Based on the discounting that already seems to be going on at stores, it already looks like another rough holiday shopping season for many retailers.

That’s true even for retailers that want to sell you things so you can make gifts for your kin, such as A.C. Moore Arts & Crafts Inc.

The Berlin, N.J., company last week reported a decline in comparable-store sales of 7.7 percent. Management was disappointed, but noted that one industrywide survey indicated a 9 percent drop in the overall consumption of arts and crafts products.

The company reported a wider net loss of $12.9 million, or 53 cents per share, for its quarter ended Oct. 3. Its stock price fell the most among those of local companies last week, falling 22.8 percent to close at $3.69.

A.C. Moore cited heavy discounting on seasonal merchandise by other retailers, with some markdowns hacking 50 percent off the regular price.

“While our consumer confidence may arguably be slowly improving, it appears certain that discretionary income spending is still lagging behind general household spending,” said Rick Lepley, president and CEO of A.C. Moore, on a conference call with financial analysts.

For the last three years, Lepley has been leading a turnaround of the 134-store chain that competes with Michaels Stores Inc. and Jo-Ann Stores Inc. “We continue to think that we’re in a stronger position to take advantage of increased consumer spending when it occurs,” he said.

But “when” is the key word. Will the consumer spend money this Christmas? Or Valentine’s Day? Anyone want to guess back-to-school?

Earnings

Today: American Water Works, BMP Sunstone, Lannett, Stonemor Partners;

Tomorrow: Astea International, Pep Boys - Manny, Moe & Jack;

Wednesday: Amerigas Partners, UGI;

Thursday: Quigley, SL Industries, Urban Outfitters.

Quotable

We expected a challenging second half. We baked into our plans and budgets, and that’s exactly what we got.

- Cristobal Conde, president and chief executive officer of Wayne-based SunGard Data Systems Inc., on a call with analysts Friday.

As fun as it has been to follow the Philadelphia Phillies race to repeat as world champs, there’s one thing the team probably won’t duplicate: whopping merchandise sales.

Matt Powell, an analyst with SportsOneSource, which tracks the sporting goods industry, said sales of Phillies T-shirts, hats and other merchandise are “way off” from last year. But that’s a typical pattern for teams that produce multiple championships, he said.

While it’s too early for final figures, sales of Phillies merchandise for the last four weeks are down more than two-thirds versus last year, Powell said.

After all, how many Ryan Howard jerseys do you need?

Born in bad times

One of the counterintuitive factoids I’ve heard during this damaging downturn is that recessions are a great time to start a company.

To support the notion, some experts trot out Microsoft and Apple as examples of two that got their start during the malaise of the ’70s. However, not every small business becomes a household name with a market capitalization in the many billions of dollars.

I asked Dane Stangler, a senior analyst at the entrepreneurship think tank Ewing Marion Kauffman Foundation, about the unconventional wisdom. He said survival rates of companies born during the last four recessions are no different from those launched during economic expansions.

In fact, the United States pretty consistently creates about 500,000 new businesses every year, he said. Most of them don’t survive to see their fifth birthday, so the nation needs a steady rate of new-company formation.

This year is likely to be no different. Stangler projects that more than 500,000 people will plunge into the entrepreneurial soup in 2009.

Quotable

To me, Atlantic City is in a long-term death spiral. They just don’t have what they need to compete with the local-option slot machines that are cropping up all over the place.

Dennis I. Forst, gaming analyst at KeyBanc Capital Markets, in an interview Thursday about the casino industry on Bloomberg Radio.

Everyone expected September would be clunker for auto sales, and the numbers coming out today show that everyone was right.

General Motors' sales were down 45 percent in September compared with the same month in 2008. Chrysler was down 42 percent, while Ford Motor was down only 5 percent.

Locally, Cherry Hill-based Subaru of America Inc. eked out a 0.7 percent rise in September sales. The Japanese automaker is tiny next to the Detroit Three. (Subaru sold 14,593 vehicles last month.)

South Korea's Hyundai was another automaker with a rare increase, with September sales up 27 percent compared with last year.

Subaru did experience a big 50 percent decrease in sales between August, when the federal "cash for clunkers" program was humming, and September. (Subaru sold 28,683 units in August.)

