Retailers assess Black Friday sales; Cyber Monday retailers handle online sales…Affiliated Computer Services CEO and CFO resign after probe of stock options practices finds violations of ACS Ethics Code…
Retailers got the big start they’d been hoping for over the Thanksgiving weekend, but now the question is can the momentum be sustained? Early tabulations show that special early hours Friday and huge discounts helped draw larger than expected crowds. That produced robust sales which were needed to offset slower sales as the weekend wore on. Electronics chains, such as Best Buy, appear to have fared best. Popular-priced department stores, including J.C. Penney, did well by offering deals. But Wal-Mart was a notable exception, despite promising its most aggressive discounts ever. Shoppertrak, which tracks sales at mall-based retailers across the nation, says it expects the weekend’s sales will be higher than last year. But the group’s co-founder says the true measure of the season will be whether stores can sustain shoppers’ loyalty now that the hysteria has passed.
Traditional retailers began their holiday shopping season push last Friday–with so-called “Black Friday.” Today is being called “Cyber Monday.” This is becoming a new tradition–watching Web sales on the Monday after Thanksgiving. The thinking is that after the long holiday weekend, workers are getting back to their offices and making use of those high-speed Internet connections to point, click and shop. Internet commerce continues to grow strongly, but it is still a small portion of overall holiday sales. Even so, a number of promotions were in place today. Comscore Networks found that on Cyber Monday last year, non-travel spending jumped 26 percent, to $485 million. But it’s not the busiest online shopping day. In fact, Comscore puts it somewhere around the tenth busiest day. Last year, the busiest day was December 12th, one of the last days of the holiday season that retailers were offering free standard shipping. The retail trade has a Web site that tracks many of these at Cybermonday.com.
Houston ranks sixth in projected online spending during the holiday season, according to the nationwide 2006 AOL Shopping/Zogby International Poll. About 23 percent of Houston consumers plan to spend more than half of their holiday shopping budget online—an average of $527.96 on the Internet in the next four weeks. The poll finds that about 24 percent of Houston shoppers will spend more online this year than last. New York City ranks first with online shoppers, planning to spend an average of $1,483.36 this holiday season. The most popular online purchases for Houstonians are books and music, followed by electronics, clothing and accessories.
Black Friday kicked off a frustrating shopping experience for many who tried to access Web sites operated by Wal-Mart and Walt Disney. On the day after Thanksgiving, people who tried to open Walmart.com were greeted with blank pages, delays or other problems caused by a seven-fold increase in online purchases. By early afternoon, visitors were simply told to come back later. Wal-Mart.com CEO Carter Cast says that was a one-time occurrence and that “we won’t get another surge like that.” Wal-Mart.com says its Web site is seeing year-over-year growth of 60 percent in the early days of the shopping season. Big sellers include electronics, particularly flat-panel TVs and digital cameras. WalMart.com is the 21st most popular site in the U.S. The Walt Disney company also had problems handling Friday’s online rush. Also noting a slight disruption was Amazon.com. The site had brief disruptions on Thursday, thanks to a Thanksgiving Day sale on the popular X-Box 360.
The Thanksgiving lull for economic reports continued Monday with nothing on the horizon. But just wait for Tuesday. First up will be October Durable Goods Orders from the Commerce Department. After a more than eight-percent rise in September, Briefing.com is forecasting a decline of six percent. The Conference Board will weigh-in with November Consumer Confidence. October’s survey found job worries offsetting a drop in gas prices. Also Tuesday, we’ll get another look at how bad the housing market is. The National Association of Realtors will report on October’s existing home sales. September saw the slowest pace since January of 2004. On Wednesday, look for the Commerce Department to report on sales of new homes last month. And automakers report November sales on Friday.
Affiliated Computer Services says its chief executive and chief financial officer have resigned. That’s after a probe of stock options practices at the Dallas-based information technology company found the officials had violated the ACS Ethics Code. Both CEO and President Mark King and Finance Chief Warren Edwards signed agreements with ACS that allow them to remain with the company during a transition period ending June 30th. Effective immediately, Chief Operating Officer Lynn Blodgett was named president and CEO. Executive Vice President of Corporate Development John Rexford was appointed CFO. In September, the company delayed filing its annual report and said it would review stock option grants going back to 1994. It says the probe produced evidence showing that aside from former CEO Jeffrey Rich, King and Edwards, one other current management employee was aware of intentional misdating of documents. It says that official isn’t an executive officer or director. The company says no other current executives, directors or management employees were aware of either the improper use of hindsight in selecting grant dates or the intentional misdating of documents. ACS says it’ll continue to review and evaluate the results of the internal investigation. It now expects cumulative non-cash compensation costs related to backdating will be about $51 million, plus additional tax-related expenses.