Tuesday, January 31, 2006

Coretta Scott King Dead at 78

By Elaine Woo
Los Angeles Times Staff Writer

Coretta Scott King, the dignified and determined widow of the Rev. Martin Luther King Jr., who assumed her murdered husband's burden as chief symbol of the civil rights movement and fiercely guarded his legacy — often in ways that drew pointed criticism — has died. She was 78.

King, who had heart problems and had suffered a major stroke in 2005, died during the night, her family said in a statement.

"We appreciate the prayers and condolences from people across the country," the King family statement said.

Former Atlanta Mayor and U.N. Ambassador Andrew Young broke the news in a call to NBC's "Today" show this morning.

"I understand that she was asleep last night and her daughter [Bernice] went in to wake her up and she was not able to, and so she quietly slipped away. Her spirit will remain with us just as her husband's has." Young said.

Sometimes called the first lady of the civil rights movement, King was thrown into a life of struggle soon after she married the charismatic minister, whose eloquence and strategy of nonviolence put the fight for racial equality on the national agenda. Although the responsibilities of motherhood and her husband's traditional thinking about sex roles kept her off the frontlines during many of the pivotal campaigns of the 1960s, she shared his deep commitment to social justice and was a critical influence at key moments in his career.

She helped to win his release from a Georgia prison in 1960 through a widely publicized telephone call from then-presidential candidate John F. Kennedy. A staunch pacifist, she influenced her husband's controversial decision in 1967 to speak out against the Vietnam War.

After her husband's murder in 1968, she fought for more than a decade to establish a federal holiday on his birthday. The goal was accomplished in 1983 when President Ronald Reagan, yielding to popular pressure, signed the law, becoming the only American besides George Washington so honored.

She also raised millions of dollars to establish the Martin Luther King Jr. Center for Nonviolent Change, an Atlanta complex that houses her husband's tomb, archives and exhibits. She served as its president for two decades.

However, her decision to focus the King Center on educational efforts rather than the direct action her husband was famous for disappointed many movement leaders. Some of the slain icon's closest allies became her critics when she and her family allowed financial concerns to guide the use of his image and his stirring words by scholars, television producers and journalists.

The King family sued to enforce the copyrights on his writings and speeches and offered his archives — at one time valued at $30 million — for sale to the highest bidder. Their actions engendered debate over whom King's ideas belong to — his estate or the American public — and how much more his survivors should be expected to sacrifice.

Operating in her husband's long shadow was a challenge that tested King to the end of her life.

"I am often identified as the widow of Martin Luther King Jr.," she said some years ago. "Sometimes, I am also identified as a civil rights leader or a human rights activist. While these designations are factually correct, I would also like to be thought of as a complex, three-dimensional, flesh-and-blood human being with a rich storehouse of experiences, much like everyone else, yet unique in my own way much like everyone else."

King knew more hardship and prejudice from an early age than the man who would one day sweep her into history.

She was born on April 27, 1927 on her grandfather's farm in Heiberger, Ala., about 80 miles south of Montgomery. Her parents, Obadiah and Bernice Scott, grew cotton, and young Coretta hoed and harvested alongside the hired hands. Her father bragged that she was the best cotton picker in the family, capable of pulling in 200 pounds a day.

Obadiah supplemented the family income by hauling lumber for other people. He became the only black man in town to own a truck; eventually, he owned three trucks and a sawmill. But this modicum of success brought on the resentment of whites, who would sometimes stop him on the road and threaten him.

Later, both his house and sawmill were destroyed in suspicious fires. The culprits were never found.

"I learned very early to live with fear for the people I loved. It was good training," King wrote in her 1969 memoir, "My Life With Martin Luther King Jr."

Each day, she and her sister, Edythe, walked three miles to a segregated elementary school outside town while white children rode to theirs in a bus; each day, the buses would "rattle past us in a cloud of dust or a spatter of mud," Coretta wrote, recalling her hurt and anger.

When she and her sister finished the lower grades, they went to nearby Marion to attend semi-private Lincoln High School, founded for blacks by white missionaries after the Civil War. There, Coretta learned to read music, play piano and sing classical works. To help with her expenses, she took a job in town as a domestic, working for a white woman who wanted her to use the back door and answer every command with "yes, ma'am." Bristling at these rules, Coretta quickly found herself out of work.

