December 18, 2006

Another Sign of Widespread Prosperity, and of A Company That Is Taking Full Advantage of It

Filed under: Business Moves,Economy — Tom @ 3:22 pm

DISCLOSURE: I have done a small amount of past business with one of the subject company’s subsidiaries.


Saturday’s Wall Street Journal had a subscription-only weekend “interview” that was really more of a feature article about Federated Departments Stores, its now-national flagship store Macy’s, its CEO Terry Lundgren, and the “surprising” performance Federated is expected to turn in during the Christmas season:

…. If all goes well, Mr. Lundgren may be the guy who buries the canard, repeated incessantly for at least 30 years, that traditional department stores are history, squeezed to death by trendy specialty stores like Abercrombie and Fitch and social-climbing discounters like Target.

….. After years in the retailing trenches, all at Federated except for six years at Nieman Marcus, Mr. Lundgren took the top job in January 2004. By then, Macy’s had swallowed more than a dozen department store chains, brands like Lazarus, Goldsmith’s, Bon Marché, and Abraham & Straus. With May, he added Hecht’s, Kaufmann’s, Marshall Fields, Filene’s, Foley’s and other stores to Federated’s domain, boosting annual revenues to about $27 billion.

Despite some resistance to the name changes — especially in Chicago — so far the numbers look good. Federated’s November same-store sales figure, up 8.5% from last year, was the best performance “in the company’s history,” Mr. Lundgren said. Federated has since raised its internal growth forecast for the 4th quarter to 5% to 8%, from 3% to 5%.

Better yet, the sales growth is coming from mall stores, which Mr. Lundgren claims is evidence that department stores are gaining market share from rivals. “There’s a resurgence,” he says. “It is indeed growing, but it’s relatively new.” He dismisses the idea that department stores owe their better numbers to the buoyant economy, or to the fact that the total number of department stores is shrinking, inflating the same-store sales of the survivors.

….. According to Mr. Lundgren, even young fashionistas are coming to Macy’s now: a new survey among 18- to 24-year-olds, he says, found that 43% said Macy’s would be the primary place for them to shop this season. “I think it’s because we worked on our assortment to make it relevant to them.”

This high priest of department store revivalism hasn’t converted everyone — yet. But Macy’s is just getting started; there’ll be more changes. Over the next five years, Mr. Lundgren believes that department-store chains “will define the lane we travel in more clearly.” By that he means that stores will settle into a hierarchy, with Bloomingdale’s and Nieman at the top, followed by Nordstrom, Macy’s, J.C. Penney and Kohl’s, and so on down to Wal-Mart.

….. Macy’s has also been sprucing up its stores, trying to dispel the dowdy, department-store image via Mr. Lundgren’s “Reinvent” strategy to make shopping easier. When customers complained that stores were too big and they didn’t know where departments were, Macy’s installed big signs directing them to departments and sometimes to specific brands; when they said they didn’t know where they could try things on, Macy’s put in bigger, more clearly marked fitting rooms and built lounges, often with plasma TV screens tuned to sports and cartoons, for the men and children who waited outside. When customers said that, given the plethora of “take 25% off the last marked price” signs and coupons, they couldn’t do the math and didn’t carry a calculator, Macy’s bought electronic price scanners that calculate the final price of marked-down items for customers before they go to registers. Now in 600 stores, and headed for all Macy’s, “they are getting used millions of times in each store,” he says. Mr. Lundgren also widened store aisles and is upgrading restrooms.

Well of course Mr. Lundgren is going to see Federated’s success as internally driven, and he certainly deserves quite a bit of credit for how things are going. It doesn’t hurt, though, that there is a bit of a wind at his back (previous year comparables, where available, come from this link):

While the majority of shoppers continue to say that everyday low prices (14.2%) and sales or price discounts (36.5%; vs. 37.9% in 2005) bring them into stores, more shoppers this year said that other factors like customer service (4.4%; vs. 3.7% in 2005), product quality (12.4%; vs. 11.0% in 2005), and merchandise selection (24.3%; vs. 23.1% in 2005) are the most important when determining where to shop. Additionally, 6.5 percent of shoppers (same as 2005) said they choose stores with the most convenient location.

