down their messaging there is that much less clutter to break through.
Even if you don’t have more money to spend on advertising, this is a good time to focus your messaging on whatever marketing you can afford. In a survey conducted for the OIA Specialty Retail Operational Report 2007, more retailers (53%) attributed increased sales to improved advertising than to eight other reasons, including more advertising and a strong economy. Brands, retailers and marketing gurus consulted last week by OIA WebNews indicated they are getting the best return on investment by focusing on existing customers, building up their online communities with user generated content and generating public relations.
“I would wrap all the marketing dollars I had left around those ideas that live in PR,” said Gregg Bagni, a marketing consultant whose firm Alien Truth Communications works with brands in the active outdoor lifestyle market. “I think PR is elevated to another level because PR has a lot more extension and legs on the web from a viral standpoint.”
Below are some marketing tactics that appear to be working in today’s environment.
A constant flow of promotions. Use your close-out buys to fuel a steady stream of sale promotions expected by today’s consumer. Dick’s Sporting Goods has been emphasizing $29 and $39 running shoes in its Sunday circulars for months and is working closely with suppliers to identify other close-out deals to drive traffic. Offer first-come, first-serve daily or weekly deals on your Website to those willing to sign up for an e-mail alert.
Expand rental/outfitter business. Gear rental and outfitting enjoy the highest gross margin of anything outdoor retailers do and will drive motivated buyers into your store.
Focus on existing customers. Existing customers tend to be twice as profitable as new ones, so start rewarding them. Reinvigorate your ties with local outdoor clubs, schools, parks and recreation departments and other NGOs. Partner with them to bring in speakers or hold events that will elevate your brand. If creativity is not your forte, hire a local enthusiast for 10 hours a week to work on promotions and community relations. Give all employees 20% off coupons or $10 gift certificates for distribution to enthusiasts, friends and family outside the store.
Mock “Liquidation Sale.” Bagni offers this free guerilla marketing tip. Buy a gigantic block of ice, carve your logo in it, put it in your parking lot and announce you are having a “Winter Liquidation Sale” until it melts. Hook up a live web cam to your web site to show how much ice is left and send photos to local TV stations every day. “In March, if you’re above Mason-Dixon Line, you can probably get a week out of it,” said Bagni. “The down side is if it melts quickly you’d have to put a tent out there, but then you could have fun with that. It’s totally guerilla.”
Marketing professionals argue that’s why a recession is the best time to boost your marketing activity. As other brands and retailers dial down their messaging there is that much less clutter to break through.
Even if you don’t have more money to spend on advertising, this is a good time to focus your messaging on whatever marketing you can afford. In a survey conducted for the OIA Specialty Retail Operational Report 2007, more retailers (53%) attributed increased sales to improved advertising than to eight other reasons, including more advertising and a strong economy. Brands, retailers and marketing gurus consulted last week by OIA WebNews indicated they are getting the best return on investment by focusing on existing customers, building up their online communities with user generated content and generating public relations.
“I would wrap all the marketing dollars I had left around those ideas that live in PR,” said Gregg Bagni, a marketing consultant whose firm Alien Truth Communications works with brands in the active outdoor lifestyle market. “I think PR is elevated to another level because PR has a lot more extension and legs on the web from a viral standpoint.”
Below are some marketing tactics that appear to be working in today’s environment.
A constant flow of promotions. Use your close-out buys to fuel a steady stream of sale promotions expected by today’s consumer. Dick’s Sporting Goods has been emphasizing $29 and $39 running shoes in its Sunday circulars for months and is working closely with suppliers to identify other close-out deals to drive traffic. Offer first-come, first-serve daily or weekly deals on your Website to those willing to sign up for an e-mail alert.
Expand rental/outfitter business. Gear rental and outfitting enjoy the highest gross margin of anything outdoor retailers do and will drive motivated buyers into your store.
Focus on existing customers. Existing customers tend to be twice as profitable as new ones, so start rewarding them. Reinvigorate your ties with local outdoor clubs, schools, parks and recreation departments and other NGOs. Partner with them to bring in speakers or hold events that will elevate your brand. If creativity is not your forte, hire a local enthusiast for 10 hours a week to work on promotions and community relations. Give all employees 20% off coupons or $10 gift certificates for distribution to enthusiasts, friends and family outside the store.
Mock “Liquidation Sale.” Bagni offers this free guerilla marketing tip. Buy a gigantic block of ice, carve your logo in it, put it in your parking lot and announce you are having a “Winter Liquidation Sale” until it melts. Hook up a live web cam to your web site to show how much ice is left and send photos to local TV stations every day. “In March, if you’re above Mason-Dixon Line, you can probably get a week out of it,” said Bagni. “The down side is if it melts quickly you’d have to put a tent out there, but then you could have fun with that. It’s totally guerilla.”
Thursday, March 12, 2009
Retail - January Outdoor Sales Mixed Bag as Retail Prices Plunge, Internet Sale
January 2009 retail sales for all core outdoor stores (chain, internet, specialty)* started off the new year on a mixed note, according to the most recent edition of The Outdoor Industry Association (OIA) Outdoor Topline Report, produced for OIA by the Leisure Trends Group.
According to The OIA Outdoor Topline Report, retail sales for all core outdoor stores (chain, internet, specialty)* gained 4% in dollars ($363,157,003) compared to January 2008 ($350,116,342), with the internet channel realizing a 35% gain in dollar sales while specialty stores (-2%) and chain stores (-8%), logged declines in overall dollars this month.
Internet Sales Continue to Grow
Online sales were very healthy in January. Retail prices plunged across the board as consumers took advantage of bargains and sales; however, the resultant increase in units was more than enough to make up the difference. The channel improved on last January’s dollar sales by double-digits in nearly every category and moved from 21% of total dollars sold last January to 27% this month. Carryover (defined as old and/or discontinued merchandise) sales leapt to record amounts in January, a significant factor in driving prices down and units up for the period.
Category Bright Spots
Although total sales dropped 2% in specialty stores this month, there were many bright spots. Categories with dollar growth in January included packs, climbing gear, winter equipment, hiking boots, winter boots, trail running shoes and multisport shoes. Accessories were especially hot sellers this month, as most equipment, apparel and footwear accessory categories enjoyed healthy growth compared to last January.
In chain stores, sales were driven by good deals and low retail-selling prices. The entire channel was up 5% in unit sales but fell 8% in dollars as plunging retail prices ate away gains from increased volume. Nearly every product category saw retail prices slip significantly from January 2008. Carryover product sales soared in almost every category, moving from 2% of all chain dollar sales last January to 7% this month and contributing to the overall decline in retail prices. The equipment accessory category was the only major product category to gain dollar sales this month, inching up 1%.
Positive Growth in Paddlesports
All paddle product sales from all three channels (specialty, chain, and internet) grew 7% in dollars this month. Compared to last January, specialty stores grew 6% in dollars, chain stores dipped 14% and internet grew 46% off an extremely small base. Boats, paddles and accessories each increased sales in specialty stores this month. As a whole, January is not a significant month for paddlesport sales; it typically accounts for about 2% of each year’s total sales and is traditionally the smallest month for sales. Nonetheless, the positive January growth was a welcome start to the calendar year.
