DealBook: R.B.S. Names New Head of British Retail Bank

Bill Would Ease Way for Unions at Some Retail Stores in New York City

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Retail Sales Up 0.7% in November

The Commerce Department said on Thursday retail sales increased 0.7 percent last month after rising by a revised 0.6 percent in October. November's retail sales increase was the largest in five months.

Economists polled by Reuters had forecast retail sales, which account for about 30 percent of consumer spending, advancing 0.6 percent after a previously reported 0.4 percent gain in October.

So-called core sales, which strip out automobiles, food services, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, increased 0.5 percent after rising 0.7 percent in October.

That suggested consumer spending would likely step up from a two-year low touched in the third quarter.

Spending is being supported by solid employment gains and steady income increases, which could help limit the drag from inventories on fourth-quarter GDP growth. Lower gasoline prices are also helping, though they are a drag on retail sales figures.

The steady stream of fairly upbeat data should give the Fed confidence to start cutting back its monthly $85 billion bond buying program at least by March.

Retail sales last month were buoyed by a 1.8 percent jump in receipts at auto and parts dealers. That helped to offset a 1.1 percent drop in sales at gasoline stations.

Receipts at building materials and garden equipment stores rebounded 1.8 percent after falling 1.5 percent in October.

There were also gains in receipts at furniture, electronics and sporting goods shops, among others. Sales at electronics and appliance stores rose 1.1 percent, while furniture store sales rose 1.2 percent. However, receipts at clothing stores fell 0.2 percent after rising 2.6 percent in October.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

March Retail Sales Rise Only Slightly

Retailers reported that a benchmark sales figure rose slightly during the month, as shoppers held back on spending because of cold weather across the nation, particularly in the Midwest and East Coast, and continued fears about the economy.

Retail analysts and industry executives, however, said they expected sales to pick up in April.

According to a preliminary tally of 15 retailers by the International Council of Shopping Centers, sales in stores open at least a year rose 1.4 percent in March, or 2.2 percent excluding drugstores. That was below expectations, said Michael Niemira, chief economist at the council.

Sales in stores open at least one year is a prime measure of a retailer’s financial health, because it excludes stores that open or close during the year.

Weather was a factor, with March being the coldest in seven years. The comparison with March 2012 was especially tough, since last year had the warmest March on record, according to Planalytics, a weather research firm.

“Wintry weather conditions persisted deep into March, depressing spring apparel, home and garden and seasonal merchandise sales,” said Ken Perkins, president of Retail Metrics. At the same time, the payroll tax increase that took effect in January and the uncertain economy have weighed on spending, he said.

Analysts often like to combine March and April to get a clearer picture of shoppers’ habits, because of volatile weather patterns at that time of year and the effect of the Easter holiday, which moves around the calendar.

Mr. Perkins said he expected April to be stronger, as the weather improves and customers respond to strong fashion trends such as colorful jeans and prints. An earlier Easter, which meant one fewer selling day in March if stores were closed or a low-sales day if they stayed open, will also help April results, he said. In addition, shoppers should benefit from tax refunds and falling gas prices.

The number of retailers reporting monthly sales has been shrinking. Big names like Target, Macy’s and Nordstrom have recently stopped reporting. Wal-Mart, the world’s largest retailer, has not reported monthly sales in several years.

With the shrinking list, Costco Wholesale, which posted a 6 percent sales gain in February, now accounts for about two-thirds of the revenue in the tally. In total, the retailers that report monthly data represent about 6 percent of the $2.4 trillion in retail industry sales.

A clearer picture of retail sales will emerge when the government reports retail sales figures on Friday. Costco Wholesale’s sales rose 4 percent in March, short of analysts’ expectations for a 5.2 percent rise.

TJX, which operates TJX and Home Goods stores, said revenue in stores open at least a year fell 2 percent, while analysts expected a 1 percent drop. The company said that the drop was a result of the weather and the Easter shift, and that they expected a stronger April.

