Consumer Confidential: The skinny on Black Friday; Keds recall

Here's your feelin'-stronger-every-day Friday roundup of cosnumer news from around the Web:

-- Getting all excited about Black Friday? Maybe you'll want to rethink things. Here are a few reasons why the Black Friday hoopla is overblown: Most "door busters" are second-tier products offered by less-prominent brands. Many of the same deals you'll find in the store can be found online. Layaway may not be available until after Black Friday ends. Return policies are often stricter for discounted goods. And more importantly, you're likely to overspend after lining up in the middle of the night to get a shot at some bargain-basement product. The stores know this, which is why they go through all this fuss in the first place. Just saying. (MoneyWatch)

-- Heinz wants to make a little ketchup go a long way. The world's biggest ketchup maker's second-quarter profit fell as it focused on fast-growing emerging markets. But in struggling developed markets such as the U.S. and Europe, the company is shrinking product sizes and selling lower-priced products such as ketchup for 99 cents and beans for around a dollar to appeal to budget-stretched shoppers. Many people are living paycheck to paycheck, buying only what they can afford rather than bigger bottles or cans of food that might be more cost-effective. Heinz says that to meet consumers' needs, it is selling pouches instead of bottles of some of its condiments, reintroducing bean products to the U.S. and selling a bag of french fries for family dinners at $1.99. (Associated Press)

-- Heads up: Keds is recalling about 45,000 Know It All girls' shoes. Ornamental stars on the heel of the shoe may loosen, posing a laceration hazard. The company has received 27 reports of cuts and scratches resulting from metal stars that loosened from the heel of the shoe. This recall involves Keds girls' rubber-soled shoes. The shoes are black and pink, with white trim and a pink loop on the heel. The Chinese-made shoes were sold in girls' sizes 12 to 5 at various department stores and online retailers. Consumers should take them away from children immediately and contact Collective Brands to receive a gift card for $30 redeemable at Stride Rite stores or striderite.com. (ConsumerAffairs.com)

-- David Lazarus

Photo: Black Friday may be more hassle than it's worth. Credit: Al Seib / Los Angeles Times

 

American Apparel executive Marty Staff steps down

The troubled American Apparel clothing chain, known for its colorful basics and its flamboyant chief executive, Dov Charney, announced that its chief business development officer would be stepping down.

Marty Staff, who has spent much of his career at fashion companies, joined the Los Angeles clothing maker and retailer a little more than half a year ago in March. The company did not give a reason for Staff's departure.

In a statement Wednesday, American Apparel's Chief Executive Dov Charney said Staff was "one of the most experienced and capable professionals in our business."

"His contributions to American Apparel have been very substantial," Charney said.

American Apparel faced a liquidity crisis in the spring but obtained new financing. The retailer also has appointed several new executives and directors, cut expenses and shut underperforming stores.

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American Apparel reports improved third-quarter results

-- Shan Li

Photo: An American Apparel store in Los Angeles. Credit: Lawrence K. Ho / Los Angeles Times

Consumer Confidential: Store prices, student loans, bank fees

Here's your walk-on-by Wednesday roundup of consumer news from around the Web:

--You're paying a little more food and clothes and stuff -- and that's probably not such a bad thing. The consumer price index rose 0.3% in September, less than the 0.4% increase in August, according to the Labor Department. Excluding food and energy, so-called core prices increased 0.1%, the smallest increase since March. Food prices rose 0.4% in September, pushed up by big increases in dairy, cereals and fruits and vegetables. Gas prices rose 2.9%. Costs of medical care, airline fares and tobacco also increased. But economists say a little bit of inflation is a good thing because it shows the economy is relatively stable. A deflationary spiral is something to be feared because it can lead to more jobs being lost and more pistol whippings for stocks.

--Speaking of inflation, let's talk about student loans. The amount of student loans taken out last year crossed the $100-billion mark for the first time, and total loans outstanding will exceed $1 trillion for the first time this year. Americans now owe more on student loans than on credit cards, according to the Federal Reserve Bank of New York. Students are borrowing twice what they did a decade ago after adjusting for inflation. Total outstanding debt has doubled in the last five years -- a sharp contrast to consumers reducing what's owed on home loans and credit cards. Full-time undergraduate students borrowed an average $4,963 in 2010, up 63% from a decade earlier after adjusting for inflation. And down the road, of course, those bills will have to be paid.

