SAN FRANCISCO (Reuters) – Foot Locker said it was consolidating its management team, cutting jobs and closing 117 stores this quarter as the athletic shoe retailer reorganizes its business under its new chief executive officer.

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The company, which has suffered in the downturn, said on Friday that it was combining the management team that oversees its Lady Foot Locker business with the one that manages Foot Locker U.S., Kids Foot Locker and Footaction.

Foot Locker will record an after-tax charge of $3 million, or 2 cents per share, for the fourth quarter, which began on November 1, for cutting about 120 home office and field management positions. The reorganization should result in $10 million in annual expense savings in the upcoming fiscal year, it said.

Richard Johnson, now chief executive officer of Foot Locker Europe, will become president and CEO of Foot Locker U.S., Footaction, Kids Foot Locker and Lady Foot Locker, the company said.

“We expect the consolidation of our Foot Locker businesses under the direction of one management team to help us clarify our Foot Locker family of brands position in the retail marketplace,” said Ken Hicks, who was named CEO in June. Hicks was previously president of J.C. Penney Co Inc.

For its current fiscal year, Foot Locker expects to have opened 37 stores, closed 190, and remodeled or relocated 160. As a result, it will close 117 stores in the fourth quarter, many of which are Foot Locker and Lady Foot Locker stores in the United States.

Foot Locker operates about 3,600 stores in North America, Europe and Australia. Its sales have suffered from weak mall traffic and a move by consumers away from athletic shoes.

The company’s shares fell 2 cents to $11.80 in morning New York Stock Exchange trading.

(Reporting by Nicole Maestri; Editing by Lisa Von Ahn)

NEW YORK (Reuters) – A late holiday shopping surge helped U.S. retailers beat analysts’ sales estimates for December, but industry experts see the momentum fading early in 2010 as consumers return to saving their money.

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Retailers from Macy’s Inc to Aeropostale Inc and Limited Brands Inc raised their earnings outlooks for the holiday quarter, and the Standard & Poor’s Retail Index rose 0.4 percent.

“We have figured out that we can survive and maybe we can spend a little bit more than we did when we panicked,” said Patricia Edwards, founder of wealth management firm Storehouse Partners, referring to late 2008, when shoppers pulled back on spending in the wake of a financial crisis.

“But Mr. and Mrs. Middle America have debts to pay off and jobs to find,” Edwards added.

A total of 21 retailers out of 30 tracked by Thomson Reuters Data posted better-than-expected sales results for stores open at least a year in December, the most important month in the calendar for the sector.

Retailers overall posted a 2.9 percent increase, exceeding the 2 percent rise analysts were expecting and marking the best performance since a 3.4 percent gain in April 2008, according to Thomson Reuters Data.

Retail watchers said the December performance showed consumers warmed up for the holidays, but cautioned that a full recovery requires a better job market.

U.S. jobless claims rose less than expected last week, suggesting a better tone to the overall labor market. But economists still see unemployment rising to 10.1 percent in December from 10 percent in November.

The International Council of Shopping Centers noted that same-store sales for all of 2009 were the worst on record, down 2 percent. It forecast sales would be flat to up 1 percent in January and only pick up steam later in 2010 for a full-year rise of 3 percent to 3.5 percent, marking the biggest yearly gain since 2006.

“As the year progresses, I think you’ll see the consumer stepping up their spending,” said ICSC chief economist Michael Niemira.

DECEMBER’S GAIN, JANUARY’S PAIN?

Some of December’s upside could have come at the expense of January, as shoppers filled stores the day after Christmas to take advantage of the biggest bargains of the season, said Al Ferrara, a partner in BDO Seidman’s retail and consumer product practice. December 26 was the second-largest sales day after the day after Thanksgiving, according to ShopperTrak.

KeyBanc analyst Ed Yruma was unwilling to extrapolate December’s strong results into a consumer recovery this year.

“The consumer is shopping, but they’re pretty measured in what they’re buying,” Yruma said. “We’re actually relatively cautious on the consumer in the near to medium term.”

Macy’s posted a 1 percent rise in same-store sales, slightly better than analysts’ estimates, and raised its quarterly earnings view. Shares of the department store operator rose 2.3 percent.

TJX Cos Inc and Zumiez Inc were also among companies that raised quarterly earnings outlooks. The moves suggested promotions were “relatively tame compared to last year and that retailers were able to hold onto margins,” said Retail Metrics President Ken Perkins.

But he sees little impetus for increased consumer spending in the coming months, at least until employment picks up.

