Staff Staff -- Furniture Today, November 3, 2003
Retail execs grow more bullish
U.S. retailing executives are becoming more confident about where there business is headed as the domestic economy continues to expand, the job market improves and consumers show signs of spending more freely.
The Retail Sector Performance Index, a monthly gauge of retailer sentiment compiled by the National Retail Federation and the Bank of Tokyo-Mitsubishi, improved substantially during October, rising to a new reading of 57.9, up from a revised level of 54.6 in September. Even more dramatically, the barometer of retailer confidence now stands 20.3 percentage points above its year-before level of September 2002.
The Retail Sector Performance Index, begun in September of 2002, measures retail executives' evaluations of monthly sales, customer traffic, the average transaction per customer, employment, inventories and a six-month-ahead sales outlook expectation. The index is based on a scale of 0 to 100, with 50% equaling normal.
The Operations Index, an average of employment and inventories, stood at 52.3 in October, said the retail trade group, up from a revised 46.4 in September.
The Current Demand Index, the average of sales and traffic, rose as well, climbing to a reading of 57.3 from a revised 56.5 in September, and was a full 24.0 percentage points over the year-before reading.
The Pricing Index, which measures the industry's discounting or pricing power, remained low in October at 28.1. While higher than in September, when it stood at 17.9, "the index still reflects a considerable lack of pricing power by retailers. The index is only moderately above the 23.8 level of September 2002.
"Each month we see very strong indicators that the economy is making a comeback," said NRF president Tracy Mullin. "Retailers can expect reasonably healthy holiday sales as consumers are returning to the stores and ready to spend."
WestPoint gets court extension
WestPoint Stevens received a bankruptcy court extension of its exclusive right to file a plan of reorganization until March 31, 2004. The company said its creditors' committee has the option to require a further hearing on the portion of the extension from Jan. 31, 2004, to March 31, 2004.
The nation's second-largest home fashions producer earlier withdrew its original plan or reorganization after it couldn't come to terms with bank lenders over the amount of debt that would remain on the company's books after it emerged, said Lorraine Miller, WestPoint svp for investor relations.
In a news release, the company said it "is continuing to move forward on a consensual basis" with negotiating new terms for a Chapter 11 plan of reorganization with all its major creditor constituencies.
Miller characterized the withdrawal of the original plan as more of a speed bump than a set back, and said the company now hopes to emerge from bankruptcy by the end of the first fiscal quarter of 2004.
Home builder confidence surges
Home builder confidence in the market for single-family homes shot up in October to the highest level in almost four years, rising four points to a reading of 72, the National Association of Home Builders (NAHB) reported.
The October reading indicates "the builders' outlook for single-family housing is very good, and we expect the improving economy to sustain robust levels of housing market activity even though mortgage interest rates are somewhat higher than the record lows that we saw earlier this year," said NAHB chief economist David Seiders.
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