According to The OIA Outdoor Topline Report, retail sales for all core outdoor stores (chain, internet, specialty)* gained 4% in dollars ($363,157,003) compared to January 2008 ($350,116,342), with the internet channel realizing a 35% gain in dollar sales while specialty stores (-2%) and chain stores (-8%), logged declines in overall dollars this month.
Internet Sales Continue to Grow
Online sales were very healthy in January. Retail prices plunged across the board as consumers took advantage of bargains and sales; however, the resultant increase in units was more than enough to make up the difference. The channel improved on last January’s dollar sales by double-digits in nearly every category and moved from 21% of total dollars sold last January to 27% this month. Carryover (defined as old and/or discontinued merchandise) sales leapt to record amounts in January, a significant factor in driving prices down and units up for the period.
Category Bright Spots
Although total sales dropped 2% in specialty stores this month, there were many bright spots. Categories with dollar growth in January included packs, climbing gear, winter equipment, hiking boots, winter boots, trail running shoes and multisport shoes. Accessories were especially hot sellers this month, as most equipment, apparel and footwear accessory categories enjoyed healthy growth compared to last January.
In chain stores, sales were driven by good deals and low retail-selling prices. The entire channel was up 5% in unit sales but fell 8% in dollars as plunging retail prices ate away gains from increased volume. Nearly every product category saw retail prices slip significantly from January 2008. Carryover product sales soared in almost every category, moving from 2% of all chain dollar sales last January to 7% this month and contributing to the overall decline in retail prices. The equipment accessory category was the only major product category to gain dollar sales this month, inching up 1%.
Positive Growth in Paddlesports
All paddle product sales from all three channels (specialty, chain, and internet) grew 7% in dollars this month. Compared to last January, specialty stores grew 6% in dollars, chain stores dipped 14% and internet grew 46% off an extremely small base. Boats, paddles and accessories each increased sales in specialty stores this month. As a whole, January is not a significant month for paddlesport sales; it typically accounts for about 2% of each year’s total sales and is traditionally the smallest month for sales. Nonetheless, the positive January growth was a welcome start to the calendar year.
Tuesday, March 10, 2009
Retailers - Vicious economic times could call for brutal retail game plans
Surviving vicious retail markets can require difficult and unpleasant action -- bankruptcy, staff reductions, renegotiating leases or shuttering underperforming stores. Although the navigation of today's challenging marketplace can be brutal, those steps are often necessary.
That was the consensus of a group of business attorneys, retail real estate experts and specialty retailer financial officers who gathered recently for a conference in Seattle. The goal: offer tips and suggestions for distressed retailers to help them get a handle on the extreme downturn in the economy.
"Retailers are facing unprecedented challenges," said Scott Staff, business development director at event sponsor Perkins Coie, Washington state's largest law firm and legal counsel to leading retailers and others in consumer products. "We expect the challenges to grow in number and complexity."
Practical advice for surviving the downturn ranged from knowing when a customer is in trouble (sources include www.debtwire.com, a real-time news and data site for financial professionals published by the Financial Times, plus www.MarketWatch.com) to what to look for when a customer is in trouble (e.g. are they stretching out payments).
Other advice included:
Be sure to have a diverse base - Don't become dependant on any one single customer or account, said Marv Toland, Eddie Bauer's chief financial officer. Prior to Eddie Bauer, Toland was executive vice president and CFO of London Fog Group from 1999 to 2007. Seattle-based London Fog Group sought Chapter 11 bankruptcy protection twice (prompting some ribbing from panelists about the company having filed Chapter 22). Click here to see a March 23, 2006, SNEWS® story, "London Fog files again for Ch. 11 reorganization, to divest Pacific Trail.")
"You can't prevent these shocks (customers going out of business), so make sure that no single one can kill you. You have to diversify," Toland said.
Later, when asked what a business owner can do when suppliers or customers are operating under Chapter 11 reorganization and court protection, Toland suggested a clinically objective approach.
"Ask why they are in bankruptcy," he said. "If you see a business model that really is failing and the ground is shifting so fast, it may not be fixable in today's environment."
Use bankruptcy if it could provide breathing room - One tool a bankruptcy filing can provide is the ability to unload unprofitable leases with limited exposure to landlords, Smith said.
It's no secret that retailers are struggling. Retailers are seeing their revenue plunge as financially strapped U.S. consumers spend less and scrutinize purchase decisions. The holiday shopping season failed to save some companies as seasonal sales fell, with some areas logging the first declines in 20 years.
Last year saw a growing number of companies seeking bankruptcy protection, shuttering thousands of stores, breaking leases with shopping malls and laying off workers. And retailers are far from alone in rising bankruptcy rates: newspapers, auto makers, casinos, electronics retailers, and fitness clubs, manufacturers and retailers. The latest: Ritz Camera Centers sought Chapter 11 protection in early March as did Joe's Sports & Outdoor (Click here to see that March 5, 2009, SNEWS story, "Joe's Sports & Outdoor files for bankruptcy protection.")
…But it's not for everyone - A bankruptcy is not "a solution to a business problem, it's a solution to a balance sheet problem," said Alan Smith, Perkins Coie partner, during a retail restructuring and bankruptcies seminar. Bankruptcy offers "just an opportunity for the debtor to take a deep breath."
"There's no point in filing bankruptcy if you don't have a core business that is worth saving," Smith said. "You have to look at business and ask if it is a business that can survive in today's environment."
Carefully examine workforce reductions - During such a down economy, knowing when and how to reduce your workforce is, of course, another important key to survival. To catch the benefits of the next boom, a company also needs to manage its workforce with an eye on top talent retention, employee morale and strategic hiring.
"Some clients are looking for bargains, but that doesn't always work out," said Roy Notowitz, partner at Portland-based Generator Group, a recruiting firm. In a down economy, there are "more candidates on the market, but usually the market floods from the bottom up. "
In these times, it's difficult to convince professionals to relocate for jobs, Notowitz added. Trailing spouses often fear they won't find new employment after following a partner to a new location, he said. Decreased residential real estate values also hamper relocation deals.
Avoid layoff mistakes - The other side of the headcount equation -- reductions in workforce -- sees more action. More companies are scrambling to trim their worker roles. Perkins Coie attorney Linda Walton advises employers to avoid layoff missteps that could land them in front of a jury.
"For every single person you layoff, you need a reason for laying off that person," she said.
Develop selection criteria; train your managers on the process; and sit down and map it out in advance, she said.
As bad as 2008 was, 2009 isn't looking much better. In fact, you can already say sayonara to New Year's cheer, said Nina Kampler, executive vice president of Northbrook, Ill.-based Hilco Real Estate. She spearheads retail business development and works with major retailers and commercial companies to implement real estate portfolio restructuring strategies.
"People still had jobs in 2008. (In 2009), actual net worth has disappeared and there are way fewer shoppers," Kampler said.
Phase out underperforming store locations - In order to stay healthy, retailers can't allow underperforming, duplicative or non-core locations to weigh them down, she said. Retailers have to grab their landlord's ear -- and renegotiate lease terms, she said.
Kampler said she sees "a mass movement of probably every retailer in this country with more than one store acknowledging that in order to stay alive the expense line of rent and occupancy -- the R&O -- has to shorten."
