Wal-Mart posts sales increase
The outlook for the retail industry was suddenly more upbeat Tuesday after Wal-Mart Stores Inc. raised its June sales outlook after months of tepid results.
Investors had a burst of enthusiasm for retail stocks, even as they waited for merchants to issue their sales reports on Thursday. And analysts also said Wal-Mart’s news, released over the weekend, augurs well for the rest of the industry.
Still, with gasoline prices well over $2 a gallon, analysts question whether consumers’ spending mood will last into the back-to-school season, one of the most critical periods in the retail year.
Wal-Mart, the world’s largest retailer, said Saturday it expects to post a 4.5 percent increase in same-store sales, a gain it attributed to consumers buying summer merchandise as warmer weather arrived. The forecast was welcome news after several months of disappointing sales gains, and surpassed Wal-Mart’s original projection of a 2 percent to 4 percent gain.
A 4.5 percent in same-store sales, which reflect business at stores open at least a year, will mark Wal-Mart’s biggest gain since May 2004, when it announced a 5.9 percent increase, according to Thomson Financial.
McDonald’s wants fashionable new uniforms
Chicago McDonald’s Corp. is seeking a high-profile fashion designer to give its 300,000 U.S. restaurant workers a trendy, stylish new look.
The nation’s largest fast food chain says Tommy Hilfiger and Sean “P. Diddy” Combs are among its top choices to design new employee uniforms.
“It’s about taking the contemporary look and feel of our restaurants and embodied in our advertising and incorporating that into our employees’ business attire,” McDonald’s spokesman Bill Whitman said Tuesday.
Whitman said the company has not yet chosen any designers. New York brand consultant Steve Stoute said possible candidates include Russell Simmons’ “Phat Farm” label, Ralph Lauren, Giorgio Armani, American Eagle and P. Diddy’s Sean John label.
Subway founder must pay damages
Hartford, Conn. The founder of the Subway sandwich chain must pay two franchise owners $150,000 each because Connecticut doesn’t have a well-defined law against excessive punitive damage awards, the state Supreme Court ruled.
A three-person arbitration panel awarded the money four years ago to franchise owners Dennis Rottinghaus of Kansas and Bob Dowell of Iowa.
In 1997, the two ran for the board of directors of the Subway Franchise Advertising Fund, which distributes advertising money to Subway stores across the country.
All franchise owners pay a percentage of their sales to the trust, and associates make voluntary contributions.
The lawsuit against Fred DeLuca, founder of Milford-based Subway, claims he was worried about Rottinghaus and Dowell running for the board.