--Looks like many consumers won't take higher bank fees on the chin. About 30% of U.S. consumers say they'd leave their banks over fees for using their debit cards, according to a survey by the Research Intelligence Group. About 43% say they'd switch to paying with cash or credit cards if their bank implemented charges, while 13% say they'd pay the fee if it was "reasonable." The survey comes as the largest banks, including Bank of America, are testing or planning to start charging fees of as much as $5 a month for consumers who have a debit card or use one for purchases.

-- David Lazarus

Photo: You might have to look harder for bargains amid rising prices. Credit: Rahoul Ghose / We TV

 

Consumer Confidential: Sales up, Chris Tucker in trouble

Here's your not-fade-away Friday roundup of consumer news from around the Web:

--Nothing like a little retail therapy to make the economic blues go away. Consumers stepped up their spending on a variety of retail goods in September, according to the Commerce Department. They spent more on autos, clothing and furniture last month to boost retail sales 1.1% -- the largest gain in seven months. Auto sales rose 3.6% to drive the overall September increase. Still, excluding that category, sales increased a solid 0.6%. The government also revised the August figures up to show a 0.3% increase after initially reporting no gain. Not a great showing, but not so bad either.

--You're not the only one feeling a pinch. Court records show comedian Chris Tucker is facing foreclosure on his multimillion-dollar mansion in central Florida. Records show SunTrust Banks filed papers against the California resident with Lake County courts earlier this week. According to documents, Tucker bought the 10,000-square-foot lakefront home for $6 million in 2007 -- before the housing market crashed. The bank claims he still owes more than $4.4 million, but the county property appraiser has the home currently assessed at $1.6 million. Tucker is best known for starring alongside Jackie Chan in three "Rush Hour" films.

-- David Lazarus

Photo: Court records say "Rush Hour" star Chris Tucker, right, with Jackie Chan, faces foreclosure on his Florida home. Credit: Glen Wilson / New Line Cinema

 

Gap to close 34% of namesake U.S. stores by end of 2013

Gap Inc. is closing stores and downsizing others in the U.S. as it focuses on international expansion, the San Francisco company said Thursday.

The long-struggling apparel giant plans to reduce the number of Gap brand stores in North America to 700 by the end of 2013, a 34% decrease in the number of those stores when compared to the end of 2007. It didn't specify which stores would close.

The company's Old Navy brand will have roughly the same number of stores in North America, but the locations will continue to downsize in terms of square footage. By the end of fiscal year 2013, Old Navy "expects to potentially remove" another 1 million square feet.

"In North America, sales are expected to grow modestly on its smaller, healthier specialty store fleet supplemented by sales growth in its online and outlet channels," the company said in a statement.

Gap Inc. has suffered from weak sales for years as shoppers have turned to trendier rivals to shop. Although it has had some success in turning things around -- namely a line of so-called premium denim that launched at Gap stores two years ago -- analysts say many of its fashions, such as women's tops, have underperformed.

Gap shares rose as high as $18.12 earlier but were off 8 cents to $17.77 shortly before 10 a.m. PDT. The stock is down 20% year to date, while the average retail stock in the Standard & Poor's 500 index is up 3.8%.

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Retail sales jump 5.1% in September

Gap reports second-quarter profit down 19%

Gap weaves fabric of L.A. into 1969 jeans campaign

Gap jeans step into designer territory

-- Andrea Chang

Photo: A Gap store in San Francisco. Credit: Bloomberg

Target announces Jason Wu as next designer collaboration

Its wildly successful Missoni line is still in stores (well, supposedly), but Target is already looking ahead. The discount chain announced Monday that it will next collaborate with fashion designer Jason Wu, who shot to fame after First Lady Michelle Obama wore one of his dresses to the 2009 Inaugural Ball. A limited-time-only collection of Wu's apparel and accessories will be available at Target in February.

Target began teasing the announcement on Twitter over the weekend, with tweets such as: "Clue 1: the new @TargetStyle designer began sketching the future of fashion at 5 years old" and "Clue 5: Senior year of high school in #Paris? Oui, oui. Our next designer has international influence."

On Monday, Target released a 37-second YouTube video revealing Wu as its next designer-collaborator.