"What we are really talking about when you strip this all away is a retail revolution," she said. "It's about valuations, about what was that shopping center worth? How many times did it change hands? All that perceived value has been filtered down to a rent number and the tenants -- the retailers -- were happy to pay as long as the people were ringing up hundreds of thousands in sales each week. All that is the backdrop to first quarter 09. Where it will settle, we don't know. But people are shopping differently and today's values are all wrong."
Every retailer should carefully study the value of their real estate, Kampler said.
Given the downturn, some landlords (particularly smaller ones) are nervous and are willing to deal, willing to work with retailers to try and keep them.
"They not only want a warm body in the real estate, they have a personal pride and interest in the operation," she said. "They are proud of (the businesses) they have in the center and they want to keep them there."
To get the landlord's attention, you could show the level of threat and demonstrate the downward trend in sales, she said. Of course, Chapter 11 provides another tool that gets the landlord's ear. But she thinks many landlords would rather renegotiate first, and she encouraged that route whenever possible. Forge win-win solutions with landlords, she added.
That was the consensus of a group of business attorneys, retail real estate experts and specialty retailer financial officers who gathered recently for a conference in Seattle. The goal: offer tips and suggestions for distressed retailers to help them get a handle on the extreme downturn in the economy.
"Retailers are facing unprecedented challenges," said Scott Staff, business development director at event sponsor Perkins Coie, Washington state's largest law firm and legal counsel to leading retailers and others in consumer products. "We expect the challenges to grow in number and complexity."
Practical advice for surviving the downturn ranged from knowing when a customer is in trouble (sources include www.debtwire.com, a real-time news and data site for financial professionals published by the Financial Times, plus www.MarketWatch.com) to what to look for when a customer is in trouble (e.g. are they stretching out payments).
Other advice included:
Be sure to have a diverse base - Don't become dependant on any one single customer or account, said Marv Toland, Eddie Bauer's chief financial officer. Prior to Eddie Bauer, Toland was executive vice president and CFO of London Fog Group from 1999 to 2007. Seattle-based London Fog Group sought Chapter 11 bankruptcy protection twice (prompting some ribbing from panelists about the company having filed Chapter 22). Click here to see a March 23, 2006, SNEWS® story, "London Fog files again for Ch. 11 reorganization, to divest Pacific Trail.")
"You can't prevent these shocks (customers going out of business), so make sure that no single one can kill you. You have to diversify," Toland said.
Later, when asked what a business owner can do when suppliers or customers are operating under Chapter 11 reorganization and court protection, Toland suggested a clinically objective approach.
"Ask why they are in bankruptcy," he said. "If you see a business model that really is failing and the ground is shifting so fast, it may not be fixable in today's environment."
Use bankruptcy if it could provide breathing room - One tool a bankruptcy filing can provide is the ability to unload unprofitable leases with limited exposure to landlords, Smith said.
It's no secret that retailers are struggling. Retailers are seeing their revenue plunge as financially strapped U.S. consumers spend less and scrutinize purchase decisions. The holiday shopping season failed to save some companies as seasonal sales fell, with some areas logging the first declines in 20 years.
Last year saw a growing number of companies seeking bankruptcy protection, shuttering thousands of stores, breaking leases with shopping malls and laying off workers. And retailers are far from alone in rising bankruptcy rates: newspapers, auto makers, casinos, electronics retailers, and fitness clubs, manufacturers and retailers. The latest: Ritz Camera Centers sought Chapter 11 protection in early March as did Joe's Sports & Outdoor (Click here to see that March 5, 2009, SNEWS story, "Joe's Sports & Outdoor files for bankruptcy protection.")
…But it's not for everyone - A bankruptcy is not "a solution to a business problem, it's a solution to a balance sheet problem," said Alan Smith, Perkins Coie partner, during a retail restructuring and bankruptcies seminar. Bankruptcy offers "just an opportunity for the debtor to take a deep breath."
"There's no point in filing bankruptcy if you don't have a core business that is worth saving," Smith said. "You have to look at business and ask if it is a business that can survive in today's environment."
Carefully examine workforce reductions - During such a down economy, knowing when and how to reduce your workforce is, of course, another important key to survival. To catch the benefits of the next boom, a company also needs to manage its workforce with an eye on top talent retention, employee morale and strategic hiring.
"Some clients are looking for bargains, but that doesn't always work out," said Roy Notowitz, partner at Portland-based Generator Group, a recruiting firm. In a down economy, there are "more candidates on the market, but usually the market floods from the bottom up. "
In these times, it's difficult to convince professionals to relocate for jobs, Notowitz added. Trailing spouses often fear they won't find new employment after following a partner to a new location, he said. Decreased residential real estate values also hamper relocation deals.
Avoid layoff mistakes - The other side of the headcount equation -- reductions in workforce -- sees more action. More companies are scrambling to trim their worker roles. Perkins Coie attorney Linda Walton advises employers to avoid layoff missteps that could land them in front of a jury.
"For every single person you layoff, you need a reason for laying off that person," she said.
Develop selection criteria; train your managers on the process; and sit down and map it out in advance, she said.
As bad as 2008 was, 2009 isn't looking much better. In fact, you can already say sayonara to New Year's cheer, said Nina Kampler, executive vice president of Northbrook, Ill.-based Hilco Real Estate. She spearheads retail business development and works with major retailers and commercial companies to implement real estate portfolio restructuring strategies.
"People still had jobs in 2008. (In 2009), actual net worth has disappeared and there are way fewer shoppers," Kampler said.
Phase out underperforming store locations - In order to stay healthy, retailers can't allow underperforming, duplicative or non-core locations to weigh them down, she said. Retailers have to grab their landlord's ear -- and renegotiate lease terms, she said.
Kampler said she sees "a mass movement of probably every retailer in this country with more than one store acknowledging that in order to stay alive the expense line of rent and occupancy -- the R&O -- has to shorten."
"What we are really talking about when you strip this all away is a retail revolution," she said. "It's about valuations, about what was that shopping center worth? How many times did it change hands? All that perceived value has been filtered down to a rent number and the tenants -- the retailers -- were happy to pay as long as the people were ringing up hundreds of thousands in sales each week. All that is the backdrop to first quarter 09. Where it will settle, we don't know. But people are shopping differently and today's values are all wrong."
Every retailer should carefully study the value of their real estate, Kampler said.
Given the downturn, some landlords (particularly smaller ones) are nervous and are willing to deal, willing to work with retailers to try and keep them.
"They not only want a warm body in the real estate, they have a personal pride and interest in the operation," she said. "They are proud of (the businesses) they have in the center and they want to keep them there."
To get the landlord's attention, you could show the level of threat and demonstrate the downward trend in sales, she said. Of course, Chapter 11 provides another tool that gets the landlord's ear. But she thinks many landlords would rather renegotiate first, and she encouraged that route whenever possible. Forge win-win solutions with landlords, she added.
A Third of Global Suppliers Unaware of Climate Change Risks: CDP
NEW YORK, N.Y. -- One in three global suppliers believes climate change poses no risk to their operations despite the increasing amount of attention being paid to supply chain greenhouse gas emissions.
