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Mary Mastroeni

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Consumer Demand Driving Improved Retail Performance

May 14, 2011 10:29 am

RISMEDIA, May 14, 2011-Senior financial executives of global retail companies expect improved financial performance in 2011, as a result of increasing consumer demand, but many indicate that their companies will have difficulty raising prices and sustaining profit margins, according to a survey by KPMG International.

In the KPMG global survey of 152 retail executives, 24 percent expect "significant increases" in financial performance over last year and 51 percent are expecting "some increase." Only nine percent expect a decline in performance. This optimistic view is a result of seeing an increase in consumer demand. In fact, 18 percent say they've already seen a sustained increase in demand for their company's products and services since the economic slowdown, while 54 percent expect sustained demand in 2011, and 24 percent in 2012 or later.

Despite the growth in demand, 58 percent of the KPMG survey respondents say that their companies will have difficulty raising prices in 2011 and 41 percent say that their firms will have difficulty sustaining profit margins. In identifying the greatest threats to margins, 56 percent point to costs of inputs or merchandise and 47 percent to discounting and other sales incentives.

"Retail executives are seeing strong top line growth, but in order to generate growth and success in the years ahead, their companies will need to reconsider and often recast their understanding of customers, markets, and their means of serving them, as well as the level of investment that it will take to succeed going forward," says Mark Larson, KPMG's Global Head of Retail.

"With consumer behavior, spending, and demographic profiles changing rapidly," Larson says, "a key to success will be investing in technology to harness the vast amounts of data that reside in a company. That data can derive the insights that lead to the new markets, new strategies and new operating models that will ultimately generate growth and profitability," Larson says.

As to how they believe their firms can increase market share, 46 percent say primarily through organic growth initiatives, 22 percent say through a mix of organic growth and M&A, and 22 percent primarily through M&A.

Forty-four percent of the retail executives in the KPMG survey believe that it is "very likely" that their companies will enter new geographic markets in 2011 and 30 percent say "somewhat likely". In expressing how they will expand, 53 percent say by opening new stores, 39 percent say through additional distribution channels (including online), and 21 percent say through mergers and acquisitions.

Asia (49 percent) and the United States (48 percent) were identified as the global regions where the retail executives expect the greatest growth in company sales. The next two regions were Latin America (44 percent) and India (40 percent).

KPMG's Larson believes that, "We're witnessing the beginnings of a cost-to-growth agenda in retail characterized by a renewed focus on growth, while preserving margins, and investing in IT. The sector has learned the hard way that it can't take its eye off the ball of cost management."

In fact, according to executives surveyed by KPMG, retailers will pursue major investment in customer relationship management systems, business intelligence systems, and enterprise resource systems for transaction processing.

In improving supply chain efficiency and costs over the next two years, the retail execs-in order of priority-see enhancing distribution structure, investing in production or distribution technology, decreasing inventory levels, and consolidating suppliers as the greatest priorities.

KPMG conducted its survey in the first quarter of this year and conducted another phase in April to gauge how crisis in the Middle East and Japan in April may have impacted operations. Sixty-four percent report little or no impact on their business operations, while 31 percent report moderate impact, with five percent seeing a dramatic impact. When presented with an array of issues, 61 percent say they expect "energy, input, and merchandise prices" will be most affected, followed by 35 percent who say "availability of goods and services from my company's suppliers."

For more information, please visit www.KPMG.com.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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An Introduction to Mortgage REITs

May 14, 2011 10:29 am

RISMEDIA, May 14, 2011-Considering the low yields currently offered by many traditional fixed income investments, income-seeking investors have been scouring the investment universe for increased income generating power.

One largely uncovered corner of the market that may fit the bill for such investors is Mortgage Real Estate Investment Trusts (mREITs). Much like other forms of REITs, these companies are required to distribute 90 percent of their net income to shareholders to maintain their tax advantages or exemptions, as outlined in the Internal Revenue Code.

However, whereas equity REITs invest primarily in physical properties, mREITs achieve their income through investments in mortgage-backed securities. Given the hefty dividends offered by many of these vehicles, with some yielding in excess of 15 percent, they are an attractive option for investors seeking a high level of current income. However, before diving in head-first, it is important to discuss how these companies operate and understand their potential risks.

In general, mREITs operate by taking out short-term loans and using the proceeds to purchase mortgages, thus profiting from the spread between their short-term financing costs and the payout of the underlying mortgages. The degree to which they use debt to finance their activities is known as their leverage, or debt-to-equity ratio. While many of these investments offer comparable yields, the path they take to get there may be starkly different.

Consider two such vehicles: Cypress Sharpridge Investments (CYS) and Chimera Investment Corporation (CIM), both of which yielded between 16 percent and 18 percent in 2010. Whereas CYS invests primarily in high-quality mortgages backed by the government, CIM primarily deals in lower-quality, higher-yielding, non-agency and commercial mortgage-backed issues (CMBS).

