Just as Target Corp. announced a sluggish third-quarter on Monday, it also announced a new strategy for luring customers back to its stores.
Price cuts.
That is easier said than done for a company that reported third-quarter earnings of $369 million, a 24 percent drop from a profit of $483 million during the same quarter last year.
The company's total revenue rose to $15.1 billion, a 2 percent increase from $14.8 billion during the same period last year.
But there's no way to hide its weak sales and plummeting credit card business.
They're stuck in a dilemma. Sales are down because people are shopping less. The Minneapolis company wants to lower prices, but this will ultimately cut into its bottom line.
This dilemma is going to ripple through retail companies in the country, especially now that there's talk of a looming deflation.
It is going to be a tough for PR folks to sell the retail industry to consumers because so many people have lost their jobs this year. They're cutting back on spending and doing without that $300 Cuisinart mixer.
I don't know about you, but my family is not doing presents this holiday season.
How does a consumer public relations team get past that and get consumers to not just walk in the door of Target, Macy's and Michaels-- but get them to spend money there.
That's where the key problem is. In the example of Target, consumers might be curious to browse and see if prices are indeed lower. But it doesn't mean they'll spend money on the store's products.
I noticed a similar problem at JcPenney's a few weeks ago. They had a "buy one get one for a $1" on select clothing. But I had to spend $40-$50 to get the deal. I didn't think it was worth it. Judging from people leaving empty-handed others thought the same thing.
This is a serious problem facing retailers and their PR folks this holiday season.
It is going to be a tough holiday season and it will be interesting to look at the various tactics companies use to lure consumers to their products.
Thursday, November 20, 2008
Sunday, November 16, 2008
Auto industry bailout
Anyone else out there curious about the future of the auto industry and how the consumer is going to react if the Big 3 get a government bailout?
I have a feeling the auto industry is going to have a huge PR issue on its hands if Congress approves bailout money. This is because consumers are already bitter. They've lost jobs, watched their 401K sink, some have dealt with home foreclosure and everyone has had to pay more for fuel and food this year.
I am wondering where is my bailout as are many others.
With that in mind if the auto industry gets help from the government it may actually have negative results because consumers might say "This huge corporation got help while I am struggling to pay for food. I am not going to buy a car from them."
I am sure PR gurus are already wondering how to handle this and I am closely watching for any "positive ads" from the companies to put them in better light.
In the meantime this is the latest news on the bailout.
http://www.npr.org/templates/story/story.php?storyId=97069463
I have a feeling the auto industry is going to have a huge PR issue on its hands if Congress approves bailout money. This is because consumers are already bitter. They've lost jobs, watched their 401K sink, some have dealt with home foreclosure and everyone has had to pay more for fuel and food this year.
I am wondering where is my bailout as are many others.
With that in mind if the auto industry gets help from the government it may actually have negative results because consumers might say "This huge corporation got help while I am struggling to pay for food. I am not going to buy a car from them."
I am sure PR gurus are already wondering how to handle this and I am closely watching for any "positive ads" from the companies to put them in better light.
In the meantime this is the latest news on the bailout.
http://www.npr.org/templates/story/story.php?storyId=97069463
AIG news
The story of AIG paying millions in deferred compensation to top executives recently broke, and it was interesting to read AIG spokesman's response to the situation.
I am sure Nicholas Ashooh is being closely watched not just by the media, but his bosses. He has to say just the right thing.
This article is a good example of how he is handling the media inquiries. He's smart, pointing out that this helps retention and that government funds are not being used for this purpose.
AIG to Pay Millions To Top Workers
Move Comes on Heels Of Revised Bailout
By Carol D. Leonnig
Washington Post Staff Writer
Friday, November 14, 2008;
American International Group plans to pay out $503 million in deferred compensation to some of its top employees, saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant.News of the payments to top AIG talent comes as the federal government has just put more money into saving the company from bankruptcy, beefing up the total public commitment to $152 billion. Meanwhile, members of Congress are questioning the company's expenditures -- including lavish business trips to resorts -- during a time when taxpayers are on the hook for the bailout.AIG's troubles stem from bad bets it made guaranteeing and buying risky mortgage investments. On Monday, the U.S. government announced that it would have to expand its rescue of the company to nearly double the $85 billion loan it first provided in September when AIG was unable to pay billions of dollars in claims.Treasury officials said earlier this week that they had imposed some of the most stringent limits ever on AIG executives' bonuses and compensation in exchange for the broader bailout.AIG's plans to crack open its deferred compensation bank for payments early next year is conveyed in a two-sentence paragraph buried inside a quarterly financial report filed with the Securities and Exchange Commission on Monday. But some compensation experts and AIG stakeholders yesterday said they considered the exodus of $503 million in AIG money dubious at a time when the company is drenched in red ink. The company reported losses this week that brought total losses to $37.63 billion for the first nine months of the year.AIG spokesman Nicholas Ashooh said yesterday that the company is desperately trying to keep top talent from leaving, and that giving them deferred compensation works as a carrot to keep them on board. He said more than 6,000 employees are covered by AIG deferred compensation plans, but declined to name any employees or the number of top executives who will receive the early payouts.Companies over the past 20 years have increasingly use deferred compensation as a way to attract and retain highly paid executives. Under these plans, top talent can postpone taking some of their large annual salaries for years -- often until a set date -- and can put off being taxed on it. Some wait to take the funds until they retire, when they would presumably be in a lower tax bracket.Most deferred compensation plans are arranged to encourage employees to stay at a company by holding money back, not paying it out early. Ashooh acknowledged that the company takes a significant risk that employees will leave immediately after they receive their deferred earnings in the first quarter of 2009. But he stressed that the funds are not from the government."This is not taxpayers' money they are going to run away with," Ashooh said. "We are trying to take the incentive away for people to leave now, until we have time to get the company running right again."The issue of taking deferred compensation ahead of schedule arose during the Enron scandal, when top company executives who had reason to know the company was financially ailing quietly demanded that their staff pay them their deferred earnings ahead of schedule."If this involves putting the same responsible parties first in line [for AIG money], that is clearly not appropriate," said Lee Wolosky, an attorney for Starr International, the largest shareholder of AIG stock. "Half a billion dollars could clearly be better spent paying back the American taxpayer, rather than rewarding the same executives responsible for AIG's current condition."Congress has also been complaining about how AIG's top executives are running the company and spending AIG money while taxpayers are bearing the brunt of keeping it afloat. Rep. Henry A. Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, has been investigating how AIG has spent taxpayer money and demanded documents specifically on its bonus and compensation plans.
