Aa Driving School

Retailers Feel Us Downgrade Pinch Favor Buying With Cash

We can’t say that retailers exactly saw the big downgrade of the United States by Standard & Poor’s coming, but as one of the sectors hardest hit by multiple economic downturns, the big guns already knew what to do: Hold on to your cash.

It’s a tactic that serves retailers well. Investors like to see cash on hand when they’re looking at a balance sheet. And even if a company is reporting losses, it can be a nice offset .

Of course, where that tack hurts is in overall growth, because when companies hold cash they’re not spending it on things such as hiring, buying excess inventory, making improvements to store infrastructure, or various other economy-building activities.

But at times like these, when the nation’s credit rating has been downgraded, meaning getting anyone to extend a line of credit to a U.S.-based company is more difficult, having cash means being able to keep conducting business, albeit not under the usual circumstances.

Those who have ready cash can better control inventory because they can better negotiate pricing. If they can buy more, because they don’t have to deal with purchasing on credit and therefore don’t have to worry about qualifying for a credit line, they can squeeze more discounts out of the vendor. Whether they choose to pass those savings on to the consumer initially or at mid- or end-of-season clearances varies by retailer.

The pace of investment at retailers will largely depend on sales trends, reports WWD.com . And it is the consumer who will lead the way. “The government debt crisis spooked some folks,” Paul Lejuez, an analyst at global investment firm Nomura Securities , told the fashion site. “It brought to light some of the issues that we face and probably should have already been paying attention to. It could hurt confidence. It could hurt how often people shop. It could impact where people shop. It tends to hit the low end and the middle more than the high, but I don’t think anybody is immune.”

“You basically have two primary things driving consumer wealth,” Lejuez said. “That’s the value of their homes and the value of their equity investments, and homes right now are still down year over year. What it does is it puts that much more pressure on the stock market to make up for some of that wealth that’s been given up on the consumer balance sheet.”

What we’re already seeing are special incentives by retailers to entice shoppers to come out ahead of back-to-school shopping. Christmas in July offers ruled last month, with major retailers like Target, Toys R Us, and Macy’s offering deep discounts and holiday preview sales.

Aa Driving School | Major Takeover Deals For Contis Group And Pace

9:30am Thursday 16th June 2011

Two locally-based technology companies are celebrating new deals which will boost their international operations .

Skipton -based online banking and pre-paid card technology business Contis Group has acquired card issuer GTP Financial Services for an undisclosed sum.

The deal cements Contis as one of a handful of ‘end-to-end service providers’ in the European pre-paid card industry.

Meanwhile, Saltaire digital TV technology group Pace has clinched a major deal to supply a new set top box to one of its largest US customers.

Buying GTP is part of the Contis Group’s plan to grow organically through acquisitions. Director Mike Fromant said the deal would further develop its strengths and capabilities as a full supplier of Visa pre-paid card solutions across the UK and EU.

He said: “This milestone positions us as a major player in what is becoming a complex and often poorly-serviced sector. We see great opportunities in developing innovative pre-paid solutions which can be linked to our internet banking solutions, as well as to our advanced payment platforms.”

In addition to its Skipton base, where it has 25 staff, Contis has established a high-tech development centre in India where it creates bespoke solutions for clients and partners.

Mr Fromant added: “There is a voracious demand from programme managers throughout the UK and Europe for a dynamic partner who can retain total in-house control, demonstrate a full set of capabilities and can be relied on for timely and professional delivery of schemes.

“Our expertise and hard work ensures we are ready to step up to the plate and maximise this opportunity to underpin our position as a major player in the payment technologies market.”

The group’s cutting-edge technology is used by leading banks, retailers and financial services giants. Contis is a leading player in the pre-paid, gift and account card sectors.

Founded in 2007, Contis Group provides technology and services to a range of international retail and financial clients including Pizza Express, Pilkington, SpeedeCard, Mywonga, Kube, Empire Cinemas, AA Driving School, Zizzi, Crabtree Evelyn, and Virgin.

Contis Group also issues its own brand prepaid card.

Pace is providing a new set top box to leading US cable operator Comcast, which will use it in a market trial of its next-generation services in Augusta. The service allows customers to search and select from tens of thousands of television shows and movies that reflect their interests and provides an interactive and personalised cable TV service.

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