by David Bodamer January 8th, 2008
Starbucks has ousted its CEO and announced store closings in the U.S. not long after McDonald’s announced its plans to bring its premium coffee service to its nearly 14,000 U.S. outlets.
The Jan. 7 ouster of CEO Jim Donald, coupled with plans to close some U.S. stores and slow down opening new ones, comes as the world’s largest chain of coffeehouses has seen its stock plummet 50% over the last year amid declining traffic in its domestic stores.
Starbucks wouldn’t say how many stores would close and declined to detail its revised growth plans until it reports fiscal first-quarter earnings on Jan. 30.
The company’s announcement after regular markets closed Jan. 7 sent its shares up 9% in after-hours trading. The shares finished the regular session at $18.38, just above their 52-week low of $18.
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by David Bodamer January 8th, 2008
Retailers will officially report December same-store sales on Thursday. But we’re getting a little preview today.
Circuit City said its December same-store sales plummeted 11.4 percent.
For the month, the company said significant sales decreases in tube and projection televisions more than offset high single-digit sales growth in flat-screen televisions. Sales of camcorders and DVD hardware fell by double digits.
Domestically, Internet and call center sales grew 17 percent in December, the company said.
Costco, meanwhile is shaking off the slowdown and moving ahead with its previously announced expansion plans.
Galanti said Costco will use the more difficult economic environment, where some retailers may be cutting back on inventories or canceling orders, to convince vendors to start doing business with the warehouse club or expand the business they already have with Costco.
He also said the retailer continues to follow its expansion plans. When Costco reported first-quarter results in December, it said it expected to open roughly 30 new clubs this year.
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CMBS Volume in 2008 May Drop to $100B
by David Bodamer January 8th, 2008
The mood at the Commercial Mortgage Securities Association’s Investors Conference is unsurprisingly a bit different than a year ago. Last January, the industry was still on the ascendancy. It had just finished a year in which nearly $300 billion in new CMBS issuance had occurred in addition to $39.8 billion in commercial real estate CDOs.
In the end, 2007 did set a new record with $315 billion in CMBS issuance and CDO volume came in at $39.3 billion. Things slowed down significantly in the second half of the year as a result of the credit crunch. As a result, expectations are that volume will drop all the way down to $100 billion to $150 billion this year and with almost no issuance at all of new CDOs. That’s going to create opportunities for other lenders–like life insurance companies and portfolio lenders.
There are also concerns that the underwriting in the past two or three years will come back to haunt CMBS investors more than older vintages. But there’s no consensus on the scale of the problem. All that anyone can agree to is that there are a lot of reasons to believe commercial real estate’s problems won’t come close to rivaling what’s occurred on the residential side.
Consider the following figures:
In all, expect a slow start to the year for CMBS. But with any luck, credit markets will stabilize and CMBS issuance should kick back into gear by the second half of the year.
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