Companies find bigger returns in smaller spaces
By Joyce Smith, The Kansas City Star, Mo.
Feb. 22--To Neng Yang, the Best Buy box store in Independence is just too overwhelming, so much so that she only shops there once a year, at the holidays.
So when she needed a new cellphone, she bypassed the 55,000-square-foot store with its many departments -- appliances, big-screen TVs, computers, cameras, car audio, video and music. Instead, she stopped across the street at the Best Buy Mobile store.
The slimmed-down 850-square-foot sister store, in Independence Center, concentrates only on mobile devices.
"I ask about a thousand questions, and this is more personalized, more one-on-one attention," said Yang, of Blue Springs.
Yang bought a white Droid Razr, and her brother, John Yang, picked up a black one.
Bigger is not always better. Just ask the biggest retailers in the country -- and their customers.
The recession and the growth of online shopping have conspired to cut chains down to size. One strategy they've employed has been to close underperforming stores. But Best Buy and an increasing number of companies are trying another strategy, too -- going smaller.
Among the retailers testing smaller concepts are Blockbuster, Ann Taylor, the Gap, Kohl's, Lowe's and Sports Authority. RadioShack is trying a "store within a store" format in several OfficeMax stores in California.
Restaurants are also thinking small, including Leawood-based Houlihan's Restaurants Inc.
Lower square footage makes for lower construction and remodeling costs, and that also tends to make them easier to finance. The smaller locations have less overhead costs and can be staffed by fewer employees.
The small size also gives the chains more flexibility in locations, allowing them to squeeze into heavily developed urban centers, and compact spaces in airports, college campuses and strip centers. If the location isn't successful, the chains can close the sites with less financial fallout.
"For a decade it was 'Build it, and they will come,'" said Candace Corlett, president of WSL Strategic Retail in New York. "It's definitely a correction for retailers as well as restaurants, a direct result of consumers not having as much to spend on the extras. The strategy has to be to reduce your costs to offset less traffic. Usually that means less rent, shrinking retail and restaurants."
Read More»Stimulus a mixed bag for Ashtabula County
By Carl E. Feather, Star Beacon, Ashtabula, Ohio
Feb. 22--ASHTABULA -- Three years ago the Obama Administration rolled out its $831 billion stimulus plan to help lift the nation out of recession by putting Americans back to work.
A sliver of the money from that plan, formally known as the American Recovery and Reinvestment Act (ARRA), trickled down to Ashtabula County agencies, school districts and "shovel-ready" projects. Overall, Ohio received about $8.6 billion, and it would appear that about $75 million of that was committed to the county. The largest single project, $28.7 million for repairing and paving Interstate 90 between Kingsville and Conneaut, is just getting started. But in most other areas of investment, the money has been spent and the recipients are left with the question of how to replace it in order to continue the programming it funded and keep its employees working.
When the ARRA was announced three years ago, there were 42,200 Ashtabula County residents employed. In December 2011, there were 42,300 employed (Ohio Labor Market Information). The unemployment rate did fall, but only because the number of residents who were counted as unemployed decreased.
"It was a good shot in the arm, but it needs to continue," said John Rubesich, superintendent of the Ashtabula County Educational Service Center (ESC). "It was one-time money."
The ESC received more than $1.5 million, which it funneled into local school districts. Superintendents turned to the fund as a way to keep teachers in the classrooms when state funding dried up, he said.
Individual districts also received grants of ARRA funds -- Ashtabula Area City Schools received more than $7 million, but it was not "new" money in the sense it allowed the districts hire additional teachers.
"The ARRA money comes from the federal government and the state basic aid was reduced by the same amount ... the net result was no increase to the district," said Superintendent Joseph Donatone.
Worse, when the ARRA money ended, the state did not replace the aid it had supplanted. Money from another federal program, the Education Jobs Bill, served as stopgap funding, but that also is being withdrawn.
"The bottom line is that next year we will eliminate 47 positions because the ARRA money is gone, the (Jobs Bill) money is gone and state basic aid (remains decreased)," Donatone said.