“Overall business trends improved as the weather became warmer,” TJX’s chief executive, Carol Meyrowitz, said. “April is off to a good start.”

L Brands, formerly Limited Brands, the parent of Victoria’s Secret and Bath and Body Works, said their revenue figure was flat, above the drop expected by analysts.

Gap said its sales fell 1 percent, a smaller drop than the 2.1 percent analysts expected. The company said the earlier Easter had hurt results.

Retail Sales Unexpectedly Fall

Sales fell 0.4 percent in March, missing analysts' expectations for a flat reading, Commerce Department data showed on Friday.

The data suggests consumer spending was considerably weaker in the first quarter than analysts previously believed, and many cut economic growth forecasts for the period.

Prior reports had made consumers look relatively resilient despite an increase in tax rates in January on most Americans.

"The payroll tax increase is hurting," said Ian Shepherdson, an economist at Pantheon Macroeconomic Advisors in White Plains, New York.

Readings for sales have been volatile this year, making it difficult to know how much of the recent weakness has been due to higher taxes and how much might be because of temporary factors related to the weather.

But supporting the view that tighter fiscal policy is the culprit, a closely watched gauge of consumer spending unexpectedly fell in March and the government revised the readings for January and February sharply lower.

These so-called core sales, which strip out cars, gasoline and building materials, fell 0.2 percent last month. This measure corresponds closely with the consumer spending component of the government's measure of gross domestic product.

"The miss in retail sales sends concerns about the impact of higher payroll taxes," said Omer Esiner, a market analyst at Commonwealth Foreign Exchange.

Economists also cited an increase in gasoline prices earlier this year as a factor holding back sales.

Forecasting firm Macroeconomic Advisers lowered its estimate of first-quarter economic growth by three tenths of a percentage point to a 3 percent annual rate.

That would be much stronger than the 0.4 percent rate clocked in the fourth quarter, although much of the acceleration is expected to come from a temporary build up of inventories. Reinforcing that expectation, a separate Commerce Department report showed retail inventories rose 0.4 percent in February when stripping out cars.

Growth is expected to slow sharply in the second quarter largely because fiscal policy tightened further in March, when the federal government began across-the-board spending cuts known in Washington as the "sequester," part of Washington's efforts to shrink the budget deficit.

U.S. stocks declined on the weak retail sales data and as results from major banks failed to impress investors. Prices for U.S. Treasuries rose, while the dollar declined against the yen.

SENTIMENT TUMBLES

A separate report suggested the government's belt tightening was damaging consumer sentiment.

The Thomson Reuters/University of Michigan's preliminary reading on the overall index of consumer sentiment fell to 72.3 in April, the lowest since July 2012 and below economists' forecasts.

Over the entire year, Washington's austerity drive could subtract about 1.5 percentage points from economic growth this year, according to an estimate by the non-partisan Congressional Budget Office.

"The worry is the full reaction to the expiration of the payroll tax cut and to the sequester budget cuts won't be evident until sometime this quarter," said Cary Leahey, a senior advisor at Decision Economics in New York.

Economists said the loss of momentum evident in many economic indicators for March could reflect a warm winter, which may have led companies and consumers to pull forward spending, and a chilly March may have then dulled activity.

Indicators from retail sales and hiring to factory manager confidence were much stronger in February.

SUBDUED INFLATION

A fourth report showed wholesale prices fell sharply in March due to lower gasoline costs. That will come as a relief to consumers beset by high prices at the pump, and could help the U.S. Federal Reserve maintain its very accommodative monetary policy.

Producer prices fell 0.6 percent in March, their biggest drop in 10 months, as gasoline prices tumbled, the Labor Department said. Economists polled by Reuters had expected prices received by the nation's farms, factories and refineries to fall only 0.2 percent.

In the 12 months through March, wholesale prices were up 1.1 percent, the smallest rise since July. Prices had increased 1.7 percent in February.