“It’s all about the jobs,” he said, adding that sales would have to return to at least 2007 levels for him to call it a turnaround. “We would like to see some mid-single-digit comp growth from these guys on a consistent basis.”

And when it comes to profit margins, analysts warned that growth might be harder to come by as the year progresses and retailers cycle the inventory reductions and cost cuts enacted over the last year.

IMPROVEMENTS SEEN FOR MOST SECTORS

By sector, the strongest performance in December came from discount chains, which clocked a 3.9 percent sales increase, according to Thomson Reuters Data.

Costco, the largest U.S. warehouse club operator, posted a 9 percent rise, exceeding analysts’ expectations of 7.9 percent growth.

Sears Holdings reported a 0.4 percent increase in December same-store sales and forecast quarterly earnings well above expectations. Its shares surged 8.9 percent.

Target Corp posted a surprise 1.8 percent rise, helped by stronger-than-expected traffic. Analysts had forecast a decline of 0.2 percent.

Beyond discounters, the strongest growth came from apparel chains that cater to both adults and teenagers.

Aeropostale said same-store sales in December rose 10.1 percent, blowing past expectations for a gain of 3.1 percent, and raised its outlook for the current quarter.

High-end retailers like Nordstrom, Neiman Marcus Group and Saks Inc also surprised Wall Street for the better with larger same-store sales increases.

“We’re actually to starting to see the return of the customer who will pay full price for differentiated product,” said Brean Murray, Carret & Co analyst Eric Beder.

Retailers that fell short of expectations included Hot Topic Inc and Abercrombie & Fitch. Shares of both companies fell about 8 percent.

GameStop Corp, the biggest U.S. specialty videogame retailer, said holiday sales failed to improve from a year earlier and cut its quarterly profit forecast, sending its shares down 15.2 percent.

(Additional reporting by Brad Dorfman, Jessica Wohl and Ben Klayman in Chicago; Nicole Maestri in San Francisco and Dhanya Skariachan in New York; Editing by Michele Gershberg and Lisa Von Ahn)

CHICAGO (Reuters) – U.S. retailers largely saw a strong finish to the 2009 holiday season even though sales fell at apparel chains and department stores in December, according to MasterCard Advisors’ SpendingPulse.

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Online retailers, jewelers and consumer electronics retailers all saw sales gains last month, SpendingPulse said on Wednesday.

The findings back up Wall Street’s view that retailers were able to sell more merchandise without resorting to drastic discounts as many had to in late 2008 during the global financial crisis.

A strong rebound in U.S. consumer demand is vital for a sustained global economic recovery.

“In general what we had was a pretty decent holiday season, I think you saw sort of a cautious return to spending. It wasn’t an amazing holiday season,” said Kamalesh Rao, director of economic research at SpendingPulse.

The weakness in 2008, when holiday season sales fell for the first time on record, made year-over-year comparisons look better.

Compared with December 2007, sales in December 2009 in most sectors SpendingPulse tracks likely fell about 2 percent to 3 percent, with online showing the only rise, Rao said.

SpendingPulse findings reflect activity the group tracks in the MasterCard payments networks as well as estimates for other payment forms such as cash and checks.

Investors will get a closer look at spending on Thursday when many top retailers report their December sales at stores open at least a year.

Analysts expect a 2 percent increase in December same-store sales at 30 retailers tracked by Thomson Reuters Data.

The International Council of Shopping Centers said on Tuesday it expects December same-store sales to rise about 2.5 percent, up from its earlier forecast for a 2 percent rise.

ONLINE SHINES

SpendingPulse previously said retail sales rose 3.6 percent from November 1 through December 24.

While Rao did not update that figure to include the final days of December, he suggested that early signs of a recovery in the retail sector emerged in late 2009.

“We entered into either a period of sort of modest or moderate growth, maybe a tentative recovery,” Rao said.

Online sales rose 17.7 percent in December and were likely aided by bad weather in the week before Christmas, which led some shoppers to buy from home, SpendingPulse said.

Electronics sales rose 7.3 percent and were up for the fourth consecutive month, but were down about 4 percent from December 2007.

Rao said electronics were “surprisingly strong,” which may say “something about the appetite for discretionary spending.”

Jewelry sales rose 6.9 percent, and were also up for the fourth month in a row. Within jewelry, mid-tier mall-based chains suffered, while lower and higher-end retailers remained strong, according to SpendingPulse. Excluding jewelry, luxury sales rose 5.5 percent.

Sales at specialty apparel retailers fell 1.8 percent, after dropping 5.7 percent in November, and 8.9 percent in December 2008. Specialty apparel sales were down almost 11 percent from December 2007, Rao said.

