Red Nose Day exceeds all expectations as participants prepare for NBC broadcast
NEW YORK — Today, Walgreens Boots Alliance executives are extremely proud to be a little red in the face. Because today is Red Nose Day, and Walgreens, along with partners Comic Relief, M&M's and NBC, have raised well north of $7.5 million to help children in need across the world. In fact, the final tally raised will be revealed Thursday night during NBC's inaugural three-hour live telecast of the nation's first Red Nose Day.
In addition, Walgreens and Duane Reade locations together sold through more than 99% of an inventory of 5 million red noses to Walgreens consumers who were all too happy to buy into a good cause, as evidenced by the number of #RedNoseDay red nose pics posted on Twitter, Facebook and Instagram today. On Twitter, #RedNoseDay was the No. 1 trending hashtag.
"We knew that social media was going to be a very large part of our campaign, and we generated a lot of content in order to engage with the consumer on Red Nose Day, and NBC has done the same," Linn Jordan, Walgreens Boots Alliance director marketing, strategy and planning, told Drug Store News. "All of the tweets and Facebook posts on social media, as well as Instagram, are really terrific with everything hashtagged Red Nose," she said. "It's been building the last six weeks since we started this campaign, and the week of the campaign is always a big deal."
All told, Walgreens Boots Alliance and partners generated more than 3 billion impressions bringing the iconic U.K. fundraiser across the pond and stateside.
"We really exceeded all of the goals that we put forth for the organization," Jordan said. And for that reason Walgreens associates have plenty of reasons to celebrate today. "But it's also a reflection on what this is all about, which is to help children out of poverty, and so we're here today in New York City to attend the live event that [will be broadcast on NBC] tonight at 8/7 central," she said. "NBC is bringing their best talent to Red Nose Day. It's a three-hour star-studded specatular with a lot of sketches."
And Walgreens is just getting started with Red Nose Day, Jordan added. "We want to carry forward the momentum that we've accomplished with Red Nose Day into other initiatives like Get a Shot/Give a Shot, Vitamin Angels and other causes that we celebrate and support as apart of our overall purpose."
What keeps retail executives up at night? BDO USA finds out
CHICAGO — Upbeat sales projections and elevated consumer confidence levels aren't painting a rosy picture for most retail chief executives concerned about future growth, a recent report from BDO USA found. According to BDO USA’s ninth annual analysis of risk factors listed in the most recent 10-K filings of the 100 largest U.S. retailers, concerns over growth initiatives remain high, despite promising year-over-year performance across the industry. This year, 92% of companies note risks related to U.S. growth and expansion, up from 56% in 2013. Meanwhile, as more companies look strategically at consolidation as a way to increase market share, 76% note merger and acquisition risks.
What’s clear is that retailers are aggressively eyeing opportunities to grow their brands and provide consumers with speed and convenience across platforms. But even with stronger cash flows at their disposal, many of these new capital investments bring greater risks and less tangible ROIs. Not surprisingly, a full 92% of companies this year cite risks around failure to execute business strategy, while 71% note failure to successfully invest capital.
After months of a precarious sourcing situation stemming from labor negotiations at the West Coast Ports, the 2015 BDO Retail RiskFactor Report also found that virtually all (98%) retailers analyzed are concerned about supplier and vendor risks, including shipping and imports. Although the labor issues were resolved in February, many retailers have since faced delays and increased transportation costs. These exposures, combined with rising labor and import costs from traditional sourcing regions like China, have prompted more retailers to consider near-sourcing as a strategic approach to reducing costs and liabilities. In fact, a plurality (42%) of retail CFOs cited North America as the most attractive sourcing option this year in BDO’s 2015 Retail Compass Survey of CFOs.
“Until 2008, retailers’ capital spending default was to invest in opening new stores,” said Doug Hart, partner in the Consumer Business practice at BDO USA. “That default no longer suffices. Now, with the migration of customers online, the ROI on new store openings is often reduced and capital investment is being redeployed to online sales channels, supply chain networks and systems implementations. As the ROI on that spending is less proven, there is a higher risk associated with such capital investment.”