Although their mother dropped out of school after the fourth grade, the Scott girls were expected to reach much higher. In 1943, Edythe became the first black student to enroll at Antioch College in Yellow Springs, Ohio. Coretta joined her in 1945 and became the first black at Antioch to major in elementary education.

One of the requirements for her major was to spend a year teaching in a public school, but the all-white faculty at the one school in town would not accept her, even though some of their students were black. This rejection, Coretta recalled, made her "terribly disillusioned and upset." Finding no sympathy for her grievances, she resigned herself to teaching at the school on campus and channeled her frustrations into the Antioch chapter of the NAACP.

Then she met Paul Robeson, the famous black baritone and activist, who heard her sing at a political event and urged her to undertake voice training. She shifted the focus of her studies to music and began to envision a career based on Robeson's example.

"I admired Robeson so much because he was a tremendous personality," King told the Washington Post in 1978. "He was a powerful figure on the stage, combining the singing with the social issues. That was what I planned to do."

In 1951, King won a scholarship to the New England Conservatory of Music in Boston. She arrived with $15 in her pocket and the promise of a room and breakfast for $7 a week in the Beacon Hill house of an Antioch patron. When her money ran out, she survived on peanut butter and crackers until a school counselor helped her arrange to do housework in exchange for her board.

In early 1952, a matchmaking friend asked if she would be interested in meeting a graduate of Morehouse College in Atlanta who was studying for his doctorate at Boston University. The minute she heard that the young man was a minister, she lost interest, fearing that he would be too pious and narrow-minded for her taste.

But Martin Luther King Jr. called her anyway and made a strong play for her affections. When she appeared immune to his charms, he was undaunted, telling her that every man has his Waterloo and Coretta might be his. She dismissed his line as "intellectual jive," but agreed to meet him for lunch the next day.

When he stepped out of his green Chevy, he struck her as short and unimpressive. But when he spoke, she said, "he grew in stature," revealing charisma, intelligence and moral passion. After an animated conversation about music, race, economic injustice and peace, Martin made his feelings known.

"So you can do something else besides sing? You've got a good mind also. You have everything I ever wanted in a woman. We ought to get married someday," he told her.

Although she was nearly 25, somewhat past the prime marrying age for women of the era, Coretta did not leap into romance: She had been disappointed in love before. She also knew marriage would spell the end of her plans for a singing career.

"When I got home to my room after our first meeting, my intellect hoped that Martin had not really meant what he said about marriage," she wrote in her memoir. "For I did not want anything to stop me, to stop my career. And my emotions told me that this might."

Her emotions prevailed. She and the young doctoral student from Morehouse courted intensely over the next months. When she realized she was not the only object of his affections, she invited his other girlfriends to a surprise party for him — and coolly eliminated them from contention.

"Coretta was all graciousness, thereby making it clear that she was in charge," Young, the former Atlanta mayor and U.N. ambassador who was one of King's top lieutenants in the Southern Christian Leadership Conference, wrote in his 1996 memoir, "An Easy Burden." "It was a nonviolent way to deal with one's opposition that Martin couldn't help but respect."

Her resolve did not weaken in the face of fierce opposition from Martin's father. The Rev. Martin Luther King Sr. was pressuring his son to choose his bride from within their own comfortably middle-class circle in Atlanta. But "Daddy King" ultimately gave Coretta his blessing and presided over the marriage ceremony in the garden of her parents' home in Alabama on June 19, 1953.

Later that summer Martin was offered the pastorship of Dexter Avenue Church in Montgomery, Ala. Although Coretta was reluctant to give up the freedom and opportunities she had grown to enjoy in the North, she moved to Montgomery with Martin in September, after she earned her degree in voice and violin and Martin passed his exams.

He had barely finished his doctoral dissertation when Coretta discovered she was pregnant. Their first child, Yolanda Denise, was born on Nov. 17, 1955.

A few weeks later, on Dec. 1, 1955, a seamstress named Rosa Parks boarded a crowded Montgomery bus and refused to give up her seat to a white passenger. She was arrested for violating the state's bus segregation law, igniting a fury among Montgomery's blacks that would ripple across the South. Local black leaders formed the ad hoc Montgomery Improvement Assn. and called for a boycott of the municipal bus system.

The man chosen to lead the protest was the young minister from Dexter Avenue Church.

Earlier, Martin had been offered the presidency of the local NAACP, but Coretta had talked him out of it by arguing that it would deprive the church of his attention. "Coretta's opposition probably resulted in one of the luckiest decisions of my life," Martin later wrote. "For when the bus protest movement broke out, I would hardly have been able to accept the presidency of the Montgomery Improvement Assn. without lending weight to the oft-made white contention that the whole thing was an NAACP conspiracy."

