Springale resident Darin Gray of Springdale has been named the president of Little Rock-based Cranford Johnson Robinson Woods, Arkansas’ largest advertising, marketing and public relations companies.

Gray earlier this month announced he was leaving his job as publisher of the Northwest Arkansas Business Journal.

Wayne Woods, who has served as president, will continue to work as chairman and CEO of CJRW.

Gray Matters, LLC, of Fayetteville, had been placed in a family trust to be administered by his wife, Tami. In 1997 Gray began serving as President and Publisher of the Northwest Arkansas Business Journal and its related publications. In June of 2004, Gray acquired the Northwest Arkansas division of Arkansas Business Publishing Group.

“For some time now, we have been planning to name a President of the firm so that we can best manage and plan our growth and development and prepare for the future,” Woods said in a statement. “During that process, we identified a number of qualities that we wanted in a President. Chief among them are executive experience in managing a multi-faceted business, proven leadership qualities, a working knowledge of Northwest Arkansas, and a deep understanding of the Arkansas business community and the state in general. ... I am hard-pressed to think of anyone who has those qualifications and is more widely respected and genuinely admired around the state than Darin.”

“The cliché that ‘timing is everything’ certainly applies in this case,” said Gray. “At the time my family and I were talking through ‘what’s next?’ CJRW reached out to me. A casual conversation became a serious discussion and here we are today. I have long had deep respect for the agency, its founders and principals, and what it has meant to the business community and the entire state.

As president, Gray becomes a member of CJRW’s Executive Committee and its Board of Directors. Continuing to serve on the Executive Committee will be Wayne Woods, chairmen Emeriti Wayne Cranford and Shelby Woods, and Steve Allen, senior vice president and chief financial officer.

Gray, his wife Tami and son, Caleb, live in Springdale and will maintain their residence there. Gray will split time between CJRW’s Northwest Arkansas office in Johnson and the agency’s downtown Little Rock location.

Tyson Foods Inc. recently promoted Kevin Hueser to senior vice president of beef margin management. He will oversee cattle procurement, boxed-beef pricing, ground beef and trim sales and pricing, beef-production planning, carcass sales, fats and oils and rendered-product sales.

His career in the industry began at IBP Inc., which is now Tyson Fresh Meats. He held various management positions in operations, human resources, sales and marketing and beef pricing for IBP.

Hueser was also a consultant at Lakeside Packers in Brooks, Alberta, a previous wholly owned Canadian subsidiary. His most recent position was vice president of boxed beef pricing.

It’s been six years since Harold Crye, CEO of Crye-Leike Real Estate, expanded the company’s footprint into Northwest Arkansas. He said the local business has grown sales each year from $76 million in 2007 to $385 million last year. Crye-Leike had a 35% share of total units sales last year, with 2,659 properties.

Crye said the economy tanked just as the company ramped up in Northwest Arkansas, but in the past few years the momentum has returned. 

“Our agents in this region had a 15% increase in volume sales from 2012 to 2013. They blew our $370 million goal out of the water and we predict $400 million in total volume for the region this year. That’s about a 5% increase and unless the market really tanks they should reach that goal and more,” Crye said at the company’s 2014 Kick-off breakfast event held in Rogers on Wednesday (Feb. 19).

LOOK AHEAD
Crye said higher interest rates are inevitable and will hurt affordability in many markets. He said as home prices declined in recent years in concert with interest rates, affordability hit a five-year low last summer. But Crye warns as prices improve and rates tick upward, affordability could become a stumbling block later this year.

“This should be creating a sense of urgency in prospective buyers now that the region looks to be thawing out from the winter freeze,” Crye said. 

Another challenge for the business is a lack of inventory. Vickie Briolet, an agent in Crye-Leike’s Bentonville office, said inventory levels are as low as she has seen in many years.

“We all need listings. There are buyers looking and limited properties to show,” Briolet said.

Crye said fewer new homes being constructed is partially to blame for the lower inventory levels across the country. The National Association of Realtors reports new home inventory hit a 50-year low in 2012 at just under 200,000, after peaking at 500,000 in 2006.

Market watchers say housing starts need to reach the 1.5 million level soon on annual basis or there will likely be a persistent shortage of housing inventory for the long-term. For the past six years the residential construction industry has fallen short of the 1.5 million units needed just to keep pace with the new household formation.

Bankers are keeping a tight rein on building, Crye said, and this is likely to continue as long as job growth remains tepid.

“The biggest reason there are less new homes built is because of the weak job growth President Obama has been able to muster. There are families doubling up and grown kids living in basements because they don’t have the financial stability to start a new household,” Crye said.

He said this has set up favorable dynamics for the rental market and he encouraged his agents to get busy seeking out investor deals. In the larger Memphis market, he said the company is working with an institutional investor who is purchasing 1,000 homes for rental. Crye-Leike is also providing the property management in that deal.

Two goals he has for the local region in 2014 is to expand its property management division as well as establish a commercial real estate division.

AGENT GROWTH
Crye-Leike continues to expand its offices westward, adding an office in Grove, Okla., and acquiring the Coldwell Banker office building in Siloam Springs in October. Crye said the company has recruited several agents from other large national firms to work in that Siloam Springs market.

The Arkansas Realtors Association reports there were 8,419 agents working in the state last year. Total agent count is down 46% since 2007. Crye said there are 217 agents working in the Northwest Arkansas market among the company’s eight offices. Crye-Leike added more than 40 new local agents in 2013.

“We continue to recruit and hire new agents, our total number is up in this region and up nationally,” Crye said.

On the national level Crye-Leike operates 106 office with 2,828 agents. The largest market for the company is Memphis where the company has 16 offices and 716 agents with roughly a 40% marketshare, according to Crye. The company has 9 offices in Little Rock, with 351 agents and Crye said he is looking to other growth opportunities.

NATIONAL RESULTS
Crye-Leike posted combined annual sales of $5.2 billion, selling 30,471 units last year. Those results include franchise office sales, Crye said.

The company sales goal for 2014 is $5.5 billion, a 6% increase year-over-year.

“All of our offices are growing and we think this is doable, unless the economy tanks. We have several new offices planned this year, one in eastern Tennessee and two in Georgia.” Crye said.

Higher-than-expected loan losses prompted America’s Car-Mart to amend its credit agreement with lenders. The 2% adjustment to credit losses cut third quarter earnings by $4.9 million, or 68-cents a share, and sent Car-Mart stock to a 52-week low on Wednesday (Feb. 19).

“We still have $220 million in equity, after the $4.9 million aftertax charge off. We looked at our $400 million in loans owned by our 62,000 customers and estimated that if we didn’t sell another car, we could likely collect 23.5% of the money owed to us. The last time we did this calculation it was 21.5%,” Jeff Williams, chief operating officer for the Car-Mart said in a phone interview Wednesday.

He said the credit loss adjustment is a cautious play made by the company based on the competitive climate they are facing in the deep subprime auto lending market.

Car-Mart execs said some of its mature dealerships are experiencing customers defaulting on their loan, parking the car on the Car-Mart lot after they have purchased another car from a competitor offering a lower monthly payment. 

