News Archive

Saks to start Black Friday sales early: Hudson’s Bay CEO

Black Friday comes early to Saks Fifth Avenue stores this year.

The luxury retailer, owned by Canadian department store operator Hudson’s Bay Co (HBC.TO), will start Black Friday sales on Wednesday, Chief Executive Jerry Storch said.

“We thought it would be nice for customers to be able to come on Wednesday and get the great Black Friday offerings without having to go through the more crowded atmosphere on Friday,” Hudson’s Storch told Reuters.

The upscale Saks Fifth Avenue stores will be closed on Thanksgiving, unlike the offprice Saks OFF 5TH stores that will remain open on the day.

Black Friday is the peak shopping day of the holiday season and sales on the day signal whether retailers need to drop prices or change promotions. Last year, reports of weak Black Friday spending were followed by deeper discounting in the week before Christmas.

This year, retailers are taking a more cautious approach and have started offering deals sooner to attract shoppers.

Earlier this month, Inc (AMZN.O) offered a preview of its upcoming Black Friday deals, while Wal-Mart Stores Inc (WMT.N) said the majority of its Black Friday deals would be available on after midnight on Thursday.

Best Buy Co Inc (BBY.N) has over the past couple of weeks offered discounts on select items. Others including Target Corp (TGT.N), J.C. Penney Co Inc (JCP.N) and Kohl’s Corp (KSS.N) have also stepped up promotions and deals as they look to grab a piece of the action.


North American apparel retailers are hoping for a solid start to the holiday season after a less-than-exciting back-to-school quarter, which led to a selloff in retail stocks.

While companies have blamed an unusually warm autumn for lackluster sales of winter clothes, market experts say shoppers are spending more on other items such as electronics, cars and travel or are hunting for deep discounts on Amazon.

This has led to rising inventory at stores such as Macy’s Inc (M.N) and Nordstrom Inc (JWN.N).

“There is no doubt that the entire market for coats and winter gear has been affected by an unusually warm fall but that’s only one component of the business,” Storch said.

He declined to comment on the company’s third-quarter inventory levels because it is slated to report results on Dec. 10.

“And winter always comes … often the weather affects the timing and weather affects the eventual outcome,” he said, suggesting that inventories at stores could be cleared up in the holiday season.

The company, which completed the acquisition of Saks in November 2013, raised its sales and earnings forecast for the fiscal year ending Jan. 31 in September.

Hudson’s Bay’s shares had fallen 15.6 percent this year.

(Reporting by Subrat Patnaik and Sneha Banerjee in Bengaluru; Writing by Sayantani Ghosh; Editing by Anil D’Silva)

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Fedex, TNT win U.S. approval to merge

WASHINGTON Tennessee-based Fedex Corp (FDX.N) and Dutch counterpart TNT Express (TNTE.AS) have won U.S. antitrust permission to merge, according to a listing of approved deals the Federal Trade Commission issued on Tuesday.

The European Union has yet to sign off on the proposed transaction, although the companies have said they received assurances that EU antitrust regulators would allow it to go forward.

The companies announced in April that Fedex would buy TNT for 4.4 billion euros ($4.8 billion) in order to better compete in Europe. The deal should catapult FedEx to second place in Europe behind Deutsche Post’s DHL.

(Reporting by Diane Bartz; Editing by Dan Grebler)

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General Mills to use only cage-free eggs in U.S. by 2025

General Mills Inc (GIS.N) will use only cage-free eggs in its U.S. operations by 2025, it said on Tuesday, marking the first time the packaged food company has given a timeline for the switch.

The maker of products including Betty Crocker cake mixes and Cheerios cereal said in July that it was working toward using exclusively cage-free eggs in its products but did not provide specifics on when the process would be completed.

The move comes at a time when the food industry is under pressure from groups including the Humane Society of the United States, Mercy for Animals and World Animal Protection, which have successfully lobbied many companies to adopt animal welfare practices.

“General Mills is further demonstrating that confining hens in cages has no place within our food system. We applaud the company for its great work,” said Josh Balk, senior food policy director for the Humane Society of the United States

Competitor Kellogg Co (K.N) said in October that it will source 100 percent cage-free eggs by 2025. Fast-food companies have made similar announcements. McDonald’s Corp (MCD.N) said in September that its 16,000 U.S. and Canadian restaurants will serve only eggs laid by cage-free chickens within 10 years while rival Burger King [BKCBK.UL] already has committed to using only cage-free eggs by 2017.