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Nearly three dozen companies -- including heavy hitters such as Johnson and Johnson, P&G, Johnson Controls, Boeing, Dell and PepsiCo -- called on thousands of their major suppliers to disclose emissions and reduction strategies through the Carbon Disclosure Project.
Of the more than 2,300 suppliers asked to participate in the disclosure, 634 responded, the vast majority of which -- 71 percent -- were divulging their emissions and mitigation strategies for the first time. Fifty-eight percent of respondents acknowledged climate change risks.
Supply chain emissions often represent the largest slice of corporate carbon footprints, but is, in many ways, the least understood aspect of a company's environmental impacts.
Since many suppliers are confronting climate change risks for the first time, the CDP suggests companies engage them, raise awareness and identify the greatest opportunities to improve efficiency. There must be an open dialogue on the types of information needed and how they will be used, and companies should seek support at the board level of supplier companies.
"Procurement teams worldwide must take a role in developing more sustainable business practices and embed the issue of climate change into an organization's core operations," Francis Way, CDP's head of supply chain, said while announcing the survey results. "Risks posed to a company's supply chain from the impacts of climate change include extreme weather events, water scarcity, regulation and associated cost volatility. Companies must take steps to mitigate the impact of these risks to their business."
Michael Meehan, CEO of Carbonetworks, a carbon measurement software developer, hailed the CDP's contribution to supply chain emissions measurement but cautioned that addressing carbon goes beyond using a simple spreadsheet to track emissions.
"What's needed are strategies for managing corporate carbon emissions to achieve the ultimate goal -- that of reductions," Meehan said via email. "The tools to do that already exist, and corporations and their consultants need to evolve their thinking to reflect the possibility of active carbon management, versus passive measurement."
\
Nearly three dozen companies -- including heavy hitters such as Johnson and Johnson, P&G, Johnson Controls, Boeing, Dell and PepsiCo -- called on thousands of their major suppliers to disclose emissions and reduction strategies through the Carbon Disclosure Project.
Of the more than 2,300 suppliers asked to participate in the disclosure, 634 responded, the vast majority of which -- 71 percent -- were divulging their emissions and mitigation strategies for the first time. Fifty-eight percent of respondents acknowledged climate change risks.
Supply chain emissions often represent the largest slice of corporate carbon footprints, but is, in many ways, the least understood aspect of a company's environmental impacts.
Since many suppliers are confronting climate change risks for the first time, the CDP suggests companies engage them, raise awareness and identify the greatest opportunities to improve efficiency. There must be an open dialogue on the types of information needed and how they will be used, and companies should seek support at the board level of supplier companies.
"Procurement teams worldwide must take a role in developing more sustainable business practices and embed the issue of climate change into an organization's core operations," Francis Way, CDP's head of supply chain, said while announcing the survey results. "Risks posed to a company's supply chain from the impacts of climate change include extreme weather events, water scarcity, regulation and associated cost volatility. Companies must take steps to mitigate the impact of these risks to their business."
Michael Meehan, CEO of Carbonetworks, a carbon measurement software developer, hailed the CDP's contribution to supply chain emissions measurement but cautioned that addressing carbon goes beyond using a simple spreadsheet to track emissions.
"What's needed are strategies for managing corporate carbon emissions to achieve the ultimate goal -- that of reductions," Meehan said via email. "The tools to do that already exist, and corporations and their consultants need to evolve their thinking to reflect the possibility of active carbon management, versus passive measurement."
Tuesday, February 3, 2009
Industry Watch: Keeping an eye on layoffs, bankruptcies and closings… Who’s next?
Among mainstream stores and suppliers, lists grow longer each day it seems of shutterings, bankruptcies, layoffs and rumors of demise. From Mervyns and Home Depot, to Circuit City and Starbucks, we read daily about the financial and human toll the economy is taking on businesses.
The same sadly holds true for our industries. We hear reports and rumors daily about a manufacturer or store that is or will be laying off more employees or reducing stores -- or filing for bankruptcy protection. To survive, those decisions could be a necessary evil, but it could be argued that some companies are in this situation only because they were not as smart about growth as they could have been – and may not have or are not now taking the appropriate steps to survive the slowdown. Remember the dot-com era? One website (www.fu_____company.com – you fill in the blanks since there was one word that not even SNEWS® is willing to publish) tracked the dot-com industry’s unfolding drama of companies collapsing and workers losing everything – click here to find what is left of that website. Ironically, like the dot-com’s it covered, it too hasn’t survived – perhaps that’s a good sign – and can’t even sell its URL.
Starting today, in a less morbid fashion we hope, SNEWS is tracking the economic impacts, both large and small, as outdoor and fitness industry companies work to navigate through today’s marketplace of minefields. In the chart below, you will find a company name, the date of some “action,” a brief summary of the situation – layoffs, closings, bankruptcy filings – and then a link to the appropriate SNEWS news with more information and details. It is certainly sobering to see an account of the impacts on our industries in one list, rather than scattered here and there among headlines and archives as individual articles. We will keep you posted as we update the list when new reports of turmoil roll in. Feel free to drop us a note at snewsbox@snewsnet.com if you know of companies or individuals who have been impacted and should be added to our list – or of ones we have missed. As always details and dates are appreciated. Naturally, we keep the sources of our reports confidential, if requested, and we fact-check every tip.
Check out our current SNEWS Reader Poll – a new ongoing feature since our website redesign launched in January – that ask, “If the economy does not improve in the next six months, do you believe additional businesses are at risk of going under?” The poll was posted Jan. 26 and will remain active until Feb. 9. Simply click here to voice your opinion. To view the regularly updated survey results as well as past Reader Polls and their results, click here or, simply log in at www.snewsnet.com and scroll down the right navigation bar until you arrive at the colorful survey graphic.
And, if you have not yet seen our blog posting on the subject of layoffs, click here to read…and to chime in should you desire.
The same sadly holds true for our industries. We hear reports and rumors daily about a manufacturer or store that is or will be laying off more employees or reducing stores -- or filing for bankruptcy protection. To survive, those decisions could be a necessary evil, but it could be argued that some companies are in this situation only because they were not as smart about growth as they could have been – and may not have or are not now taking the appropriate steps to survive the slowdown. Remember the dot-com era? One website (www.fu_____company.com – you fill in the blanks since there was one word that not even SNEWS® is willing to publish) tracked the dot-com industry’s unfolding drama of companies collapsing and workers losing everything – click here to find what is left of that website. Ironically, like the dot-com’s it covered, it too hasn’t survived – perhaps that’s a good sign – and can’t even sell its URL.
Starting today, in a less morbid fashion we hope, SNEWS is tracking the economic impacts, both large and small, as outdoor and fitness industry companies work to navigate through today’s marketplace of minefields. In the chart below, you will find a company name, the date of some “action,” a brief summary of the situation – layoffs, closings, bankruptcy filings – and then a link to the appropriate SNEWS news with more information and details. It is certainly sobering to see an account of the impacts on our industries in one list, rather than scattered here and there among headlines and archives as individual articles. We will keep you posted as we update the list when new reports of turmoil roll in. Feel free to drop us a note at snewsbox@snewsnet.com if you know of companies or individuals who have been impacted and should be added to our list – or of ones we have missed. As always details and dates are appreciated. Naturally, we keep the sources of our reports confidential, if requested, and we fact-check every tip.