I am sure Nicholas Ashooh is being closely watched not just by the media, but his bosses. He has to say just the right thing.
This article is a good example of how he is handling the media inquiries. He's smart, pointing out that this helps retention and that government funds are not being used for this purpose.
AIG to Pay Millions To Top Workers
Move Comes on Heels Of Revised Bailout
By Carol D. Leonnig
Washington Post Staff Writer
Friday, November 14, 2008;
American International Group plans to pay out $503 million in deferred compensation to some of its top employees, saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant.News of the payments to top AIG talent comes as the federal government has just put more money into saving the company from bankruptcy, beefing up the total public commitment to $152 billion. Meanwhile, members of Congress are questioning the company's expenditures -- including lavish business trips to resorts -- during a time when taxpayers are on the hook for the bailout.AIG's troubles stem from bad bets it made guaranteeing and buying risky mortgage investments. On Monday, the U.S. government announced that it would have to expand its rescue of the company to nearly double the $85 billion loan it first provided in September when AIG was unable to pay billions of dollars in claims.Treasury officials said earlier this week that they had imposed some of the most stringent limits ever on AIG executives' bonuses and compensation in exchange for the broader bailout.AIG's plans to crack open its deferred compensation bank for payments early next year is conveyed in a two-sentence paragraph buried inside a quarterly financial report filed with the Securities and Exchange Commission on Monday. But some compensation experts and AIG stakeholders yesterday said they considered the exodus of $503 million in AIG money dubious at a time when the company is drenched in red ink. The company reported losses this week that brought total losses to $37.63 billion for the first nine months of the year.AIG spokesman Nicholas Ashooh said yesterday that the company is desperately trying to keep top talent from leaving, and that giving them deferred compensation works as a carrot to keep them on board. He said more than 6,000 employees are covered by AIG deferred compensation plans, but declined to name any employees or the number of top executives who will receive the early payouts.Companies over the past 20 years have increasingly use deferred compensation as a way to attract and retain highly paid executives. Under these plans, top talent can postpone taking some of their large annual salaries for years -- often until a set date -- and can put off being taxed on it. Some wait to take the funds until they retire, when they would presumably be in a lower tax bracket.Most deferred compensation plans are arranged to encourage employees to stay at a company by holding money back, not paying it out early. Ashooh acknowledged that the company takes a significant risk that employees will leave immediately after they receive their deferred earnings in the first quarter of 2009. But he stressed that the funds are not from the government."This is not taxpayers' money they are going to run away with," Ashooh said. "We are trying to take the incentive away for people to leave now, until we have time to get the company running right again."The issue of taking deferred compensation ahead of schedule arose during the Enron scandal, when top company executives who had reason to know the company was financially ailing quietly demanded that their staff pay them their deferred earnings ahead of schedule."If this involves putting the same responsible parties first in line [for AIG money], that is clearly not appropriate," said Lee Wolosky, an attorney for Starr International, the largest shareholder of AIG stock. "Half a billion dollars could clearly be better spent paying back the American taxpayer, rather than rewarding the same executives responsible for AIG's current condition."Congress has also been complaining about how AIG's top executives are running the company and spending AIG money while taxpayers are bearing the brunt of keeping it afloat. Rep. Henry A. Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, has been investigating how AIG has spent taxpayer money and demanded documents specifically on its bonus and compensation plans.
Monday, October 27, 2008
About me
I am a bilingual communications specialist with seven years of experience in journalism and a Master's degree from Northwestern University.
My work experience includes covering healthcare, nonprofts, small business, conservation districts and municipalities.
I've worked at large dailies in Illinois, the University of Minnesota and most recently the Minneapolis/St. Paul Business Journal.
I am adept at juggling multiple projects under tight deadline constraints and skilled at interviewing, reporting, fact-finding and writing on a range of topics.
My key skills include managing others and doling out responsibilities, facilitation skills, leadership roles, client services, start to finish project management.
My work experience includes covering healthcare, nonprofts, small business, conservation districts and municipalities.
I've worked at large dailies in Illinois, the University of Minnesota and most recently the Minneapolis/St. Paul Business Journal.
I am adept at juggling multiple projects under tight deadline constraints and skilled at interviewing, reporting, fact-finding and writing on a range of topics.
My key skills include managing others and doling out responsibilities, facilitation skills, leadership roles, client services, start to finish project management.
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