RILA supports act to curb organized retail crime
The Retail Industry Leaders Association (RILA) has lent its support to a new organized crime act that targets the growing problem of organized retail crime.
Crime rings have been stealing and stockpiling “huge quantities” of merchandise in various targeted areas, the retail trade group said in a statement, with profits from selling those items online and in pawn shops helping fund criminal enterprise.
The Organized Retail Crime Act of 2008, introduced by Representative Jim Jordon (R-OH) seeks to address the problem by equipping law enforcement officials with additional tools to help curtail theft and offering consumers greater ability to recognize fraudulent consumer products.
“Because of widely varying state laws and the lack of a clear federal criminal statute addressing [organized retail crime], gangs who move from store to store stealing thousands of dollars of merchandise are often only subject to minor misdemeanor charges,” the group said in a statement.
The bill would criminalize the theft and subsequent sale of retail goods and services and would amend the federal criminal code to make activities involved in furthering organized retail crime illegal. The bill would also impose specific duties on online marketplaces to limit illegal activity occurring online involving organized retail crime.
As earlier reported in HCN, Organized Retail Crime has deeply affected the home channel in a number of ways.
Earlier this year, for example, the U.S. Attorney’s Office in Newark, N.J., alleged a far-reaching criminal enterprise engaged in illegal gambling, extortion, loan sharking, labor racketeering and a fraud scheme involving a Lowe’s store in Paterson, N.J. Members of both the Gambino and the Lucchese crime families were named in the indictment, which charged 23 individuals and capped a two-year investigation by the FBI.
One of the defendants, India Fugate, worked as a 28-year-old customer service associate at Lowe’s in Paterson, N.J. According to the indictment, Fugate fraudulently obtained personal identification information from Lowe’s customers and, with the help of Gambino family member Andrew Merola, used the information to open store credit cards and purchase merchandise.
The indictment describes a second scheme where Fugate and other organized crime figures created fake bar codes that enabled them to fraudulently purchase goods from Lowe’s, Home Depot, Best Buy, Circuit City and other New Jersey stores. The items, which included power tools, were allegedly purchased at greatly reduced prices.
Wal-Mart, Target and a number of other big-box chains have reported being the victim of various bar code theft schemes as well. Several Home Depot stores have been the victim of thefts of high-ticket items, such as power tools and drills. In Ada County, Idaho, for example, two residents were charged in a theft ring that included stealing tools and other items and returning them for cash and gift cards to local Home Depot and Lowe’s stores.
“Organized retail crime costs consumers and businesses tens of billions of dollars every year,” RILA noted.
Menards plans further Missouri stores
Menards plans to forge ahead with its second and third home improvement stores in Missouri, according to local media reports.
According to the Columbian Missourian newspaper, Menards store project manager Donald Lairmore told the newspaper that construction is expected to begin on the Columbia big-box site by the end of July.
Menards entered the state of Missouri last year with its first location in St. Joseph, Mo., on the northwestern border of the state with Kansas.
Menards also recently announced plans to go forward with a further store in Sedalia, Mo. That 162,000-square-foot plan is slated to go under construction later this summer, according to the Sedalia Democrat newspaper. Sedalia is located in the west-central part of the state.
Both locations are expected to be open in 2009.
Fitch offers outlook on housing market
Financial pressures will continue to mount on the nation’s largest home builders this year, forcing them to make further cuts in staff and overhead to remain profitable, according to Fitch Ratings, a New York-based ratings agency for credit markets.
But the company’s most recent report on the construction sector predicts that most of the industry’s top home builders have enough liquidity to pull through a prolonged downturn, even one that stretches into the back half of 2009.
Other findings and forecasts from the 167-page research report:
• First-quarter 2008 revenues decreased for all 14 home builders tracked by Fitch. The declines ranged from 18.7 percent for NVR to 61.9 percent for Lennar. On average, revenues decreased 38 percent in the quarter.
• The absence of investors — especially property “flippers” — continues to negatively affect builders’ orders. Fitch predicts that cancellation rates will rise sharply in the second quarter of 2008, compared to the previous year, because many buyers are unable to sell their existing homes.
• Since the early 1960s, it has taken anywhere from 13 to 42 months to realize a cyclical trough in housing inventories. This downturn is in the midst of its 20th month.
• California, Florida, Arizona and Nevada have the highest rates of home foreclosures.
• In Fitch’s most likely scenario, single-family housing starts will not bottom out until late 2009. The first markets to recover will be Texas; the greater Washington, D.C., area; and the Southeast (excluding Florida).
• Smaller builders have been much more constrained by their banks this year, while large, privately held companies still have sufficient credit and have, as a back-up, obtained revolving credit facilities. Many builders continue to raise cash by large land sales, tax refunds and public equity offerings. Eleven of the 14 top home builders have cash reserves of $100 million or more.
• In the decade ahead, Fitch expects more consolidation in the home builder sector, with large builders acquiring private, mid-sized companies, Regional or multi-regional builders will become national players. A few national or near national builders may permanently exit secondary markets and become multiregional companies.