Check out our current SNEWS Reader Poll – a new ongoing feature since our website redesign launched in January – that ask, “If the economy does not improve in the next six months, do you believe additional businesses are at risk of going under?” The poll was posted Jan. 26 and will remain active until Feb. 9. Simply click here to voice your opinion. To view the regularly updated survey results as well as past Reader Polls and their results, click here or, simply log in at www.snewsnet.com and scroll down the right navigation bar until you arrive at the colorful survey graphic.
And, if you have not yet seen our blog posting on the subject of layoffs, click here to read…and to chime in should you desire.
Global environmental standard bluesign now on speedy growth track
A year ago, bluesign's CEO Peter Waeber held a press conference at the ispo trade show in Munich, Germany, with a smattering of curious journalists in the room who had never heard of his company.
bluesign, he patiently explained while flanked by representatives from MEC and two suppliers, is a Swiss company dedicated to addressing health and safety atrocities throughout the entire textile manufacturing and selling chain. He has been establishing its plan and making industry contacts at bluesign since 2000, a demonstration of his trademark Swiss patience, thoroughness and, in this case, confidence.
"It's a slow process," he told SNEWS® at that time. Waeber knew bluesign's time was coming.
"I have a vision and a mission," he said. "We had a vision to bring something easier to the market…. I know we can do it in a better way; however, it's not easy to motivate the chemical industry."
Time is now
Twelve months later, bluesign's time has come. Companies are being motivated, difficult or not. bluesign has more than quadrupled its membership, albeit still only 10 brands; had a 50-percent stake in the company acquired in July 2008 by Swiss SGS (www.sgs.com), a 200-year-old inspection, verification, testing and certification company; and the "bluefinder," a database for its members of processes and chemicals, will be relaunched by March 2009.
But with no time to rest, Waeber trots the globe to push membership and support. He prowled the aisles at Outdoor Retailer Winter Market in January 2009, moving from meeting to meeting, and he received a Top 25 honor as a 2009 SNEWS Power Player (Click here to see his interview and photo in a Jan. 19, 2009, SNEWS story.) Always understated, Waeber paused a moment at the show to show an edge of a smile about the award, but quickly moved on to his next meeting -- and to continue work on bluesign's future that could change the world's environment.
"We have a lot of projects," he told SNEWS. "The companies that are now members realize and they also know sustainability isn't happening overnight.
"But it's happening," he said. "We can talk and talk and talk, but now we have to take action. I'm not pessimistic at all."
All action, not just talk
bluesign (www.bluesign.com), which Waeber spells using a lower case "b," tackles the problem of environmentally unfriendly manufacturing at its root, from air emission and waste water to chemical processes and components, using systems only a long-time textile scientist like Waeber -- but one with an environmental passion -- could create. Waeber is also a chemist and outdoor enthusiast who has studied economics. He has worked at various textile mills and, before starting bluesign, was the technical director and a member of the board at Schoeller Textil AG, also in Switzerland, where the concept was born.
Said Jeff Crook, product manager at MEC, who participated in the conference at ispo a year ago, "They're focused on solutions."
"The foundation of the system is economically sustainable," Crook said. "It has to be economically sustainable for everybody in the production chain."
Another participant, Roger Yeh, president of Everest Textile of Taiwan, put it more simply, "I trust Peter."
How it works
According to the company, the bluesign standard's five principles are:
>> resource productivity
>> consumer safety>> air emission
>> water emission
>> occupational health and safety
This "gives suppliers, manufacturers, retailers, brands and consumers the good feeling of having done everything possible for the environment, health and safety," a company statement said.
There are various components -- all rather precise albeit a bit complicated -- designed to link closely the manufacturing and selling chain, create buy-in from all sides, and give each a tool to find out more to operate in an environmentally friendlier way while also being more transparent and gaining more knowledge about others in the chain.
First, there are three levels of participants:
>> Supporters are companies from the chemical and machine industry.
>> Partners are mills, manufacturers and converters.
>> Members (also known as users) are brands and retailers.
The most recent members are REI, which announced its membership on Jan. 20 and Deuter on Jan. 31. Others include Patagonia and MEC, both of which were the first, joining in May 2007; The North Face, Vaude, Helly Hansen, Hagloefs, Eileen Fisher and Boardroom/Eco Apparel.
Then, there are three systems provided by bluesign for information and transparency:
>> bluetool, a source of information for the chemical industry.
>> bluefinder, the guide for manufacturers to source better materials and mills.
>> blueguide, still in development, a tool for all member brands and retailers to help them choose better environmental sources.
Only a year away from celebrating its 10th anniversary, bluesign has goals, big goals, for the year, including 100 percent growth and opening a hub in Hong Kong. Waeber and his small team will collect a lot of frequent flyer miles to get there since partners, supporters and members don't just sign papers to join. bluesign, with a vision that reads "one world -- one standard," must in fact do lengthy inspections and analysis on-site at each potential partner and supporter, a process which can take up to a year, he said. When completed, the applicants get a thick report with recommendations for changes and a list of bad components or methods (black), a list of mediocre ones (gray) and a list of good ones (blue). Being a bluesign participant doesn't necessarily mean your company is perfect since the fact-finding systems (finder or guide) show what part of a supplier is good and what is not so good, literally grading the firm like a report card.
"It's a process," he said.
There is no way around this kind of detail because, as Waeber told SNEWS, "It would get around if it were bull."
With most of the world calling these types of practices "green," Waeber went with blue. He said blue is a more holistic color -- think of the blue sky and the blue sea, he said."
Green washing is not what we are all about," Waeber said. "We want to bring solutions on the table."
--Therese IknoianSNEWS® View: Certainly, bluesign is a business since companies pay for the report cards and screening, but in the end the process is obsessively detailed and will give all segments of the supply chain better information when they make choices. Although addressing the textile chain, such an organization -- if not different divisions of bluesign in the future -- could certainly address other segments, from hardgoods such as stoves to the likes of fitness equipment -- the manufacturing to pour steel and form plastics can't be great for our environment. With the forward-thinking and long-term thinking, bluesign could be paving the way for a more environmentally sound planet for our children and their children. --SNEWS® Editors
bluesign, he patiently explained while flanked by representatives from MEC and two suppliers, is a Swiss company dedicated to addressing health and safety atrocities throughout the entire textile manufacturing and selling chain. He has been establishing its plan and making industry contacts at bluesign since 2000, a demonstration of his trademark Swiss patience, thoroughness and, in this case, confidence.
"It's a slow process," he told SNEWS® at that time. Waeber knew bluesign's time was coming.
"I have a vision and a mission," he said. "We had a vision to bring something easier to the market…. I know we can do it in a better way; however, it's not easy to motivate the chemical industry."
Time is now
Twelve months later, bluesign's time has come. Companies are being motivated, difficult or not. bluesign has more than quadrupled its membership, albeit still only 10 brands; had a 50-percent stake in the company acquired in July 2008 by Swiss SGS (www.sgs.com), a 200-year-old inspection, verification, testing and certification company; and the "bluefinder," a database for its members of processes and chemicals, will be relaunched by March 2009.