(Reporting by Anjali Athavaley in New York; Editing by Matthew Lewis)

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Swatch signs pact with Visa on payment watch: report

ZURICH Swatch Group (UHR.VX) Chief Executive Nick Hayek has signed a contract with credit card company Visa Inc. (V.N) in connection with the Swiss firm’s new watch that enables wearers to make payments, a newspaper reported on Tuesday.

Swatch has already introduced the watch in China and aims to introduce a similar device in 2016 in Switzerland and the United States, Le Temps said.

In China Swatch has partnered with China UnionPay. Hayek confirmed he has signed a contract with Visa for elsewhere. That covers Switzerland and the United States, the paper said.

Hayek said the Swiss watchmaker would make an announcement in the coming days about its pact with Visa, the world’s largest payments network.

A Swatch spokesman confirmed the report on Tuesday but declined to give additional information.

Swatch is joining other Swiss watchmakers seeking a share of the so-called “smartwatch” market in competition with the Apple Watch.

(Reporting by John Miller; Editing by Greg Mahlich)

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U.S. GDP growth raised for third quarter

WASHINGTON The U.S. economy grew at a healthier clip in the third quarter than initially thought, but strong inventory accumulation by businesses could temper expectations of an acceleration in growth in the final three months of the year.

    The Commerce Department on Tuesday said the nation’s gross domestic product grew at a 2.1 percent annual pace, not the 1.5 percent rate it reported last month, as businesses reduced an inventory bloat less aggressively than previously believed.

The pace of economic growth, which was also boosted by upward revisions to business spending on equipment, suggests a resilience that could help give the Federal Reserve confidence to raise interest rates next month.

While consumer spending was revised down a bit, its pace remained brisk, suggesting consumers were cash-flush.

“The economy continues to move along at a good clip relative to its potential. With growth like this, the Fed has the data it needs to light the candle finally and lift off on December 16,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

When measured from the income side, the economy grew at a sturdy 3.1 percent clip, the fastest in a year and an acceleration from the second quarter’s upwardly 2.2 percent pace. Wages and salaries increased $109.3 billion, $61.6 billion more than initially estimated.

    The third-quarter’s respectable expansion should set up the economy to achieve at least 2 percent growth in the second half of the year, around its long-run potential. In the wake of robust job growth in October and strong domestic demand, the Fed is expected to raise rates at its Dec. 15-16 policy meeting.

Other data on Tuesday showed consumer confidence fell further in November, hitting a 14-month low, as sentiment towards the labor market surprisingly soured. Economists suspected the Nov. 13 attacks in Paris and rising tensions in the Middle East had weighed on consumer confidence.

Despite the drop, more consumers say they plan to buy homes, automobiles and other big-ticket items over the next six months.

“The bigger picture suggests that domestic demand is still firm, spending plans are evolving positively and the housing market continues to post gains,” said Robert Kavcic, a senior economist at BMO Capital Markets in Toronto.

A third report showed house prices rose solidly in August.

U.S. financial markers were little moved by the data as investors worried about global security after Turkey shot down a Russian warplane.


In the third quarter, businesses accumulated $90.2 billion worth of inventories, instead of the $56.8 billion reported last month. That followed more than $100 billion worth of inventories accumulated in each of the prior two quarters.

As a result, the change in inventories chopped off only 0.59 percentage point from third-quarter GDP growth, rather than the 1.44 percentage points the government reported in October.

    That, however, suggests inventories could be a drag on fourth-quarter growth.

“The bigger inventory overhang helps explain why manufacturing sentiment remains cautious early in the fourth quarter, and does present downside risk to our 2.5 percent estimate for current-quarter GDP growth,” said Michael Feroli, an economist at JPMorgan in New York.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a still strong 3.0 percent rate in the third quarter, down from the 3.2 percent rate estimated last month. The downward revisions mostly reflected weak outlays on communication services and utilities.

A measure of private domestic demand, which excludes trade, inventories and government spending, was revised down to a still sturdy 3.1 percent pace from the previously 3.2 percent rate. Though there are signs consumer spending slowed early in the fourth quarter, it should continue to be supported by strong income gains. Income at the disposal of households after adjusting for inflation rose at a robust 3.9 percent pace in the third quarter.

