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IN BRIEF

Movie Gallery offers to share stores

Dothan, Ala.-based Movie Gallery wants to sublease retail space at some 2,200 Movie Gallery and Hollywood Video stores and has hired Lake Success, N.Y.-based Excess Space Retail Services to help find suitable co-tenants. Movie Gallery expects those retail partners will occupy about 2,500 square feet at each location. “In addition to the incremental revenue we expect to realize through subleasing portions of the stores, we look forward to the additional traffic that our retail partners will generate,” said Keith Cousins, Movie Gallery’s executive vice president and chief development officer, in a press release. “By taking advantage of our outstanding retail presence, we expect this initiative to improve our operating results and create value for our shareholders.” Movie Gallery operates about 4,800 stores in North America under the Movie Gallery and Hollywood Video banners.

Sears: Profits trump sales

Sears Holdings Corp., parent of Kmart and Sears, will focus on boosting profits, even if it means giving up some of its sales volume, Chairman Edward S. Lampert wrote in a note to shareholders in March. “‘No longer are we carrying excessive inventories, spending excessive amounts on marketing and scheduling excessive labor dollars all in the pursuit of a given level of sales,”’ he wrote. Instead, Sears and Kmart are focused on building relationships with customers to sustain long-term profits, the document said. “‘While reducing sales is not a prescription for success on a base of healthy, profitable stores, it can be … where profit was not the primary objective and where sales come from ‘giving product away’ rather than from providing value to the customer,”’ Lampert wrote. For the fourth quarter, ended Jan. 28, same-store sales grew 0.9 percent at Kmart stores and fell 12.1 percent at Sears’ U.S. stores. Net income more than doubled to $648 million, thanks mainly to combining the two retailers’ operations.

Lancôme takes Manhattan

French cosmetics brand Lancôme has opened its first New York City boutique, on Manhattan’s Upper West Side. The boutique, Lancôme’s fourth freestanding U.S. store, includes a full-service spa. The other three are at Mall at Short Hills (N.J.); North Park Center, in Dallas; and Valley Fair Mall, in San Jose, Calif.

Wal-Mart ups ante in Latin America

Wal-Mart Stores said it will boost its stake in Central American Retail Holding Co. to 51 percent and rename the entity Wal-Mart Central America. CARHCO operates 375 supermarkets in five Central American countries and generates about $2.2 billion in annual sales. CARHCO was formed in 2001 as a joint venture of three equal partners: Dutch retailer Royal Ahold; Costa Rica-based Corporación de Supermercados Unidos; and the Paiz family, major shareholders of Guatemala-based retailer La Fragua. Wal-Mart bought Ahold’s 33 percent stake for an undisclosed sum less than a year ago. The CARHCO investment is Wal-Mart’s first in Central America, though the company already has business relationships in the region. Wal-Mart says it directly imports more than $350 million in goods from Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador.

Build-A-Bear’s Passage to India

Build-A-Bear Workshop plans to open its first store in India this year, saying the market boasts the youngest population in the world. The company, which lets customers make their own stuffed animals, says it will open the store through its new international franchisee, The Murjani Group. Bob Buchanan, a retail analyst at A.G. Edwards & Sons, calls Build-A-Bear’s India move “an important step in growing the business.” Last year Murjani joined Marvin Traub, a former chairman of Bloomingdale’s, to set up Murjani Traub India, which will bring international brands and retail concepts to India. The first Build-A-Bear store will probably be located in Mumbai or New Delhi, says Murjani Group. The venture brings the total number of countries with Build-A-Bear franchises to 14. India is the world’s second-largest retail market, according to the A.T. Kearney global retail development index. More than 50 percent of the population is under 21.