The benign inflation environment could strengthen the argument for the Fed to keep monetary policy loose as it tries to steer the economy towards faster growth, despite divisions among policymakers over continued asset purchases.

"This is not the time to take away the accommodation," Boston Federal Reserve Bank President Eric Rosengren told CNBC television in an interview.

Minutes of the Fed's March 19-20 meeting released on Wednesday showed the central bank was moving closer to ending its monthly $85 billion purchases of mortgage and Treasury bonds to keep rates low and spur faster job growth.

(Reporting by Jason Lange; Additional reporting by Lucia Mutikani in Washington; and by Nick Olivari, Ellen Freilich and Steven C. Johnson in New York; Editing by Neil Stempleman)

DealBook: What Barnes & Noble’s Retail Arm Might Be Worth

Though Leonard S. Riggio has sought to push Barnes & Noble into the future by supporting its Nook e-reader business, the bookseller’s chairman has long held a soft spot for the retailer’s brick-and-mortar outlets.

Now that he is planning to bid for those stores, how much will he pay? According to some analysts, maybe not all that much.

Shares of Barnes & Noble rose on Monday after Mr. Riggio formally disclosed his plans, rising 8.9 percent by midmorning, to $14.80. That values the overall company at about $863 million. Its total enterprise value is nearly $1.3 billion, according to Standard & Poor’s Capital IQ.

But by some measures, that means the physical stores and BarnesandNoble.com are worth virtually nothing. Microsoft and Pearson collectively bought a stake of roughly 23 percent in the Nook division last year, valuing it at close to $1.8 billion.

Clearly, Barnes & Noble’s board is not going to part with the company’s 689 outlets and online merchant operations for nothing.

David Schick, an analyst with Stifel, estimated in a research note on Monday that the retail operations were worth about $484.5 million. That is based on a multiple of 0.1 times trailing 12 months’ revenue, the same used in an attempted buyout of the smaller competitor Books-A-Million last year.

Mr. Schick added that he believed his estimate to be a conservative figure.

But James McQuivey, an analyst at Forrester Research, argued that Barnes & Noble had little ability to command a top-drawer price for its legacy businesses. The physical stores will continue to face the challenges bedeviling a vast array of retailers, with the Barnes & Noble name carrying weight for a declining number of people.

“Making a bet on bookstores now, when we don’t know what the ultimate footprint of those stores will be, will require getting a really great price,” Mr. McQuivey told DealBook in an interview.

DealBook: Barnes & Noble Chairman Leonard Riggio to Bid for Bookstore's Retail Business

Lily Bowers/ReutersA patron in a Barnes & Noble bookstore in Manhattan in 2010.

The chairman of Barnes & Noble plans to bid for the retail business of the bookstore chain he started 40 years ago, as the company struggles with a changing competitive landscape.

On Monday, Leonard S. Riggio told the company’s board that he would make an offer for Barnes & Noble Booksellers, barnesandnoble.com and other retail assets. The proposal would not include the e-book division, Nook Media.

Like many retailers, the company is confronted by waning profit in its core business, as online retailers and other competitors gain market share. Barnes & Noble recently warned that earnings would be weak in the latest quarter, with losses rising in its Nook Media division.

Conceived as a serious competitor to Amazon.com’s Kindle, the Nook has instead become an also-ran in the race for digital book supremacy. The Kindle remains the top-selling dedicated e-reader, while the iPad consistently leads the competition among tablets. Amazon’s Kindle app has also maintained a huge lead in popularity, limiting Barnes & Noble’s reach across the broader digital bookselling landscape.

It is the boldest move yet by Mr. Riggio, the company’s largest shareholder who owns nearly 30 percent of Barnes & Noble, to try and save the company.