A trade deficit that was larger than previously estimated subtracted 0.22 percentage point from GDP growth in the third quarter. Data on Tuesday showing a smaller goods trade deficit suggested trade would contribute to fourth-quarter growth.

Deep spending cuts by energy firms following a collapse in oil prices continued to weigh on growth. Spending on mining exploration, wells and shafts tumbled at a 47.1 percent rate, rather than the 46.9 percent pace reported last month.

However, business spending on equipment was revised up to a 9.5 percent rate from a 5.3 percent pace.

The Commerce Department also reported that corporate profits after tax fell at a 1.6 percent rate in the third quarter after rising at a 2.6 percent pace in the second quarter. Profits, which have been undercut by the dollar’s strength and lower oil prices, were down 8.1 percent from a year ago, the biggest decline since the fourth quarter of 2008.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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Car emissions campaigners turn sights on Renault

BERLIN/LONDON Renault’s (RENA.PA) flagship Espace minivan released toxic diesel emissions 25 times over legal limits in a Swiss study, despite complying with EU tests carried out at unrealistically low engine temperatures, a German environmental group said on Tuesday.

The tests commissioned by the DUH group, which have not been independently verified, follows Volkswagen’s (VOWG_p.DE) admission that it used illegal “defeat devices” to cheat diesel emission regulations.

In a statement, Renault said it contested the findings of the DUH lobby group.

Environmental and consumer groups are leading calls for improved European Union tests to bring soaring car emissions of nitrogen oxides (NOx) and carbon dioxide into line with legal limits.

The DUH, which had earlier singled out General Motors’ Opel brand in tests which suggested NOx emissions on the road were higher than those measured in official testing, has turned its fire on France’s Renault in a report commissioned from the University of Applied Sciences in Bern.

When run with a warm or hot engine, a 1.6-litre Espace of the latest Euro 6 diesel generation emitted up to 2.06 grams of NOx per kilometer, the campaign group said, more than 25 times the EU limit. The vehicle met the statutory 80 milligram cap only with a cold engine after “specific pre-conditioning”.

GM (GM.N) last month rejected similar DUH findings on its Opel Zafira model, after running its own tests monitored by Germany’s TUV certification body.

The VW diesel scandal has drawn attention to a wider pattern of legal test manipulation that stops short of outright cheating. The EU rules themselves are now acknowledged to be inadequate even by carmakers such as PSA Peugeot Citroen (PEUP.PA).

Carmakers routinely strip out standard equipment to reduce test vehicles’ mass, tape up door joints and fit bald tires that would be illegal on the road.

Tuesday’s DUH findings may shed light on the real-world impact of optimizing engines to pass tests only when cold – which would be another tactic allowed by the current regime.

“It’s unbelievable that so-called modern diesel vehicles that damage the air we breathe in this way are on the road today,” campaigner Axel Friedrich said in the DUH statement.

Friedrich is a co-founder and council member of the Washington-based International Council on Clean Transportation (ICCT), which commissioned the original investigation that led eventually to the exposure of VW’s test-rigging.

Europe needs a “comprehensive reorganization of the system in which mandatory regular controls on the street are integrated”, he said.

EU moves to phase in real-world emissions measurements were watered down in committee last month under sustained German-led lobbying.

Volkswagen admitted in September to rigging U.S. diesel emissions tests, unleashing a scandal that forced out longstanding CEO Martin Winterkorn and may cost the group as much as 40 billion euros ($43 billion) in recall costs, fines and compensation, some analysts estimate.

(Story corrects role of ICCT co-founder in 12th paragraph)

(Additional reporting by Barbara Lewis in Brussels and Georgina Prodhan in Frankfurt; editing by Jason Neely, Greg Mahlich)

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DraftKings hires Exiger to review financial controls, compliance

NEW YORK Daily fantasy sports company DraftKings said on Tuesday it hired regulatory risk and compliance firm Exiger to conduct a review of its financial, operational, compliance and risk controls, as the company and its top competitor, FanDuel, have come under fire from state and federal regulators.

DraftKings said in a statement that Ray Pollitt — a former Federal Bureau of Investigation special agent who was the lead case agent in the U.S. government’s investigation of online poker — will head up Exiger’s efforts at the daily fantasy sports company.

The company said Exiger will help develop best practices for safety and consumer protection.

DraftKings and FanDuel are scheduled to face off against New York State Attorney General Eric Schneiderman in court on Wednesday. Schneiderman has called daily fantasy sports illegal gambling and filed an injunction to shutter the companies in the state.

