Bed Bath & Beyond stock price dropped 6.5 percent last week.  The retailer's third quarter earnings of 50 cents a share fell short of analyst forecasts that on average called for earnings of 52 cents.
 
"Wal*Mart's renewed focus on discounts has caused fallout throughout the retailing world. Electronics retailers have felt the brunt of it as Wal*Mart waded into their turf in its search for new growth opportunities.  BEST BUY and Circuit City stores have both been cutting prices sharply on flat screen TVs and both issued quarterly reports this month that disappointed investors."  Source: Justin Lahart, WSJ, Dec 26, 2006.
 
Carmine D.

Here's a recap of the final weekend of 2006 for vacuum cleaner ads  by the big box retailers.  And a good vacuum cleaner sales weekend it is.  
 
But......... first the TV vacuum cleaner ad story for the week has to be David Oreck who, partnered with the jolly old bearded man in the red suit, is pitching his Oreck vacuums on prime time.  Just because Christmas passed doesn't mean people don't buy vacuums after the Holidays for themselves.  And what better way to convince people to rethink that vacuum purchase than with Christmas tree pine needles and pet fur, both of which are made easy fodder for the Oreck lightweight upright vacuum.
 
And now for the PARADE:  And the big winner is...........dyson but not for its ad.  No.  Even better.  Seems the Intelligence Report by Lyric Wallwork Winik quotes Lisa Roberts, author of Antiques of the Future, for the picks on tomorrow's treasures.  And on the 2006 list is a dyson vacuum DC07.  Since the pic is black and white its hard to tell what model.  But I'm guessing it's the DC07 pink.  Some of Roberts' s picks for tomorrow's treasures are a dyson vacuum, a 1996 wastebasket named for Greta Garbo, and Apple's iMac G3 (not Kirby's) computer.  Roberts says these products "represent the best designs of their time."  So Lisa does that mean we will see a dyson vacuum cleaner in 50 years on TV's Antique Roadshow?  Have to wait and see.
 
If the above makes you want to go buy a 1st generation DC07, there are plenty still available and on sale.  Circuit City as usual is offering the first generation DC 07 All Floors and Animal for $399 and $499 respectively.  (Before a 10 percent savings on all in-store floorcare).  That beats TARGET which is selling the 1st generation DC07 All Floors for $399 before a $20 in store savings.  
 
Could it be that Circuit City and TARGET knew about the PARADE article and the dyson prediction and planned their ads?  
 
If so, it didn't affect BEST BUY's dyson ads.  It's pushing the DC17 Absolute Animal for $549 with no discounts.  And several BISSELL bagless models AND the HOOVER Steam Vac, All Terrain Steam Vac and WT2 Surface Command.  The WT 2 is $265 with BEST BUY's claim:  "Most powerful upright for carpet cleaning."
 
And SEARS is advertising the DC17 Absolute Animal for $549 with the printed caveat: "Priced lower in the store."  And also an array of Consumer Reports winning Sears Progressive uprights and canisters from $229 to $379.  
 
And Kohl's bypasses dysons altogether and features BISSELL and Eureka instead.
 
But IMHO THE BEST vacuum cleaner ad this final weekend of 2006 goes to Linen-n-Things.  Hands down the winner for 2006.  First a full page ad for the dyson DC14 Animal for $549 PLUS a $50 Gift Card and 20 percent off and the claim: "Our #1 BEST Seller."  Maybe so but $549 for the 2nd generation when the latest and greatest dyson DC17 Absolute Animal (the greater dyson) is $549 (before in store savings), its going to be  a HARDSELL for savvy dyson vacuum cleaner buyers.
 
And the final and best for 2006: A 2 full page fold out of dyson, HOOVER, BISSELL, Shark, Bosch, Electrolux, Roomba and Scooba floorcare products in splendiferous color and detail.  This is a keeper vacuum fans.  Forget the Lisa Roberts pick of dyson DC07 for future treasures.  The real treasure is this FREE (just the cost of the newspaper) LNT paper ad.  This is the 2006 keeper for future treasures.  With 24 floorcare products, descriptions and prices in one huge color display, you'll have a real treasure for posterity.
 