Williams warns that the lower payment is accomplished by a longer term, out to 60 months or so, which is not in the consumer’s best interest at the high interest rates and higher mileage cars. He said Car-Mart does not play that game but instead work to ensure their customers can own the car outright within two and a half years.

The experts agree that large bank lenders are fronting cash to the subprime auto finance market with the belief they have the technology to collect. Car-Mart executives said technology may be giving these bankers the boldness to lend, but it is not a viable substitute for good collections. 

“Even our best customers will need two or three payment modifications when they may have a repair issue or some other personal finance concern. They may need some local help working through this issues. That’s hard to do unless you have brick and mortar stores and local customer service relationships,” Williams said.

Other costs Car-Mart absorbed in the quarter were $300,000 toward GPS systems in the cars sold. This effort is costly on the front-end and average about $3 to $4 per car per month. Williams said it’s part of the company’s investment in infrastructure costs that will pay off over time.

Williams said the company is experiencing more late payments because of higher utility costs. There were more defaults and repossessions among the company’s mature lots as they are being hit hardest by competitive lenders wooing away some of the best customers.

“The hyper-low interest rate environment is attracting more dollars with the subprime auto lending. We thought the competition might have subsided by now, but it has not. And it looks like it may be with us for some time longer,” Williams said.

For the full nine months of this fiscal year the provision for credit losses increased to $91.6 million, up from $65.83 million. These reserves set aside for losses should they occur. 

CEO Hank Henderson said the company did not get to where it is today by focusing on one or two quarters, but instead, investing for where the company wants to be five years down the road.

“In the past five years we have grown our finance receivables by nearly $200 million, added 20,000 new customers and are selling about 1,000 more cars each month. I would say that’s pretty impressive. While it’s true we are facing some competitive pressures, that’s always been the case in one fashion or another,” Henderson said in the earnings call on Wednesday. 

Car-Mart continues to repurchase its stock. Since February 2010 Car-Mart has repurchased 3.1 million shares or 27% of the company. 

“We will continue to stay focused on cash returns and aggressive expense management. We believe in the long-term value of our company and will continue to invest in the repurchase program when we believe favorable conditions exist. Our first priority for capital allocation will continue to be to support the healthy growth of the business,” Williams said.

Shares of Car-Mart fell 4.87% to close Wednesday at $35.72. During trading on Wednesday the stock set a new 52-week low of $35.50.

Murphy USA, the retail spinoff of Murphy Oil Corp. posted fourth quarter profits of $93.6 million on revenue of $4.19 billion. For the full year, El Dorado-based Murphy USA posted net income of $235 million on revenue of $18 billion.

The company also recognized a gain from its sale of a Texas ethanol plant in the last quarter of 2013.

“In completing the sale of the Hankinson ethanol plant for a premium price, we delivered on our commitment to rationalize non-core assets,” said President and CEO Andrew Clyde. “We continue to see non-tobacco growth expand through our innovative promotions and larger stores. We opened 18 stores in the quarter including 14 of our new format 1,200 sq. ft. stores. This includes our milestone 1,200th store in mid December in our hometown of El Dorado, Arkansas. Our financial position remains very strong.”

During 2013, Murphy USA opened a total of 39 retail locations, while one location was closed. Through mid-February 2014, the company has opened an additional five sites. With the addition of these stores in 2014, Murphy USA has 1,208 total locations in operation that include 1,022 Murphy USA sites and 186 Murphy Express sites. There are 15 sites under construction.

Murphy USA’s stock closed trading on Wednesday at $39.30 per share. The company’s shares have traded between $36.12 and $46.91 since it went public in early September 2013.

That was ugly. Not only did Wal-Mart Stores miss by a large margin its fourth-quarter earnings expectations, but the global retailer’s full year net income was down 5.7% compared to the prior year and its overall U.S. comp sales for the year was down 0.4%.

Officials with Bentonville-based Wal-Mart reported fourth-quarter and full year earnings Thursday morning (Feb. 20) prior to the markets opening.

Full year total revenue for the company was $476.294 billion, up 1.6% over the previous year, but below the analysts’ consensus estimate of $476.83 billion. The retailer said it felt a $5 billion negative impact from foreign currency headwinds last year. Operating income was $26.872 billion, down 3.1% compared to the previous fiscal year. Wal-Mart’s fiscal year and fourth quarter end on Jan. 31.

Net income for the year was $16.022 billion, 5.7% less than the previous year. Full year earnings per share was $4.90, well off the analysts’ consensus estimate of $5.11. Global e-Commerce sales, including acquisitions, grew to more than $10 billion during fiscal 2014.

Fourth quarter revenue totaled $129.706 billion, up 1.5% compared to the fourth quarter of the prior year and was below the consensus estimate of $130.23 billion. Operating income during the quarter was $7,347 billion, down 14.4% compared to the previous fourth quarter.

Net income during the quarter was $4.431 billion, down 21% compared to the previous year. Earnings per share of $1.37 missed the consensus estimate of $1.59. However, the company posted one-time charges during the fourth quarter that reduced quarterly earnings by 26 cents per share. The charges were related to tax and employment issues in Brazil, store closures in Brazil and China, a transaction in India, and restructuring of Sam’s Club operations in the U.S.

Nevertheless, Wal-Mart Stores President and CEO Doug McMillon and other executives pushed an optimistic view of the numbers in the company’s earnings report. It’s McMillon’s first earnings report since becoming CEO on Feb. 1.

“Our company grew net sales this year to reach more than $473 billion. Global eCommerce sales, including acquisitions, surpassed the $10 billion mark, a 30 percent increase over last year," McMillon said in the statement. "We will continue to grow our global business by focusing on customers and serving them how they want to be served."

McMillon said Wal-Mart will embrace more change this year as it focuses more intensely on customer relevance.

“We must be more nimble and flexible as we operate our businesses to adapt to changing customer shopping habits. Our focus is to invest in capabilities that connect with customers on their terms,” he said.

CAUTIOUS GUIDANCE
One big takeaway from Wal-Mart’s announcements was the cautious guidance the company gave for this year. The retailer forecast first quarter earnings per share of $1.10 to $1.20 with negative U.S. comparable sales recorded in the first two weeks of February because of weather.

Budd Bugatch, retail analyst with Raymond James & Associates, said that guidance is lower than the $1.26 his firm had predicted.

“Clearly there are macro pressures at work here. The weather impact has been hard for investors to gage. Concretely, the company did say it was facing $330 million in added health care costs this year. We know the SNAP cuts are having an impact as well. I think the company using this macro headwind as a time when it invests for longer term results,” he said.

Wal-Mart Chief Financial Officer Charles Holley said during the first quarter of this year, the company will begin to anniversary the increased costs incurred for Foreign Corrupt Practices Act matters, including compliance program enhancements and the ongoing investigations. These costs are expected to range between $200 million and $240 million for the year. 

The company gave a full-year guidance range of $5.10 and $5.45, a wide gap noted by the retailer and analysts. Joe Feldman, assistant director of research for the Telsey Advisory Group, said although Wal-Mart expects to hit the high-end of the estimate, it’s still below Wall Street consensus.

