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Amazon to add yet another center to sprawling distribution network

BY Dan Berthiaume

A few days after announcing a new fulfillment center in Edgerton, Kansas, Amazon.com is unveiling plans for another new center that will serve customers a little further west.
 
Amazon plans to open a seventh California fulfillment center in San Bernardino, where the company launched its first Golden State fulfillment center in the state in 2012. The retailer currently employs more than 12,000 full-time hourly associates at its six existing California locations and says it will hire more than 1,000 full-time employees in the new San Bernardino facility.

Employees at the 1.1 million-square-foot San Bernardino fulfillment center will pick, pack, and ship smaller customer items, such as books, electronics and toys.

“San Bernardino has proven to be an important part of Amazon’s growth in California, and we are proud to continue creating jobs and helping support the economy here in the Inland Empire,” said Akash Chauhan, Amazon’s VP of North American operations. “Over the past three and a half years, we have built a network of top-notch fulfillment centers across the state.”

Outside of San Bernardino, Amazon’s other California fulfillment centers are located in Tracy, Patterson, Moreno Valley, Redlands and Rialto. Amazon reportedly operates nearly 100 fulfillment centers across the U.S.

“We are excited Amazon continues to view San Bernardino as a great place to do business and we’re proud to be part of Amazon’s history and future,” said Mayor R. Carey Davis of San Bernardino. “The company continues hosting a robust public tours program, donating needed items and volunteer hours to local charities, and supporting local businesses on a regular basis.”

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Dollarama names founder’s son as new CEO as sales surge

BY Gina Acosta

Canada's leading value chain has promoted its head merchant to be the new CEO as the company logs another quarter of impressive sales growth.

Dollarama Inc. has appointed Neil Rossy as president and CEO, effective May 1, 2016. Company founder and current CEO Larry Rossy will continue to play an active role in key areas of Dollarama's business as executive chairman.

"Neil is an experienced retail executive with an intimate knowledge of all company operations, and is respected by his colleagues," said Stephen Gunn, lead director of Dollarama's board. " The board has full confidence in Neil's ability to lead Dollarama's growth in the coming years with the support of the strong team in place."

Neil Rossy, 46, is currently chief merchandising officer and a member of the board since 2004. 

The company also reported an increase in sales, net earnings and earnings per share for the fourth quarter Jan. 31. Compared to the prior year quarter, sales increased by 14.6% to $766.5 million. Same store sales grew 7.9%. Operating income grew 25.6% to $176.9 million , or 23.1% of sales, compared to 21.1% of sales. And diluted net earnings per common share increased by 31.6%.

The corporation opened 25 net new stores during the fourth quarter of fiscal 2016 compared to 27 net new stores during the corresponding period of the previous fiscal year.

"Looking at the fourth quarter in particular, we enjoyed a good holiday period with ideal weather conditions and a strong customer response to our seasonal assortment," said Larry Rossy. "In addition, we made select changes to our product mix and prices, and we expect these initiatives to help us manage currency headwinds and drive our performance in Fiscal 2017. We are also seeing more pricing flexibility from suppliers in China due to a softer demand environment, and this should also help in offsetting the weakness of the Canadian dollar this year."

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Supplier survey bodes well for retail sales

BY Marianne Wilson

If the major suppliers of soft goods such as clothing and accessories to retail stores are a bellwether of the economy, then the coming months are looking to provide a jolt as 75% of these suppliers expect retail sales to significantly outpace the gross domestic product for the spring and summer shopping season.

That’s one of the major  findings of a new survey conducted by Capital Business Credit.

According to the Global Retail Manufacturers and Importers Survey, the vast majority of those surveyed believe that 2016 will either be better (45.5%) than or the same (38.6%) as 2015.  How much better?  Seventy-five percent believe that retail sales will grow by 4% or more, outpacing core GDP growth.  

"While retail sales for January and February were lower than initially anticipated, this hasn't seemed to deter retail suppliers' confidence or business activity," said Andrew Tananbaum, executive chairman, CBC. "In fact, nearly 90% of importers and suppliers are reporting reorders for the spring/summer shopping season.”

Retailers have become increasingly reticent to stock shelves if they do not believe products will sell or consumers will buy, according to Tananbaum, and the reorders mean that the major retail chains and individual stores are optimistic.
 
When it comes to orders that retailers are placing, the majority stated they have increased or stayed the same (78%). Approximately half (49.1% ) indicated that they have increased.

Of those that stated orders have increased, one third indicated that orders increased between seven and ten percent, while 28.8% t said that orders increased by more than 10%.

The Impact of the Chinese Yuan
Given that so many U.S. retail goods are produced in China, the devaluation of the yuan has been an important factor for importers and retailers to increase profitability while keeping prices low. 
Half of respondents are considering increasing their Chinese production due to the strong dollar vs. the yuan.  

A third (37%) believe that margins may increase due to the lower cost to produce goods in China, however the majority (56.7%) do not think this will translate into lower consumer prices.
On the flip side, 71%  believe that the strong U.S. dollar will impact foreign spending domestically.

"While the overall recovery from the great recession of 2008 has been sluggish, the low costs of goods produced in China has allowed the U.S. consumer to stretch their spending dollars and allowed retailers to keep costs down," Tananbaum concluded. "In our opinion, this is the first time since the recession that manufacturers, importers and other participants in the retail goods supply chain will have the opportunity to recover some of the margins they lost over the past decade."

CBC surveyed approximately 30 retail importers and manufacturers that supply approximately $800 million in goods at retail outlets throughout the United States.  These wholesalers sell to all segments of the retail supply chain with the exception of the juniors market.

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