But with no time to rest, Waeber trots the globe to push membership and support. He prowled the aisles at Outdoor Retailer Winter Market in January 2009, moving from meeting to meeting, and he received a Top 25 honor as a 2009 SNEWS Power Player (Click here to see his interview and photo in a Jan. 19, 2009, SNEWS story.) Always understated, Waeber paused a moment at the show to show an edge of a smile about the award, but quickly moved on to his next meeting -- and to continue work on bluesign's future that could change the world's environment.
"We have a lot of projects," he told SNEWS. "The companies that are now members realize and they also know sustainability isn't happening overnight.
"But it's happening," he said. "We can talk and talk and talk, but now we have to take action. I'm not pessimistic at all."
All action, not just talk
bluesign (www.bluesign.com), which Waeber spells using a lower case "b," tackles the problem of environmentally unfriendly manufacturing at its root, from air emission and waste water to chemical processes and components, using systems only a long-time textile scientist like Waeber -- but one with an environmental passion -- could create. Waeber is also a chemist and outdoor enthusiast who has studied economics. He has worked at various textile mills and, before starting bluesign, was the technical director and a member of the board at Schoeller Textil AG, also in Switzerland, where the concept was born.
Said Jeff Crook, product manager at MEC, who participated in the conference at ispo a year ago, "They're focused on solutions."
"The foundation of the system is economically sustainable," Crook said. "It has to be economically sustainable for everybody in the production chain."
Another participant, Roger Yeh, president of Everest Textile of Taiwan, put it more simply, "I trust Peter."
How it works
According to the company, the bluesign standard's five principles are:
>> resource productivity
>> consumer safety>> air emission
>> water emission
>> occupational health and safety
This "gives suppliers, manufacturers, retailers, brands and consumers the good feeling of having done everything possible for the environment, health and safety," a company statement said.
There are various components -- all rather precise albeit a bit complicated -- designed to link closely the manufacturing and selling chain, create buy-in from all sides, and give each a tool to find out more to operate in an environmentally friendlier way while also being more transparent and gaining more knowledge about others in the chain.
First, there are three levels of participants:
>> Supporters are companies from the chemical and machine industry.
>> Partners are mills, manufacturers and converters.
>> Members (also known as users) are brands and retailers.
The most recent members are REI, which announced its membership on Jan. 20 and Deuter on Jan. 31. Others include Patagonia and MEC, both of which were the first, joining in May 2007; The North Face, Vaude, Helly Hansen, Hagloefs, Eileen Fisher and Boardroom/Eco Apparel.
Then, there are three systems provided by bluesign for information and transparency:
>> bluetool, a source of information for the chemical industry.
>> bluefinder, the guide for manufacturers to source better materials and mills.
>> blueguide, still in development, a tool for all member brands and retailers to help them choose better environmental sources.
Only a year away from celebrating its 10th anniversary, bluesign has goals, big goals, for the year, including 100 percent growth and opening a hub in Hong Kong. Waeber and his small team will collect a lot of frequent flyer miles to get there since partners, supporters and members don't just sign papers to join. bluesign, with a vision that reads "one world -- one standard," must in fact do lengthy inspections and analysis on-site at each potential partner and supporter, a process which can take up to a year, he said. When completed, the applicants get a thick report with recommendations for changes and a list of bad components or methods (black), a list of mediocre ones (gray) and a list of good ones (blue). Being a bluesign participant doesn't necessarily mean your company is perfect since the fact-finding systems (finder or guide) show what part of a supplier is good and what is not so good, literally grading the firm like a report card.
"It's a process," he said.
There is no way around this kind of detail because, as Waeber told SNEWS, "It would get around if it were bull."
With most of the world calling these types of practices "green," Waeber went with blue. He said blue is a more holistic color -- think of the blue sky and the blue sea, he said."
Green washing is not what we are all about," Waeber said. "We want to bring solutions on the table."
--Therese IknoianSNEWS® View: Certainly, bluesign is a business since companies pay for the report cards and screening, but in the end the process is obsessively detailed and will give all segments of the supply chain better information when they make choices. Although addressing the textile chain, such an organization -- if not different divisions of bluesign in the future -- could certainly address other segments, from hardgoods such as stoves to the likes of fitness equipment -- the manufacturing to pour steel and form plastics can't be great for our environment. With the forward-thinking and long-term thinking, bluesign could be paving the way for a more environmentally sound planet for our children and their children. --SNEWS® Editors
Monday, February 2, 2009
State of Green Business 2009: Green is Growing, But Not Fast Enough
OAKLAND, Calif. -- The second annual State of Green Business Report, created by Joel Makower and the editors of GreenBiz.com, looks at hard data behind 20 indicators to find out just how well companies are doing on addressing environmental issues.
Green business activity has continued to grow, even during a down economy, but the aggregate environmental progress being made is marginal, according to a new report, titled "State of Green Business 2009," the second annual report of its kind published by GreenBiz.com.
The State of Green Business shows that companies are making progress on only a handful of the 20 measures of performance investigated. In some areas, such as in the case of climate change, company commitments and achievements are failing to stem the overall rise of carbon emissions.
"This year's update is a mixed bag of encouraging and discouraging news," says Joel Makower, executive editor of GreenBiz.com and the report's principal author. "But on balance, despite a growing chorus of corporate commitments and actions, we're less optimistic that these activities, in aggregate, are addressing planetary problems at sufficient scale and speed.
"The report found many reasons for optimism, according to the authors. Green building is on the rise, spurring new technologies that save energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to rigorously assess the environmental impact of their products using sophisticated metrics, sending signals up the supply chain that tomorrow's products will need to hew to higher levels of environmental responsibility.
The report marks the second year of the GreenBiz Index, a set of 20 indicators of U.S. business environmental progress. They include macroeconomic measures, such as carbon emissions, toxic releases, packaging materials, and paper use per unit of gross domestic product, as well as the fuel efficiency of corporate vehicle fleets, construction of green office space, investments in cleantech, and the financial costs of companies' environmental impacts.
Among the findings:
• Greenhouse gas emissions in the United States rose in 2007 by 1.4 percent in absolute terms over 2006, but shrank 0.6 percent in intensity -- that is, when measured as a percentage of gross domestic product (GDP). That's the smallest annual decrease since 2002, when intensity improved 0.4 percent.
• U.S. patents for clean-energy technologies -- wind, fuel cells, hydroelectric, tidal, and geothermal -- in 2008 were at their highest level in seven years.
• Americans are continuing their love affair with the car, and appear unwilling to give up their vehicles for the solo commute to work. Since a high of 77.8 percent in 2003, the number of solo commuters has inched down slowly to 76.1 percent in 2007.
• American industry has been doing more with less energy for decades. The amount of energy required -- in the form of electricity and fuel -- per dollar of GDP has dropped more than 75 percent since 1950.• The growth of certified green buildings, which for years had been growing from 10 to 90 percent, slowed dramatically in 2008.
• Generation of non-hydro renewable energy -- including solar, wind, and biomass -- grew nearly 7 percent in 2007 from the year before, outpacing the 2.3 percent annual growth in all electricity generation during the same period.
• The packaging intensity of the economy -- the aluminum, plastics, cardboard, and other materials used per dollar of GDP -- continued to decline slightly, as it has for the past several years.
• Over the past decade, the amount of paper used per dollar of GDP dropped by 27 percent and the amount of paper recycled rose -- also by 27 percent.