Tiffany shines brighter outside NYC

Fewer tourists bought baubles at Tiffany’s New York City flagship last holiday season, but the jewelry retailer says sales at its 59 stores in smaller cities made up for that. Same-store sales were down 2 percent at the Fifth Avenue store in Manhattan, but they were up 7 percent at branch stores. “The flagship’s performance was affected by lower foreign tourist spending in the fourth quarter, which was more than offset by higher sales to local resident customers,” said Mark Aaron, vice president of investor relations, on a conference call. Same-store sales at Tiffany’s 95 non-U.S. stores were up 7 percent for the quarter; in Japan comps grew 7 percent, and in the Asia-Pacific ex-Japan they rose 13 percent, the company said. Total sales at non-U.S. stores, meanwhile, grew 10 percent on a constant-exchange-rate basis.

Ahold fights slump with U.S. cuts

Royal Ahold, the world’s fourth-largest food retailer, says it will slash prices at its U.S. operations in a bid to boost sagging sales. Ahold estimates that sales will grow only 2.5 percent to 3 percent this year, well below the 5 percent target it outlined three years ago. “2005 has been a difficult year with mixed performances in our key business areas,” said CEO Anders Moberg in a press release. “We continue to experience strong competitive pressures in our retail operations.” In a conference call with analysts last week, Moberg said Ahold will continue “cost-reduction initiatives” at its Giant and Stop & Shop divisions this year and that more-aggressive measures may also be in store. “Going forward, we’re very well aware … that we need to take further steps,” he said, “more probably drastic steps than we’ve taken in the past.”

Rewe expands into Russia

Rewe Group, Europe’s fourth-largest supermarket chain, plans to open 82 Billa stores in Russia within the next four years, a more than fivefold increase, as sales in that market surge. Stefan Gesslbauer, CFO of Rewe’s Russian and Belarussian operations, says the company will have 100 outlets in Russia by 2010.

Paiva is Finish Line’s new chain

Finish Line, a seller of athletic shoes and apparel, will call its new chain of stores for women between 25 and 40 Paiva. “Whether this woman needs product, information, or a resource for training needs, Paiva will be a reliable destination for this consumer,” said Alan Cohen, the company’s chairman and CEO. “This store is about an attitude and mind-set and will encompass everything to fit this consumer’s needs.” The 4,000-square-foot, primarily mall-based stores will target women who report household income of at least $80,000 a year and who exercise. The merchandise line will comprise 70 percent soft goods and 30 percent footwear, both national and private-label. At press time Finish Line had plans to open five stores through the spring, though it specified no locations. Jeff Pofsky, a former women’s apparel buyer for Target Corp., will head the operation as vice president.

Storehouse redecorates

Atlanta-based home furnishings retailer Storehouse worked with internationally known architect and designer Michael Graves to come up with a new look. The chain introduced the new design at its 7,749-square-foot store at the Mall at Wellington (Fla.) Green. The prototype incorporates the look of a studio workspace, where Storehouse staff members help patrons create custom designs for their home decorating projects. It features large windows and an exterior canopy supported by industrial-looking brackets, and rugs, fabrics and drapes are displayed along the walls.

Boots reinvests in stores

Boots Group, the U.K.’s biggest health and beauty chain, says it will spend £250 million ($432.8 million) to revamp its 700 smaller stores, inventory management and information technology system. A central automated warehouse the company will set up within three years is to replace its current 17 regional warehouses and truck docks. The funds are coming from the $3.3 billion sale of the company’s Boots Healthcare International division. “This is a major step forward in our plans to build a better Boots,” said CEO Richard Baker in a press release. “Our small stores have been underinvested and are important to the communities they serve.” The chain operates about 1,400 stores in the U.K.

Solstice follows the sun

Solstice Sunglass Boutique says it plans to expand to 120 stores by next year and to 155 by the year after. The chain, which sells high-end sunglasses, currently operates 52 full-price stores that measure between 800 and 1,200 square feet. This year alone Solstice plans to open 31 stores, including an outlet. Openings are slated for Atlanta; Austin, Texas; Baton Rouge, La.; Boston; Jacksonville, Fla.; Las Vegas; Milford, Conn.; Providence, R.I.; San Francisco; St. Louis and other areas.

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