Investors focused on the weaker guidance and tempered outlook as Wal-Mart stock fell more than 2% after the earnings release. Shares traded at $73.25, down $1.60 in heavy volume during the morning market session. For the past 52 weeks the share price has ranged from a $69.72 low to a high $81.37.

In an effort to rally support among investors, Wal-Mart raised its annual dividend by 2.12% in fiscal 2015. The company will pay $1.92 per share, in four quarterly installments of 48 cents per share. 

Wal-Mart said this is the 41st consecutive time it has increased the dividend for its shareholders. While Wal-Mart is a widely held stock, the largest shareholders are still the Walton family. During fiscal year 2014, the retailer returned $12.8 billion to shareholders in the form of dividends and share repurchases.

WALMART U.S.
The cash cow for Wal-Mart Stores Inc. is its U.S. business comprising 59% of the retailer’s total consolidated sales last year. But the business faces a number of problems which showed up in negative same-store sales quarter after quarter.

Comparable store sales are a key metric in the retail industry. Last year Walmart U.S. posted negative comps of 0.6%, compared to 1.6% positive comps the year before. In the recent 13-week period comp sales slid 0.4%, compared to a 0.3% gain a year ago.

Bill Simon, CEO of Walmart U.S., said about 0.4% of the decline in comp sales in the last quarter relate to SNAP cuts. He expects that impact to continue for the rest of the year as consumers adjust. He said last year it was the 2% payroll tax increase that pressured comp sales and the weather is what it is.

“The weather isn’t an excuse but it did have a short-term effect as we had between 200 and 300 stores (closed) at times because of the winter storms,” Simon said in the media call.

One particular area of concern is the continued decline in store traffic, despite slightly higher overall ticket sales. Simon said they are seeing more consumers stock up at a supercenter, but know they are losing out on the fill-in trips as consumers are going to convenience stores, dollar or drug stores for the loaf of bread or gallon of milk.

"Comp sales improvement is a key priority, and we’ll focus on being even stronger item and category merchants, delivering value and improving our service levels," McMillon said. "Well remain focused on our expense structure, and innovate to improve productivity and aid our ability to deliver every day low prices.”

Simon said the Neighborhood Market format compares favorably for these quick fill-in trips, and is seeing strong comp sales at 5% or better in recent quarters. The company plans to accelerate the expansion of its small-store format this fiscal year.

“In our small formats we’re seeing increased traffic, we think we can compliment the stock-up trip with the small store rollout planned this year,” he said.

Simon was asked about Wal-Mart’s position on raising the minimum wage and he said the company’s stance has not changed as it remains neutral on the issue.

“Less than 1% of our workforce makes minimum wage. In states that have already raised the wage, we see very little overall impact,” Simon said.

CNB analysts said a minimum wage hike is largely a neutral issue for retailers like Wal-Mart who have to ability to pass along the extra cost to consumers.

A larger concern — $330 million this year — is a headwind Wal-Mart said it faces with added health care costs as more of its employees are signing up for coverage because of the Affordable Health Care Act.

INTERNATIONAL CHALLENGES
David Cheesewright, the new CEO of Walmart International, said the division has operated in a challenging global environment, with low inflation, relatively high unemployment and fragile consumer confidence leading to modest consumer spending.

Walmart International grew annual net sales to $136.5 billion, an increase of 1.3%. On a constant currency basis, International net sales would have increased 4.6% to $140.9 billion. Operating income for this segment totaled $5.454 billion, down 17.6% year-over-year.

In the recent quarter, International net sales were $37.7 billion, down 0.4%  On a constant currency basis, sales increased 4.3%. Operating income fell 45.8% from the prior-year period.

Cheesewright said a combination of soft sales, price investments, higher expenses and e-commerce expenditures were reasons for the lower operating results.

“We are especially pleased that in this tough environment, we grew market share in most countries and maintained share in a challenging Mexico market. We did experience share loss in the U.K. and Brazil. Competitors remained very aggressive with vouchering in the U.K., and around the world. We continue to focus on expanding price leadership,” he said.

Bright spots for Walmart International include:
• Solid performance in Central America, where net sales increased by 6.1% with comparable store sales increasing 1.8%.

• Fourth quarter net sales grew 5.3% in Brazil, with total comp sales up 4.6%%Average ticket grew 8%, and traffic declined 3.4%
 
• Walmart China sales grew by 3.7% during the fourth quarter, with comp sales up 0.4%. Comps were driven by an 8.6% increase in ticket, while traffic declined 8.2%, as customer behavior continued to shift towards fewer trips and larger baskets.

STREAMLINING SAM’S
Sam’s Club reported full-year revenue of $57.157 billion last year, up 1.3%, fueled by an increase in membership fees. Operating income, excluding fuel, was $1.949 billion, up 1.9% year-over-year.

In the recent quarter Sam’s Club had total revenue of $14.679 billion, up 1.4% from the year-ago period. Operating income declined 15.7% to $412 million from the same period last year. Those numbers exclude fuel sales.

Sam’s Club grew its membership income 9% in the recent quarter, one of the few positives reported by this division, which is undergoing a streamline effort to reduce overhead, increase online presence and combat declining sales from the burdened small business sector.

Sales charged to the Sam’s Club credit card reached record highs in the quarter resulting in a financial benefit from a profit sharing arrangement with the company’s credit card provider. Sam’s Club also earned $24 million for the sale of two real estate properties. These factors contributed to Sam’s membership and other income growth of 23.4% in the quarter.

Continued severe winter storms have resulted in a soft start to this quarter. Sam’s expects comp sales, without fuel, for the 13-week period from Feb. 1 to May 2, to be flat. For the 13-week period last year, comp sales, excluding fuel, increased 0.2%.

Convenience is what consumers want and officials with Wal-Mart Stores said Thursday (Feb. 20) they committed to giving shoppers what they want by doubling the number of small-format stores the retailer previously announced it would build in the fiscal year.

The retail giant is expanding its original capital forecast provided in October, and now expects to add approximately 270 to 300 small stores during the fiscal year, doubling the initial forecast of 120 to150 stores. Walmart U.S. will continue its plan to open approximately 115 new supercenters this year.

“Customers’ needs and expectations are changing. They want to shop when they want and how they want, and we are transforming our business to meet their expectations,” Bill Simon, Walmart U.S. president and CEO, said in Thursday’s earnings report. “Customers appreciate the broad assortment of our supercenters for their stock-up trips as well as our small store formats for fill-in trips. By unlocking this growth opportunity and further combining our supercenters and small store formats with an unlimited selection available through e-commerce, we provide our customers with anytime, anywhere access to our brand.”

The small store fleet has continued to deliver positive comp sales and traffic increases each quarter. Comp sales for Neighborhood Market stores grew 4% for fiscal year 2014, driven by fresh and pharmacy. This compares to overall U.S. negative same-store sales of 0.4% posted for the past 53-week period.