Sales at department stores fell 2.3 percent from a year earlier.

Macy’s Inc said on Tuesday it was closing five of its namesake department stores as it pares underperforming locations. (Editing by Steve Orlofsky)

NEW YORK (Reuters) – Top U.S. retailers will give investors the most detailed picture yet of holiday sales this week, with most expected to show better sales after an abysmal 2008 performance.

The retailers will report sales at stores open at least a year, data that may also shed light on their positions heading into the spring season. Wall Street is predicting a tougher environment as consumers return to saving money.

Chains from Costco Wholesale Corp to Macy’s Inc to Abercrombie & Fitch will report December same-store sales data Wednesday and Thursday. Analysts expect a 1.3 percent increase from a year earlier at 30 retailers tracked by Thomson Reuters Data.

That would mark the fourth consecutive monthly sales increase, after a straight year’s worth of declines during the recession.

Jharonne Martis, director of consumer research for Thomson Reuters, said the December results should reflect an improvement from last year, when same-store sales fell 3.6 percent, but not an economic recovery.

A rise of 1.3 percent “is still on the weak side, but it’s an improvement from last year,” Martis said. “Things are better, but they’re still not healthy yet.”

Retailers can ring in up to 40 percent of annual revenue in the weeks leading up to Christmas on December 25. This year, as investors search for signs of an economic recovery, the period holds even greater significance.

“Santa did show up this year, delivered a lot of presents, and helped retailers become at least as profitable, and likely more profitable for everyone, than last year,” said Stifel Nicolaus analyst Richard Jaffe. “Things are going to be OK. “Not great, but OK.”

Industry groups such as the International Council of Shopping Centers (ICSC), ShopperTrak and SpendingPulse have released preliminary data on holiday sales, but their parameters often differ, leading to widely varying figures.

ICSC has forecast an increase of about 2 percent for December. The National Retail Federation expects holiday sales for November-December to decline 1 percent.

This week’s same-store sales results will be the first figures provided by retailers themselves.

“I absolutely trust the same-store sales numbers because those are what they are,” said Patricia Edwards, founder of wealth management firm Storehouse Partners.

FALSE NEGATIVE

At the start of the holiday season after U.S. Thanksgiving, shoppers focused only on big bargains. As a result, retailers clocked a weaker-than-expected 0.5 percent gain in November, dimming hopes for a recovery and pushing retail shares lower.

Deutsche Bank analyst Bill Dreher called the November miss “a false negative on the holiday season, as consumers waited until December and even the final week before Christmas to purchase gifts.”

In a note to clients, Dreher said the benefit of an extra shopping day between Thanksgiving and Christmas this year would help compensate for the negative effect of snowstorms that hit parts of the country in the last week of the season.

Dreher expects sales for the entire holiday season to be up 1 percent to 2 percent, with Nordstrom Inc, Kohl’s Corp and Target Corp prevailing due to market share gains.

By category, the best performance is expected from discount chains such as Target and BJ’s Wholesale Club Inc, which are expected to see a gain of 3.5 percent, according to Thomson Reuters Data. The worst, a 4.5 percent decline, is expected from teen apparel chains such as Aeropostale Inc and Zumiez Inc.

FEAR FOR SPRING

In addition reporting same-store sales, some retailers are likely to offer guidance on the coming year.

Stifel’s Jaffe said he was not worried about retailers’ performance in the fourth quarter, since most chains had well-planned promotions, tight inventories and reduced expenses. He said his concern was with spring, when retailers will start to cycle the improvements made since 2008.

“The game’s gotten much harder for these retailers,” he said. Jaffe has “buy” ratings on stocks such as Gap, American Eagle Outfitters, TJX Cos and Urban Outfitters, but sees earnings growth in the sector cooling as consumers again tighten purse strings.

“We’ve gone from an overweight perspective coming into the fall, to what I would describe as an underweight situation as we look to spring 2010,” Jaffe said.

(Additional reporting by Jessica Wohl in Chicago; Editing by Michele Gershberg and Steve Orlofsky)

NEW YORK (Reuters) – Prudential Financial Inc said on Thursday it completed the planned sale of its minority stake in a retail brokerage to Wells Fargo & Co for $4.5 billion in cash.

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The second-largest U.S. life insurer also received $418.4 million in principal and interest on a note connected to the joint venture, according to a regulatory filing.

San Francisco-based bank Wells Fargo inherited a majority stake in the joint venture, originally agreed between Wachovia and Prudential, when it acquired Wachovia last year.