Consumer attitudes change incrementally like this when their real incomes are going up; even a 1% change means over a million shoppers doing something differently, which lead to billions in changed spendng patterns. The atttitude shitft represents anecdotal evidence to support the number-crunching from earlier this month that the Paul Krugmans of the world who say that incomes are stagnant are simply wrong. Bully to Federated, despite a very difficult transition to a unified brand and the work involved in integrating the old May Department Stores into the fold, for getting itself into a position to leverage the improved environment in a big way.


UPDATE: Further supporting the quality over price trend, and the overall health of retail sales — It’s certainly possible that I’ve missed it, but unlike many previous years, I haven’t seen a lot of coverage of stores having to resort to pervasive deep discounting to move merchandise during the final weeks of this year’s Christmas shopping season.

Ahmadinejad’s Description as Time’s ‘Person of the Year’ Candidate Changes

Filed under: MSM Biz/Other Ignorance — Tom @ 12:27 pm

Welcome LGF, Hot Air, and other readers! (Thanks to both for the linkovers.) If you’re still looking for a Christmas gift for someone else, or want to keep a New Year’s resolution to get a handle on your moolah and eliminate debt, click on the “Control Your Money Now” graphic on the right.


(Begin Blog Entry)

The original (from Daily Gut and LGF; link is to LGF):


What it says now (as of 12:15 ET; halfway down to the SECOND picture of Ahmadinejad on right; link may require skipping Chrysler ad):


(Future-reference backups: Old, New)

The poor editing reflected in the fact that the first version could ever get through, plus site navigation seemingly designed to maximize annoyance while forcing maximum page views, is why they could name ME sole winner of Person of the Year and I would still not subscribe.

Cross-posted at

Double-Digit Growth and Reaganesque Tax Cuts Are Happening WHERE?

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 11:39 am

From MSNBC/Newsweek (HT Instapundit), one of the world’s best-kept secrets, and yet another example of supply-side econ at work:

Civil war or not, Iraq has an economy, and—mother of all surprises—it’s doing remarkably well. Real estate is booming. Construction, retail and wholesale trade sectors are healthy, too, according to a report by Global Insight in London. The U.S. Chamber of Commerce reports 34,000 registered companies in Iraq, up from 8,000 three years ago. Sales of secondhand cars, televisions and mobile phones have all risen sharply. Estimates vary, but one from Global Insight puts GDP growth at 17 percent last year and projects 13 percent for 2006. The World Bank has it lower: at 4 percent this year. But, given all the attention paid to deteriorating security, the startling fact is that Iraq is growing at all.

….. Even so, there’s a vibrancy at the grass roots that is invisible in most international coverage of Iraq. Partly it’s the trickle-down effect. However it’s spent, whether on security or something else, money circulates. Nor are ordinary Iraqis themselves short on cash. After so many years of living under sanctions, with little to consume, many built up considerable nest eggs—which they are now spending. That’s boosted economic activity, particularly in retail. Imported goods have grown increasingly affordable, thanks to the elimination of tariffs and trade barriers. Salaries have gone up more than 100 percent since the fall of Saddam, and income-tax cuts (from 45 percent to just 15 percent) have put more cash in Iraqi pockets. “The U.S. wanted to create the conditions in which small-scale private enterprise could blossom,” says Jan Randolph, head of sovereign risk at Global Insight. “In a sense, they’ve succeeded.”

Iraq’s economic growth and optimism wouldn’t be so “startling” if it were reported more than once every, oh, 11 months or so.

….. Real-estate prices have risen several hundred percent, suggesting that Iraqis are more optimistic about the future than most Americans are.

That’s because they don’t have our media.

….. A government often accused of being no government at all has somehow managed to take its first steps to liberalize the highly centralized economy of the Saddam era. Iraq has a debt-relief deal with the IMF that requires Baghdad to end subsidies and open up its gas-import market.

