Luxury Shoppers Shut Their Purses

(Businessweek) - Purveyors of luxury goods are finding that even their well-cushioned customers are feeling the economic pinch and putting their credit cards away

 

Luxury stores have finally caught the economy's cold.

For months, high-end retailers posted healthy sales increases, thumbing their noses at dismal reports of slumping home sales, risky mortgages, and rising energy prices. But now it looks as though even well-heeled consumers are pulling back. On Jan. 10, the upscale department store Nordstrom ( JWN) said that December sales at stores open at least a year fell 4% from last year, compared with an 8.7% increase in November. Saks (SKS), New York's Fifth Avenue luxury mainstay, also reported that its same-store sales were up a mere 0.8%, compared with a 25.7% increase in the previous month. And blue-blood retailer Neiman Marcus eked out a tepid 2.9% sales increase, vs. 5.8% in November and 8.5% in October.

"Everyone's shopping for the bare necessities, and people have stopped treating themselves," says Patricia Pao, founder of the Pao Principle, a New York retail consultant.

 

Read more at Businessweek

Less Moz miners in SA

(Fin24) - Fewer Mozambican workers were hired by South African mines in 2007, indicating a move away from the former
migrant labour system of old.

According to recruiting agency Teba, South Africa's mining industry recruited 44 849 Mozambican workers in 2007 - 3.6% fewer than the 46 528 recruited in 2006.

Of the total number of miners recruited last year, 36 702 were contract renewals, 7 950 were new hires with experience in the mining sector, and just 227 were cases of individuals who had never previously worked in mines.

José Carimo, regional director for Teba in Mozambique and Swaziland, this week told Mozambican newspaper Notícias, that the lower number of
Mozambicans recruited by South Africa's mines was primarily the result of South Africa's new migrant labour laws, which among other things restrict access to employment by non-qualified foreign workers.

 

Read more at Fin24

Canada lifts SA steel duties

(Fin24) - The Canadian International Trade Tribunal, an independent quasi-judicial body, has lifted anti-dumping duties
on hot-rolled steel plate from South Africa and Russia, saying they aren't likely to harm Canadian steel producers.

However, the tribunal ruled that anti-dumping duties would continue on hot-rolled steel plate from China.

It stated that the "dumping of hot-rolled steel plate from South Africa and Russia is unlikely to result in injury or
retardation."

"The Canada Border Services Agency will therefore no longer impose anti-dumping duties on these products," the tribunal added.

Dumping not on

Under international trade rules, dumping occurs when products are exported or sold in another country at prices below their cost in the producer's home market.

The Canadian press said the anti-dumping duties were imposed after Hamilton-based Stelco, backed by other Canadian steel producers, brought a complaint in 1997 against several countries comprising South Africa, Russia and China, Mexico and Poland.

Since then, all of Canada's major publicly traded steel producers - Stelco, Ipsco, Algoma and Dofasco - have been bought by foreign companies and taken private, although they continue to operate.

Hot-rolled carbon steel is used in making such things as rail cars, fuel storage tanks, construction machinery, agricultural equipment, bridges, industrial buildings, high-rise office towers, automobiles and truck parts and ships.

Read more at Fin24

China Mobile Apple talks over

(Fin24) - China Mobile Limited says that it has discontinued talks with Apple over the launch of iPhone handsets in China.

"We have held talks with Apple to launch the iPhone device in China. However, those talks have ended," China Mobile spokesperson Rainie Lei said. She declined to say why the talks ended.

China Mobile Chairperson Wang Jianzhou said in November last year that the two companies had been unable to agree on a revenue-sharing model.

Calls to Cupertino, California-based Apple were not answered today.
 

Read more at Fin24

Metorex plunge may hurt deals

(Fin24) - The share price of Metorex is plunging inexplicably and has fallen 38% from its 12-month high at a time of bullish conditions for two of its main products - copper and gold.

The fall is particularly embarrassing in terms of Metorex's bid to minority shareholders in Copper Resources Corporation (CRC) which has just been extended for the second time to January 18.

CRC owns three copper projects in the Democratic Republic of Congo (DRC) with resources and reserves totalling up to 2.4 million tonnes of contained copper metal.

Metorex bought 38.7% of CRC in July last year plus a 5% stake in its 75% held subsidiary MMK from the Forrest group for R600m. The Metorex share price stood around 2 400c at the time and it subsequently rose to an all-time high of 2 950c.

The CRC share price at the time sat around 87p and, when Metorex pitched its equity offer to the CRC minorities, it also included an alternative cash offer of 125p per CRC share.

But Metorex shares hit 1 725c today before recovering to around 1 830c while CRC shares have risen to around 160p.

Read more at Fin24

Sovereign Bancorp to take $1.58 billion charge

(Reuters) - Sovereign Bancorp Inc (SOV.N: Quote, Profile, Research), the second-largest U.S. savings and loan, said on Monday it expects to take $1.58 billion in fourth-quarter charges, hurt by worsening credit quality and a tough mortgage environment.

The Philadelphia-based thrift expects to write down $1.4 billion of goodwill. This includes $600 million related to consumer lending, which has been hurt by weaker credit and a decision to stop making some auto loans.

It also includes $800 million related to operations in the New York area. Sovereign in June 2006 paid $3.6 billion for Brooklyn, New York's Independence Community Bank Corp, and said revenue and deposit growth have been lower than expected.

Results also reflect a $180 million write-down related to preferred stock investments in mortgage financiers Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research).

Sovereign also said it will set aside $738 million for bad loans and leases, up from $650 million in the prior quarter. It also plans $27 million in charges related to financings to two mortgage companies that have defaulted.

Chief Executive Joseph Campanelli in a statement said Sovereign remains a "fundamentally sound financial institution," despite market and credit pressures. The company operates about 750 banking offices in eight Northeastern U.S. states, and ended September with $86.6 billion in assets.

 

Read more at Reuters

U.S. Stock Futures Rise on IBM Profit, Rate-Cut Speculation

(Bloomberg) -- U.S. stock-index futures rallied after International Business Machines Corp.'s profit topped analysts' estimates and investors bet on larger interest-rate cuts by the Federal Reserve.

IBM, the world's biggest computer-services provider, rose on results that were boosted by international growth. Apple Inc. climbed after Bank of America Corp. increased its earnings forecast for the maker of the iPod media player. Barrick Gold Corp. and Newmont Mining Corp. advanced as gold reached a record.

The gains today signaled that the market may rebound from the worst start for a year since 1982. Standard & Poor's 500 Index futures expiring in March added 10 to 1,417.8 as of 9:16 a.m. in New York. Dow Jones Industrial Average futures rose 111 to 12,772 and Nasdaq 100 Index futures increased 24.75 to 1,950.25.

``One of the driving forces behind weakness in the markets had been the theory corporate earnings would be squeezed with the global slowdown,'' said Tim Smalls, head of U.S. trading at Execution LLC in Greenwich, Connecticut. ``IBM telling you they're doing well is going to take a little bit of the pressure off.''

U.S. stocks were poised to rebound from the worst start for a year since 1982 as Fed fund futures showed traders see a 44 percent probability the central bank will lower its benchmark interest rate by 0.75 percentage point to boost economic growth at its Jan. 30 meeting. Before Jan. 11, traders saw no chance of a three-quarter point cut.

 

Read more at Bloomberg