“Neighborhood Market is performing comparable or favorable to leading grocers,” said Simon. “Our small store expansion, in addition to providing customers access to a wide variety of products, including fresh, pharmacy and fuel, will help us usher in the next generation of retail. This will combine thousands of points of physical access with digital retail experiences that include initiatives such as Site to Store and Pay with Cash.”

Joe Feldman, assistant director of research Telsey Advisory Group, said this is a positive sign for the retailer as it shows the efforts to downsize the format is paying off.

Walmart operates 346 Neighborhood Markets and 20 Walmart Express stores. The Express units have performed well and are being expanded beyond the initial three-market pilot.

Walmart U.S. projects to end fiscal year 2015 with net retail square footage growth of approximately 21 to 23 million square feet across all formats, versus its original projection of approximately 19 to 21 million square feet. The projected capital expenditures and square footage details exclude the impact of future acquisitions.

“We have a healthy pipeline of stores in development, and we systematically work to improve our real estate and construction processes, reduce building costs and shorten the time needed to open our stores,” said Simon. “Our small store expansion will also strengthen our market share and create greater efficiencies in our supply chain through a tethered approach that uses supercenters as a supply chain base, links our resources and provides a unique and connected customer experience.”

To fund this additional growth, the company is revising its capital expenditures forecast for the Walmart U.S. segment to $6.4 billion to $6.9 billion, up from an initial range of $5.8 billion to $6.3 billion. This reflects the increased small store growth and the planned new supercenters, which remain an important part of the company’s strategy. In total, across supercenter and small store formats, Walmart U.S. plans to open 385 to 415 units in fiscal 2015, adding considerably to the more than 4,200 stores now open.

Wal-Mart’s newest test in the small store format will get underway in next two months as the retailer opens it first U.S. convenience store in Bentonville, roughly six blocks from the company’s corporate headquarters and Supercenter No. 100, across the street.

At least two analysts have recently noted that perhaps Wal-Mart should buy its way in to more small format leadership by acquiring Family Dollar or Rite Aid. Other industry experts peg a major U.S. acquisition as unlikely, citing regulatory approval hurdles because of Wal-Mart’s already massive size.

Wal-Mart was asked about the likelihood of an acquisition like Family Dollar on Thursday during the call with the media.

Bill Simon, CEO of Walmart U.S., said the retailer is always looking for the right acquisitions. But he also added Wal-Mart has a very efficient model in place for organic expansion. He said the costs of retrofitting competitor stores for the amount of frozen and fresh product it sells would be very expensive, not to mention the regulatory issues that could arise.

The Walmart Express does about four times the volume of a dollar store and the Neighborhood Market does six times more," Simon said.

Michael Gerrard will speak on climate change regulation at NorthWest Arkansas Community College on Feb. 27. Gerrard is a professor at Columbia Law School in New York, where is also serves as the director of the Center for Climate Change. The event is will begin at 4 p.m. in the Shewmaker Center for Business Development and is hosted by the NWACC Honors Program and the Service Learning Program.

The subject of Gerrard’s talk is “Climate Change Regulation: Where Are the U.S. and the World Heading?”

Gerrard has written or edited 11 books, including “Global Climate Change and U.S. Law.”  Since 1986 he has been an environmental law columnist for the New York Law Journal.

He practiced environmental law in New York from 1979 through 2008, most recently as partner in charge of the New York office of Arnold & Porter LLP. He worked as a trial and appellate litigator, having tried numerous cases and argued many appeals in the federal and state courts and administrative tribunals. Upon joining the Columbia law faculty in 2009, he became Senior Counsel to the firm. 

Gerrard has lectured on environmental law in Great Britain, France, Netherlands, Denmark, Italy, Malta, China, India, Japan, Chile, Canada and throughout the United States.

Randy Franco, president of NorthWest Arkansas Community College’s Speech and Debate Team, recently qualified for the 2014 Interstate Oratory Association National Championship.  

Franco won second place overall at the Southern Forensics Championship event held Jan. 31 to Feb. 2 in Hattiesburg, Miss. He is from Bentonville.

For nearly 150 years, Interstate Oratory has taken only the top two students from each state to compete for title of top orator, and all students at the competition have their speeches published in the journal “Winning Orations.”

Franco is the first student from NWACC to earn a bid to this tournament, which will be held April 25-26 at James Madison University in Harrisonburg, Va.Faculty member Erick Roebuck is the coach for the college’s new speech and debate team.

The Northwest Arkansas Clinical Pastoral Education Institute will present an interactive grief seminar for parents and families who have suffered the loss of a child. The “Parents Left Behind” seminar is slated for April 5. The event will held at the Jones Center for Families in Springdale from 8 a.m. until noon. There is no charge for resident in Northwest Arkansas or the Fort Smith metro area.

The seminar, sponsored by Northwest Health System and The Grief Center at Circle of Life will begin with breakfast and then feature keynote speaker Susan Averitt MD, a local pediatrician and bereaved mother.  Averitt’s life was changed forever in 2006 when her five year old daughter Cameron was killed in a school zone accident. In the years after Cameron’s death, as Averitt grieved her loss and worked to rebuild her life, she was struck by the lack of support for parents on this difficult journey. 

This event will allow Averitt to share her experience with other bereaved parents as she continues her work to help others in honor of her Cameron’s memory. Participants will have the opportunity to attend one of four interactive breakout sessions including: Grieving Partners, Grieving Families, Forgiveness and Navigating Life.  Each session will be directed by specialists in counseling and/or bereavement. The event will close with a memorial ceremony honoring the memory of loved ones.

Register online here for the seminar.

Blake Holzhauer was recently appointed as the chief lending officer for Centennial Bank's Northwest Arkansas region, where he will oversee all facets of lending.
 
“We will utilize his experience to continue growth for Centennial Bank,” said Scott Hancock, Northwest Arkansas divisional president. “Blake’s attention to customer needs and willingness to go the extra mile will provide strong results in the near future.”
 
Throughout his 12-year banking career, Holzhauer has worked in several areas of the bank, most recently as senior vice president / commercial lending for Centennial Bank in Searcy. His background includes originating and servicing commercial and agriculture loans.
 
Holzhauer earned his a bacheolor’s degree in finance from Arkansas State University. He has also graduated from Barret School of Banking in Memphis, Tenn., and from Southern Methodist University’s Graduate Commercial Lending School in Dallas. Holzhauer has served in several civic organizations in the northeastern part of the state.

He is relocating to Northwest Arkansas with his wife Jennifer and two children. Holzhauer will work from Centennial Bank’s Joyce Branch in Fayetteville.

A looming doctor shortage in the U.S. that Kyle Parker classifies as a “crisis” is one of the primary reasons the Fort Smith Regional Healthcare Foundation is planning to invest more than $58 million to build a college of osteopathic medicine in Fort Smith.

The foundation announced the project Feb. 18, along with an announcement from the Fort Chaffee Redevelopment Authority that it would donate 200 acres – valued at $4 million – to the college. Once fully operational, the college will serve about 600 students,  with about 150 graduating each year. The college is also estimated to employ around 65 (full-time equivalent jobs) with an average salary of $103,000. The school is targeted to accept its first cohort of students in the fall of 2017.