They have been at the center of controversy since early October when a DraftKings employee won $350,000 from a $25 entry in an American football contest on the rival FanDuel site.

The two companies then banned their employees from playing, but local and federal authorities began to investigate whether the fantasy sites offered games of chance, which were essentially gambling.

(Reporting by Michael Erman Editing by W Simon)

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Cabin crew union, Lufthansa attempt to avert strikes

BERLIN The main cabin crew union at Lufthansa (LHAG.DE) is working with the airline’s management to find a way to ease tensions and ward off the strikes that the union has threatened for the end of this week.

The union, UFO, on Monday called for a fresh round of strikes starting on Thursday and Friday and continuing on Monday, if Lufthansa did not show more willingness to deal directly with the union in a long-running and increasingly bitter row over early retirement and pensions.

“We are trying to defuse the situation with Lufthansa management in order to possibly call off the strikes,” union head Nicoley Baublies said in a statement on Tuesday, adding that more information would be made available on Wednesday.

The cabin crew union staged a week-long strike, the longest in the carrier’s history, earlier this month, resulting in the cancellation of about 4,700 flights.

On the final day of the strike, UFO said Lufthansa must change the way it deals with its staff.

Lufthansa, trying to cut costs to better cope with low-cost rivals in Europe and Gulf carriers on long-haul routes, has also seen a series of costly walkouts by its pilots over the last 18 months.

Last week, in a bid to improve relations with labor, Lufthansa invited UFO and two other unions representing pilots and ground staff to a roundtable to be held on Dec 2 to discuss jobs and pension issues that have caused tension.

In a letter to management in response, the cabin crew union complained that Lufthansa management was communicating via the press, rather than with the union directly, and that Lufthansa had determined the time and topics for the roundtable without discussing it with the other parties.

Lufthansa declined to comment on the new talks on Tuesday.

Lufthansa shares were down 4.5 percent on Tuesday, following other travel stocks lower .SXTP in the wake of a U.S. travel alert and as the downing of a Russian warplane near the Syrian border added to geopolitical tensions.

(Reporting by Victoria Bryan in Berlin and Peter Maushagen in Frankfurt; Editing by Arno Schuetze and Georgina Prodhan)

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Dollar Tree sales beat estimates after Family Dollar deal

Dollar Tree Inc (DLTR.O) reported better-than-expected net sales for the third quarter, its first since acquiring Family Dollar and becoming the largest discount retailer in the United States.

The company’s shares rose as much as 7 percent to $74.47 in early trading on Tuesday.

Higher rents, taxes and healthcare costs are pushing low-income Americans to rein in spending, helping discount retailers to win more business, Dollar Tree Chief Executive Bob Sasser said on a conference call.

Dollar Tree completed its acquisition of Family Dollar this year, in the process overtaking rival bidder Dollar General Corp (DG.N) as the No. 1 U.S. discount retailer by number of stores. It sold 330 stores as a condition of the deal.

The cost of rebranding hundreds of the 8,200-plus Family Dollar stores contributed to a 38 percent drop in third-quarter profit.

Margins were also hit, falling to 28.3 percent from 34.6 percent a year earlier due to more lower-margin products and marked down inventory at Family Dollar stores.

BBT Capital Markets analyst Anthony Chukumba said the company’s third-quarter results suggested the integration “may be diverting management’s attention from the legacy business.”

Net sales, however, more than doubled to $4.95 billion, higher than the $4.84 billion that analysts had expected, according to Thomson Reuters I/B/E/S.

Sasser said Dollar Tree planned to convert 200 Family Dollar stores to its own brand – which sells everything for $1 – in the current fiscal year ending January. It will also retain the Family Dollar brand, where prices vary.

Dollar Tree’s net income fell to $81.9 million, or 35 cents per share, in the third quarter ended Oct.31, from $133 million, or 64 cents per share, a year earlier.

Excluding items, the company earned 49 cents per share, missing the average analyst estimate of 53 cents.

The company forecast current-quarter sales of $5.32 billion to $5.42 billion, below the average analyst forecast of $5.44 billion.

Dollar Tree’s shares were up 4.6 percent at $72.79 in late morning trading.

(Reporting by Sruthi Ramakrishnan in Bengaluru, Additional reporting by Shubhankar Chakravorty; Editing by Maju Samuel and Sriraj Kalluvila)

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