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Holiday sales fall short of expectations

Holiday retail sales appeared to fall short of industry expectations, reported The Wall Street Journal last week. The weaker holiday sales set the stage for bigger markdowns in the increasingly important post-Christmas period, said the article. Post-holiday sales were no reflected in the article.

From the day after Thanksgiving to midnight Monday, Dec. 24, total retail sales rose 3.6 percent over the previous year, according to MasterCard SpendingPulse, a unit of MasterCard Advisors. After factoring out spending on gasoline, retail sales increased only 2.4 percent. Industry forecasts had predicted gains of 3.5 percent to 4.5 percent.

The SpendingPulse data includes sales in stores and online. It also covers spending at restaurants and on gift cards. The data is based on sales activity in the MasterCard payments network, and also estimates for payments made by cash and checks.

There was an 18.7 percent sales gain for the weekend before Christmas versus the same weekend last year, according to ShopperTrak RCT Corp., which tracks sales in retail outlets nationwide.

Among the season’s strongest performers was the e-commerce sector, which posted a 22.4 percent gain in online sales over last year. Last year, shoppers spent $58 billion at U.S. stores and restaurants in the seven days following Christmas, marking a 4.3 percent increase from the same period a year earlier, according to SpendingPulse.

The 2007 holiday season turned out to be the best yet for Amazon.com Inc. , with its busiest day being Dec. 10. On that day, Amazon online customers ordered more than 5.4 million items, which is 62.5 items per second, says the company. The Seattle, Wash.-based company shipped over 3.9 million units on Dec. 10, and shipped to more than 200 countries this season. Top sellers in consumer electronics area included the Garmin GPS unit, Canon PowerShot digital Elph cameras, and Samsung LCD HDTVs.

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AgfaPhoto wins trademark dispute with Agfa-Gevaert
AgfaPhoto Holding GmbH, Cologne, Germany, won its legal dispute with Agfa-Gevaert Group, Mortsel, Belgium, regarding the use of the AgfaPhoto trademark rights . According to a press release, the International Court of Arbitration (ICC) ruled that Agfa-Gevaert was not entitled to terminate the existing license agreement with AgfaPhoto Holding, the parent-company of the collapsed AgfaPhoto GmbH. The notice of termination issued by Agfa-Gevaert in October 2005 was therefore without legal affect, and the worldwide licensing rights are still held by AgfaPhoto Holding, the company pointed out, adding that the ruling is final and no appeal is possible. Among other things, the license agreement includes the rights of the AgfaPhoto trademark and runs for an indefinite term.
“We welcome the decision by the ICC, which fully confirms our point of view,” said Frank Nellissen, managing director of AgfaPhoto Holding GmbH. “This ruling marks an important positive signal to us and our present and future partners with whom we have entered sublicense agreements. Now we can finally get started.”
AgfaPhoto Holding plans to systematically expand its brand activities across the entire consumer imaging market on a worldwide scale.
Based on an order for interim measures issued last year by the Court of Arbitration, Agfa-Gevaert was obliged to approve some sublicense agreements negotiated by AgfaPhoto Holding. Under the license agreement, Agfa-Gevaert is required to approve the conclusion of sublicense agreements between AgfaPhoto Holding and its partners.
In view of Agfa-Gevaert’s negative attitude and the legal uncertainty, AgfaPhoto said it had so far been impossible to expand its sublicensing business as planned. Following the recent arbitration award, Agfa-Gevaert may no longer refuse its approval based on the argument that AgfaPhoto GmbH, the operating subsidiary of AgfaPhoto Holding, was declared insolvent in May 2005.
“In the second phase of the proceedings which is now pending, the main issue is AgfaPhoto Holding’s claim for damages and determining the quantum of the damages caused and payable by Agfa-Gevaert as a result of its illegal conduct,” added Nellissen. At the beginning of the proceedings, AgfaPhoto Holding had already estimated impending damages of no less than euro 200 million.
In a press release commenting on the decision, the Agfa-Gevaert Group said the court did not question the good faith basis for Agfa-Gevaert’s termination of the trademark license agreement or the company’s belief that the license was granted and existed for the sole purpose of supporting its former consumer imaging business and employees. The majority, however, concluded the technical terms of the trademark license agreement did not permit such a termination. Nevertheless, the tribunal confirmed that any sublicensing activity by AgfaPhoto must remain limited to the consumer imaging market, Agfa-Gevaert said.
Agfa-Gevaert President and CEO Jo Cornu stated: “We obviously regret this decision and will continue to analyze the award. As a first reaction, I can only confirm that it has always been the intention of Agfa-Gevaert to grant the use of the trademark royalty-free in order to help our former consumer imaging division and employees. That business is no longer there.”