Parker, chairman of the FSRHF, said Tuesday that one of the most frequent questions has been, “Will you be able to recruit students?” The answer to the question, according to Parker, is a definite, “Yes.”

He said there are about 2,500 applications for every opening in U.S. medical schools. He also said the country will have to produce more doctors to push back against a possible shortage of 140,000 doctors by 2030. That number could rise to 250,000 if the federal Affordable Health Care Act if fully implemented.

“We are in a medical crisis in the United States,” Parker told the more than 85 people who attended the Tuesday press conference.

PHYSICIAN ‘BOTTLENECK’
That sense of urgency to expand medical training is also shared by the Association of American Medical Colleges. The group predicts that a shortage of 91,500 doctors by 2020, with the shortage increasing to 130,600 by 2025. Of the 91,500, the AAMC estimates a 45,400 shortage among primary doctors and a 46,100 shortage in surgeons and specialists. The group also estimates 250,000 doctors will retire by 2020.

During a Jan. 14 interview on C-SPAN, Dr. Atul Grover, chief public policy offer for the Association of American Medical Colleges, said the “silver tsunami of baby boomers” will be a big cause of physician shortages. He also said there is a “bottleneck” at the residency level, and he blamed Congress for curbing support of residency training. According to Grover, Congressional passage of the 1997 Balanced Budget Act reduced funds for residency support.

Grover said medical colleges have boosted enrollment a combined 30% since 2006, but residency openings have shown less than 1% growth. He said what Congress has “failed to do is to address a freeze on support for physician training that’s been in place now for 16 years.”

The AAMC website notes that “Medicare support of graduate medical education (GME) includes paying its share of the costs of training, as well as supporting the higher costs of critical care services, such as emergency rooms and burn units, on which communities rely. Without adequate support, the ability of teaching hospitals to provide essential patient care is threatened.”

MEDICALLY UNDERSERVED AREAS
Reports from Kaiser Health and the Pew Center also point to a shortage of doctors.

A Kaiser report notes that the federal Health Resources and Services Administration estimates that 20% of Americans – roughly 55 million – live in areas with too few primary care doctors. The agency also says that 16% of Americans have too few dentists, and 30% live in areas with not enough mental health care doctors and providers.

The Pew Report says federal government estimates are that the number of doctors will grow by 7% in the next 10 years, but the number of Americans over age 65 will grow by 36%. The nation would need more than 15,000 additional providers to meet the target ratio of one primary care practitioner for every 3,500 residents, according to federal estimates. Massachusetts, according to the Pew report, has the most primary care doctors per capita and Mississippi has the fewest.

The Pew report also notes that income may also result in fewer primary care doctors. Primary care physicians earn around $3 million less during their career than their colleagues in specialty fields.

150 TOWARD SOLVING THE PROBLEM
Parker said Tuesday that the new college of osteopathic medicine will play a small role in attempting to address the shortage.

“We’re happy to put out 150 (graduates) a year to help solve that problem,” Parker said.

He also praised area physicians and medical facility managers for working together, “despite being competitors,” to “get clinical rotations worked out” and address other issues to provide enough residency positions in the area to support the new college.

“You can’t say enough about that kind of commitment,” Parker said of the collaboration among area doctors and medical operations.

Notes about the importance of size, a real-world example of how Obamacare halted a business expansion and the push to sustain sustainability are part of the Northwest Arkansas Friday Wire for Feb. 21.

NOTES & ANALYSIS
• Size matters
We learned this week that the top bosses at Wal-Mart Stores are going to double the number of small format stores they build in fiscal 2014 compared to their previous construction plans.

Why? Because one size does not fit all. If you are on a tight budget and want to stock up for the week or the month and have the time to spend 90 minutes or more wandering from car batteries to peppered bacon to Covergirl blush, then the supercenter is the place to stop.

But if you’re leaving work, in a hurry to get home and just need a gallon of milk and a box of Cocoa Puffs for that guilty-pleasure breakfast you’ve been promising yourself, then that Dollar General or Harp’s or other smaller retail outlet is likely your stop. Ain’t nobody got time to walk a country mile for a dose of dairy and box full of sugary, chocolatey heaven.

How do we know that size matters, but that one size does not fit all? Comparable sales for Wal-Mart’s Neighborhood Market stores (smaller format) were up 4% in the most recent fiscal year. Comp sales at the larger stores were down 0.4% during the same time period. 

Where would you invest more capital? Exactly.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Sustaining sustainability
In his first public forum as CEO of Wal-Mart Stores Inc. Doug McMillon challenged employees and suppliers to innovate, saying he would push the envelope in testing these new ideas that will drive the retailer’s future growth.

• Negative pressures at Car-Mart
A recovering economy, more lenders in the subprime auto space and higher charge-offs have thrown a monkey wrench into the operations of America’s Car-Mart, a large buy here, pay here auto dealer.

• Real estate market share growth
It’s been six years since Harold Crye, CEO of Crye-Leike Real Estate, expanded the company’s footprint into Northwest Arkansas. He said the local business has grown sales each year from $76 million in 2007 to $385 million last year. Crye-Leike had a 35% share of total units sales last year, with 2,659 properties.

NUMBERS ON THE WIRE
5.7%: Decline in net income for Wal-Mart Stores Inc. between fiscal year 2014 and fiscal year 2013.

42%: Level of support among likely voters for both Mike Ross, the Democrat candidate for Arkansas Governor, and Asa Hutchinson, the Republican candidate for Arkansas Governor. The poll was conducted by Little Rock-based Impact Management Group.

393: Number of homes sold during January in Benton and Washington counties, down slightly from the 395 in January 2013.

OUTSIDE THE WIRE
• Democrats compare Walker investigation to Christie
For more than three years Wisconsin Gov. Scott Walker avoided political fallout from a criminal investigation that ensnared six of his former aides and associates, winning a recall election even as his opponent ran ads attacking him on the scandal. But with the Republican up for re-election this year and considering a run for president in 2016, questions are intensifying over how much he knew about illegal campaign activity going on in his county executive office as he launched his bid for governor.

• Governors pitching for jobs
As the U.S. economy gains strength and states are in their best financial position in years, governors are proposing unconventional tactics to create jobs, especially in health care and high-tech.

• Keystone ruling favors Obama politically
A Nebraska judge's ruling on the Keystone XL pipeline could let President Barack Obama delay his final decision on the project until after mid-term elections and avoid political damage, analysts say.

WORD ON THE WIRE
"We've done quite a lot of that. We've been consistently independent in our vote choices since that time (1968), so we're very comfortable and we were doing this before the rest of the country. We are very comfortable voting Republican at the top of the ticket and still pretty comfortable identifying as Democratic and voting Democratic on other positions."
– Dr. Janine Parry, director of the Arkansas Poll, discussing the split among voters self-identified as Democratic but saying they will vote Republican in a poll released this week by Impact Management Group

“We would’ve probably already been open in Little Rock with a third store if this whole health care thing wouldn’t have taken place. But it scared the heck out of us.”
– Joe Donaldson, co-owner and general manager of Sam’s Furniture in Springdale, about the company pulling back expansion plans because of uncertainty surrounding the federal health care law

A note of thanks, positive home sales in January and the fourth push for a tax to build a new jail in Crawford County are part of the Feb. 21 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• A moment for gratitude
Jim Walcott issued the challenge to make a difference, and here we are now several years later with the reality that a more than $58 million college of osteopathic medicine will be built in Fort Smith. Sure, some last minute goofiness could derail the project, but we’re likely to have an operational medical college by the fall of 2017.