Sales for the first nine months of 2009 for Subaru remain 10 percent ahead of where they were in 2008. So far, it has sold 158,421 of its all-wheel drive vehicles this year.

Dietz & Watson Inc. has a beef with Boar’s Head Provision Co., its larger competitor.

A Philadelphia maker of deli meats and cheeses, Dietz & Watson is casting itself as the defender of consumer choice in calling on its Florida rival to end its practice of demanding exclusivity to sell in supermarket delis.

Dietz & Watson and Boar’s Head duke it out in deli sections where store personnel slice to order. Given the “premium” nature of the brands, both charge a buck or two more per pound than a store’s private-label brand meats and cheeses.

But you won’t find Dietz & Watson and Boar’s Head side-by-side in that deli case.

Case in point: About a dozen Harris Teeter supermarkets in the Charlotte, N.C., area dropped Dietz & Watson products this spring in order to carry Boar’s Head. A couple of food-oriented blogs buzzed with customer comments praising or panning the switch.

Dietz & Watson president and CEO Louis Eni said the customer reaction to the Harris Teeter move spurred him to draw attention to Boar’s Head’s practice of insisting that grocers boot out other brands, including some pre-packaged products.

Shoppers lose when any product maker demands that a retailer carry only its line and no other, Eni said. Dietz & Watson has not and will not do that, he said.

But seeking exclusivity is Boar’s Head’s business model, according to Mark Lang, a food marketing lecturer at St. Joseph’s University. He saw it firsthand as a marketing executive at Publix Super Markets Inc. in Florida, where Boar’s Head has managed the 900-story chain’s deli cases for years.

Lang called Boar’s Head’s aggressive distribution network its “secret sauce.”

Most areas of a supermarket are self-service. Not the deli or bakery, where customers must ask interact with employees to get the cold cuts or birthday cakes they want.

A well-run deli should be a profit center, Lang said. But we’ve all encountered delis that aren’t well-run. Boar’s Head’s distributors are the best at whipping a deli into shape, even training the store’s own staff, Lang said.

I called Boar’s Head’s corporate offices in Sarasota, Fla., seeking comment. With the spokeswoman on vacation, I asked to speak with someone in management about its practices. No one called back.

Dietz & Watson calls itself the No. 2 deli brand, which is quite possible but with the biggest players all privately held it’s hard to get independent confirmation. Eni would say only that Dietz & Watson has annual sales of more than $300 million, having grown at a double-digit pace for several years in a row.

Boar’s Head and Dietz & Watson have much in common. Frank Brunckhorst started making Boar’s Head cooked hams in Brooklyn in 1933, while Gottlieb Dietz began making deli meats in 1939. Both have expanded beyond their regional strongholds in recent years.

Boar’s Head is available through the U.S. with Dietz & Watson sold in more than 40 states.

Eni insists Dietz & Watson is making more inroads than it is losing. It recently began distributing products to Meijer, a Grand Rapids, Mich.-based chain of 189 stores in the Midwest. Costco Wholesale warehouse clubs is another new client.

Why doesn’t Dietz & Watson fight back with its own exclusivity arrangements? Eni said he thinks that it's unfair to customers to limit their choices.

When it comes to grocery stores, consumers have a lot of choice. And supermarkets have been known to relent when enough customers demand the return of a product.

As we shun credit cards and their high fees in favor of cash, many of us are hitting automated teller machines more frequently.

But if we’re not careful, tapping some ATMs can incur other fees.

Bank customers who stick to their ATM network generally don’t pay fees. The biggest U.S. network run by a bank is Bank of America’s with 18,532 machines.

Then there’s a bunch of “independent sales organizations” that own and operate ATMs, splitting per-transaction surcharges with the owners of locations where they place their machines: convenience stores, movie theaters, hotels, restaurants, pharmacies and stadiums.

I was surprised to learn that one of the largest such ISOs is based in Cherry Hill.

Access to Money Inc., which was known as TRM Corp. until last month, operates about 11,400 ATMs. (According to ATM & Debit News, the biggest ISO is Houston’s Cardtronics Inc. with 33,100 machines.)

TRM had been a Portland, Ore., company that, starting in the early ’80s, put self-service photocopiers in all sorts of retail settings.