"Just in time for spring, my collection for Target includes womens wear and handbags -- all for a great price," Wu says in the video, in which he describes some of his fashion inspirations and sketches some designs.

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Haute couture and designers walk down the aisle

 Target stores, website swarmed on first day of Missoni launch

-- Andrea Chang

Photo: First Lady Michelle Obama wore a Jason Wu creation to the Inaugural Ball in 2009. Credit: Carolyn Cole / Los Angeles Times

Consumer Confidential: Milk lawsuit, sneaker settlement, toy recall

Here's your kitten-with-a-whip Wednesday roundup of consumer news from around the Web:

--A Los Angeles law firm has filed a class-action lawsuit alleging that various dairy companies and trade groups slaughtered more than half a million cows to inflate the price of milk. The suit filed by Hagens Berman alleges that the National Milk Producers Federation, Dairy Farmers of America, Land O'Lakes and Agri-Mark combined to form Cooperatives Working Together in order to fix the price of milk in the United States. CWT is a trade group representing dairy producers throughout the country who produce nearly 70% of the milk consumed in the United States. The lawsuit alleges that between 2003 and 2010, more than 500,000 cows were slaughtered under CWT's dairy herd retirement program in a concerted effort to reduce the supply of milk and inflate its price nationally. According to the complaint, the increased price allowed CWT members to earn more than $9 billion in additional revenue.

--You don't see this every day: A sneaker company will pay for people wearing its shoes. Well, sort of. Reebok will pay $25 million to customers to settle charges by the Federal Trade Commission that it made deceptive claims in ads that its toning shoes would strengthen and tone the legs and butts of those who wear them. The company is also barred from making any claims of the strengthening effects of the shoes unless it is backed by scientific evidence. Consumers will be paid either directly from the FTC or through a court-approved class-action lawsuit.

--Heads up: More than 1.7 million toy workshop and tool sets from toymaker Little Tikes are being recalled because of choking concerns. The Consumer Product Safety Commission says the play tool sets have oversized plastic toy nails that might get stuck in the throats of young kids. The recall is an expansion of a 2009 recall of about 1.6 million workshop sets and trucks with the same toy nails. The new recall involves an additional 11 models. Little Tikes has reported two additional incidents in which children choked when the toy nail became lodged in their throat. Both children made a full recovery. The incidents occurred before the 2009 recall.

-- David Lazarus

Photo: A lawsuit alleges that thousands of cows were killed to boost milk prices. Credit:  Lillian Chou

Consumer Confidential: Target down, Whole Foods discount, minivan probe

Here's your to-hell-and-back Tuesday roundup of consumer news from around the Web:

--Apparently Target shoppers can't get enough of designer Angela Missoni. Target's website crashed on the same day that the retailer launched a new fashion line called "Missoni for Target." The company's Twitter account has been apologizing to customers for hours for the difficulties with its website. Target has been working with Italian luxury knitwear design house Missoni for the past year to develop the line of 400 items. Missoni's hallmark, colorful zigzag stripes, appear on everything from melamine appetizer plates (starting at $2.99) to a four-piece sectional furniture set ($599.99.) Most items are less than $40 and include knit dresses, tights, cardigans, rain boots, bedding, luggage, dinner ware, even iPad and iPod covers.

--Meanwhile, over at the LivingSocial site, people are flocking to a sweet offer from Whole Foods. The high-end grocer is offering 50% off, giving LivingSocial users $20 worth of groceries for $10. As part of the deal, 5% of proceeds will go to the Whole Kids Foundation, which supports schools and aims to inspire families to improve children's nutrition and wellness. There's a limit of one voucher per person. This is the highest-profile deal on LivingSocial to date following a similar discount with Amazon earlier in the year. The Whole Foods deal is poised to surpass the more than 1 million vouchers it sold for the Amazon deal. Anything that makes shopping at Whole Foods cheaper is OK by me.

--Heads up: Auto-safety regulators are opening an investigation into complaints that Chrysler minivan headlights can go out unexpectedly. The National Highway Traffic Safety Administration has received more than 1,500 complaints from consumers about the problem, including two reports of crashes, one of which caused a minor injury. Drivers have reported that the headlights turn off and stay off indefinitely. Toggling the headlight switch can sometimes get them to come back on, but not always. Additionally, vehicle owners have complained that the lights sometimes blink and flicker. Vehicles included in the investigation are the Chrysler Town and Country, the Chrysler Voyager, the Dodge Caravan and the Dodge Grand Caravan.