Martin became the most famous black man in America when the U.S. Supreme Court ruled on Nov. 13, 1956 that Montgomery's bus segregation laws were unconstitutional. He became known as a powerful rhetorician, whose most famous speech — the "I Have a Dream" address delivered at the 1963 March on Washington — was a clarion call for justice that galvanized the nation. The following year he reaped the world's accolades as the recipient of the 1964 Nobel Peace Prize.

But peril was ever-present. The Kings' house in Montgomery had been bombed in 1956 when Coretta was at home with baby Yolanda. No one was hurt, but angry blacks marched to the house with guns, ready to wreak havoc on the perpetrators. Then in 1958, Martin was stabbed in the heart by a deranged black woman in Harlem; doctors said if he had sneezed, he would have died.

He also was jailed numerous times, the most traumatic imprisonment coming in 1960 shortly after the Kings moved to Atlanta, the headquarters of the newly formed SCLC. He had been sentenced to six months of hard labor in a remote Georgia penitentiary on charges stemming from an invalid driver's license. Coretta feared he would be killed in prison.

His incarceration was cut short only through the intercession of John F. Kennedy, who called Coretta from the campaign trail to offer his help.

When Robert F. Kennedy, his younger brother and campaign manager, heard about the call, he went into a rage, fearful that the show of support for the civil rights leader would cost his brother crucial votes in the South. According to an account included in Henry Hampton and Steve Fayer's 1990 oral history of the civil rights movement, "Voices of Freedom," the future attorney general told an aide that when he "thought about King in jail with that sentence, and screwing up our politics in this country and maybe losing the election for my brother," he got so mad that he called the sentencing judge and persuaded him to free the charismatic leader. King was released the next day.

News of John Kennedy's support for King was spread through pamphlets disseminated in black churches on the Sunday before the election. The Massachusetts Democrat wound up defeating GOP nominee Richard M. Nixon by 100,000 votes. "The most startling component of Kennedy's victory," according to historian Taylor Branch, "was his 40% margin among Negro voters," who historically had voted Republican.

"It is my belief that historians are right when they say that [Kennedy's] intervention in Martin's case won the presidency for him," Coretta wrote years later.

Plunged into the movement so soon after marrying, the Kings had little time to develop a normal family life. Martin traveled constantly: He was in jail or away on movement business when Martin III and Dexter were born in 1957 and 1961, respectively, and nearly missed the arrival of Bernice in 1963.

Although he often asked Coretta to stand in for him at rallies when he had to be elsewhere, he usually wanted her to stay home and raise their family. Thus, she rarely joined her husband on the front lines of marches, which bred resentment. As she pointedly told a reporter once, "My husband says, 'You have to take care of the children.' "

He may have had other reasons to keep her at home, according to biographers and former colleagues.

Rev. King had affairs with other women and grew particularly close to one woman, according to David J. Garrow in his Pulitzer Prize-winning 1986 book "Bearing the Cross, Martin Luther King Jr., and the Southern Christian Leadership Conference." Garrow wrote of how the FBI bugged King's hotel rooms and sent a sampling of its evidence of his extramarital couplings to SCLC headquarters.

Ralph David Abernathy recalled in his 1989 memoir of the movement, "And the Walls Came Tumbling Down," that the movement leader had been unfaithful on the night before he was killed. But these assertions of infidelity were dismissed by Coretta, who said in Garrow's book that she would not allow such suspicions to taint "the very high-level relationship" she enjoyed with her husband.

Family finances were another strain. Martin gave away most of his modest income; in the early days in Atlanta, they lived on his salary of $6,000 a year from Ebenezer Baptist Church, where he co-pastored with his father, and some lecture fees. He kept none of the $54,000 in Nobel prize money, even though Coretta had wanted to set aside $20,000 for their children's college funds. But Martin "felt that the prize was an award to the movement in general, rather than to him individually, and that the entire amount should be used in the struggle and not for the benefit of his family," according to Garrow.

Despite Martin's desire for Coretta to remain at home as much as possible, he encouraged her participation in another movement. She had been a member since her college days of the anti-war group Women's Strike for Peace. At Martin's urging, she joined a delegation of the group that went to Geneva, Switzerland, in 1962 for atomic test-ban talks. She also was a member of the Women's International League for Peace and Freedom. In 1969, she would lead a quarter of a million people on the first "moratorium" on the Vietnam War in Washington, D.C.