With laptops and laser printers now in most homes, Access to Money CEO Richard Stern said the company had to adapt. So it looked for another machine consumers would seek out in high-traffic areas. In 1998, that led TRM to ATMs, and attracted Philadelphia investors, among them financiers Edward Cohen and his son, Daniel Cohen.

TRM got big in the ATM business quickly and took on a lot of debt. Too much, as it turned out. Financial difficulties led TRM to sell its copy business to pay down debt.

Stern, who became CEO in June 2007, said he wanted to strengthen its ATM operations by bringing in some new expertise. In April 2008, TRM bought a competitor, the Whippany, N.J.-based Access to Money, in a deal worth more than $14 million.

The acquisition led Stern to move TRM’s operations from the West Coast to New Jersey. (Because of its Philadelphia investors, TRM’s executive offices have been in the region for several years.)

Last month, shareholders approved the name change to Access to Money, which Stern said better reflects what the company provides.

However, access to profits isn’t easy for ISOs. Cardtronics lost $70 million in 2008, while Access to Money lost $26.1 million.

The former chief financial officer of Rohm & Haas Co. has been hired as CFO of Bacardi Ltd. , the privately held maker of rum and other liquor.

Jacques Croisetiere, 55, will join the Bermuda-based company Aug. 3. He succeeds Ralph Morera, who is retiring.

Croisetiere had been at Philadelphia's Rohm & Haas for 10 years, serving as CFO since 2003. He was one of three executives that formed the "Chairman's Committee" at the specialty chemical maker, which was acquired earlier this year by Dow Chemical Co.

(The others on that committee were former Rohm & Haas CEO Raj Gupta and Pierre R. Brondeau, who is currently president and CEO of Dow's Advanced Materials Division, which consists mostly of the Rohm & Haas operations.)

Bacardi said that Croisetiere's appointment will become effective at its July 9th annual general meeting.

And yes, this means that Croisetiere will be based in Bacardi's headquarters in Hamilton, Bermuda. Think he'll miss Philadelphia winters?

Plenty of people have dreamed of starting a company in their garage. But how many asked their dads if it would be OK while they were in high school?

Stephen Voudouris and his younger brother, Andrew, did just that when they and Christopher Francy started Xoxide Inc. in 2001.

They started by selling computer and auto parts out of the Voudouris’ home in Marple Township. They got so good that the company took over the basement, closets, backyard, and most of the rest of the house.

It also changed the neighborhood’s traffic patterns, thanks to trucks delivering parts and UPS vans picking up shipments. “We destroyed and replaced a lot of lawns and sidewalks,” said Andrew Voudouris, now 22.

When shipments began arriving in 40-foot containers, they took to borrowing parking lots to unload and called every friend with a car to help transport the equipment. Each container had 900 cases, and 15 to 20 cases can fit in an SUV.

So Xoxide meant a lot of jobs for their at Marple-Newtown High School friends. The three founders plowed their profits back into more inventory and new business lines.

Today, Xoxide and its 80 employees operate out of a 45,000-square-foot building in Malvern. If you didn’t know how it started, Xoxide would seem like any of the dozens of other businesses in the Great Valley region.

Except it is different.

Perhaps because of their youth, Xoxide’s founders were using search-engine marketing before most businesses were aware of what that meant.

They’ve turned what some teens would treat as a hobby into a growing business that had $27.5 million in sales last year.

For that, the partners have been named Small Business Administration national young entrepreneurs of the year.
It’s pretty rare for a Philadelphia-area company to win any national SBA award. It hasn’t happened in David Dickson’s 3-1/2 years as director of the SBA’s Philadelphia District Office.

As you can imagine, not many bankers would be eager to lend money to businesspeople who look like their own kids. But First National Bank of Chester County did, and Xoxide got an SBA-backed loan to buy its current building.

Parts for Ford Mustangs for model years 1979 through 2009 now account for 80 percent of their sales through their American Muscle Web site. While auto parts can be bought through catalogs and speed shops, Xoxide has trimmed the usual four- to six-week wait into a one- or two-day turnaround thanks to its inventory.