Read More»Upbeat forecast for Silicon Valley commercial real estate
By George Avalos, Contra Costa Times, Walnut Creek, Calif.
Feb. 16--Silicon Valley's technology-powered surge of expansion is only in its early stages, and this should be another robust year for leasing activity, according to a report released Wednesday by realty firm Colliers International.
"We are seeing a huge impact from social media," said Jeff Fredericks, managing partner with the San Jose office of Colliers International. "Anything that can replace porn as the No. 1 activity on the Internet must have something going for it."
Activity should be strong enough that occupancy for office and research space in Silicon Valley should increase by 5 million square feet in 2012. That would come on top of an increase in net occupancy of office and R&D space of 3.5 million square feet in 2011, figures released by Colliers showed.
The predictions and analysis were part of Colliers' annual market forecast for Silicon Valley.
The biggest local cloud over commercial real estate this year could come from the large chunks of empty industrial space in Fremont resulting from the implosion last summer of Solyndra, a defunct maker of solar panels.
Experts who made presentations at the Colliers gathering in downtown San Jose said that the upswing in the region is being driven by companies in an array of tech sectors. Among the strongest are cloud computing, mobile applications and social networks, said Andy Zighelboim, a senior vice president with
Colliers.
"These are real technologies, with real profits and with real business plans," Zighelboim said.
At the end of 2011, the research and development vacancy rate in Silicon Valley was 13.7 percent, down from 16.2 percent at the end of 2010. Office vacancies were 16 percent at the end of last year, compared with 20.2 percent the year prior.
The South Bay's optimistic prospects have a solid foundation beneath them, the experts at the gathering said. They noted that total jobs in the region grew by 3 percent last year, tying the area with Houston for the nation's fastest rate of growth among large urban centers.
"Like everyone else, we are on the lookout for bad news," Zighelboim said. "But today, we see a lot more good signals. We are super bullish."
Read More»33% of Saudi firms ‘definitely hiring in the next 3 months’
By Arab News, Jeddah, Saudi Arabia
Feb. 13--RIYADH -- The latest Job Index survey conducted by Bayt.com and YouGov has shown that Saudi Arabia's hiring expectancy in the coming months is slightly lower than it was in the fourth quarter of 2011. Most jobs in the coming three months will be for junior executives in the private sector, with a preference for computer science, commerce and business management qualifications across the region.
Of the 58 percent of companies in the Kingdom that are "definitely" or "probably" hiring in the next three months, the majority (43 percent) will be looking to hire less than five people, while 24 percent will look for 6-10 new employees. In a year's time, the figures are slightly more positive with 68 percent of companies "definitely" or "probably" hiring.
Across the region, the majority of survey respondents (31 percent) equally prefer candidates with the following experience: Strong computer skills, and the ability to manage a team with a prior experience in a managerial role. Sales and marketing experience followed next (26 percent). Meanwhile, in terms of skill sets, the ability to communicate effectively in both English and Arabic is considered to be the most important skill in a job-seeker, according to 51 percent of respondents. Other skills that employers look for are the ability to be a flexible, helpful and cooperative team player (45 percent), overall personality and demeanour (43 percent), and trustworthiness (42 percent).
In Saudi Arabia specifically, computer skills is the most desirable experience that a candidate can have according to 35 percent of respondents, followed by managerial (33 percent), and sales and marketing experience (30 percent). On the other hand, the three most desirable skills for KSA employers are good communication capabilities in English and Arabic (69 percent); the ability to be a flexible team player (48 percent) and overall personality and demeanour (44 percent).
Meanwhile, the top five academic qualifications that are most sought-after by KSA employers are computer science (25 percent), engineering (24 percent), jointly commerce, business management and administrative qualifications (22 percent each), information technology (16 percent) and electronics (13 percent). Employers are mostly looking for junior executives, executives, coordinators and senior executives.