Circuit City hopes concept stores will help the retailer regain profitability

Circuit City Stores Inc., which lost more than one-quarter of its stock value after posting a wider loss than expected, is hoping that a new store concept two years in development will be a turning point for the company, said MarketWatch. Circuit City opened seven “The City” stores in 2007, including one in New York separated only by a wall from a store operated by its larger and better-performing rival, Best Buy Co. Inc.

The 20,000-square-foot concept is at least one-third smaller than its standard 30,000- to 35,000- square-foot stores, the company said. The new concept also will be where Circuit City allocates capital spending. Circuit City had 681 U.S. locations at the end of its third quarter and plans to open as many as 60 The City stores this year, said MarketWatch.

Circuit City, which analysts said has lost sales and traffic to Best Buy and others partly because of aged stores and lackluster customer service, said that the City is cleaner and more brightly lit. The concept also showcases digital cameras and other products in round pods, offering customers a more desirable retail experience, said the company.

“The City is more than just a better-looking store,” said Chief Executive Philip Schoonover on a conference call. “We have data that show both the customers and associates prefer this experience to our older stores. Customer-shopping patterns have changed a lot. They are looking for full service.”

At the City, employees are armed with tablet PCs to help answer customers’ questions and are trained to handle different tasks and sell various product categories throughout the store, instead of only being assigned to one product category. Almost all of the fixtures are on wheels and can be easily taken apart to quickly feature different merchandise. In addition, the concept has portable price scanners for customers to check on product information and price, said MarketWatch.

While the City marks a step in the right direction, some analysts thought the concept stores wouldn’t be enough on their own to turn the company around. “The initial read on the City stores is that management understands what it takes to be competitive in the industry,” said Scott Tilghman of Soleil Securities in the MarketWatch article. “But I don’t think it’ll be the driver of the turnaround.”

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Kodak to end production on infrared film, some pro films this month

Eastman Kodak Co., Rochester, N.Y., citing declining sales of the product, will quit manufacturing and distributing Kodak HIE-135 infrared film after 2007, the company said in a release . There is no suggested replacement for the HIE-135 film. Infrared film is used mainly by the scientific community for capturing objects using infrared light, but fine-art photographers also use the film due to the striking black-and-white images it creates.

The company said in a release: “Demand for these products has been declining significantly in recent years, and it is no longer practical to continue to manufacture given the low volume, the age of the product formulations and the complexity of the processes involved.”

Kodak also said in the release, it will discontinue the Kodak Professional Ektachrome 64 Film and Kodak Professional Ektachrome 100 Film in addition to the Kodak Professional High-Speed Infrared Film / 135-36. The discontinuance was effective at end of December. These discontinuances are effective in all countries worldwide, with one exception, said the release, Kodak Professional Ektachrome 64 Film / EPR will continue to ship to Japan beyond 2007, said Kodak.

The following products are discontinued: Kodak Professional Ektachrome 64 Film / EPR 120, Kodak Professional Ektachrome 64 Film / EPR 135-36, Kodak Professional Ektachrome 64 Film / EPR / 6117 / 10 sh 4-by-5-inch, and Kodak Professional Ektachrome 64 Film / EPR / 6117 / 10 sh 8-by-10-inch. Kodak said the suggested replacement for Kodak Professional Ektachrome 64 Film / EPR is Kodak Professional Ektachrome Film E100G or E100GX.

Additionally, discontinued are Kodak Professional Ektachrome 100 Film / EPN 120, Kodak Professional Ektachrome 100 Film / EPN 135-36, Kodak Professional Ektachrome 100 Film / EPN / 10 sh 4-by-5-inch, Kodak Professional Ektachrome 100 Film / EPN / 50 sh 4-by-5-inch, and Kodak Professional Ektachrome 100 Film / EPN / 10 sh 8-by-10-inch. The suggested replacement for Kodak Professional Ektachrome 100 Film / EPN is Kodak Professional Ektachrome Film E100G or Kodak Professional Ektachrome 100 Plus Film / EPP

North Carolina photographer James C. Williams uses HIE-135 film in his fine-art shooting and is seeking a reprieve for film, reports the Rochester Democrat and Chronicle. Williams has contacted professional photographers worldwide through e-mail and messages left on electronic bulletin boards, asking them to lobby Kodak to keep making the infrared film.