Walcott, serves on the board that emerged from the Sparks Health System Board when the hospital sold to Naples, Fla.-based Health Management Associates. That deal left more than $50 million in a foundation to be used to advance health care needs. Walcott wanted to make a big splash with the money rather than just throw out nickels and dimes.

Kyle Parker, an attorney and Fort Smith resident who is independently wealthy, assumed much of the responsibility for Walcott’s challenge. To be sure, there have been many people involved in the effort to see the college be a reality, but Parker has been a key behind-the-scenes driver to keep the project on track.

If you’ve ever wondered if the folks with financial means are doing something meaningful to leave a positive legacy for the Fort Smith region, well, here you go. Mr. Parker will certainly seek to deflect credit, but he should know we are grateful for someone in Fort Smith who is willing to envision what is possible.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...
• $58 million osteopathic medical college planned for Chaffee Crossing
Fort Smith could soon be home to Arkansas’ first college of osteopathic medicine and one of just 31 in the U.S., thanks to a more than $58 million investment from the Fort Smith Regional Healthcare Foundation (FSRHF) and a grant of 200 acres from the Fort Chaffee Redevelopment Authority (FCRA).

• No action against Whirlpool
A proposal that would have seen the city of Fort Smith seek to impose fines against Whirlpool Corporation for violating the city's nuisance ordinance by spilling trichloroethylene (TCE) at its site more than 30 years ago, a spill that eventually spread to the neighborhood north of the site, failed at Tuesday's (Feb. 18) meeting.

• A good January for area home sales
January home sales in Crawford and Sebastian Counties posted increases from the same period last year, with both counties posting values more than 40% higher in January 2014 than in January 2013.

NUMBERS ON THE WIRE
• 43.5%: The increase in sales volume for Crawford County home sales from January 2013 to January 2014. The values increased to $3.89 million last month from $2.711 million during the same period the year before.

• 2-5: The vote of the Fort Smith Board of Directors on a contract that could have had the city imposing fines against Whirlpool Corporation for polluting not only the company's former manufacturing site on the south side of the city, but also up to 50 surrounding properties that sit above a plume of trichloroethylene (TCE), a toxic chemical that can cause cancer if ingested.

• 42%: Level of support among likely voters for both Mike Ross, the Democrat candidate for Arkansas Governor, and Asa Hutchinson, the Republican candidate for Arkansas Governor. The poll was conducted by Little Rock-based Impact Management Group.

OUTSIDE THE WIRE
• Democrats compare Walker investigation to Christie
For more than three years Wisconsin Gov. Scott Walker avoided political fallout from a criminal investigation that ensnared six of his former aides and associates, winning a recall election even as his opponent ran ads attacking him on the scandal. But with the Republican up for re-election this year and considering a run for president in 2016, questions are intensifying over how much he knew about illegal campaign activity going on in his county executive office as he launched his bid for governor.

• Governors pitching for jobs
As the U.S. economy gains strength and states are in their best financial position in years, governors are proposing unconventional tactics to create jobs, especially in health care and high-tech.

• Keystone ruling favors Obama politically
A Nebraska judge's ruling on the Keystone XL pipeline could let President Barack Obama delay his final decision on the project until after mid-term elections and avoid political damage, analysts say.

WORD ON THE WIRE
"We enclosed three of the four exercise yards, we've manipulated walls — we've done everything we can. Still we're not in compliance (with state law). And I think that we can show, or I know I can show the voting citizens of Crawford County the numbers and the need for this. We're a growing population. We are in the top 12 (counties based on population) and we've got a small jail."
– Crawford County Sheriff Ron Brown explaining why a new $20 million jail is needed in the county

"We've done quite a lot of that. We've been consistently independent in our vote choices since that time (1968), so we're very comfortable and we were doing this before the rest of the country. We are very comfortable voting Republican at the top of the ticket and still pretty comfortable identifying as Democratic and voting Democratic on other positions."
– Dr. Janine Parry, director of the Arkansas Poll, discussing the split among voters self-identified as Democratic but saying they will vote Republican in a poll released this week by Impact Management Group

“We would’ve probably already been open in Little Rock with a third store if this whole health care thing wouldn’t have taken place. But it scared the heck out of us.”
– Joe Donaldson, co-owner and general manager of Sam’s Furniture in Springdale, about the company pulling back expansion plans because of uncertainty surrounding the federal health care law

It’s been less than three months since the city of Bentonville unveiled an ambitious project involving the redevelopment of an 18-acre southeast extension to downtown. The plan called for two distinct areas dubbed the Arts District and the Market District  which are connected by two main thoroughfares  — Southwest A Street and Main Street.

Community and economic development director Troy Galloway said private investment has begun to flow into both districts.

“There is already a great deal of buzz around these two experience districts. ERC Construction out of Fort Smith announced plans to build a 60 unit multifamily project with mixed used space as well. That project will be located at the corner of Southwest A and Southwest 4th Streets. They plan to break ground in the next 30 to 45 days, so we will soon be seeing construction in this new Arts District,” Galloway said, during his comments at the Business Matters breakfast in Bentonville on Friday morning (Feb 21).

Business Matters is a new Bentonville-Bella Vista Chamber of Commerce event that provides a look at development and growth projects each quarter.

The city approved the large scale development in November and rezoned for higher residential density levels. The project includes 44,000 square feet of mixed-use development consisting of 62 residential units and 1,760 square feet of flex space. The ERC project name is “Thrive.”

“We worked with ERC for sometime to find them the right location and we are very excited about this project as it will provide more housing for these developing districts. The businesses that locate there will need the foot traffic. The ERC project will change the entire face of the new Arts District,” Galloway said.

Rob Coleman, an owner and vice president of ERC Properties, said the company was not yet ready to discuss project costs. He did say the company “is excited to be rolling out this new urban look.”

Across the street from the ERC development in the old lumber yard area is planned a new pizza restaurant and office space that Doing Business in Bentonville (DBI) is relocating to in the next few months.

“This is a significant amount of activity in this immediate area and a great extension to downtown,” Galloway said. “The city is also planning to redo Main Street from the Square all the way to Highway 102, that includes brand new curb and guttering, landscaping and storm water drainage control. This street work will begin in next 90 days,” Galloway said.

The city street project will serve as a gateway to the expanded downtown area and as one of the connectors between the new experience districts. Galloway said once the Main Street improvements are completed, the same work will begin on Southwest A, the other major connector between the Square and the new redeveloped areas.

