Retail Is Struggling

J.C. Penney merges marketing and merchandising functions across online/retail channels, then cuts 100 - 200 jobs. I'll bet that the 100 - 200 people who lost their jobs aren't big fans of multichannel integration.

Ann Taylor lets go of 13% of their corporate staff, 180 jobs amid a tepid retail environment. In addition, 117 stores will be closed.

Talbots to shut down 78 kids and mens stores. Sure this is old news, but it is reflective of what could be a widespread problem in 2008. This economic downturn could weed-out a lot of over-assorted retail square footage.

Eddie Bauer cuts 16% of its corporate staff, even as sales improved in Q4.

Home Depot cuts 500 corporate jobs, 10% of the corporate staff. Assume these are $75,000 a year jobs (including benefits). Take the $210,000,000 that former CEO Robert Nardelli garnered as part of his golden parachute, divide it by $75,000, and you are able to keep these 500 folks gainfully employed for another five years.

Dell plans to close 140 shopping mall kiosks.

Starbucks will close 100 underperforming stores.

If you are a retail real estate executive, you have to be wondering who the retailers are that will line up for the store locations made available by the great recession of 2008?

Old Navy updates their logo, and elects to move away from families, now focusing on a fashion-based twenty-something target audience.

Trees rejoice as USPS volume drops by 3% in Q1-2008.

Home Depot CEO Takes Home $210,000,000 Severance Package

By now, you've heard the sad story of Bob Nardelli, the CEO of Home Depot who resigned on Wednesday. His severance package will yield him $210,000,000.

Please remember, his board of directors had to approve this package. Also keep in mind that the amount of revenue and profit this business generates is beyond staggering. In the last fiscal year, Home Depot generated nearly $82,000,000,000 (that's eighty-two billion) net sales, and $9,300,000,000 in pre-tax profit. Yes, that's right, 9.3 billion, pre-tax.

A severance package of $210,000,000 barely registers against $9.3 billion in pre-tax profit. Only mega-companies can offer mega-compensation.

If you are wondering how this hurts the 380,000 employees who made all of this possible, here's how. Take $210,000,000 / 380,000 = $552. Ultimately, each employee contributed $552 to Mr. Nardelli's good fortune. A half-time employee making $12 an hour sacrifices just shy of five percent of her salary supporting CEO severance.

There's only one way to stop this, folks. Stop shopping at Home Depot. As long as we keep shopping at mega-stores, mega-profits will drive mega-severance packages. We are part of the problem.