Williams has posted some examples of his HIE-135 infrared film photos on Flickr. Williams is also part of a group on Flickr called “Kodak HIE High Speed Infrared Film.”

“I understand Kodak has its challenges with … making their shareholders happy and maintaining a good business profile in a difficult environment,” said Williams, who lives in Winston-Salem. But the company that popularized photography, he said, also has a responsibility to the art form it made possible. “They’re responsible for an art form, and they need to understand they are affecting an artistic outlet.”

Kodak declined to make someone available to the Democrat and Chronicle to respond to the lobbying effort. But in a statement, the company said: “We very much appreciate the correspondence we’ve received from some photographers who use our infrared film and would like to be able to purchase it in 2008 and beyond. However, the fact is the decline in use of infrared film has been so substantial over the years that it is no longer practical for Kodak to continue to manufacture this product, given the extremely low demand and volume, the age of the product formulations and the complexity of the processes involved.”

Kodak’s infrared film usually has to be special-ordered from photography supply shops, with rolls costing $13 to $15 for 36 exposures, says the Democrat and Chronicle. The film also requires special handling because of its sensitivity to infrared light, with rolls needing to be loaded into and unloaded out of cameras in complete darkness.

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People on the move

· Unisource Worldwide Inc., Norcross, Ga., announced the appointment of Walter Glenn as business manager in the company Packaging unit. Glenn, who will oversee sales operations in the Jacksonville, Fla., and Tallahassee, Fla., areas, will report to Mark Trainer, area vice president, Packaging - South, for Unisource. Prior to joining Unisource, Glenn was Regional Sales Manager for Wurzburg Inc., supervising sales in Kentucky, Tennessee, North Carolina and South Carolina. He began his career in 1988 with Berry Packaging, in Tampa, Fla., and held positions with Quality Container and Weyerhaeuser before a six-year stint with Longview Fibre Co., in Bowling Green, Ky.

Industry notes

· Harvey Electronics recently filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York. Harvey Electronics will continue to operate its business and manage its property as a debtor-in-possession, and the company expects to promptly file a plan of reorganization with the court. Harvey Electronics warned the plan, as finally confirmed by the court, may adversely affect its outstanding common stock through the issuance of substantial additional shares or common stock, or otherwise. Harvey Electronics hopes to emerge from court protection by the spring of this year. YA Global Investments, the current secured lender, has agreed to provide Harvey Electronics with a $1.5 million debtor-in-possession line of credit, subject to court approval of the terms of the financing.

· Eastman Kodak Co., Rochester, N.Y., has rolled out its Kodak Picture Movie kiosks in 60 Bartell Drug Stores in the Seattle, Wash., region, according to a report by KOMO-TV. The kiosks let consumers input up to 60 digital photos and add music, movement effects, and burn them to a DVD right in the store. The discs cost $14.95.

· Eastman Kodak Co., Rochester, N.Y., said it entered into separate patent settlements with Matsushita Electric Industrial Co. and Victor Co. of Japan Ltd., reports The Wall Street Journal. According to a filing with the U.S. Securities and Exchange Commission, Kodak agreed to dismiss patent infringement lawsuits and entered into technology licensing agreements with each. There is no monetary consideration with Matsushita and financial terms of the JVC settlement were unclear, reports The Wall Street Journal.

· The U.S.-based Sony Electronics Blog will add several new enhancements to the site in the coming year to make it more user-friendly. Additionally, the blog has added a photo album in Flickr at www.flickr.com/photos/sonyelectronics for more interactivity. The blog said on the Flickr photo sharing site photos relating to each post, photos of products, commercials, events, and photos taken with various Sony cameras will be added.

· The Hallmark Museum of Contemporary Photography, Turners Falls, Mass., will feature “Themes and Variations,” an exhibit of landscapes, birds and nude studies by New Hampshire-based photographer Paul Taylor, opening Jan. 17. Taylor’s black-and-white images feature shots of the Turkish countryside and the Connecticut River Valley. They were created using photogravure printing, ambrotype and wet collodion process, arcane photographic techniques from the earlier days of photography. The exhibit concludes March 16.

· Eastman Kodak Co., Rochester, N.Y., announced that its Kodak EasyShare All-in-One (AiO) printers will be featured on NBC’s “The Celebrity Apprentice” airing on Jan. 17. During the episode, teams of contestants will be tasked with creating a Kodak Mobile Printing Station in New York City that drives brand messaging and awareness of the value proposition of the Kodak AiO Printing System. Kodak has also developed a microsite with new information and activities. Kodak also encourages visitors to add their voice to “Thank God It’s Inkjet Friday” blog posts.

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