However, by employing leverage of 8.3 to 1 as of 12/31/10, CYS attains a similar yield to CIM-which carried leverage of 1.2 to 1-despite the divergence in yield of their underlying investments. Another option, Invesco Mortgage Capital (IVR), falls somewhere between the two and uses a hybrid approach that blends a mix of agency, non-agency, and CMBS securities based on their interpretation of current market conditions. Likewise, IVR's 4.1 to 1 leverage ratio falls between that of CYS and CIM.

When evaluating these varied approaches, investors should weigh their relative tolerance to credit risk vs. interest rate risk. Since CYS invests in agency-mortgages, whose principal is backed by the federal government, its credit risk is relatively low. However, because it employs a high degree of leverage, a sharp increase in short-term interest rates could severely crimp its profits. While many mREIT investors remain concerned that the end of QE2 in June could push short-term rates higher, it is important to remember that the Fed's Treasury purchases during QE2 have been largely focused on issues maturing between 2 and 10 years. As such, movements in short-term rates should continue to be a function of investor preference for short-term T-Bills and the Fed's decisions on the Federal Funds Target Rate, which Fed Chairman Ben Bernanke has expressed his commitment to keeping the target rate low for an "extended period."

Conversely, while rising short-term interest rates also pose a threat to investors in CIM, which invests in non-guaranteed MBS and CMBS issues, credit risk remains a much larger source of concern. Such investments, which carry a higher default risk, allow CIM to reach a similarly higher yield with a much lower degree of leverage due to the higher payout of its underlying investments. Investors should note that since the dividend payments made by such companies are a direct function of their operating profits, they can fluctuate over time along with the strength of its underlying business.

After all but going extinct during the recent financial crisis, when a credit market freeze cut off their access to short-term funding, mREITs are making a comeback as more investors seek out their high yielding potential. With that being said, mREITs have accounted for 7 of the 9 initial public offerings within the REIT space thus far in 2011. Individuals can invest in mREITs by buying shares directly on an open exchange or through an ETF which tracks a basket of companies in this area. However, investors need to keep in mind the aforementioned risks associated with mREITs when deciding which one, if any, is right for their portfolio.

For more information, please visit www.condorcapital.com.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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Word of the Day

May 13, 2011 10:29 am

Title search. A professional examination of public records to determine the chain of ownership of a particular piece of property and to note any liens, encumbrances, easements, restrictions, or other factors that might affect the title.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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Question of the Day

May 13, 2011 10:29 am

Q: Are there such things as no-cost and no-fee loans?

A: You see promotions for them all the time. But banking regulators have gone after lenders who misrepresent these loans. The reality is that no-cost and no-fee loans may actually cost the borrower more over the long term because costs are often hidden by rolling them into the new loan through higher principal or interest.

The rates on no-cost loans are usually about 1/2 or 5/8 of a percentage point higher than the "full cost" rate.

A typical no-fee loan includes points and all fees in the loan principal, so the borrower does not pay or "see" these expenses at the closing. Instead, the borrower pays them over the life of the loan.

If you are looking to refinance, it may be possible to get a no-cost program that will lower your rate at no expense to you. Today, lenders are paying all closing costs, such as title fees, appraisal fees, and credit report fees. There are no loan fees or points, and nothing is added to your loan balance.

However, many lenders may charge a loan application fee and some restrictions may apply depending on the size of the loan.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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101,000 Americans become 'Sun Certified,' Raising $101,000 for The Skin Cancer Foundation

May 13, 2011 10:29 am

RISMEDIA, May 13, 2011-With the weather warming up across the country, families are spending more time outdoors enjoying the sun. But, with skin cancer as the most common form of cancer in the U.S., they need to take steps to protect themselves from sun exposure. To help increase awareness of this important issue, Banana Boat sun care is teaming up with The Skin Cancer Foundation to raise funds for skin cancer education initiatives by challenging 101,000 consumers to get "Sun Certified" this year.

Each consumer who takes a short "Sun Certification" quiz on www.facebook.com/BananaBoatBrand will receive a "Sun Certified" badge to display on their own Facebook wall and trigger a $1 donation to support The Skin Cancer Foundation's sun education initiatives, for a total donation of up to $101,000.

"With skin cancer as the leading type of cancer in the U.S., it's become increasingly important that families know how to protect themselves from the sun," says Perry Robins, M.D., President, The Skin Cancer Foundation. "We are proud to partner with Banana Boat in our ongoing efforts to raise awareness for this important issue."