"I think, on many points, she educated me," Martin said in an interview with Arnold Michaelis in 1967, the year he finally broke with other civil rights leaders on the issue of speaking out against the war. "I wish I could say, to satisfy my masculine ego, that I led her down this path; but I must say we went down together, because she was as actively involved and concerned when we met as she is now."

Coretta also raised money for the civil rights movement by organizing a series of "Freedom Concerts," the first of which took place in New York City in 1964. They were modeled on a program held on Dec. 5, 1956, the first anniversary of the Montgomery boycott, in which she, Duke Ellington, Harry Belafonte and other performers told the story of the Montgomery struggle through music, poetry and prose.

Rep. John Lewis, the Democratic congressman from Georgia who marched with her husband and was an early leader of the Student Nonviolent Coordinating Committee, recalled being stirred by her performance in Nashville in 1958.

"I was struck, not just by her beauty, but by the pure grace of her presence [S]he sang, all alone on the stage, spirituals like 'Steal Away' and 'There's a Great Camp Meeting in the Promised Land,' and some old slave songs. She recited a poem or two as well. It was mesmerizing, just her by herself, a one-woman show," Lewis wrote in his 1998 memoir, "Walking With the Wind."

She eventually gave more than 30 concerts and raised in excess of $50,000 for the cause.

Coretta was at home with the children on the afternoon of April 4, 1968, when the phone rang. It was Jesse Jackson, one of her husband's top aides. "Coretta, Doc just got shot. I would advise you to take the next thing smoking."

The civil rights icon had been shot on the balcony of the Lorraine Motel in Memphis, where he had come to support a strike by sanitation workers. She was at the Atlanta airport waiting for the next plane to Memphis when word came that her husband had died of his wounds. Observers later would remark on her calm in the midst of the misery, confusion and anger spawned by his murder.

She was 40 to his 39 when he shot. They had been married for 14 years.

President Lyndon B. Johnson proclaimed a national day of mourning. On April 9, 200,000 to 300,000 mourners packed the streets around Atlanta's Ebenezer Baptist Church before falling in line behind his mule-drawn casket for a four-mile march through the city.

The funeral drew a diverse group of top dignitaries and celebrities, including Jacqueline Kennedy; Sen. Robert Kennedy (D-N.Y.) and his chief presidential rivals, Nixon and Sen. Eugene J. McCarthy (D-Minn.); Vice President Hubert Humphrey; U.S. Supreme Court Justice Thurgood Marshall; and U.N. Undersecretary Ralph Bunche. Entertainer Harry Belafonte sat behind Coretta King, who was flanked by the King family and her four children, ages 5 to 13.

Before burying her husband, King flew to Memphis to take his place at the head of the protest march by garbage workers whose plight had brought him to the city. A month later, she helped to open the Poor Peoples' Campaign that he had been planning before his death. As Abernathy recalled in his memoir of the movement, King delivered a stirring speech that called for "black women, white women, brown women and red women — all women of this nation — [to join] in a campaign of conscience." She called for welfare reform and benefits for women with children.

She was elected to the SCLC board. But while others expected her to raise her children and fulfill the symbolic role of the widow of the martyr, she wanted to be a leader and carry on her husband's work.

"This caused incredible tension within the SCLC staff," Young wrote. "Ralph [Abernathy] and the board wanted to use Coretta to raise money for SCLC, but they didn't want her to play any kind of policy role in the organization. The men in SCLC were incapable of dealing with a strong woman like Coretta, who was insisting on being treated as an equal."

Abernathy eventually was chosen to lead the SCLC. King became the custodian of her late husband's legacy.

In 1969 she began to mobilize support for the Martin Luther King Jr. Center for Nonviolent Change. She eventually raised $15 million to build the complex, which opened in 1982. Located within a 23-acre national historic park that includes his birth home, the center houses his tomb, a museum, a gift shop and archives. King ran the center as president.

Within a few years after her husband's death, she also channeled her energy into a long and difficult drive to establish a King holiday.

After repeated failures in Congress to pass a bill, the King family in 1971 backed a mule train that deposited 3 million petitions in favor of the holiday at the Capitol. Over the next several years, other endorsements came in the form of a song titled "Happy Birthday" by Stevie Wonder and successful state bills establishing a King holiday. But federal legislation was blocked by formidable opponents, including Sens. Jesse Helms of North Carolina and Strom Thurmond of South Carolina, who argued that the holiday's price tag in federal overtime would be too steep.