MARKET DISTRICT PLANS
The Market District encompasses the old Tyson Foods plant, the Kraft cheese facility and the Icehouse. Galloway said there are several investors now working in the area. The Tyson building is being stabilized with some of the exterior manufacturing equipment being removed. It is also being painted with the intent that the interior can be redeveloped into a market area, perhaps overflow from Farmer’s Market as well as other culinary, wholesale and retail food venues.

The Icehouse is being refurbished into office space and the large kitchen in that facility will used for catering opportunities. Galloway said the Kraft plant is being looked at by several investors for redevelopment.

The biggest project announced so far is the ERC development.

“We worked with ERC for sometime to find them the right location and we are very excited about this project as it will provide more housing for these developing districts. The businesses that locate there will need the foot traffic. The ERC project will change the entire face of the new Arts District,” Galloway said.

David Deggs, the executive director of Downtown Bentonville, said downtown is more than just the square. In Bentonville it encompasses 1,790 acres.

“We are at the forefront of what is going on in the new Arts District. We are moving our office to 401 Southwest A. Street into the old Grant building. It is going to become what is called the Hub. It’s adjacent the trail system for the Razorback Greenway. Our office, Bike Bentonville, Bike Rack Brewery and a new pub and pizzeria will be located in the Hub,” he said.

The new ERC housing project will be located across the street from the Hub, which Deggs says will bring an added population that can help to revive this neighborhood as an extension of downtown square.

He said First Friday events brought more than 42,000 people out to the Bentonville square last year and DBI has added several new downtown programing events in 2014. DBI also is looking forward to this year’s Farmer’s Market as they had 70 vendors in 2013.

“It’s a great way to support our local farmers and this year we are adding some healthy cooking demonstrations and other unique features,” Deggs said.

RECREATION CENTER
Also on tap for the city of Bentonville is a brand new $16 million recreation center. The 80,000 square foot complex will include two pools, a zero-depth entry recreation pool for all ages and a competitive swimming pool that will be used by Bentonville schools, who contributed $1 million to the overall project for sharing rights.

David Wright, director of parks and recreation, said the center will be located near Highways 12 and the 112 in the southwestern part of the city. Construction has begun and is expected to take 18 months.

“We are excited about this project, it’s the grand-daddy of them all as far as parks and recreation goes. This zero-depth entry pool is like a playground in the water. There is a large playground in the middle. There is a slide that actually takes you outside the building and back into again for the landing. There is an area for laps and a river float section,” Wright said.

He told the group that during certain hours the leisure pool would be used for senior programing like water resistance strength classes or yoga. The center also features a designated area for senior citizens as well as a basketball court, volleyball court and fitness center.

The recreation center is slated to open in early 2015 and Galloway said there will be use fees charged. Those rates have not yet been set. While out-of-city residents are welcome, they will likely pay a slightly higher rate for the amenities, he said.

Cabela’s Outdoors in Rogers will celebrate the beginning of the thaw by hosting “Spring Great Outdoor Days 2014” on March 1 and 2. The outdoor speciality retailer hopes to encourage outdoorsmen and women to shift their focus from winter to spring adventures. Among the activities will be seminars, demonstrations and cooking events for the entire family.

Cabela’s will offer a two full days of complimentary workshops and in-store demonstrations. Local industry expert Mike McClelland, Cabela’s Pro Fisher will be in-store presenting tips and answering questions. As part of the festivities, attendees will be able to enter to win a $5000 Cabela’s shopping spree.

The retailer recently faced a rough fourth quarter with same-store sales declining 10.1% and stock dropping as much as 13% due to the decline in guns and ammunition purchases. Excluding guns, comp sales were down 3.5% from a year ago.

Despite the dip in the gun market, Cabela’s rang up $1.2 billion in total sales and raised profit 5.5%, to $94.7 million. Cabela’s continues to invest in operation efficiencies and omnichannel fulfillment.

"We often forget we're in the merchandise selling business," Cabela's president and CEO Thomas Millner, said in the earnings release. "We continue to make operational improvements in the Direct business, we're getting better at omnichannel marketing, and now we have omnichannel fulfillment capability. The first two quarters will be challenging, but we ought to return to more normal trends later this year."

Saturday, Mar. 1
• 10 am Transitional Walleye-Spawn to Post Spawn
• 11am  Training Your New Hunting Retriever
• 11:30 am  My First Bow Intro
• 12 pm  Spring Jerkbait
• 1 pm  Guillotine Broadhead Demo
• 2 pm  Late Season Predator Tactics
• 3 pm  How to Outfit Your Kayak for Fishing
• 4 pm  Striper Fishing Local Waters

Sunday Mar. 2
• 10 am Fly Casting 101
• 11 am Reloading 101
• 12 pm Successful Spring Fishing Crappie
• 1 pm Spring Fishing Basics
• 2 pm  Tune Up Your Turkey Calling
• 3 pm  Fly Fishing for NWA Streams
• 4 pm  Striper Fishing Local Waters

For additional information about Spring Great Outdoor Days event in Rogers, visit the retailer online.
 

Lane Kidd is leaving the Arkansas Trucking Association after 22 years as president of the trade association.

The Arkansas Trucking Association, which represents transportation firms in Arkansas, released this statement on Monday (Feb. 24): “The Arkansas Trucking Association (ATA) and Lane Kidd, the ATA president since 1992, jointly announced today that Kidd is leaving the organization to devote his full energies to The Kidd Group, LLC, a business investment and public affairs firm he created in 2013.”

Kidd said wants to pursue new opportunities as a lobbyist.

“I’ve wanted to pursue my own projects for some time now and there are many opportunities out there, so this feels like a good time to say goodbye to the ATA,” said Kidd. “My career as ATA president has been a phenomenal experience, and I’m handing the keys over with ATA looking much better than it did 22 years ago.”

The Kidd Group will operate in Washington, D.C. and Arkansas providing business services in the transportation industry where Kidd said he is most experienced – corporate advocacy and public affairs strategies, media relations, corporate branding and publishing.

“We also have the capability to arrange private equity opportunities for companies in the transportation industry,” said Kidd.

Gary Salisbury, chairman and CEO of Fikes Truck Line in Hope, Ark., and ATA chairman, said Kidd put the ATA on the map.

“During Lane’s tenure, he has taken a relative unknown group of truckers and propelled us to the front of the line. The ATA is known across the country as a leader and an example for other associations to strive for. As chairman of the ATA, I speak for the Board of Directors when I say that Lane will be missed and we wish him success as he starts his newest pursuits.”

Salisbury said the ATA will announce plans to name a replacement soon.

Sales slipped and profits fell as Dillard’s reported its fourth quarter and full year earnings on Monday. The Little Rock-based retailer reported fourth quarter net income of $119.1 million on sales of $2.08 billion. One year ago, Dillard’s posted profits of $161.4 million on sales of $2.15 billion.

For the full year, Dillard’s recorded $323.7 million on lower sales of $6.69 billion. In its last fiscal year, Dillard’s posted $336 million on revenue of $6.75 billion.