The Banana Boat "Sun Certification" program is part of a Sun 101 sun education campaign designed to give Americans the basic information they need to enjoy the sun without worry. This sun season, the brand will also share advice from and host live conversations on its Facebook page with sun experts, including: two-time Olympic Gold Medalist and U.S. Women's Soccer Team captain Christie Rampone, dermatologist Julie K. Karen, M.D., and family lifestyle expert and magazine editor Amy E. Goodman.

"We are on a mission to inspire more people to use more sunscreen more often," says Beth St. Raymond, Director, Energizer Personal Care Sun Care, maker of Banana Boat . "An estimated 62 percent of American households don't use sun care products, and by working with partners like The Skin Cancer Foundation, we hope to change that to ultimately reduce the incidence of skin cancer."

More information visit www.BananaBoat.com or http://www.facebook.com/BananaBoatBrand.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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Women Winning the Battle of the Sexes when it Comes to Periodontal Health

May 13, 2011 10:29 am

RISMEDIA, May 13, 2011-The differences between men and women are extensive, especially when it comes to taking care of one's health. According to the Centers for Disease Control (CDC), compared to men, women are better about seeing their physician for routine check-ups and are more likely to schedule a doctor visit when feeling sick or injured. And now, new research published in the Journal of Periodontology reveals another area where women are more proactive than men: in maintaining healthy teeth and gums.

According to the study, published in April 2011, women are almost twice as likely to have received a regular dental check-up in the past year. In addition, women were more likely to schedule the recommended treatment following the dental check-up. Women in the study also had better indicators of periodontal health, including lower incidence of dental plaque, calculus and bleeding on probing; all of which can be used as markers of periodontal disease.

The study also suggested that women have a better understanding of what oral health entails, as well as a more positive attitude towards dental visits.

The study included over 800 participants between the ages of 18 and 19. Participants were asked to complete a written questionnaire concerning lifestyle, dental knowledge, dental attitude and oral health behaviors. In addition, the participants underwent an oral examination to assess for indicators of periodontal disease.

Periodontal disease is a chronic inflammatory disease that affects the gum tissue and other structures supporting the teeth. Left untreated, gum disease can lead to tooth loss. In addition, previous research has associated gum disease with other chronic inflammatory diseases such as diabetes, cardiovascular disease, and rheumatoid arthritis.

"It is crucial that everyone-both men and women-strive to maintain periodontal health," says Donald S. Clem, DDS, a periodontist in private practice in Fullerton, California and President of the American Academy of Periodontology. "With increasing research indicating that one's periodontal health may be related to overall health, never has it been more important to ensure the health of your teeth and gums. You cannot be healthy unless you are periodontally healthy."

Dr. Clem stressed the importance of routine oral care in helping to prevent periodontal disease. "Taking good care of your periodontal health involves daily tooth brushing and flossing. You should also expect to get a comprehensive periodontal evaluation every year," he advises. A dental professional, such as a periodontist-a specialist in the diagnosis, treatment and prevention of gum disease-can conduct a comprehensive exam to assess your periodontal disease status.

To assess your risk for periodontal disease or to learn more, visit www.perio.org.

Periodontal Health: Women vs. Men

Women are 26 percent more likely than men to floss on a daily basis.

74 percent of women would be embarrassed by a missing tooth-a possible consequence of periodontal disease-compared to 57 percent of men.

Women are almost twice as likely to notice missing teeth on another person than men.

44 percent of women are aware that periodontists can help contribute to overall good health, compared to 33 percent of men.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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Alternatives for Seniors Predict Increased Burden for Caregivers

May 13, 2011 10:29 am

RISMEDIA, May 13, 2011-Members of the largest demographic group in American history, Baby Boomers, will begin turning 65 next year. According to Alternatives for Seniors, as these men and women join a senior citizen population that continues to live longer lives, many in the country will face the becoming a caregiver for a parent or loved one and being involved first hand with senior care challenges.

The sons and daughters of an aging population have no easy task ahead of them in determining how to care for elderly loved ones, but if caregivers take the time to consider available senior housing and care options and start planning sooner than later, the challenges faced by the demographic changes in America's population will not be too much to handle.

According to AgingStats.Gov - Federal Interagency Forum on Aging Related Statistics, about 13 percent of the American population is currently 65 or older and that number is expected to grow to 20 percent (or 72 million people) by the year 2030. Also, as the life expectancy grows, the number of people age 85 or older is expected to jump from 5.7 million to 19 million by the year 2050. These statistics show sons, daughters, friends, and family all across the county they need to prepare themselves for very difficult choices about the caregiver role they may need to play and the long term care their loved one may need.

A study by the Family Caregiver Alliance estimates that 39 million people have become an informal or family caregiver to somebody age 50 or older. These informal caregivers are individuals who provide either full or part-time care free of charge. While it is excellent there are so many loving people who are willing to care for a loved one in this way, as a result caregiver stress has become an increasing problem. Caregivers run a risk of increased blood pressure and insulin levels, increased rates of depression, and for caregivers who are over 65 themselves, an increased mortality rate.