Finally, in 1983, black leaders approached Rep. Jack Kemp, a Republican from New York, to lead the charge. They arranged for Coretta King to personally plead the case for the holiday. Kemp would later compare his meeting with King to "sitting down with Mother Teresa." The conservative congressman agreed to champion the bill.

The legislation cleared Congress on Nov. 19, 1983 and was signed by Reagan two weeks later. Martin Luther King Jr.'s birthday became the 10th national holiday and only the second named for an American. (The first was George Washington; Abraham Lincoln's birthday is only observed in some states.)

Coretta King chaired the commission that planned the first annual celebration festivities in Atlanta on Jan. 20, 1986.

"The holiday wouldn't have happened without her," Lewis, the Georgia congressman, told the Atlanta Journal-Constitution n 1993.

The same was true of the King Center, which became a popular Atlanta tourist spot. She led the Atlanta center from its inception in 1969 until 1994, when she turned over the management reins to Dexter after a bruising battle with King Center board members who thought he was unqualified for the job. It is now headed by his brother, Martin Luther III.

Two daughters also survive her: Yolanda Denise and Bernice Albertine.

The King Center has been attacked over the years for a lack of activism, and it struggled financially. In the 1990s it began to run large deficits, and by 2005 it needed $11.6 million in repairs. The future of the center became the subject of an ugly family squabble, with Dexter and Yolanda pushing to sell the institution to the National Park Service over the objections of Martin III and Bernice.

Several years earlier the King family had tried to block a National Park Service proposal to open its own exhibit on Rev. King, arguing that it would detract from the family-run center across the street. The Kings and the Park Service eventually resolved their differences, but the dispute tarnished Coretta King's image.

Other controversies — such as selling the rights to her husband's "I Have a Dream" speech for use in cell phone commercials while limiting access to his papers by serious scholars and journalists- only sharpened the criticism that King and her family were putting personal profit before public interest.

The King estate forced USA Today to pay $1,700 plus legal fees after the newspaper published the text of Rev. King's "I Have a Dream" speech. It also sued CBS for selling a video documentary that made extensive use of the network's own film of King and the march on Washington. After the success of Henry Hampton's widely praised PBS series on the civil rights movement, "Eyes on the Prize," the estate made similar claims that film of King had been used illegally and demanded a licensing fee. The latter dispute was settled out of court for an undisclosed sum.

After a deal to sell King's papers to the Library of Congress for $20 million fell through, the King estate arranged with Sotheby's auction house to sell the archives privately, but no satisfactory buyers have been found. Meanwhile, the estate was expected to earn as much as $10 million from a 1997 deal with TimeWarner to release his speeches and writings in various media, including audio and CD-ROMs.

A self-professed workaholic who often called staff members late at night, Coretta King never took a salary from the center but supported herself through speaking fees and royalties from her autobiography and her late husband's writings.

She established herself as an advocate of women's rights and full employment in the 1970s, campaigned against apartheid in the 1980s and was a keynote speaker in 1984 at the U.N. International Day of Solidarity with the Women of South Africa and Namibia. The next year she was arrested with daughter Bernice at a rally outside the South African Embassy in Washington. In 1994, she shared the podium with Nelson Mandela after he won the first nonracial government election in South Africa.

She made news again in 1997 when she gave emotional testimony in a hearing to support reopening the case of James Earl Ray, her husband's convicted killer, who was dying of liver disease. She believed that her husband had been the victim of a conspiracy that likely involved agents of the government and that Ray, who had confessed to the crime and later recanted, was innocent. He died in 1998 before a new trial could be ordered; King called his death a tragedy.

In 2004 she finally moved from the four-bedroom family home in Atlanta that she had shared with her husband after several break-ins convinced her it was unsafe. She relocated to a condominium in the exclusive Buckhead area of Atlanta that was a gift from talk show host Oprah Winfrey.

King became a vegetarian after she began to experience serious health problems, which included atrial fibrillation, a heart disorder that caused blood clots. In 2005 she spent several weeks in an Atlanta hospital after a mild heart attack and a major stroke left her partially paralyzed and unable to speak.

She never remarried. Nor have her children married, a consequence, Dexter suggested in his memoir "Growing Up King," of the pressure of their father's towering achievements and the trauma of his violent death.

