Retailers report dismal September sales

Rocky staff and wire reports

Published October 9, 2008 at 12:05 a.m.

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American shoppers went into hiding in September, sticking to buying the bare-bone essentials and leading many retailers to report dismal sales for the month as skittish consumers grappled with the financial meltdown spreading around the globe.

The weak reports on Wednesday - an alarming gauge of consumer behavior since the meltdown began midway through last month - are fueling more worries about the holiday season and the overall economy, since consumer spending accounts for two-thirds of all economic activity.

Many retailers, including J.C. Penney Co., Kohl's Corp., Saks Inc. and Nordstrom Inc. cut their outlooks as they use aggressive discounts to pull in shellshocked shoppers.

"Everybody across the board is feeling it," said Ken Perkins, president of research company RetailMetrics LLC.

Wal-Mart Stores Inc. and wholesale club operator Costco Wholesale Corp. both reported solid sales but results were a bit shy of Wall Street estimates.

Target Corp. reported a bigger-than-expected drop.

NATIONAL

Bank of America to buy back securities, federal regulators say

Federal regulators say Bank of America Corp. has agreed to buy back as much as $4.7 billion in auction-rate securities to settle charges that it misled thousands of customers about the risky investments.

The Securities and Exchange Commission announced the preliminary settlement with the Charlotte, N.C.-based bank.

Bank of America joins eight other big investment banks that have agreed to buy back a total of more than $50 billion of the securities.

Bank of America also agreed to "use its best efforts" to provide as much as $5 billion in liquidity to other businesses that bought them, according to the SEC.

SMOKING BAN The latest casualty of the economic crisis may be the ban on smoking in casinos in Atlantic City, N.J. The city council moved Wednesday night to postpone for a year a law that was to take effect next week banning smoking on the gambling floor.

The casinos and the head of their largest workers union asked the council to put the ban on hold until the economy improves. They fear deep losses and significant layoffs if smokers take their money elsewhere. Some casinos in nearby states do not restrict smoking.

COSTCO PROFITS Warehouse-club operator Costco Wholesale Corp. said Wednesday that its fourth-quarter profit rose 7 percent as consumers shopped for bargains in the tough economy.

The Issaquah, Wash.-based company said net income for the 16-week fiscal quarter rose to $397.8 million, or 90 cents a share, from $372.4 million, or 83 cents, a year earlier.

Excluding a charge related to food and gas price increases in the U.S. and a charge related to a litigation settlement, net income was 97 cents per share for the quarter. Revenue rose 13 percent to $23.1 billion from $20.48 billion last year.

Analysts predicted profit of 93 cents per share on revenue of $23.05 billion.

AIRLINE LAYOFFS United Airlines said on Wednesday it will lay off 414 mechanics at its San Francisco maintenance base.

The layoffs are part of 7,000 job eliminations announced previously by the Chicago-based carrier as it reduces its flying and eliminates the Boeing 737 from its fleet.

United spokeswoman Megan McCarthy said the notices went to the workers on Sept. 29, and the layoffs will take effect on Dec. 7.

WALGREEN DROPS BID Drugstore chain Walgreen Co. has withdrawn its $2.8 billion bid to acquire Longs Drug Stores, apparently helping to ease the path for Longs' $2.7 billion acquisition by CVS Caremark Corp.

Longs had already accepted CVS Caremark Corp.'s lower bid of $71.50 per share, a deal already approved by antitrust regulators.

Walgreen Chief Executive Jeffrey Rein cited what he called Longs' board's refusal to "engage in a constructive dialogue" as well as the broad financial meltdown as reasons for the withdrawal.

IBM TOPS EXPECTATIONS International Business Machines Corp., the world's largest computer-services company, reported third- quarter earnings that beat analysts' estimates.

Excluding some items, profit last quarter was $2.05 a share. Analysts estimated profit of $2.01 a share. Revenue rose 5 percent to $25.3 billion.

BREWER EXEC NAMED InBev NV, the world's biggest beer seller, said David Peacock will become president of Anheuser- Busch Cos. once its purchase of the U.S. brewer is complete.

Luiz Fernando Edmond will be zone president North America, the Brussels-based company said.

THIS JUST IN

* TruEffect named Kurt DeMarais as senior vice president of global sales.

* Mincom appointed Craig Jones executive vice president of worldwide field operations, Bruce Jacquemard general manager, Jennifer Tejada chief strategy officer and executive vice president of corporate development and marketing, and Tom Shields executive vice president for global customer support services.

* Karen Samuels, partner at Perkins Coie Real Estate, was named president-elect 2009 of CREW Denver.

* Daniel Glasser of Fennemore Craig in Denver was appointed to the Downtown YMCA Board of Advisors.

* Dan Berich was given the Lifetime Achievement Award by the Rocky Mountain Masonry Institute.

* Colorado Youth At Risk moved to 1700 E. 28th Ave. at Manual High School in Denver.

* The University of Colorado received a $450,000 grant to establish the Colorado European Union Center of Excellence.

* Rainbow Bridge changed its name to Bessie's Hope.

* Glenn Renner, president and COO of HomeSphere, joined Rebuilding Together Metro Denver's board of directors.

* Snell & Wilmer attorney Lee Mickus was listed in The Best Lawyers in America 2009.

* Emergency Medical Services Corp. appointed James Murphy president and chief operating officer of its EmCare subsidiary.

* Dean Weber joined Golden- based Initech as account executive.

* Bill Greer of the Denver Northwest Market Center of Keller Williams Realty was named the 2008 Realtor of the Year by the North Metro Denver Realtor Association.

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