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Industry News - September 18th, 2009



American Eagle Launches Mobile Commerce Business

American Eagle customers can now purchase AE, aerie and 77kids product right off their smart phone with the recent launch of its new mobile commerce program. In addition to browsing and buying, customers can now experience expanded functionality of www.ae.com from their mobile devices, including Find a Store and Wish Lists.

"We know that AE customers are using their mobile devices for just about everything, from communication to entertainment," said Mike Dupuis, vice president of marketing, digital channels, for American Eagle. Mobile commerce is still in its early stages, but as an early adopter of technology and a leading lifestyle brand, it is important to AEO to be among the first to offer it to customers as another way to interact with our brands.

Mobile devices are growing rapidly as a means for consumers to access the brands they love, particularly among AE's demographic of 15- to 25-year-olds. Since November 2008, American Eagle Outfitters has had an opt-in SMS texting program in which customers sign up to receive targeted messages about special offers, new product introductions and promotions on their mobile phones. This program has been highly successful, with hundreds of thousands of customers opting in to date, and increasing daily.

Enabling customers to experience the functionality of the Web site, including commerce, takes the mobile experience to the next level. Customers can look up the store nearest them, complete with a detailed map and directions. They can access Wish Lists from their mobile devices to assist with shopping in the store, or purchase directly from their mobile device. They can also e-mail their Wish Lists directly to a parent, friend or relative.

Accessing the AE Web site from a mobile device is easy and requires no downloads or special Web address entries. The technology detects when a customer is accessing the site from a mobile device and serves up the appropriate Web experience that is customized for whatever device they happen to be using.

American Eagle Outfitters has partnered with Usablenet, a mobile Web platform for leading brands to offer this functionality. The company offers a universal solution, supporting all Web-enabled devices, carriers, mobile browsers, screen and file sizes, and technologies.

"American Eagle Outfitters' mobile strategy is designed to make our brands accessible to customers anytime, anywhere, as well as bridge the gap between online and stores," says Dupuis. "The ultimate goal is to create a seamless experience in which each channel - store, mobile and traditional online - work together to the mutual benefit of all three."


Kmart and Ted’s Expand Photo Merchandising Offerings with HP's New Minilab

HP introduces HP Photosmart ML1000D Minilab printer, a dry, inkjet minilab capable of producing traditional single-sided photo prints as well as duplex photo book pages and calendars in a single machine in retail.

Beginning this month, Kmart and Ted's Camera in Australia are the first retailers to implement the HP Photosmart ML1000D Minilab printer in their stores. The Minilab also is available for installations in the United States and Europe, with deployments by retailers in these regions expected in the coming months.

"The HP Photosmart ML1000D Minilab printer will allow Kmart to offer our customers arguably the best quality photo books in retail all within one hour, while using HP technology to reduce the environmental footprint of our photo centers," said Adam Gradon, divisional merchandise manager, Entertainment, Kmart Australia Ltd.

With the abiltiy to serve as a standalone unit or as part of the HP Photo Center solution, the HP Photosmart ML1000D Minilab printer is the latest addition to HP's HP Retail Publishing Solutions portfolio.


Blockbuster to Close Up to 960 Stores

Blockbuster may close as many as 960 stores by the end of next year, due to growing competition from video rental heavyweight rivals Netflix and Redbox. The cut would leave Blockbuster with about 20 percent fewer U.S. stores.

The struggling video rental chain has yet to make a definitive move to close all 960 stores according to Chief Executive James Keyes in documents filed yeasterday. Blockbuster is considering closing between 810 and 960 of its U.S. stores before 2011, up from the 380 to 425 stores that normally would be closed during that time span, according to Tuesday's filing.

The appeal of video stores may be trailing off as more consumers opt to buy and rent movies through the mail, on the Internet and through cable connections and standalone kiosks.

Keyes notes that Blockbuster is considering setting up more DVD-rental kiosks in the stores of other merchants following the lead of highly popular Coinstar Redbox.

Blockbuster aims to add about 10,000 kiosks scattered around the country by the middle of next year. It had just 500 kiosks at the end of August 2009.

"We could have fewer physical stores and still have more rental points for our customers," said Keyes.


Toys 'R' Us Acquires KB Toys Brand

Toys "R" Us announced on Friday that it has acquired the KB Toys' brand, including its Web site, trademarks and intellectual property rights. KB Toys, which filed for bankruptcy in December 2008, sold its logos and online addresses in a bankruptcy auction last month for $2.1 million to CE Stores, a unit of Toys "R" Us.

The acquisition doesn't include KB Toys' 460 stores, which were closed and liquidated earlier this year following the chain's bankruptcy filing. Toys "R" Us hasn't yet decided how it will use the KB name as part of its business plan, a company spokeswoman said.
Earlier this year, Toys "R" Us bought FAO Schwarz and eToys.com in separate
transactions for undisclosed sums.

"We continue to make prudent capital investments to expand our business, domestically and around the world," said Jerry Storch, chairman and CEO of Toys "R" Us in a statement.