BDO USA identified the top 25 risk factors cited by the 100 largest U.S. retailers:
- General economic conditions (100%);
- Federal, state and/or local regulations (100%);
- Competition and consolidation in the retail sector (100%);
- Implementation of maintenance and IT systems (99%);
- Privacy concerns related to security breach (99%);
- U.S. and foreign supplier/vendor concerns (98%);
- Labor (health coverage, union concerns, staffing) (96%);
- Natural disasters, terrorism and geo-political events (96%);
- Dependency on consumer trends (95%);
- Legal proceedings (95%);
- Credit markets/availability of financing and company indebtedness (94%);
- Failure to properly execute business strategy (92%);
- Impediments to further U.S. expansion and growth (92%);
- Changes to accounting standards and regulations (90%);
- Consumer confidence and spending (89%);
- Goodwill impairment (88%);
- International operations (86%);
- Environmental laws, regulatiosn and liability (83%);
- Loss of key management/new management (80%);
- Insurance costs and uninsured liabilities (77%);
- Mergers and acquisitions and joint ventures (76%);
- Intellectual property infringement (72%);
- Failure to successfully invest capital (71%);
- Inventory balance (69%); and
- Advertising, marketing and promotions (68%).
Along with top industry risks, the BDO study looks at specific challenges retailers cite under general economic conditions. For the second year in a row, interest rates (88%) came in as the most frequently cited economic concern over fuel prices (83%). With unemployment now well below 6%, both retailers and consumers alike are looking to the Federal Reserve, to see if it will soon curtail its easy-money policy and increase what have been historically low interest rates over the past several years. If it does normalize rates, companies are well aware of the potential negative impact on consumer spending, as well as their debt financing.
With the U.S. dollar’s value having risen 22% in the last 12 months, currency rate risks and their impact on profits and revenues are top of mind this year for a full 82% of retailers. For retailers with stores in European and BRIC countries (Brazil, Russia, India and China), converting foreign sales to U.S. dollars currently can cut deep into margins, and sourcing internationally in U.S. dollars can have the same costly effect. Meanwhile, nearly nine-in-ten companies cite international operations risks this year surrounding economic conditions, laws and regulations such as the Foreign Corrupt Practices Act.
As retail CFOs predict nearly double-digit online sales growth this year, according to BDO’s 2015 Retail Compass Survey of CFOs, virtually all (99%) retailers now cite both IT system operations and cybersecurity threats as top risks. Although IBM calculated that the number of cyber breaches against retailers actually declined in 2014, the high legal, operational and reputational costs associated with point-of-sale intrusions and web application attacks still very much have retailers up at night, especially as they expand their digital offerings and become increasingly cloud-based in the year ahead. A majority (56%) of retailers are proactively investing more into their cybersecurity measures in 2015, according to BDO data, but heightened concerns over legal proceedings (95%) point to the significant, wide-reaching damage that IT failures can inflict on retailers.
Labor risks remain top of mind for a full 96% of retailers. Faced with the pressures of a tightening workforce, retailers are struggling to hire and retain qualified store associates and distribution center workers. Major players like Wal-Mart are increasingly offering benefits and higher wages in an effort to attract and keep the best workers. It can be a costly investment in an environment of rising healthcare costs, cited as a risk by 63% of retailers, but a critical one in today’s ultra-competitive labor market. Competition for top industry leaders also remains entrenched, with four-in-five retailers citing risks related to attracting and retaining key management personnel.
Sears Holdings, Walgreens finance veteran lands CFO job at LivingSocial
WASHINGTON — LivingSocial, the local marketplace to buy and share the best things to do in your city and beyond, on Thursday announced the appointment of Sears and Walgreens veteran Atul Kavthekar as CFO. He will join the company in June, and will report to president and CEO Gautam Thakar.
“Atul is a seasoned finance leader with deep retail, ecommerce, corporate development and strategic experience, which will be a tremendous asset in shaping the refounding journey at LivingSocial,” said Thakar. “We are thrilled to have him join the team at this important stage of the business.”
Having started his career as an engineer, Kavthekar brings more than 20 years of experience in finance, banking and strategic business development. Prior to LivingSocial, he served as CFO and head of corporate development for Sears Holdings Corporation’s Health and Wellness Solutions business unit. In this position, he was responsible for overall financial management, corporate and business development, and strategic planning for the division.
Prior to Sears, Kavthekar was the CFO for Walgreens’ ecommerce division, where he oversaw the financial management and business development of the retailer’s rapidly growing, multi-billion dollar unit, including its mobile, tablet and website platform development. Also at Walgreens, he was a leader in mergers and acquisitions and strategic investing, including the company’s acquisition of drugstore.com. Kavthekar was responsible for the overall financial performance of walgreens.com, drugstore.com, beauty.com, skinstore.com and visiondirect.com, as well as additional venture capital investments.
Earlier, Kavthekar held senior investment banking positions at KPMG Corporate Finance, Trenwith Group and Morgan Stanley. In these roles, he led corporate development initiatives and transactions across multiple industries, sectors and countries.
Kavthekar has an MBA from the University of Chicago Booth School of Business, a master’s degree in industrial engineering from Wayne State University and a bachelor’s degree in engineering from the University of Michigan.
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