Lowe’s buys online retailer ATG Stores
Mooresville, N.C.-based Lowe’s acquired ATG Stores, an online retailer of home improvement and lifestyle products based in Kirkland, Wash.
The acquisition, announced Thursday morning, "underscores Lowe’s commitment to providing an endless aisle of products," the company said. The move is part of an effort to boost the retailer’s online and multichannel presence.
As Lowe’s explains it, the acquisition allows Lowe’s and ATG Stores to capitalize on complementary strengths and employees’ extensive expertise by sharing best practices for online marketing and merchandising.
ATG Stores is named for the initials of Allied Trade Group. It will remain an independent, wholly owned subsidiary of Lowe’s Companies, Inc. The two organizations will maintain separate branding and independent assortment planning and merchandising. All ATG jobs will remain in Kirkland, and no jobs will be lost as a result of the acquisition, the company said.
“The addition of ATG Stores is a strategic fit, providing more opportunities for Lowe’s to be a relevant partner at every stage of the home improvement process and deliver better customer experiences from inspiration to planning to enjoyment,” said Robert Niblock, Lowe’s chairman, president and CEO. “ATG Stores is an extension of Lowe’s commitment to providing consumers with flexibility, simplicity and value, whenever and wherever they choose to shop.”
"Lowe’s commitment to consumers, innovation and long-term strategy, combined with our unique online product offering, presents a long-term opportunity for ATG Stores and Lowe’s to grow in the multichannel space,” said Gary Rubens, CEO of ATG Stores.
Pending sales hit highest level in 19 months
Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 7.3% to 100.1 in November from an upwardly revised 93.3 in October and is 5.9% above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4% monthly gain.
The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the home buyer tax credit. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage,” he said.
“November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead,” Yun added.
Pending home sales are not affected by the recently published rebenchmarking of existing-home sales because the index uses a different methodology based directly on contract signings, and is adjusted for seasonality.
The PHSI in the Northeast rose 8.1% to 77.1 in November but is 0.3% below November 2010. In the Midwest the index increased 3.3% to 91.6 in November and is 9.5% above a year ago. Pending home sales in the South rose 4.3 percent in November to an index of 103.8 and remain 8.7% above November 2010. In the West the index surged 14.9% to 121.2 in November and is 2.9% higher than a year ago.
Sears Holdings to close 100-plus stores
Hoffman Estates, Ill.-based Sears Holdings plans to close 100 to 120 Kmart and Sears full-line stores after reporting a disappointing recent performance. The Tuesday morning announcement — contained in a press release titled "Sears Holdings Provides Update" — reported a 5.2% comp-store sales decline for the quarter-to-date period, and a 2.6% decline in the year-to-date period, ended Dec. 25.
At Sears Domestic, slow moving consumer electronics and home appliances were leading causes of declines. At Kmart, consumer electronics and apparel were slow. Big-ticket items continue to perform poorly.
It remains unclear which stores will be closed; the company said it will post a list when the final determination is made.
Closing stores is one of several actions the company said it is putting in place. The moves are designed to "reduce on-going expenses, adjust our asset base and accelerate the transformation of our business model," said CEO Lou D’Ambrosio.
"These actions will better enable us to focus our investments on serving our customers and members through integrated retail — at the store, online and in the home," he added.
Excluding the effect of store closures, Sears expects to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year.
It also intends to focus on improving gross profit dollars through better inventory management and more targeted pricing and promotion.
The company also intends to reduce fixed costs by $100 to $200 million.
According to the company, the store closing move reflects a change in strategy. "While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment," the announcement read.
The company’s 2011 performance will cause a fourth-quarter asset write-down of $1.6 billion to $1.8 billion.