After building a small chain of college bookstores, Mr. Riggio in the 1970s bought the Barnes & Noble name and the flagship location in Manhattan, which had run into trouble. Over the next several decades, he built the company into the nation’s biggest brick-and-mortar bookseller.

In recent years, Mr. Riggio has fended off challenges from the likes of the billionaire Ronald W. Burkle. As part of that effort, Mr. Riggio argued, in large part, that the company was well-positioned in the future by betting on the Nook and digital books.

Others believed in the promise of the e-reader as well.

Microsoft paid $300 million in April for a 17.6 percent stake in the Nook business, valuing it then at $1.7 billion. Microsoft also secured Barnes & Noble’s commitment to produce an e-reader app for its Windows 8 operating system. And in December, the British publisher Pearson agreed to buy a 5 percent stake for $89.5 million.

Mr. Riggio, plans to negotiate the price with the board, according to a regulatory filing. The proposal is expected to be mainly in cash. The retailer’s board had already been weighing whether to spin off its Nook unit.

Barnes & Noble said in a statement that it had formed a special board committee of three directors – David G. Golden, David A. Wilson and Patricia L. Higgins – to consider Mr. Riggio’s proposal. The committee will be advised by Evercore Partners and the law firm Paul, Weiss, Rifkind, Wharton & Garrison.

This post has been revised to reflect the following correction:

Correction: February 25, 2013

An earlier version of this article referred imprecisely to the role of its largest shareholder, Leonard Riggio, in the company’s history. While Mr. Riggio founded the modern company that acquired the name in the 1970s, William Barnes and G. Clifford Noble opened the original Barnes & Noble bookstore, in 1917.

DealBook: Barnes & Noble Founder Leonard Riggio to Bid for Bookstore's Retail Business

Lily Bowers/ReutersA patron in a Barnes & Noble bookstore in Manhattan in 2010.

The chairman of Barnes & Noble plans to bid for the retail business of the bookstore chain he started 40 years ago, as the company struggles with a changing competitive landscape.

On Monday, Leonard S. Riggio told the company’s board that he would make an offer for Barnes & Noble Booksellers, barnesandnoble.com and other retail assets. The proposal would not include the e-book division, Nook Media.

Like many retailers, the company is confronted by waning profit in its core business, as online retailers and other competitors gain market share. Barnes & Noble recently warned that earnings would be weak in the latest quarter, with losses rising in its Nook Media division.

Conceived as a serious competitor to Amazon.com’s Kindle, the Nook has instead become an also-ran in the race for digital book supremacy. The Kindle remains the top-selling dedicated e-reader, while the iPad consistently leads the competition among tablets. Amazon’s Kindle app has also maintained a huge lead in popularity, limiting Barnes & Noble’s reach across the broader digital bookselling landscape.

It is the boldest move yet by Mr. Riggio, the company’s largest shareholder who owns nearly 30 percent of Barnes & Noble, to try and save the company.

After building a small chain of college bookstores, Mr. Riggio in the 1970s bought the Barnes & Noble name and the flagship location in Manhattan, which had run into trouble. Over the next several decades, he built the company into the nation’s biggest brick-and-mortar bookseller.

In recent years, Mr. Riggio has fended off challenges from the likes of the billionaire Ronald W. Burkle. As part of that effort, Mr. Riggio argued, in large part, that the company was well-positioned in the future by betting on the Nook and digital books.

Others believed in the promise of the e-reader as well.

Microsoft paid $300 million in April for a 17.6 percent stake in the Nook business, valuing it then at $1.7 billion. Microsoft also secured Barnes & Noble’s commitment to produce an e-reader app for its Windows 8 operating system. And in December, the British publisher Pearson agreed to buy a 5 percent stake for $89.5 million.

Mr. Riggio, plans to negotiate the price with the board, according to a regulatory filing. The proposal is expected to be mainly in cash. The retailer’s board had already been weighing whether to spin off its Nook unit.

