WisBusiness Tuesday Trends — 29 Nov. 2005


NOTE: This is the first edition of Tuesday Trends, a new
weekly feature exclusively for WisBusiness subscribers. Written by
WisBusiness Editor Brian Clark, Tuesday Trends offers a concise look at
what’s up and what’s down in the Wisconsin business scene.

Please send questions or comments to Brian Clark at
clark@wisbusiness.com

WISBUSINESS TUESDAY TRENDS

(Nov. 22 – Nov. 29, 2005)

Rising

Retailers: Overall, discount retailers were reportedly pleased
with the Thanksgiving weekend shopping results. According to industry
polls, retail sales jumped a hefty 22 percent, up to $27.8 billion.
Shoppers headed en masse to both brick-and-mortar stores and Web sites
to buy clothing, books and lots of electronic gadgets, the National
Retail Foundation reported. The only downside was that they apparently
marched right past specialty retailers. Analysts predict more hefty
discounts as Christmas draws nigh. Shop owners also had to be happy
with declining gasoline prices, which had fallen to less than $2.20 on
Monday. The NRF said it is expecting a 6 percent sales gain for the
season, up a full point from two months ago. When gas was more than $3
a gallon, shoppers interviewed said they would spend from $25 to $35
for a gift. Now that they are spending $40 a pop to fill their cars
instead of $60, those estimates are between $36 and $50 per person. And
that means billions in retailers’ – not big oil’s – pockets.

Famous Footwear: The third quarter was good for Madison-based
Famous Footwear, which reported earnings 5.3 percent above the same
period a year ago. Its sales were $328 million, while its operating
earnings were up 7.3 percent to $26.1 million. Company officials
credited robust sales of women’s fashion footwear, followed by men’s
and kids’ shoes. Parent firm Brown Shoe Co. also posted increased
third-quarter earnings of 7 percent.

Energy rates: The state Public Service Commission has approved
Madison Gas and Electric Co. requests to increase its base prices for
next year by 11.7 percent (or $35.7 million) for electrical rates and
1.5 percent (or $3.7 million) for natural gas rates. The 2006 prices
mean the typical residential MG&E consumer should expect a monthly
hike of $7.50 for electricity and $1.50 for gas. Meanwhile, We
Energies’ proposal to raise rates for the second time within a year got
a tongue-lashing from a variety of customers – business and consumers –
at recent hearings. The company is seeking a 7 percent increase for
electricity, which would raise $143.5 million to help pay for new
transmission lines and power plants in Port Washington and Oak Creek,
as well as new renewable energy efforts. It is also seeking a 4 percent
rate increase to raise $84.5 million to pay for the higher cost of
natural gas. And it wants a 6.5 percent rate increase from Wisconsin
Gas customers to raise $53.2 million. Finally, the utility is asking
for a 4.8 percent increase for its Wisconsin Electric Gas Operations
customers to raise $27.4 million.

Mixed

Auto industry jobs: The state breathed a big sigh of relief
last week when GM announced that it would not close its SUV assembly
plant in Janesville. A plant closing could have resulted in laying off
nearly 4,000 workers. But automotive parts makers in the region are
saying it’s too early to tell whether they’ll be affected by GM’s
announcement that it will close nine North American plants by 2008 and
terminate 30,000 employees. “We think it would be inappropriate to
speculate on the impact to Lear or even more importantly the impact to
specific Lear locations, until we’ve had a better chance to look at
this and do a little bit of our own analysis,” said a spokesman for the
Michigan-based Lear Corporation, which has factories in Sheboygan and
Janesville making automotive seating and interiors.

Great Wolf Resorts: The waterpark juggernaut Great Wolf
Resorts has been named in a shareholders lawsuit charging the company
with misleading investors in its initial public offering in December
2004. A Connecticut law fired had filed a securities fraud lawsuit
seeking class action status in U.S. District Court. The class is
defined as purchasers of Great Wolf securities who bought shares
between Dec. 14, 2004, and July 28, 2005. A Great Wolf spokeswoman told
a newspaper the suit “has no merit” and said the company intended to
fight it. Meanwhile, the company, which started with one resort in the
Dells, draws good press for expansion plans in Ohio, Canada and
Pennsylvania. Ultimately, the company hopes to open 25 resorts at a
rate of two per year, reports say.

Falling

State unemployment: Unemployment dropped in all of Wisconsin’s
12 largest metro areas in October compared to September. Statewide, the
figure was 3.8 percent, down from 4.1 percent a month earlier and down
from 4.0 percent a year ago. Madison had the state’s lowest
unemployment rate at 2.7 percent in October, down from 2.9 percent in
September and down from last year’s 2.8 percent. Racine had the highest
at 5 percent, down from 5.2 percent in September and down from 5.1
percent a year ago. State labor officials said the downward tick is
normal, thanks to increased hiring in the retail trade In addition, the
figures reflect increased school employment.

Wal-Mart: ‘Tis the season to bash the giant retailer, which
employs thousands in Wisconsin. Critics in Wisconsin are after the
company because of alleged overuse of state BadgerCare health care
money and an anti-Wal-Mart group ran ads in Wisconsin in November
(http://www.wispolitics.com/index.iml?Content=24). And traditional
stores on Main Street Wisconsin increasingly fear its might —
especially at the crucial holding shopping season. Elsewhere, two
union-commissioned university studies have concluded that Wal-Mart
stores charged customers the wrong prices in the Midwest and California
at a rate that exceeds those set by federal guidelines. Attorneys
general in Illinois and California said the reports raised serious
concerns. And Connecticut AG Richard Blumenthal said his office would
investigate what he called a “culture” of inaccuracy. Wal-Mart has
called the studies biased, incomplete and outdated, and shoppers
continue to enter the doors despite the criticism.

Madison airport traffic: Airport passenger counts took a dive
in Madison during October. Some 71,171 passengers flew out of the
airport last month, down 10.6 percent from a year ago, and 70,436
passengers arrived, down 8.6 percent from a year ago. The year-to-date
count was 681,581 departing passengers, 3.5 percent below a year ago,
and 680,991 arriving passengers, 3.1 percent fewer than a year ago. The
report on charter passenger numbers was mixed: Up 8.5 percent in
October, but still down 14.3 percent for the year. Solidly in the black
was the freight report: Up 18.1 percent in October, and up 10.6
percent year-to-date. Freight received was up 17.8 percent for the
month and up 4.9 percent for the year.


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Trends is Copyright © 2005.