-- David Lazarus

Photo: Target's website is having a dog day. Credit: Jose Carlos Fajardo/MCT

Retail Roundup: Toys R Us, American Apparel, Sears and Costco, retail sales

 -- Toys R Us, which last year opened 600 temporary shops during the holidays, will reduce the number of pop-up stores this holiday season, according to Reuters. The nation's largest toy retailer, which hopes to go public next year, did not announce how many pop-ups it would open. 

-- Los Angeles-based American Apparel is in talks to raise as much as $160 million from several investors, including a private equity firm connected to Los Angeles billionaire Ron Burkle, according to Bloomberg, which cited several unnamed sources. The restructuring talks include the possibility that American Apparel's founder and chief executive, Dov Charney, could step down as chairman of the board so he could focus on day-to-day operations. 

The parties include private equity firms Colbeck Capital Management, which is affiliated with Burkle's Yucaipa Cos., and Authentic Brands Group, which is backed by L.A.-based Leonard Green & Partners.

-- Department store chain Sears has agreed to sell its exclusive line of Craftsman tools at Costco warehouse clubs. The power tools and other products will start appearing on Costco shelves as early as this weekend and are scheduled to roll out at all Costco locations this year, the Chicago Tribune says. Sears is hoping that the deal will attract customers who shop at Costco but not at Sears or Kmart, where the tools are also carried. 

Speaking of Costco, this week its chief executive and co-founder, Jim Sinegal, announced that he would be stepping down from the top post on Jan. 1. He will remain with the company until January 2013 to help replacement Craig Jelinek, currently Costco's president and chief operating officer, with the transition; Sinegal will also remain on the board of directors.

-- Major chain stores reported that sales rose a healthy 4.4% year over year in August despite stock market turmoil and Hurricane Irene. Discounters and luxury chains were among the best performers.

-- Andrea Chang

Consumer Confidential: Spending, Banana Republic, Apple TV

Here's your hey-Mickey Monday roundup of consumer news from around the Web:

--We're shopping. Maybe not a whole lot, but we are shopping. Consumer spending rebounded in July as people bought more cars and other long-lasting items. Spending was up 0.8% over the month, the strongest increase in five months, following a revised 0.1% fall in June, according to the Commerce Department. July's boost was stronger than the 0.5% rise economists had expected. Adjusted for inflation, spending rose 0.5%. Consumption is a critical driver of U.S. economic growth, accounting for about two-thirds of gross domestic product, so July's rebound strikes a positive note for the beleaguered recovery -- that is, if we keep shopping through the second half of the year.

--How do you say "Banana Republic" in French? Gap Inc. plans to open its first Banana Republic store in France in early December. The clothing company, whose other brands include Old Navy and its namesake, says the store will be in Paris on the chic Avenue des Champs Elysees. Gap says the store is part of its international growth strategy. "With loyal customers across Europe, both in our stores and online, we are confident that Banana Republic's proposition of affordable luxury will resonate well with Parisian customers," said Stephen Sunnucks, president of Gap's international division. Last week, Gap also announced that it plans to open stores in Vietnam and Guam. Do they wear khakis in Guam?

--Is there an Apple TV in your future? The website VentureBeat reports that "Apple is almost certainly working on a digital television based on its iOS operating system, according to multiple sources in Silicon Valley." An Apple TV would allow people to do many things with their televisions they can't do now. The most important of these would probably be the ability to run Apple apps. This would permit consumers to download applications from Apple's store, which has hundreds of thousands of products. The Apple TV would allow people to switch from Facebook to Google to their calendars all on one device in the living room. The big question for me: Will you have to touch the screen to change channels?

-- David Lazarus

Photo: Gap Inc. says it will open a Banana Republic store in Paris. Credit: Jae C. Hong / Associated Press

Retail Roundup: Athleta stores, Citadel Outlets job fair, Learning Express

-- Athleta, Gap Inc.'s activewear brand, will open its first store in Southern California on Wednesday. The store, at Fashion Island shopping center in Newport Beach, is the fourth Athleta store opening this year.