….. But again, that’s the remarkable thing. In a business climate that is inhospitable, to say the least, companies like Iraqna are thriving. The withdrawal of a certain great power could drastically reduce the foreign money flow, and knock the crippled economy flat.

Someone please let John Murtha and Dennis Kucinich know that “cut and run” has consequences.

Don’t Look Now, But ….

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 9:40 am

…. the markets are on track to have a pretty good year. Here are the year-to-date performances for the three major US indices (link is subscription-only; please e-mail me if know of a free one with the following data; Update — Here You Go, from Morningstar’s public section (HT e-mailer Rosemary), which has the markets a bit down today, but still preserving double digit gains in all three indices):

DJIA – up 16.12%
S&P 500 – up 14.32%
NASDAQ – up 11.42%

Of course, volatility in general and world events being what they are, it could all evaporate quickly. But anyone would accept breakeven from this point forward to 12/31 and call 2006 acceptable, especially given the barriers.

2006 Weblog Awards Debrief

Filed under: General,News from Other Sites — Tom @ 7:35 am

The results aren’t official, but I don’t expect them to change. So here they are:


BizzyBlog finished 5th in a field of 10, garnering virtually the same number of votes as in 2005, while finishing 7th in a field of 15, when 2-1/2 times as many votes were cast. Intense thanks to all who voted for yours truly.

It was pretty obvious from the beginning that the top three (a top-tier political advocacy group, a 5-year blog pioneer, and a fulltime blogging promoter) were in a zone of their own. Reasoned Audacity, which edged BizzyBlog out for fourth, is a very fine blog run by a Washington power couple, and just got blogrolled. There’s certainly no shame in finishing fifth in this group, especially because each of the blogs I managed to outpoll is very well put together and professionally done.

So, onward and upward, as they say.


UPDATE: Congrats to SOB Alliance members Right Angle Blog (results link) and Viking Spirit (results link) for finishing 2nd and 6th in their respective categories.

Couldn’t Help But Notice (121806)

Filed under: General,Taxes & Government — Tom @ 6:21 am

I’m just the messenger (and the messages, as with this previous one, keeping coming as if manna from heaven) — I cannot tell you how much this guy (also here) and this guy are going to hate this, followed by the “dialog” between Two-Timing the Cosmos (here, here) and Julian Sanchez (HTs to Volokh, who defends DC’s honor; Notes from the Lounge; and Instapundit [See? Manna from heaven.]).

Remember which party dominates DC’s voting, fellas. :–>

There are better topics to cover, so one hopes the flow of manna will subside. There’s no need for me to further elaborate on a point that the other side keeps going further with than I ever did, and that in fact it has obsessed over for years.

The Bellwether’s Bill Sloat notes that Saul Green, a court-appointed police monitor in Cincinnati, is “an ACLU ally in the (NSA) spying case” that is on appeal at the Federal District Court in Cincinnati. That IS odd, as Green’s Cincinnati responsibilty is to be a neutral observer and to report to the City and civil-rights organizations, including the ACLU, which brought the original lawsuit that led to the “Collaborative Agreement” that, among other things, led to Green’s position.

Does Green’s involvement in the NSA appeal represent a conflict of interest that means he can’t be relied on to monitor the Collaborative Agreement and its aftermath properly? On appearances, certainly — he has a vested interest in the ACLU’s success that he apparently didn’t have at the time his monitoring gig started. Is he conflicted in fact? Possibly not, but he ought to be challenged by the City and satisfactorily justify himself on the record as to why not.


Through the first two months of Uncle Sam’s fiscal year, receipts are up 8.8% ($25.2 billion), expenditures are up 4.7% ($19.8 billion), and the reported deficit is $5.4 billion lower than through the same period last year. December and January are big months for collections, so we won’t have a good handle on whether the supply-side momentum continues to chip away at the deficit until mid-February.