Barnes & Noble said in a statement that it had formed a special board committee of three directors – David G. Golden, David A. Wilson and Patricia L. Higgins – to consider Mr. Riggio’s proposal. The committee will be advised by Evercore Partners and the law firm Paul, Weiss, Rifkind, Wharton & Garrison.

This post has been revised to reflect the following correction:

Correction: February 25, 2013

An earlier version of this article referred imprecisely to the role of its largest shareholder, Leonard Riggio, in the company’s history. While Mr. Riggio founded the modern company that acquired the name in the 1970s, William Barnes and G. Clifford Noble opened the original Barnes & Noble bookstore, in 1917.

Bits Blog: In Shake-Up, Apple's Mobile Software and Retail Chiefs to Depart

Jeff Chiu/Associated Press Scott Forstall at an Apple event in September.

Scott Forstall, who has run software development for Apple’s iPad and iPhone products, and John Browett, the head of the company’s retail operations, are leaving Apple, in a rare management shake-up at the company.

The departure of Mr. Forstall, an Apple veteran, will shift his responsibilities to several other Apple executives. Most notably, Eddy Cue, the head of Apple’s Internet services, will take over development of Siri and maps, two efforts Mr. Forstall oversaw that have been widely criticized for their reliability and accuracy.

Apple said in a news release that the management changes would “encourage even more collaboration” at the company. Mr. Forstall will leave Apple next year and serve as an adviser to Tim Cook, the chief executive, in the meantime.

Dixons Retails, via Associated Press John Browlett

Jony Ive, the head of Apple’s industrial design, will take on more software responsibilities by providing more “leadership and direction for Human Interface,” Apple said. Craig Federighi, who was previously in charge of Apple’s Mac software development, will also lead development of iOS, the software for iPads and iPhones.

The departure of Mr. Browett, who joined Apple only in April to lead its retail operations, followed a number of missteps by him. In August, Apple took the unusual step of apologizing for a plan to cut back on staffing at its stores. Apple said that a search for a new head of retail was under way and that the retail team would report directly to Mr. Cook.

DealBook: Barclays to Buy British Retail Unit from ING

Andy Rain/European Pressphoto AgencyA branch of Barclays in London.

LONDON – Barclays agreed on Tuesday to buy the British savings and loan business of the Dutch firm ING Group.

The deal reflects Barclays shifting focus toward retail banking after a recent rate-manipulation scandal led to the resignation of its former chief executive, Robert E. Diamond Jr. The firm’s new chief, Antony P. Jenkins, previously ran the bank’s retail banking operations, and he has said that he will stop business activities that pose a “reputational risk” to the British bank.

Last week, Barclays announced a broad reorganization of its investment banking unit, the group at the center of the rate-rigging case. Hugh E. McGee III, one of the firm’s top deal makers, became its most senior corporate and investment banker in the Americas, while Eric Bommensath was tapped to run a combined fixed-income and equities sales and trading division.

Under the terms of the deal announced on Tuesday, the British bank will acquire deposits of £10.9 billion ($17.5 billion) and mortgages worth a combined £5.6 billion from ING Direct U.K. The acquisition also will add 1.5 million customers to its existing 15 million client base, according to a Barclays statement.

The British bank will acquire ING Direct U.K.’s mortgage book at a 3 percent discount, while the deposits will be acquired at par value, the firms said in separate statements.

“The acquisition of ING Direct U.K. is a good fit with Barclays’s existing U.K. retail banking business,” Ashok Vaswani, head of the British retail and business banking unit of Barclays, said in a statement.

The deal, which is expected to close in the second quarter of 2013, will result in a net loss of 260 million euros ($336 million) for ING. The Dutch bank added that the loss would be offset by 330 million euros of extra capital that would be freed up when the deal is completed.

ING has been required to dispose of assets around the world as part of a bailout from its local government during the financial crisis. Last month, ING sold its 9 percent stake in Capital One though a public offering worth around $3 billion.