"There isn't a day that goes by that I don't think about Martin," Coretta Scott King once said. "He was my source of inspiration. Martin and I were soul mates. When he died, a part of me died."

Boscov's duties change hands

Wilkes-Barre Times Leader

WILKES-BARRE, Pa. - Boscov's Department Stores will remain an independent, family-owned business under terms of a recapitalization and restructuring that was announced Monday.

At the same time, Albert Boscov, 76, and Edwin Lakin, 82, have retired and redeemed their equity interests. Ken Lakin, son of Edwin Lakin and nephew of Albert Boscov, will take the helm as chairman and chief executive officer.

"We spent a lot of time over the past 18 months studying our strategic alternatives, including a sale of the business, and concluded that remaining family owned and operated was much better than a sale from the perspective of our customers, employees, vendors and the communities we have been fortunate enough to have been part of over the years," Albert Boscov said in a press release.

Longtime associate Tom Jacobs looked positively on the change, saying Ken Lakin will "preserve" the business model established by the chain's founders that's built on concern for the community and employees.

Jacobs said he spoke with Lakin, who told him, "I'm going to run it the way they want me to run it."

Now manager at the Neshaminy Mall store in Bensalem, Jacobs came to Wilkes-Barre in 1980 after Boscov's purchased the former Fowler, Dick and Walker -- The Boston Store. He left in 1993, went to the new store in the Mall at Steamtown in Scranton and returned to Wilkes-Barre in 1998 for a few years.

"One of the things that Wilkes-Barre did for us," said Jacobs, "it made us a real department store."

Vendors and investors took notice as Al Boscov showed off the Wilkes-Barre property that was the number one volume store in the chain throughout the 1980s, Jacobs said. "Wilkes-Barre really brought us into the department-store age."

Boscov's influence has stretched far beyond commerce. Shortly after taking over the Wilkes-Barre store, he convinced other downtown property owners to outline their buildings in white lights for the holiday season, an idea he patterned after Boathouse Row in Philadelphia.

"Wherever Albert put a store, he became a citizen of that municipality," said Curtis Montz, who stayed on through the transition and worked as an administrator at the Wilkes-Barre store until 1987.

Boscov also spearheaded the creation of the F.M. Kirby Center for the Performing Arts. An organization called "Save the Paramount" had been struggling to preserve the landmark theater on Public Square. "They were practically penniless," Montz said.

Boscov moved the effort in another direction, but kept the existing group members on the committee. "He put his money where his mouth was, and got a lot of other money."

"I drove Albert around when we were raising money," Montz said. "He was incredible."

When the first executive director didn't work out, Boscov volunteered Montz to run the refurbished theater.

"Unbeknownst to me he told the newspaper he had a guy to run the place," said Montz, who was out of town celebrating his wedding anniversary.

Boscov's influence has continued to include helping to get the downtown theaters off the ground. Al Boscov had worked with Mayor Tom McGroarty's administration, then continued his support when the Greater Wilkes-Barre Chamber of Business and Industry took over the project.

"Albert brought Wayne Anderson (the theater operator) to town," said Chamber president Stephen Barrouk. "He helped recruit this company for us."

Barrouk was pleased when told Boscov's would remain in family hands. He had accepted that the chain might follow industry trends and merge with a larger department store.

"I figured that would be a natural thing that might happen." He's hopeful new management will continue its commitment to the community. "That family has been good to Wilkes-Barre over the years. We hope it stays that way."

Boscov's was founded as a neighborhood store in Reading in the 1920s by Solomon Boscov, Albert's father and an immigrant from Russia.

Today Boscov's generates yearly sales revenue of about $1.1 billion and is the largest full-line, family-owned independent department store in the country. The company employs more than 10,000 people and has 40 stores in six states: Pennsylvania, New York, New Jersey, Delaware, Maryland and Virginia.

New chairman Ken Lakin said he expects to add 10 or more stores in the next few years.

Boscov's will continue to be 100 percent owned by the children and grandchildren of the families of Edwin and Alma Lakin, Albert and Eunice Boscov, Joseph and Shirley Boscov, and James and Shirley Boscov Holzman, Boscov said.

Neither Boscov nor Lakin were available for comment Monday.

church chat

Still tired. Trying to sleep more. Apologies to all. I'm trying to get back in blgging mode as fast as I can.

In the meantime, check out my friend Todd Long's blog of churches in Romania at www.biserica.blogspot.com. It's really cool.