Prudential said earlier this month in a filing that it expected a gain on the sale of about $2.3 billion before tax, or $1.5 billion after tax.

Shares of Prudential were down 14 cents or 0.3 percent at $50.40 in morning trading on the New York Stock Exchange.

(Reporting by Elinor Comlay, editing by Matthew Lewis)

MONTREAL/CHICAGO (Reuters) – U.S. retailers performed better during the holiday shopping season this year than in historically dismal 2008, in line with lowered expectations, according to data released on Monday.

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Activity tracked by SpendingPulse, a unit of MasterCard Advisors, showed retail sales rose 3.6 percent in the period from November 1 through Christmas Eve on December 24.

Factoring out an extra shopping day this year between the November 26 Thanksgiving holiday and December 24, that increase was closer to 1 percent, SpendingPulse said.

SpendingPulse figures reflect activity in the MasterCard Inc payment networks and estimates for other payments like cash and checks. They exclude gasoline and auto sales.

This year, fewer consumers had credit cards after issuers tightened lending terms, while many others said they preferred to pay with harder-to-track cash in order to stay on budget.

In 2008, spending fell 2.3 percent as tracked by SpendingPulse and 2.8 percent as tracked by the National Retail Federation, as the financial crisis led consumers to cut back.

“Last year the economy and consumer spending were in free fall. This year we’re talking about an environment that has stabilized. That has seen a leveling off,” said Kamalesh Rao, director of economic research at Spending Pulse.

Rao cautioned that a consumer return was tentative and far below 2007 levels. Holiday sales can account for 25 percent to 40 percent of annual sales for many retailers.

Looking at the holiday season as a whole, industry experts said retail sales neither added an optimism-inducing upside nor a deeply worrying downside to their forecasts.

“Holiday 2009 can be described in one word, ‘Adequate,’” NPD Group chief retail analyst Marshal Cohen said in a note.

The Standard & Poor’s Retail Index was up 0.3 percent by the end of trade on Monday. Top retail gainers included American Eagle Outfitters, up 2.9 percent.

NRF STICKS TO FORECAST

The National Retail Federation continues to expect a 1 percent drop in sales for November and December, while other forecasts predict a rise of up to 1 percent.

The NRF plans to issue its own holiday season tally, based on government data, on January 14. While it is not moving away from its forecast, “we’re encouraged by preliminary survey results,” spokesman Scott Krugman said on Monday.

Among stocks cited as holiday season winners this year, Gap Inc rose 1.4 percent. Wal-Mart Stores Inc, which offered early and deep discounts, rose 0.7 percent. Amazon.com Inc was helped by higher online shopping overall and its Kindle e-reader, and its shares rose 0.6 percent.

Wedbush, which tracked stores in four markets, said traffic at U.S. malls increased over the past weekend, with shoppers looking for last-minute items on December 24 and traffic up “significantly” on December 26 for post-Christmas sales.

Gap’s namesake chain was among the more promotional apparel retailers, offering an additional 40 percent off for clearance items on December 26, Wedbush said.

About 60 percent of the space at Gap stores was made up of sale merchandise, while that level rose to about 70 percent at American Eagle and 80 percent at Children’s Place and Gymboree, Wedbush said.

While visiting malls on New York’s Long Island on Saturday, Wall Street Strategies Inc analyst Brian Sozzi saw customers buy more items than they were returning.

“They were actually buying a mix of full-price and some of the discounted goods. So I think that’s a very positive sign as we go into January,” he said.

Coupons and gift cards handed out over the weekend to be used in January could also drive spending.

But it will be weeks before investors find out what the final push meant to retailers’ bottom lines. Several chains plan to report their December sales results on January 7. Full results will come after many retailers wrap up their holiday quarters on January 31.

ONLINE SAW BIGGEST JUMP

The increase tracked by SpendingPulse was aided by a 15.5 percent surge in online purchases as consumers became more comfortable shopping online and shoppers stranded by snowstorms on the East Coast and in the Midwest bought from home. Online retail sales account for about 5 percent of overall sales.

Sales at specialty electronics chains such as Best Buy Co Inc rose 5.9 percent after falling sharply in 2008.

Luxury sales edged up 0.8 percent. Jewelry sales shot up 5.6 percent and gathered steam just before Christmas.

Men’s apparel sales rose 3.9 percent, while women’s clothing sales edged down 0.3 percent. Sales at specialty apparel retailers such as Gap and Abercrombie & Fitch Co edged down 0.4 percent, but showed signs of life after Black Friday this year, rising 2.3 percent between the last Friday in November and December 24.