Rather than take on the role of an informal caregiver, another option is to invest in long term care. Determining what form of long term care is necessary can be a difficult decision for a caregiver given there are so many options: home care, day programs, senior housing, independent living, assisted living, nursing and rehab centers, and continuing care communities. Each type of long term care has its own distinct advantages based on the level of care that is needed.

While the financial picture is different for each caregiver, everybody can plan ahead by exploring the options for long term care with their loved one. It is important to include the senior in discussion of their care and listen to their concerns. The caregiver should also include friends, family, and other who have influence in the decision making process.

The print and nationwide senior housing and care online directory provides detailed listings on Independent Living, Senior Apartments, Assisted Living, Nursing Homes, Alzheimer's Centers, Continuing Care Retirement Communities, Home Care and other services. The directories assist families by separating the options by level of care or service and geographic area making it easy to use and understand all options at a glance.

"Alternatives for Seniors' mission is to provide seniors, families and healthcare professionals with the senior care resources and tools they need to make educated, informed decisions and to understand the options available to them," says Anita Kremer, president of Alternatives for Seniors. "Whether a family's needs are immediate or planning for the future, the information and tools provided is of great value."

For more information visit http://www.AlternativesforSeniors.com.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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May Is Family Wellness Month: How Parents Can Strengthen Family Relationships, Even during Divorce

May 13, 2011 10:29 am

RISMEDIA, May 13, 2011-The word "divorce" doesn't conjure up positive thoughts of family wellness, but emotionally neutral parents can strengthen family relationships, even during the divorce process and later as a divorced family, according to Deborah A. Carder, a Partner with Schiller DuCanto & Fleck, one of the nation's leading family law firms.

Carder, who has litigated highly complex family law cases for more than a decade, says a change in Illinois law in 2006 to require parents to attend a parenting education course, has had a very positive impact on the outcome of child custody proceedings. The family law attorney explains that in DuPage, Kane and Will counties, where she practices law, within 60 days of the first court appearance parents are required to complete a parent education program. "It is extremely important for parents to take the class early in the process," advises Carder. The program teaches parents to deal with adult problems in ways that avoid harm to their children's emotional well being.

"Typically parents are so trapped in their own emotional chaos, not to mention the arduous divorce procedure, that they involve their children in the process without even knowing it," she notes. The commonly heard statements such as, "Your mother is a liar," or, "I can't afford that because your father hasn't paid support this month," are damaging to children, but equally damaging is the inability of a parent to manage their emotions. "Being emotionally neutral is the most difficult, yet most critical skill a divorcing parent must have," advises Carder. "By learning coping techniques to help deal with the emotional impact they can be more effective and available parents," she adds.

Family Wellness Month-recognized every year in May-is supported nationally to increase awareness and empower parents with practical solutions, extensive resources and specific services for family wellness, including parenting courses offered during the divorce process.

Carder acknowledges that the divorce process can be long and painful, adding that a recent change in laws has also helped to move child custody procedure forward in a timelier manner. In the past it could have taken three years to settle a child custody case. Present law requires the case be resolved in 18 months. "The true benefit is that all parties can end conflict and move forward onto the next stage of their life," she adds.

Moving forward is an important outcome of any case to Carder, but she also says her ultimate goal from the first time she meets with a client is to give them the tools, resources and support during the process. These tools enable them to be a good parent to their children, grant them the ability to focus on their professional life and allow them to continue to enjoy their personal interests and move forward in life, while Carder handles the legal aspect of the divorce.

Since 2007, Carder has consistently received the honor of being selected by her peers as a Leading Lawyer in Illinois. She has been named as one of the Top 100 Women Consumer Lawyers in Illinois. She has also been named as a 2008-2010 Illinois Rising Star by Illinois Super Lawyers. Most notably, Ms. Carder was chosen in 2010 by the Law Bulletin Publishing Company as one of the "40 Attorneys Under 40 in Illinois to Watch."

For more information visit www.sdflaw.com.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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Question of the Day

May 12, 2011 10:29 am

Q: Are victims whose homes are damaged by natural disasters granted any tax relief?

A: Damage, destruction, or loss of property from fires, floods, earthquakes and other disasters are deductible from both state and federal income taxes.

If destruction is caused by an event deemed a federal disaster by the president, homeowners can deduct their losses in the tax year before the event happened by filing an amended return. This helps to dramatically cut the wait for tax refund money that can immediately be used to make repairs or pay for living expenses.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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Word of the Day

May 12, 2011 10:29 am

Title insurance. An insurance policy that protects against any losses incurred because of defects in the title not listed in the title report or abstract.

Copyright 2008 RISMedia, Inc., All Rights Reserved. This material may not be republished without permission from RISMedia.


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