5.0 EDSR 09-08-2008 - Laserfiche WebLink

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~C~~1C~~~~~- IL C1~~G~ ~~~ News: National • keel Estate taft~rr~tii°h October 08, 2008 Written by Sasha M Pardy (spardy@costar.com) Survey Charts Direction of Store Openings & Closings Among Major Retailers Results of BDO Seidman's CFO Retail Compass Survey; Costar Provides Major Retailer 2008 Store Opening/Closing Metrics BDO Seidman just released the results of its annual Retail Compass Survey of CFOs of retailers with revenues in excess of $100 million. Despite acknowledging that high fuel costs, the weak housing market, the upcoming presidential election and rising inflation have taken their toll on consumer confidence this year, 61% of the CFOs surveyed said their companies recorded the same or increased sales during the first six months of 2008 as compared to 2007. In fact, for all of 2008, 67% anticipate sales to be the same or better, specifically projecting a 3.5% increase for 2008. (note: the BDO Seidman survey was conducted in August and September 2008) On store closings, 36% of the CFOs surveyed and 57% of the top 100 retailers' CFOs said they will have closed stores in 2008. However, suggesting the bulk of these closures are only in the normal course of business, only 33% of the top 100 said 2008 store closings would be up over 2007 -- 50% said the number of closings would be about the same, while 17% said less stores would be closed. On a more positive note, 77% of all CFOs and 67% of the top 100 CFOs, said their companies did not or would not reduce or delay store opening plans in 2008. However, continued credit market mayhem could have adverse impact on store expansion plans for the remainder of 2008 and into 2009, as 41% of CFOs said they had seen some tightening of credit from their lenders. One hint of the impending likelihood of less stores being opened in 2009 is reflected in the table below; as most retailers have yet to share their 2009 store opening guidance with the public. Some retailers have already stated they would only open stores in 2009 that were signed off many months ago; this could be a trend we increasingly see as retailers announce 2009 store opening plans over the next three months. Costar Advisor compiled the following table from researching the most recent quarterly reports, transcripts and SEC filings of the top retailers in most major U.S. retailing categories. Key metrics including the current size of the chain, typical square footage of stores, as well as the number of store openings and closings in 2007 - 2010 are provided. In aggregate, the retailers listed in this chart opened nearly 3,000 stores in 2007, and in stark contrast, the same retailers expect to open approximately 1,800 stores in 2008. The store closing figures are not so drastically different -- in aggregate, these retailers closed at least 910 stores in 2007; in 2008, that number is up to at least 1,296 stores (589 of these are from Linens 'n Things' liquidation alone). Keep in mind however, the 2008 store closing aggregate is conservative, as it doesn't account for the likelihood of additional Mervyns stores closing, any impending bankruptcy news (possibility of Circuit City, for example), and in addition, retailers were not quick to publicly share incremental store closing expectations for this year. If you would like to receive this table in excel spreadsheet format, please request it via email from the editor, Sasha Pardy, at spardy@costar.com. Copyright (c) 2008 Costar Realty Information, Inc. All rights reserved.