(Editing by Michele Gershberg and Tim Dobbyn)

MONTREAL/CHICAGO (Reuters) – U.S. retailers performed better during the holiday shopping season this year than in historically dismal 2008, in line with lowered expectations, according to data released on Monday.

U.S.  |  Hot Stocks  |  Economy

Activity tracked by SpendingPulse, a unit of MasterCard Advisors, showed retail sales rose 3.6 percent in the period from November 1 through Christmas Eve on December 24.

Factoring out an extra shopping day this year between the November 26 Thanksgiving holiday and December 24, that increase was closer to 1 percent, SpendingPulse said.

SpendingPulse figures reflect activity in the MasterCard Inc payment networks and estimates for other payments like cash and checks. They exclude gasoline and auto sales.

This year, fewer consumers had credit cards after issuers tightened lending terms, while many others said they preferred to pay with harder-to-track cash in order to stay on budget.

In 2008, spending fell 2.3 percent as tracked by SpendingPulse and 2.8 percent as tracked by the National Retail Federation, as the financial crisis led consumers to cut back.

“Last year the economy and consumer spending were in free fall. This year we’re talking about an environment that has stabilized. That has seen a leveling off,” said Kamalesh Rao, director of economic research at Spending Pulse.

Rao cautioned that a consumer return was tentative and far below 2007 levels. Holiday sales can account for 25 percent to 40 percent of annual sales for many retailers.

Looking at the holiday season as a whole, industry experts said retail sales neither added an optimism-inducing upside nor a deeply worrying downside to their forecasts.

“Holiday 2009 can be described in one word, ‘Adequate,’” NPD Group chief retail analyst Marshal Cohen said in a note.

The Standard & Poor’s Retail Index was up 0.3 percent by the end of trade on Monday. Top retail gainers included American Eagle Outfitters, up 2.9 percent.

NRF STICKS TO FORECAST

The National Retail Federation continues to expect a 1 percent drop in sales for November and December, while other forecasts predict a rise of up to 1 percent.

The NRF plans to issue its own holiday season tally, based on government data, on January 14. While it is not moving away from its forecast, “we’re encouraged by preliminary survey results,” spokesman Scott Krugman said on Monday.

Among stocks cited as holiday season winners this year, Gap Inc rose 1.4 percent. Wal-Mart Stores Inc, which offered early and deep discounts, rose 0.7 percent. Amazon.com Inc was helped by higher online shopping overall and its Kindle e-reader, and its shares rose 0.6 percent.

Wedbush, which tracked stores in four markets, said traffic at U.S. malls increased over the past weekend, with shoppers looking for last-minute items on December 24 and traffic up “significantly” on December 26 for post-Christmas sales.

Gap’s namesake chain was among the more promotional apparel retailers, offering an additional 40 percent off for clearance items on December 26, Wedbush said.

About 60 percent of the space at Gap stores was made up of sale merchandise, while that level rose to about 70 percent at American Eagle and 80 percent at Children’s Place and Gymboree, Wedbush said.

While visiting malls on New York’s Long Island on Saturday, Wall Street Strategies Inc analyst Brian Sozzi saw customers buy more items than they were returning.

“They were actually buying a mix of full-price and some of the discounted goods. So I think that’s a very positive sign as we go into January,” he said.

Coupons and gift cards handed out over the weekend to be used in January could also drive spending.

But it will be weeks before investors find out what the final push meant to retailers’ bottom lines. Several chains plan to report their December sales results on January 7. Full results will come after many retailers wrap up their holiday quarters on January 31.

ONLINE SAW BIGGEST JUMP

The increase tracked by SpendingPulse was aided by a 15.5 percent surge in online purchases as consumers became more comfortable shopping online and shoppers stranded by snowstorms on the East Coast and in the Midwest bought from home. Online retail sales account for about 5 percent of overall sales.

Sales at specialty electronics chains such as Best Buy Co Inc rose 5.9 percent after falling sharply in 2008.

Luxury sales edged up 0.8 percent. Jewelry sales shot up 5.6 percent and gathered steam just before Christmas.

Men’s apparel sales rose 3.9 percent, while women’s clothing sales edged down 0.3 percent. Sales at specialty apparel retailers such as Gap and Abercrombie & Fitch Co edged down 0.4 percent, but showed signs of life after Black Friday this year, rising 2.3 percent between the last Friday in November and December 24.

(Editing by Michele Gershberg and Tim Dobbyn)