Lehman Brothers Holdings Inc. announced today that it has exercised its right of first offer to purchase the remaining stake in Archstone held by affiliates of Bank of America and Barclays Capital (“the Banks”), which will give Lehman full ownership of Archstone. This transaction follows Lehman’s purchase in January 2012 of a 26.5% interest previously…
Holiday retail sales this year will likely decline 1.0% from the year-ago period, which saw a -2.8% Y/Y decline, representing the first back-to-back decline in holiday retail sales in the last four decades. Availability of personal credit is a significant factor in these findings, with credit card companies down on raising rates/fees and even canceling cards in reaction to recent credit card legislation. Consumer credit fell by a record $21.6 billion in July to $2.5 trillion. Other major factors impacting 2009 holiday retail performance, according to Archstone Consulting management strategy and operations consultancy, include the savings rate, which dipped slightly to 4.2% from 4.5% in June, but it is still high compared to a Y/Y 2.6% savings rate; the US unemployment rate, which was at 9.7% in August having dropped from 61.9% in September 2008; and real wages having plummeted 4.1% in August Y/Y.
Archstone notes that with 7 million fewer people employed in the U.S this holiday season compared to 2008, many consumers will remain under considerable financial stress and will stay frugal.
RETAIL SALES FORECAST
2005: +4.0%
2006: +2.5%
2007: +3.0%
2008: -2.8%
2009: -1.0%
Source: Archstone Consulting
This could be the toughest holiday sales period since 2001, and
perhaps since the âVolcker recessionâ of 1981. Archstone Consulting
predicts that holiday retail sales will nominally increase 0.5% to 1.0%;
lagging the core inflation rate of 2.6%. This represents a significant
contraction in real terms. Archstone also found in its “2008 Holiday
Gift Card Survey” that restaurant/fast food gift cards will be the most
purchased cards this season, followed by pre-paid bank cards that have
the flexibility to be used almost universally. The research firm noted
that consumers can no longer take on debt to pay for holiday spending. .
Typically, three quarters of the holiday season consumers use a credit
card during this period.
A new analysis predicts that consumers will reign in spending and is forecasting retail sales growth of 4% to 5% for the second half of 2006 compared to 9% for the same period in 2005. Archstone Consulting says rising interest rates, gas prices at an all time high, negative savings and a weakening housing market, will drive the pullback. The research firm also noted that the proliferation of gift cards as a holiday item will permanently change first quarter revenue expectations and retail strategies. According to Archstone’s research, the economy is at a crossroads similar to conditions in 1994-1995 and 1999-2000 when inflation was on the rise, the economy was softening and the Federal Reserve neared the end of a series of rate hikes. In both cases, retail sales fell from strong levels to more moderate rates of between 3-6%.
ArchStone, the on-line transaction-processing subsidiary of TX-based SCI Group, has formed a partnership with Mosaic Software to provide custom interfaces between Mosaic’s “Postilion” system and legacy payment processing software. ArchStone provides tools, products, development and support for customers moving to platform independent systems in the financial, retail, and health care industries, as well as those with Web-based high transaction needs. Mosaic Software develops next-generation payment processing software solutions for the delivery of advanced financial transactions, various pre-pay products and other self-service products and services, through ATMs, POS terminals, phones, and Internet access points.