Dillard’s had several one-time charges in its fourth quarter results, which included:
• A $6.8 million after-tax gain ($0.14 per share) related to the sale of a former retail store location;
• After-tax asset impairment and store closing charges of $1.1 million ($0.02 per share); and
• Approximately $18.1 million ($0.38 per share) in tax benefit due to a one-time deduction related to dividends paid to the Dillard’s, Inc. Investment and Employee Stock Ownership Plan.

Excluding these items, Dillard’s would have reported $137.6 million ($2.87 per share) for the 14-week period ended February 2, 2013.

Other highlights of the quarter include a 2% increase in comparable store sales, diluted earnings per share excluding certain items of $2.69 versus $2.87, retail gross margin decline of 180 basis points of sales; and operating expense improvement of 90 basis points of sales.

“Although it was a profitable fourth quarter, we are disappointed in our gross margin performance, as lower than anticipated sales necessitated heavier markdowns. We are pleased with our expense control as well as with our strong cash flow for the year,” said Dillard’s CEO William T. Dillard.

Dillard’s shares opened at $83.90 on Monday. The company’s stock has traded between $75.33 and $97.87 per share in the last 52 weeks.

Sales tax revenue dipped 3.5% across Northwest Arkansas’ four largest cities in February. Bentonville, Rogers, Springdale and Fayetteville cumulatively received more than $4.894 million in sales tax revenue, compared to $5.075 million a year ago.

All four cities posted lower revenue numbers, citing snow and ice throughout the month for the less foot-traffic and a dip in overall sales. Weather has been blamed for rough retail and restaurant sales as well as declining home and auto purchases. The same cities reported tough year-over-year comparisons in hospitality collections for December, which put downward pressure on their fourth quarter reports.

February revenue reflects sales tax collected in December, creating a two-month lag in the reporting. Each of these cites collect a 2% sales tax. One percent is devoted to bond repayment and the remaining 1% goes into the cities’ general fund. This report reflects the latter 1%.

February 2014 Revenue
Fayetteville: $1.713 million, down 2.4%
Rogers: $1.409 million, down 3.8%
Springdale: $879,035, down 4%
Bentonville: $893,260, down 4.6%

Jack Kleinhenz, chief economist for the National Retail Federation, said it’s tough to quantify the direct impact to the retail sector from the eight named winter storms already in the books, when there’s still four more weeks of winter expected for much of the country. Kleinhenz expects some retailers will make up some of the losses when spring does arrive. Not only have consumers been snowed in more this year, but bitterly cold temperatures have pushed utility bills higher and that is curbing spending habits as more income is going to heating costs.

FORWARD OPTIMISM
Northwest Arkansas city officials said 2014 is off to a sluggish start, but they expect to see revenue pick up this spring and summer. Rogers is looking forward to the July opening of the Walmart Arkansas Music Pavilion.

“We see the AMP as an overnight destination when some of the really big acts take the stage. That is going to mean more folks drive here, eat dinner, shop and spend the night, all which they do within a stone’s throw of the new music venue,” said Allyson Dyer, executive director for Visit Rogers.

At the same time Springdale is looking forward to the new Walmart Supercenter at Elm Springs Road and Interstate 540, which is slated to open later this year.

Kalene Griffith, director for the Bentonville Convention and Visitors Bureau, said last week that the spring calendar for tours and groups visiting the city continues to fill up. She said bus tours are one segment that have exploded in growth since the opening of Crystal Bridges.

“Before 2011 we might have had 15 bus tours a year. Now it’s more than 100 bus tours and we are getting more and more interest from international groups. This summer there is a group out of Ireland, that is coming through Bentonville on a multiple city bus tour,” Griffith said.

She said about 50 sporting events also are planned for this year intended to bring hundreds of people to the region for the day or perhaps the weekend.

More consumers plan to sock away their tax refunds which is bad news for retailers like Wal-Mart who are sitting on higher inventory levels two months removed from what was a disappointing holiday season.

Last week the National Retail Federation warned members that a new survey predicts 46% of those expecting a tax refund this year intend to save the money. The so-called savers outnumber last year just slight at 44%. About 67% of consumers surveyed said they anticipate a refund check from Uncle Sam.

The NFR Survey Results include the following findings.
• 38% plan to pay down debt
• 25% need the refund for everyday expenses
• 13% will spend it on a vacation
• 11% will treat themselves

The NRF also reports that about one in four of those surveyed had already filed taxes. Another 37% plan to do this month (February), and 26% said they would file in March and 15% said they would wait until the last minute.

Given this slower pace to file, retailers are holding out hope they can still woo shoppers in with big clearance sales, especially on big ticket items such as electronics, left over from unsold holiday inventory.

Bill Simon, CEO of Walmart U.S., said during last week’s media call that tax refund activity is running behind this time last year, but has started to pick up a little momentum.

Retail analyst Doug Hart, with DBO USA, said it makes sense that consumers plan to save back refunds this year, given that consumer debt has been on the rise, especially in December and January.

INVENTORY LEVELS
Simon said last week that recent fourth quarter inventory grew 3.8%, moderating from prior quarters but it was still higher than the rate of sales. He said the retailer remains committed to disciplined inventory management and is well positioned for spring seasonal conversion.

Inventory overruns are leading to deep discounts for many large ticket items such as Apple iPad 2 16 GB for $299 or 60” Vizio LED HDTVs for $798, a savings of $201.99. Large displays of unsold televisions are positioned to catch shoppers eyes as they enter some supercenters. Other stores have them lined up in the rear “Action Alley” aisle and Walmart.com continues to feature them in daily email notices to customers that have previously ordered online.

Wal-Mart also noted that its entertainment category, which includes toys, posted negative comparable sales in the fourth quarter. Sales were negative mid-single digits, according to Simon. The retailer said it was able to pick up market share with positive reactions from the “one-hour guarantee” program on Black Friday. 

“While we were pleased with the our share performance, we continued to face challenges related to ongoing entertainment industry contraction,” Simon said.

According to research firm NPD Group, consumer electronics sales fell 2.4% to $22.9 billion during the 9-week holiday period.

The inventory excess and discounts are not limited to electronics, as Wal-Mart advertises “thousands of clearance items” in its February Savings Day’s marketing campaign. Tires, mattresses, camping gear and small appliances are some of the other  categories featured in Wal-Mart’s newest rollback campaign.

WEAK FORECAST
One main concern from analysts following Wal-Mart’s recent tepid forecast for this quarter is that this aggressive pricing to move out inventory is further eroding gross margins. This could hinder top and bottom line results if the consumer stays cautious.

Comparable sales at Walmart U.S. were down in the first two weeks of February due to bad winter weather. For the 13-week period ending May 2, Walmart U.S. expects comp store sales to be flat. Comp sales declined 1.4% in the prior-year period.

The weak forecast was enough to prompt Stifel Nicolaus to downgrade its rating on Wal-Mart shares to a “hold,” or neutral position, as it plans to sit on the investment sidelines to see how the retail behemoth navigates through the next few quarters.

Shares of Wal-Mart Stores (NYSE: WMT) closed Monday at $73.35, up 23 cents. The shares have been on a downward trend since the start of this year. For the past 52 weeks the share price has ranged from an $81.37 high to a $70.44 low.