Vitacost.com targets mobile moms with new health-and-wellness site, app
SAN FRANCISCO — Health-and-wellness e-retailer Vitacost.com is targeting smartphone users with the relaunch of its mobile commerce website, developed in partnership with Moovweb, the company announced Thursday.
"Vitacost customers are very passionate about their health and wellness products," Vitacost chief marketing officer David Zucker said. "Our new Moovweb-powered mobile site unleashes the power of social media to help our customers spread the word about their favorite products, as well as easily access recommendations for new products."
The mobile site’s new features include the ability for shoppers to share their product preferences on Facebook, receive social signaling from friends with similar tastes and log into their Vitacost accounts, where they can access their complete transactional histories and receive recommendations for new products based on past purchases.
In addition to the newly revamped mobile site, Vitacost launched a complementary app, which has the mobile site’s features, as well as key personalization benefits, including reminders alerting customers to take their vitamins, and a feature allowing users to scan a product’s barcode inside a store for easy on-site comparison shopping.
Vitacost posted a "how-to" video on YouTube to help drive awareness around the new features.
Supervalu announces number of stabilization measures with first-quarter earnings
MINNEAPOLIS — Supervalu on Thursday announced a number of dramatic measures to stabilize its business — reduction in capital spending, suspension of the company’s dividend, even the exploration of possible strategic alternatives — in conjunction with its declining first-quarter earnings results.
Supervalu on Thursday reported a net sales decline of 4.5% to $10.6 billion for its first quarter ended June 16, with a net earnings drop of 44.6% to $41 million, or 19 cents per diluted share — well below the analyst consensus of 38 cents per share.
"Supervalu could become the next casualty in the troubled supermarket space, as its fundamentals have finally begun to show real signs of distress after years of steady underperformance," Credit Suisse research analyst Ed Kelly wrote in a research note published Thursday morning. "The company’s uncompetitive price position, the weak consumer and increased competitive activity combined [have] more significantly pressure[d] sales and margins."
“While our shift to a fair price plus promotion strategy is right for our business, it is essential that we move even more aggressively to lower prices, and anticipate and respond to competitor actions," Supervalu president and CEO Craig Herkert said in a Wednesday afternoon press release.
But even as Supervalu cuts prices, the grocer needs to continue paying down debt and remain profitable, Herkert added, which will necessitate deeper and more structural cost savings initiatives, the negotiation of more flexible financing facilities, a reduction in near-term capital expenditures and the suspension of the company’s dividend. “As we proceed with these actions in an effort to drive more traffic to our stores and ensure we are the destination of choice in the neighborhoods we serve, we remain focused on maintaining our operational and financial strength,” Herkert said. “We are committed to generating operating cash flows of more than $1 billion annually and meeting or exceeding our debt reduction targets. And, to assure we are evaluating the full range of opportunities available to us to create value for shareholders, the company’s board and management, together with its financial advisers, are reviewing strategic alternatives for our business.”
Among Supervalu’s planned measures:
The realization of an additional $250 million in administrative and operational expense reductions over the next two years by adopting an intense focus on efficiency and productivity across all functions and every part of its businesses;
The replacement of the company’s senior credit facility with an asset-based lending facility and term loan secured by a portion of the company’s real estate, which will remove restrictive covenant concerns and increase financial flexibility;
The reduction of capital expenditures in fiscal 2013 to a range of $450 million to $500 million from $675 million. The company will continue to invest in its store base, including 40 remodels and the addition of 40 Save-A-Lot locations in fiscal year 2013;
The suspension of the quarterly dividend; and
The increase of Supervalu’s debt reduction to a range of $450 to $500 million in fiscal 2013. The company plans to pay down at least $400 million of debt annually thereafter. The company has less than $1 billion in aggregate debt coming due for fiscal years 2013 through 2015.
Supervalu has tapped Goldman Sachs and Greenhill & Co. in reviewing strategic alternatives to be overseen by Supervalu’s non-executive chairman Wayne Sales. Save-A-Lot is Supervalu’s most marketable franchise, Kelly said, though Jewel could be attractive to Kroger. "The company’s other assets may not have much value, as there is a lack of buyers in the market place."
Beginning this quarter, Supervalu is breaking out its former retail food reportable segment, which previously included both the traditional retail and hard discount stores, into stand-alone retail food and Save-A-Lot reportable segments.
First-quarter retail food net sales were $6.8 billion, compared to $7.3 billion last year, primarily reflecting identical store sales of negative 3.7% and the sale of fuel centers. First-quarter Save-A-Lot net sales were $1.3 billion, up 0.8%, primarily reflecting the benefit from 53 net additional stores being operated at the end of the first quarter of fiscal 2013 and partially offset by network identical store sales of negative 3.4%.
FDA approves Watson arthritis drug
PARSIPPANY, N.J. — The Food and Drug Administration has approved a generic drug for arthritis made by Watson Pharmaceuticals, the company said.
Watson announced that the FDA approved a subsidiary’s application for diclofenac sodium and misoprostol delayed-release tablets. The drug is a generic version of G.D. Searle’s Arthrotec, used to treat osteoarthritis and rheumatoid arthritis in patients who have high risk of developing ulcers related to the use of non-steroidal anti-inflammatory drugs, or NSAIDs, a class that includes the painkiller ibuprofen.
Arthrotec had sales of about $130 million during the 12-month period ended in May, according to IMS Health data.