HAPPY NEW YEAR!
 
Carmine D.

COSTCO will sell the HOOVER WT bagged Self-Propelled for $177 starting Feb 12 through 18, 2007.  This is the first generation WT rated Number 1 by Consumer Reports for several years.  The price is comprised of the regular low COSTCO retail price of $217 AND a special one time $40 discount coupon.  Final COSTCO price is $177.  But wait it gets better.  The vacuum comes with SIX (6) HEPA bags and a 20 foot stretch hose.  The HOOVER WT SP vacuum is also available on line at costco.com but delivery charges may apply.
 
That's not all.  COSTCO will sell the iRobot Roomba Scheduler Robotic vacuum for $209 between March 12 through March 18, 2007.  This is the iRobot top of the line and the price is comprised of the regular COSTCO price of $259 (fairly common among all the big box retailers) AND a $50 one time discount coupon for a final cost of $209.  Also available on line but delivery charges may apply.
 
Two great products and 2 great values.
 
Carmine D.

Dec 2006 was good to Circuit City.  Even better to BEST BUY.  The nation's 2 largest consumer electronics retailers reported strong December sales on Jan 5.  Circuit City said sales at stores open at least one year rose 4.2 percent in line with analyst estimates.
 
BEST BUY, the larger chain, said sales for the month rose 7 percent at stores open at least 14 months, significantly better than the 5 percent estimate by analysts.
 
Flat panel TVs are the biggest hit in consumer electronics.  World-wide sales of flat TV sets doubled in 2006 to 50 MILLION units representing one quarter of the market.  Analysts expect sales to exceed 70 MILLION in 2007.  The product represents a combination of high volumes and high profits.  But can profits last while prices fall?  US electronics retailers, whose margins of 30-40 percent represent the biggest element of the the final price, are now using flat-panel TV sets for their own strategic discounting.  BEST BUY CO. offered a Panasonic 42 inch plasma HDTV at $999 for one day during the holiday sales season.  The set is regularly priced around $1500 still well below the $4000 it cost two years ago.
 
World-wide TV market share by revenue, for the top 5 manufacturers for quarter 3 of 2006:  Samsung 15.2 percent; Sony 10.3 percent; Panasonic 9.2 percent; LG 8.5 percent; Philips 7.7 percent.
 
The International Consumer Electronics Show opened in Las Nevada this week and is expectd to generate $200 MILLION in revenue.  Bill Gates gave the opening remarks on Sunday evening at the Venetian to 4000 attendees.
 
http://tech.yahoo.com/ces/null/11884/five-must-see-gadgets-at-ces
 
Carmine D.

Speaking of forced departures, the most notable is Mr. Robert Nardelli, CEO for the past 6 years, at HOME DEPOT.  He was forced to exit recently with a severance package of $210 MILLION including $20 MILLION in cash.  Nardelli was "old school" and focused on the idea that you do your job, take care of the numbers, and the rest will take care of itself.  In six years on the job he doubled HOME DEPOT's sales and more than doubled earnings.  But the stock price languished.  In fact the only spike up in price was on the news of his departure.  And most of the gain has been given back.  
 
What went wrong?  Was he a victim of a managment technique he championed called the "Six Sigma" made famous by his former boss at GE Jack Welch that failed miserably to lift the stock price?  Or his autocratic management style?  Or lack of retail experience?  And the exodus of high level HOME DEPOT execs with retail experience.  LOWES has been a fierce competitor beating out HOME DEPOT especially in large appliance sales by opening up room for displays, employing knowledgeable sales people, and appealing more to women consumers.  
 
But many problems still remain for the retailer, from a decline in home prices to vigorous competition from Lowe's Cos, and a shortage of top ranked managers with retail experience.  
 
Carmine D.