Excerpt of the Day: Not Holocaust Deniers as Much as Holocaust Know-Nothings (Update: An Antidote)

Filed under: Quotes, Etc. of the Day,Taxes & Government — Tom @ 6:16 am

From a Sunday LA Times op-ed by Ayaan Hirsi Ali, a Somali immigrant who served in the parliament of the Netherlands until earlier this year, and who is an outspoken critic of radical Islam — a shocking (to me) revelation explains a lot:

….. As a child growing up in Saudi Arabia, I remember my teachers, my mom and our neighbors telling us practically on a daily basis that Jews are evil, the sworn enemies of Muslims, and that their only goal was to destroy Islam. We were never informed about the Holocaust.

….. Western leaders today who say they are shocked by Iranian President Mahmoud Ahmadinejad’s conference this week denying the Holocaust need to wake up to that reality. For the majority of Muslims in the world, the Holocaust is not a major historical event that they deny. We simply do not know it ever happened because we were never informed of it.

….. What’s striking about Ahmadinejad’s conference is the (silent) acquiescence of mainstream Muslims. I cannot help but wonder: Why is there no counter-conference in Riyadh, Cairo, Lahore, Khartoum or Jakarta condemning Ahmadinejad? Why are the 57 members of the Organization of the Islamic Conference silent on this?

Could the answer be as simple as it is horrifying: For generations, the leaders of these so-called Muslim countries have been spoon-feeding their populations a constant diet of propaganda similar to the one that generations of Germans (and other Europeans) were fed — that Jews are vermin and should be dealt with as such? In Europe, the logical conclusion was the Holocaust. If Ahmadinejad has his way, he shall not want for compliant Muslims ready to act on his wish.


UPDATE: Give CBS’s “60 Minutes” props (HT LGF) for puncturing the darkness, and, given the recent horrid Denial Conference in Iran, for its timing in doing so, in its story about the opening up of the archives at Bad Arolsen, Germany. The TV show segment was intensely powerful, but way too short. The total victim count is 17 million, which includes survivors. This brings out an often-overlooked point about the Holocaust, if viewed broadly: Even though the deaths of 6 million Jews are the most historically significant because they were related to an unprecedented attempt to exterminate an entire race of people, an at least equal and probably greater number of non-Jews also died. Specifically, according to a related Wiki entry, roughly 2.5 million others died who were in groups targeted for extermination, plus the following:

The following groups of people were also killed by the Nazi regime, but there is little evidence that the Nazis planned to systematically target them for genocide as was the case for the groups above.

  • 3.5–6 million other Slavic civilians
  • 2.5–4 million Soviet POWs
  • 1–1.5 million political dissidents

Vista: To Buy or Not to Buy?

Filed under: Business Moves,Money Tip of the Day — Tom @ 6:11 am

Steven J. Vaugh-Nichols at eWeek says “Why Bother?”

Joe Wilcox says, “Yes, Bother.”

BizzyBlog links. You decide.

Powerful Stuff

Filed under: Taxes & Government,US & Allied Military — Tom @ 6:06 am

I wonder how many others from the Vietnam Era, which I was barely too young to have to wrestle with personally, are having thoughts similar to these — or should be?

Jimmy Carter Won’t Debate ‘Apartheid’

Filed under: Business Moves — Tom @ 6:01 am

Not at Brandeis, at least, against Alan Dershowitz.

Has he been challenged at all in any of his appearances? As a business move supporting the sales of a book with such weak premises, it’s smart. As a meaningful contribution to the discusson over what to do substantively in the Middle East — not so much.

Positivity: Chopper Pilot Hailed a Hero

Filed under: Positivity — Tom @ 5:56 am

From New Zealand, this is indeed impressive:

12/12/2006 9:52:02

The pilot of a helicopter that crashed on Mt Ruapehu is being hailed a hero.

Five people, including three Department of Conservation staff, were carrying out research and lahar monitoring on the mountain when the Hughes 500 helicopter crashed into the side of the crater.

Rescue helicopter pilot Dan Harcourt says the pilot, who suffered a broken foot in the crash, scaled a 30 metre vertical ice wall using an ice axe, then hiked down the mountain until he came across a group of trampers. They used a cellphone to raise the alarm.

Another helicopter working on the mountain dropped a line down to the crash site to winch up the passengers, who were taken to the mountain top and airlifted off.

The four passengers had mild hypothermia and broken bones.