Read More»Quarter of Lebanese firms will be hiring soon
By The Daily Star, Beirut, Lebanon
Feb. 13--BEIRUT -- Around 24 percent of Lebanese firms will "definitely be hiring" in the next three months, according to a poll conducted by regional job search website Bayt.com and consulting firm YouGov.The percentage is forecasted to significantly increase to 68 percent within a year, the study showed.
But it added that hiring expectancy in the coming months would be slightly lower than it was in the fourth quarter of 2011.
Of the 54 percent of companies in Lebanon that are "definitely" or "probably" hiring throughout the next three months, the majority (42 percent) will be looking to hire less than five people, while 25 percent reported that they will look for 6 to 10 new employees.
Across the region, 31 percent of respondents prefer candidates with strong computer skills and prior experience in a managerial role.
In Lebanon, team management proved to be the most sought after experience to 36 percent of the corporate respondents, followed jointly by computer skills and sales and marketing experience, according to 25 percent of the respondents.
The survey highlighted the three most desirable skills for Lebanese employers as the ability to be a flexible team player (50 percent); good communication capabilities in English and Arabic (44 percent) and the ability to work under pressure (43 percent).
The top five academic qualifications most desired by local employers are business management (34 percent), computer science (24 percent), engineering (23 percent), administrative qualifications (22 percent) and information technology (20 percent).
"Employment trends are relatively similar across the region, with roughly a quarter of MENA companies considering hiring new staff in the coming months, and in a year's time," said Bayt.com vice president Suhail Masri.
The data for the survey was collected online from Jan. 2 to Jan. 24, 2012. Results were reported on a base of 9,238 respondents.
Countries that participated are the UAE, KSA, Kuwait, Oman, Qatar, Bahrain, Lebanon, Syria, Jordan, Egypt, Morocco, Algeria, Tunisia and Pakistan.
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(c)2012 The Daily Star (Beirut, Lebanon)
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Read More»In the balance: How slowing corporate earnings could dampen job creation
By Ted Evanoff, The Commercial Appeal, Memphis, Tenn.
Feb. 12--Employers across metropolitan Memphis pulled off an unusual feat in December.
They added jobs at one of the fastest clips in the last decade.
Almost 24,000 more people in the metro area were employed full or part time in December than a year earlier.
Experts say it still isn't clear, however, whether a durable jobs recovery has set in.
Corporate profits could thin in 2012 unless the surge in national employment, which climbed by 243,000 jobs in January, continues across the country, boosting spending and earnings, analysts say.
2012
Corporate earnings may already be easing.
Profits appeared robust in 2011 for the 500 big companies tracked in the Standard & Poor's 500 stock index.
Combine the profits of all 500, and they are on pace to earn $230 billion in 2011 -- that's a hefty $12.6 billion, or 5.8 percent, more than in 2010.
But almost all the gain traces to two companies -- Apple, which made money, and insurer AIG, which stopped losing it.
Average growth for the other 498 is 1.1 percent, according to financial data researcher FactSet.
"Were the economy to sustain a shock, this makes us more vulnerable," said Barry Knapp, chief U.S. stock strategist at Barclays Capital.
Looking ahead, some stock analysts project slim profits throughout the year for the S&P 500.
Goldman Sachs strategist David Kostin figures a 3 percent average gain for the 500 corporations, with stock prices ending the year where they began it.
Jobs
What could perk up profits?
Some analysts dwell on jobs. More jobs mean more spending. It's an idea increasingly being heard.
Here's a sample of unheralded bloggers at Seeking Alpha, a digital site catering to investors:
"While Republicans and Democrats have ideas, no party has ideas on how to get to the root cause of U.S. weakness," says Robert Brusca, who contends the U.S. must "attack the structural permanent layoff problem."
Carlos X. Alexandre puts it this way: "We need 130,000 new jobs every month just to keep up with population growth (but) ... there's already a current shortage of 8.5 million jobs. ... To close the gap we need another 360,000 jobs every month, non-stop, for the next three years."
Read More»