The brand, until recently only available online and through its catalog, is slowly breaking into the bricks-and-mortar space. Athleta currently operates two stores in the Bay Area and two in New York, with additional openings slated to open this fall in Los Angeles (at the Grove), Philadelphia, Washington, D.C., and Minneapolis. The company plans to open 50 Athleta stores in the U.S. by 2013.

-- Mark your calendars: Citadel Outlets and the City of Commerce Employment & Business Development Center will host an annual job fair at the shopping center Wednesday, Sept. 21. The job fair, in its third year, will be held from 10 a.m. to 2 p.m.

Employers including Puma, Penske Motor Group, Guess by Marciano, Pacific College and Clearpoint Financial Solutions will be on interview to meet job candidates, who should "dress for success" and bring resumes.

A one-hour mini job prep workshop will be held at 9 a.m. Last year more than 5,000 job seekers met with potential employers; this year the City of Commerce mall says it expects 8,000 attendees.

-- Animal rights group Change.org is asking Learning Express stores to stop selling live frogs as toys, citing animal welfare and health concerns. The organization, which has circulated 1,000 petition signatures, says the educational toy retailer is selling live African dwarf frogs in 4-square-inch plastic cubes called "EcoAquariums." Other retailers, including Target, Brookstone and toy store chains, have stopped selling the animals.

-- Andrea Chang

Gap reports second-quarter profit down 19%

Apparel giant Gap Inc. had another lackluster quarter, reporting a 19% decline in profit and a slump in sales at stores open at least a year.

The San Francisco company -- parent to the Gap, Banana Republic and Old Navy chains -- said Thursday that its second-quarter profit fell to $189 million, or 35 cents a share, from $234 million, or 36 cents, in the year-earlier period.

Sales at stores open at least a year, known as same-store sales and considered an important measure of a retailer’s health, fell 2%.

Major divisions Gap North America, Banana Republic North America, Old Navy North America and International all posted the same or worse same-store sales results than in the second quarter of 2010.

Total sales rose 2% to $3.39 billion.

"Despite a difficult quarter, we still delivered a net sales improvement and I continue to believe we have far greater opportunities than challenges ahead of us," Chief Executive Glenn Murphy said. "Every brand, division and geography is focused on what matters most."

Christine Chen, a retail analyst at Needham & Co., said in a recent interview that although Gap brand has had some success in its pants lines, such as jeans and black pants, its tops aren't resonating with shoppers. Moreover, the company continues to have trouble convincing customers that its clothes and stores are trendy.

"That’s something they've really struggled with -- getting the coolness factor, the hipness factor, back," Chen said.

Gap released its earnings after the markets closed Thursday. During regular trading, its shares fell 90 cents, or 5.5%, to $15.52.

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-- Andrea Chang

Photo: A Gap store in San Francisco. Credit: Reuters

 

Retail roundup: Retail sales, apparel sales, Wal-Mart, Walgreens

-- July retail sales edged up slightly, according to the Commerce Department. Monthly sales were up 0.5% from June and 8.5% from July 2010. Sectors including furniture, groceries and apparel fared well.

"Retailers are adjusting to the new normal: slow, hard-fought gains," said Sandy Kennedy, president of the Retail Industry Leaders Assn. "A variety of real and perceived obstacles, including disappointingly slow job growth and economic news, continues to fluctuate between subdued and chaotic and depress consumer confidence and spending."

-- Total apparel sales for the first six months of the year rose nearly 3%, market research firm NPD Group said. Men's apparel grew 4.6% and women's apparel sales were down 0.8%. "The women's market is dragging, and women may continue to shop in their closets and make concessions," said Marshal Cohen, NPD's chief industry analyst.

Shoppers are also contending with higher prices: Across the total apparel market, average retail prices rose 6% during the first half of 2011 compared with a year earlier.

-- Wal-Mart announced it has expanded its check-cashing and card-cashing services at stores nationwide. The world's largest retailer said it will now cash most types of preprinted checks up to $5,000, including student loan, rebate, 401(k) and insurance checks. The retail chain also said it would accept more forms of ID for check cashing and would establish Express Check Cashing checkout lanes at select stores during peak hours.

-- Walgreens will begin selling health insurance plans this fall, according to a CNN report, which cited people familiar with the matter. The drugstore chain will sell health insurance products with different price ranges and coverage levels through a private health insurance exchange. 

-- Andrea Chang