• Over the past 18 years, disposal and release of chemicals by U.S. companies decreased by 1.77 billion pounds, or 59 percent.
The report also includes the top 10 green business trends of 2007. They include the rise of energy efficiency in commercial buildings; the emergence of water as "the new carbon"'; the growth of college curricula on environmental management; growing company efforts to push environmental thinking to the rank and file; the failings of green marketing to captivate consumers; and the increased use by companies of such green design principles as green chemistry and biomimicry
Green business activity has continued to grow, even during a down economy, but the aggregate environmental progress being made is marginal, according to a new report, titled "State of Green Business 2009," the second annual report of its kind published by GreenBiz.com.
The State of Green Business shows that companies are making progress on only a handful of the 20 measures of performance investigated. In some areas, such as in the case of climate change, company commitments and achievements are failing to stem the overall rise of carbon emissions.
"This year's update is a mixed bag of encouraging and discouraging news," says Joel Makower, executive editor of GreenBiz.com and the report's principal author. "But on balance, despite a growing chorus of corporate commitments and actions, we're less optimistic that these activities, in aggregate, are addressing planetary problems at sufficient scale and speed.
"The report found many reasons for optimism, according to the authors. Green building is on the rise, spurring new technologies that save energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to rigorously assess the environmental impact of their products using sophisticated metrics, sending signals up the supply chain that tomorrow's products will need to hew to higher levels of environmental responsibility.
The report marks the second year of the GreenBiz Index, a set of 20 indicators of U.S. business environmental progress. They include macroeconomic measures, such as carbon emissions, toxic releases, packaging materials, and paper use per unit of gross domestic product, as well as the fuel efficiency of corporate vehicle fleets, construction of green office space, investments in cleantech, and the financial costs of companies' environmental impacts.
Among the findings:
• Greenhouse gas emissions in the United States rose in 2007 by 1.4 percent in absolute terms over 2006, but shrank 0.6 percent in intensity -- that is, when measured as a percentage of gross domestic product (GDP). That's the smallest annual decrease since 2002, when intensity improved 0.4 percent.
• U.S. patents for clean-energy technologies -- wind, fuel cells, hydroelectric, tidal, and geothermal -- in 2008 were at their highest level in seven years.
• Americans are continuing their love affair with the car, and appear unwilling to give up their vehicles for the solo commute to work. Since a high of 77.8 percent in 2003, the number of solo commuters has inched down slowly to 76.1 percent in 2007.
• American industry has been doing more with less energy for decades. The amount of energy required -- in the form of electricity and fuel -- per dollar of GDP has dropped more than 75 percent since 1950.• The growth of certified green buildings, which for years had been growing from 10 to 90 percent, slowed dramatically in 2008.
• Generation of non-hydro renewable energy -- including solar, wind, and biomass -- grew nearly 7 percent in 2007 from the year before, outpacing the 2.3 percent annual growth in all electricity generation during the same period.
• The packaging intensity of the economy -- the aluminum, plastics, cardboard, and other materials used per dollar of GDP -- continued to decline slightly, as it has for the past several years.
• Over the past decade, the amount of paper used per dollar of GDP dropped by 27 percent and the amount of paper recycled rose -- also by 27 percent.
• Over the past 18 years, disposal and release of chemicals by U.S. companies decreased by 1.77 billion pounds, or 59 percent.
The report also includes the top 10 green business trends of 2007. They include the rise of energy efficiency in commercial buildings; the emergence of water as "the new carbon"'; the growth of college curricula on environmental management; growing company efforts to push environmental thinking to the rank and file; the failings of green marketing to captivate consumers; and the increased use by companies of such green design principles as green chemistry and biomimicry
Tuesday, January 13, 2009
Dismal Holiday Pushes Domestic Mills Over the Brink
The dismal holiday season at retail has forced a slew of textile plant closings, dealing another blow to the viability of an already withering domestic textile and apparel industry.
Invista, Milliken & Co. and Gildan Activewear are among the companies that are cutting back.
The frequency of factory closings has gained momentum since late September. As economic conditions worsened through October and November and holiday orders failed to materialize, the pace of layoffs and plant shutdowns accelerated, with North Carolina, Georgia and Tennessee particularly hard hit.
The recent spate of layoffs and closures hasn’t been limited to the few remaining independent mills, said Lloyd Wood, director of membership and media outreach at the American Manufacturing Trade Action Coalition.
“You’re seeing the most efficient people out there closing plants,” Wood said. “The weak sisters have long disappeared, and you’re seeing the best of the best either drastically reduce operations in some instances or shut down plants.”
Invista, which manufacturers products such as Coolmax and Lycra, has made significant cutbacks. In October, the company said it would trim 400 of its 500 workers at a carpet fiber facility in Seaford, Del. This was followed in early December with the announcement that the company would lay off more than 200 out of 600 employees at a facility in Waynesboro, Va. Invista said a plunge in demand for home carpeting forced the company to halt nylon production at the plant. Soon after Christmas, Invista said it was shuttering a yarn processing plant in Athens, Ga., with 50 workers losing jobs.
Milliken & Co. and Gildan Activewear have also been forced to reduce costs. Milliken announced the closing of a textile plant in Barnwell, S.C., on Dec. 30 that employed 125 people. In releasing its year-end financial results on Dec. 11, Gildan said it would “phase out sock finishing operations in the U.S. by the end of June and consolidate operations in Honduras, in order to remain globally competitive in the current economic conditions.”
As a result, the company said it would eliminate 200 jobs at its facility in Fort Payne, Ala., and close a knitting factory in Virginia that employed 180 people. Gildan also plans to expand production capabilities in the Dominican Republic.
Smaller textile players that had been treading water in recent years reached the end of the line when holiday orders failed to materialize and the chance for future orders disappeared. Belmont, N.C.-based yarn manufacturer R.L. Stowe Mills Inc. said on Jan. 5 that it would close within 60 days, bringing the company’s 108-year run to an end.
“Business conditions in the fourth quarter deteriorated suddenly and dramatically,” said president and chief executive officer D. Harding Stowe. “Looking forward, management does not see sales returning to levels sufficient to sustain business.”
The coalition’s Wood said, “It’s not about competence. It really is about the economic conditions and the underlying [government trade] policy. Until one of those things is fixed, it’s going to be tough for anybody.”
According to the U.S. Department of Labor, a total of 2.6 million jobs were lost in 2008. More than half evaporated in the last four months of the year, and the unemployment rate rose to 7.2 percent last month from 6.7 percent in November. Textile mills manufacturing apparel fabric eliminated 2,900 positions last year to employ 138,800 workers. Home furnishing fabric manufacturers, known as textile product mills, cut 1,700 positions to 143,500. Apparel manufacturers eliminated 2,800 jobs to 185,300.
Since the push to manufacture abroad that began in the Seventies, domestic apparel manufacturing has steadily dwindled. In 1973, apparel manufacturing employment topped out at 1.5 million, while the textile industry peaked at 1.3 million in 1951.
The downward trend is expected to continue. According to the Bureau of Labor Statistics’ Career Guide to Industries, about 595,000 people were employed in the textile and apparel manufacturing industries in 2006. That number is expected to contract by more than 35 percent by 2016. California, Georgia and North Carolina employ more than 40 percent of all workers in the industry.