Stephen Voudouris, 24, and his partners are examples of the Internet generation of entrepreneurs. When it came time to plan their current warehouse, they just Googled “warehouse layout” and read everything they could.

Francy, 25, explains their business model simply: “If it can fit in a box and UPS can pick it up, we can sell it.”

But not everything has an enthusiastic fan base like the Ford Mustang. Pet supplies didn’t work out so well for Xoxide.

That’s OK. Unlike Pets.com, Xoxide knew how to adjust.
 

College football’s Las Vegas Bowl used to be sponsored by the maker of that 50-inch plasma TV in your family room.

This year, it will be brought to you by the company hammering out the dents in your 6-year-old SUV.

Maaco Franchising Inc., the King of Prussia-based chain of auto-body shops, yesterday signed a deal to sponsor the Las Vegas Bowl for the next three years. Financial terms were not disclosed.

It’s the first time Maaco, which was bought by Driven Brands Inc. in October, has sponsored a bowl game. But its Charlotte, N.C.-based parent also owns Meineke Car Care Centers Inc., which sponsors a bowl game that carries Meineke’s name.

Maaco succeeds Pioneer Electronics (USA) Inc., which had sponsored the Las Vegas Bowl for five years. But fierce competition in the TV business proved too much for Pioneer, which recently announced it would no longer make plasma TVs.

Maaco jumped at the chance to sponsor a bowl game. (You’ll be forgiven if you didn’t know that the ESPN-owned bowl game pits a team from the Mountain West Conference against one from the Pac-10.)

With new-car sales moribund, companies that keep older models on the road and looking good are benefiting. “People are not buying cars like they used to,” said Eileen Moran, Maaco’s vice president of advertising. “That’s good for our business.”

Maaco was started by entrepreneur Anthony A. Martino in Wilmington in 1972. Today, it has about 500 franchises in the United States and Canada.

Sponsorship for all kinds of events is under pressure this year because of cutbacks at large corporations. Still, sports, including the 34 college bowl games, accounted for 69 percent of $16.6 billion spent by companies to sponsor events in 2008, according to the Chicago consulting firm IEG L.L.C.

To me, if a bowl game played three days before Christmas can still land a title sponsor, maybe things are starting to look up.

A few days after hiring its new CEO, Charming Shoppes Inc. has disclosed what it’s paying James Fogarty.

And while the pay isn’t outlandish by AIG or Merrill Lynch standards, it’s clear that it still takes a lot of financial inducement to attract a CEO, even in a lousy economy.

In fact, while Fogarty’s compensation package would appear to be less than Charming Shoppes’ last CEO, Dorrit J. Bern, it would be a stretch to call him a bargain.

Fogarty’s background is as a turnaround manager and the Bensalem women’s apparel retailer has been in full restructuring mode since Bern resigned as CEO last July following a months-long battle with activist investors. In part, they were critical of Bern’s pay package.

Bern’s salary in 2008 was $1.25 million. That rose to $1.55 million under a new employment agreement. The new contract sought to tie more of her pay to company performance and cut some perquisites she’d received, such as a rent-free apartment on Rittenhouse Square.

Fogarty, 40, will get a salary of $1 million and an annual bonus of up to $1.5 million. He’ll also be eligible to participate in a long-term incentive plan in 2011.

And on April 2, he received a “welcome” equity grant of 2 million stock appreciation rights, which vest over four years. Based on the closing price of $1.82 for Charming Shoppes stock on that date, that’s a $3.64 million base value.

No rent-free apartment for Fogarty, but he’ll have 12 months to relocate from New York. So the company will pay for temporary living and commuting expenses.

Still, even when he was running American Italian Pasta Co., Fogarty did not work for food. Until January 2008, he served as CEO of the publicly held pasta maker, on assignment by his employer, Alvarez & Marsal, a top restructuring firm.

Alvarez & Marsal received a total of $3.5 million for its services. A breakdown of those fees in American Italian Pasta’s proxy statement shows it paid the firm $600 per hour for “the services of Mr. Fogarty.”

Maybe Charming Shoppes got a deal, after all. If there are 52 weeks in a year and 40 hours in a workweek, Fogarty’s $1 million salary translates into $481 per hour.

Nah, that’s still a lot of linguine.