D.C. Hotline: Swipe-fee reform avoids delay
Retail associations are celebrating the defeat of a measure that would have delayed new rules governing “swipe fees” for certain card transactions at the retail point of sale.
The National Lumber and Building Material Dealers Association was among those applauding the defeat of a proposal by Sen. Jon Tester (D-Mont.) and Sen. Bob Corker (R-Tenn.).
“Out-of-control swipe fees on transactions have been yet another cost burden on building material dealers who are struggling to remain afloat in this housing recession,” said Scott Lynch, NLBMDA executive VP. “We are pleased that the Senate wisely chose not to further delay this much-needed relief.”
The amendment, which would have delayed new swipe-fee rules by 12 months, was defeated by a vote of 54-45, with a 60-vote super majority needed for passage.
As it stands, more retailer-friendly swipe-fee rules will go into effect July 21. The Federal Reserve Board plans to limit fees to 2% of the transaction for small banks and financial institutions, and a flat 12-cent cap for the largest banks. The NLBMDA said it supports the new rules, describing them “as an important move to reign in costs for building material dealers and other retailers.”
Emerging category: From potted plants to pot
Sixteen states now allow the controlled sale of medical marijuana, and retailers and suppliers are taking a look at the sales potential of items related to this expansion of DIY gardening.
One estimate puts the size of this emerging lawn and garden category at $1.7 billion in annual sales. It could be much higher.
In Phoenix last month, an openly pro-pot franchise called weGrow opened a 21,000-sq.-ft. store that was described in the local media as “the Walmart of weed.” It was the third franchise of its kind in the United States. (The original two locations are in Oakland and Sacramento, Calif.) And a fourth and fifth franchise are in the works for Washington, D.C., and Tucson, Ariz. The store doesn’t sell marijuana, just products to cultivate it — grow lights, hemp twine and all kinds of nutrients.
Major players are intrigued as well by what could be described literally as a growth industry. Marysville, Ohio-based Scotts Miracle-Gro CEO Jim Hagedorn told the Wall Street Journal that the slowdown in big-box-store openings is pushing his company to find new niches. “I want to target the pot market,” he said. “There’s no good reason we haven’t.”
Sears to spin off Orchard Supply
Orchard Supply Hardware has been through some big changes already this year. But here’s another — Sears Holdings said it plans to spin off its interest in the 89-store California chain.
OSH made a splash in March by announcing that former Home Depot merchandising executive Mark Baker would take over as CEO. A second splash came a few weeks later when OSH hired Steve Mahurin — with True Value and Home Depot on his resume — to be senior merchant.
Currently, Sears owns 80% of OSH. The rest of the California hardware store company is owned by Ares Corporate Opportunities Fund. As OSH becomes a stand-alone company, its shares will be distributed to Sears shareholders.
Orchard Supply was founded in 1931, and acquired by Sears Roebuck in 1996. It is based in San Jose and posted $660.7 million in sales in 2010, with a profit of $8.7 million.
Sears Holdings said the spinoff would allow “financial, operational and managerial benefits to both” Sears and OSH.