Invista, Milliken & Co. and Gildan Activewear are among the companies that are cutting back.
The frequency of factory closings has gained momentum since late September. As economic conditions worsened through October and November and holiday orders failed to materialize, the pace of layoffs and plant shutdowns accelerated, with North Carolina, Georgia and Tennessee particularly hard hit.
The recent spate of layoffs and closures hasn’t been limited to the few remaining independent mills, said Lloyd Wood, director of membership and media outreach at the American Manufacturing Trade Action Coalition.
“You’re seeing the most efficient people out there closing plants,” Wood said. “The weak sisters have long disappeared, and you’re seeing the best of the best either drastically reduce operations in some instances or shut down plants.”
Invista, which manufacturers products such as Coolmax and Lycra, has made significant cutbacks. In October, the company said it would trim 400 of its 500 workers at a carpet fiber facility in Seaford, Del. This was followed in early December with the announcement that the company would lay off more than 200 out of 600 employees at a facility in Waynesboro, Va. Invista said a plunge in demand for home carpeting forced the company to halt nylon production at the plant. Soon after Christmas, Invista said it was shuttering a yarn processing plant in Athens, Ga., with 50 workers losing jobs.
Milliken & Co. and Gildan Activewear have also been forced to reduce costs. Milliken announced the closing of a textile plant in Barnwell, S.C., on Dec. 30 that employed 125 people. In releasing its year-end financial results on Dec. 11, Gildan said it would “phase out sock finishing operations in the U.S. by the end of June and consolidate operations in Honduras, in order to remain globally competitive in the current economic conditions.”
As a result, the company said it would eliminate 200 jobs at its facility in Fort Payne, Ala., and close a knitting factory in Virginia that employed 180 people. Gildan also plans to expand production capabilities in the Dominican Republic.
Smaller textile players that had been treading water in recent years reached the end of the line when holiday orders failed to materialize and the chance for future orders disappeared. Belmont, N.C.-based yarn manufacturer R.L. Stowe Mills Inc. said on Jan. 5 that it would close within 60 days, bringing the company’s 108-year run to an end.
“Business conditions in the fourth quarter deteriorated suddenly and dramatically,” said president and chief executive officer D. Harding Stowe. “Looking forward, management does not see sales returning to levels sufficient to sustain business.”
The coalition’s Wood said, “It’s not about competence. It really is about the economic conditions and the underlying [government trade] policy. Until one of those things is fixed, it’s going to be tough for anybody.”
According to the U.S. Department of Labor, a total of 2.6 million jobs were lost in 2008. More than half evaporated in the last four months of the year, and the unemployment rate rose to 7.2 percent last month from 6.7 percent in November. Textile mills manufacturing apparel fabric eliminated 2,900 positions last year to employ 138,800 workers. Home furnishing fabric manufacturers, known as textile product mills, cut 1,700 positions to 143,500. Apparel manufacturers eliminated 2,800 jobs to 185,300.
Since the push to manufacture abroad that began in the Seventies, domestic apparel manufacturing has steadily dwindled. In 1973, apparel manufacturing employment topped out at 1.5 million, while the textile industry peaked at 1.3 million in 1951.
The downward trend is expected to continue. According to the Bureau of Labor Statistics’ Career Guide to Industries, about 595,000 people were employed in the textile and apparel manufacturing industries in 2006. That number is expected to contract by more than 35 percent by 2016. California, Georgia and North Carolina employ more than 40 percent of all workers in the industry.
Friday, January 9, 2009
November Outdoor Sales Slow, Accessories Remain Bright Spot
The difficult economic situation slowed outdoor industry sales in November, according to the most recent edition of The OIA Outdoor Topline Report.
The day after Thanksgiving has long been the traditional kick-off of the Holiday shopping season. This year, Black Friday occurred on November 28, leaving only three big shopping days in November. Black Monday, traditionally the biggest day for Internet deals and sales, occurred on December 1, removing those online sales from November altogether. It remains to be seen how much of a boost Black Monday sales will give December, but the timing could only hurt November’s tally. Last year, Black Friday fell on November 23 and Black Monday fell on November 26.
November Sales
In monthly sales, retail sales for all core outdoor stores (chain, internet, specialty)* fell 11% in dollars ($407,383,909) compared to November 2007 ($458,334,314), the first month of overall dollar sales decline since the recession started in December 2007. All three store channels and all four major product categories (equipment, equipment accessories, apparel and footwear) declined in November.
Internet sales saw their first month of negative sales growth since the OIA Topline began tracking online sales in 2005. The channel declined 7% in overall dollars compared to November 2007. All four major product categories slid in November. Core outdoor chain stores lost 19% in overall dollar sales compared to November 2007, with declines coming from all four product categories. Specialty stores fell 8% from last November, as all four major product categories suffered losses.
All paddle product sales from all three channels (specialty, chain, and internet) fell 16% in units and 19% in dollars with retail prices dropping 4%. All three store channels declined in November, suffering across-the-board losses compared to November 2007. However, November is a very small month for paddlesport sales, accounting for less than 3% of each year’s total. Year to date, overall dollar sales were down just 2%.
Several bright spots emerged in November. Looking at all three channels, small items such as water bottles, headwear and handwear increased sales. Winter boots also fared well; the category grew 6% compared to last November.
November sales account for about 9% of a typical year’s total dollars. This November’s declines were not enough to affect the entire year. Year-to-date, all three channels together were up 5% in total unit sales and 6% in dollar sales. In YTD dollars, all equipment increased 8%, equipment accessories 10%, apparel 5% and footwear 4%. All three store channels’ YTD dollar sales remained in the black through the end of November.
Wednesday, January 7, 2009
Monday, January 5, 2009
Saturday, December 20, 2008
GOT TO HAVE GOTS
FOR IMMEDIATE RELEASE:
econscious - First Green Company to Earn the Global Organic Textile Standard (GOTS) Certification
Petaluma, Calif., December 19, 2008 — econscious, experts in supplying organic and sustainable apparel to brands worldwide, is excited to become the first and only United States supplier certified by the Global Organic Textile Standard (GOTS).
GOTS is the highest and most comprehensive international standard for Organic textiles from farm to finished product. As brands align themselves with the green movement, both to satisfy the growing demand of conscious consumers and to align with their brand's core-values, many are turning to econscious’ experts to streamline the time, expertise and resources required to ensure the organic status of their apparel. econscious' President, Dale Denkensohn, helped lead Patagonia's conversion to organic cotton in the 1990's and is amongst the pioneers of organic and sustainable manufacturing. According to Mr. Denkensohn, "Our goal is to be the most trusted source for organic and sustainable blank apparel and accessories." Denkensohn continues, "The GOTS certification is a hallmark achievement. It helps position econscious to make a larger impact towards a better future by guaranteeing piece of mind to the growing market of conscientious consumers."
The GOTS certification ensures that the entire manufacturing process adheres to a strict set of standards, including criteria such as types of dyes allowed, types of closures and hardware use, substances prohibited in manufacturing, and the treatment of waste water. GOTS also includes important social components to ensure living wages are paid and a safe, hygienic work environment is provided.
Friday, November 28, 2008
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