Toys "R" Us also announced on Friday its fiscal second-quarter profit more than doubled and reported earnings of $27 million, up from $13 million a year earlier. Net sales fell 7.4% to $2.57 billion, mostly due to softness in the entertainment-products category, specifically video game hardware and software.


Dollar Tree's Business Booms: Plans to Open 220 Stores in '09

Dollar Tree is on the fast track to continuous growth after recently announcing a phenomenal financial growth, expanded assortments and booming store expansion plans.

In its most recent second quarter, the company announced total sales of $223 million, an increase of 11.9 percent over the second quarter of fiscal 2008. The retailer attributes much of its success to its long time customers, which are shopping more frequently and the addition of new customers.

According to Bob Sasser, President and Chief Executive Officer of Dollar Tree, "Our success is driven by the value of our merchandise and the quality of our shopping experience and the second quarter customers continue to rely on Dollar Tree's expanded assortment of basic products.

Dollar Trees' top performing categories include health and beauty care basics, household basics, and food. It discretionary business is also growing with party supplies, books, floral, and lawn and garden supplies and seasonal items delivering strong growth.

Dollar Tree also notes that's its inventory productivity has been increasing. By leveraging its investments in logistics and technology, the company's store teams including its planning, allocation, and replenishment organizations have been highly effective. These teams have been flexing inventory to meet increasing customer demand and improve its stock of basics, while developing smaller allocation of seasonal product consistent with sales trends and consistently increasing its inventory turns.

Dollar Tree continues aggressively open new stores. During the second quarter this year, the company opened 60 new stores. It relocated and expanded another 16 stores and total square footage grew by 6.4 percent. For the full year, the company now plans to open 220 new Dollar Trees, 20 Deals stores, and will relocate and expand about 75 existing stores for a total of 315 store projects.

Last quarter, the company also announced the launch of Dollar Tree Direct, an enhanced e-commerce platform where every online item is a value at only $1 and is sold in case pack quantities. The company has expanded its payment options available to online customers by adding Bill Me Later. The retailer plans to reach out to millions of customers via e-mail blasts and also has produced its first Deals Direct catalog that has been distributed at all Deals stores.

"Our investments in infrastructure continue to translate into better inventory management, more efficient stores, improved in stock condition, and a crisper execution of our model," says Sasser. "Our new Deals concept is progressing and exciting. We're opening new stores in new markets, building store teams, strengthening the merchandise organization, and creating merchandise excitement in our Deals stores."


J. C. Penney Launches New Private Label Brand

J. C. Penney announces the launch of she said, a contemporary career sportswear brand catering to the female professional. Bolstering JCPenney's assortment of contemporary brands, the private brand - designed, developed and sourced in-house - is now available at JCPenney stores, online at jcp.com and via catalog.

"The launch of she said strategically positions the Company to meet the demand for a sportswear collection that works into a younger customer's everyday life with cutting-edge style and quality at affordable prices, ultimately making JCPenney the destination for this important customer niche," says Liz Sweney, executive vice president for Women's at JCPenney. "she said is the latest example of how our in-house design talent - along with our cycle time/flow initiatives - is a strong competitive advantage for JCPenney, providing us the capability, flexibility and speed to step up our style with a variety of new contemporary brands."

Named for the girl "in the know," she said features a body conscious fit with signature pieces that allows customers to mix and match styles to create their own unique look. Items throughout the collection easily transition from work to going out and will be offered at JCPenney's "better" and "best" pricing tiers. she said will be supported by print, direct mail, preprint and digital marketing. she said joins JCPenney's growing assortment of contemporary exclusive brands including Bisou Bisou, I "Heart" Ronson, ALLEN B., Oxford & Regent and Twelfth of Eleven, creating a coalition of brands that provides customers with a variety of style and fashion at affordable prices.

Sweney added, "In today's retail environment, price alone cannot be the primary factor for buying. After months of pulling back on spending due to the recession, consumers have a pent up desire to spend - even if only a little. However, they're not looking to spend it on basics, they want something special. Now is the time to invest and grow our contemporary business, taking our style to a younger, more discerning audience by offering them new, fashion-forward merchandise - along with a new exciting and engaging shopping experience - all at our affordable prices."

Catering to how the contemporary customer likes to shop, JCPenney will feature all of its contemporary Women's brands together in store, online and via catalog, allowing customers to find the latest looks, styles and fits to mix and match. In-store, floor layout and visual elements have been updated with a signature purple color theme and design, creating a zone for the contemporary customer.

Online on jcp.com, the brands have been brought together under a new contemporary lifestyle tab under Women's. The contemporary lifestyle tab will expand in October to include a robust site that will allow customers to mix and match pieces, search for pieces by designer or category, share looks with friends via Facebook, and more. Furthermore, a specialty "Little Red Book" catalog to be mailed on Sept. 16 that will highlight for customers a variety of styles from the Company's contemporary lifestyle assortment.

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