Monday, January 30, 2006

The Couch Potatoes are in Your Store

Technology has freed them; can technology sell them?

Steve Kaufman, Editor, VM+SD

My father called from the den, waving a mechanical object the size of a shoebox.

He was in his favorite chair, facing our new color TV. What he was raving about, though, was not the color but the "clicker," a remote-control device allowing him to change the channel without getting up from that chair.

Looking back, the earth should have shaken. But, like the defining moment in the Henry James short story, "The Beast in the Jungle," a life-turning event is often marked not by seismic shifts but by the quiet tick of a clock. Life as we knew it was about to change forever, with the click of a hand-held device.

The way consumer goods had been marketed on television, viewers had always been relied on to stay on the couch, not getting up to change the channel. So if they watched "The Milton Berle Show" at 8, they'd keep it tuned to NBC all night. And, in the process, they'd watch each and every commercial. Brand marketers counted on it. After Miltie or Lucy or Sid Caesar were on, sales of Bayer aspirin and Philip Morris and Alka Seltzer soared the following day.

Suddenly, with the click of a remote-control device, we'd no longer have to leave the chair to change the channel. Couch potatoes were freed from those imprisoning chains of the TV marketers.

A decade later came cable TV, adding dozens of channels – many of them commercial-free – to the old three-network configuration. Then came the VCR, which allowed us to record our favorite programs on tape, watch them whenever we chose and fast-forward through commercials. Finally came TiVo, which now allows us to pause, rewind and fast-forward the television shows we are currently watching.

The result: The TV commercials we once couldn't avoid are now virtually invisible. Nobody has to watch a happy housewife sweeping the dirt away if she doesn't want to.

But consumer product marketers and agencies are still stuck in the 1950s, unbelievably still studying Nielsen figures, cost per thousand, viewer points, ratings shares and household viewing habits. For them, Lucy is still stuffing chocolates into her blouse, in black and white.

Want to sell Tide? The formula is still to buy time on "The View," "Martha Stewart," "Trading Spaces" and the myriad daytime soap operas. Never mind that the Tide-buyer is at work all day, or she's out driving carpool and soccer teams, and is loading up the DVR to watch those shows at her convenience.

When, then, is the right time to reach her? It would seem to be when she's making her buying decisions. In the store. Some forward-thinking product marketers not tied to doing things the same old way now realize that's the place to entice her with product information, enticing images or purely promotional messaging. In the aisles, on the shelves and in the checkout lines.

Once again, technology has stepped in, with the capability to deliver high-quality images that are centrally controlled, instantly delivered and immediately updated or changed or targeted.

You've been hearing about this stuff non-stop. But it's still being held at arm's length by retailers. Too expensive. Too experimental. Too disruptive. Perhaps. But it might also be a mistake to wait until it's too well-tested, by your competition and others.

Even the most conservative marketers have acknowledged that Ed Sullivan no longer rules Sunday night; that millions would rather pay for the cutting-edge programming of HBO than sit and watch "Joey" for free; that TV viewers now make the rules.

Couch potatoes are free at last – and they're in your stores.

it's been a long day

Not in a talkative mood. No time to research articles tonight. I'm going to bed. Check back later today.

Sunday, January 29, 2006

Seeing Fakes, Angry Traders Confront eBay


SAN FRANCISCO, Jan. 28 — A year ago Jacqui Rogers, a retiree in southern Oregon who dabbles in vintage costume jewelry, went on eBay and bought 10 butterfly brooches made by Weiss, a well-known maker of high-quality costume jewelry in the 1950's and 1960's.

At first, Ms. Rogers thought she had snagged a great deal. But when the jewelry arrived from a seller in Rhode Island, her well-trained eye told her that all of the pieces were knockoffs.

Even though Ms. Rogers received a refund after she confronted the seller, eBay refused to remove hundreds of listings for identical "Weiss" pieces. It said it had no responsibility for the fakes because it was nothing more than a marketplace that links buyers and sellers.

That very stance — the heart of eBay's business model — is now being challenged by eBay users like Ms. Rogers who notify other unsuspecting buyers of fakes on the site. And it is being tested by a jewelry seller with far greater resources than Ms. Rogers: Tiffany & Company, which has sued eBay for facilitating the trade of counterfeit Tiffany items on the site.

If Tiffany wins its case, not only would other lawsuits follow, but eBay's very business model would be threatened because it would be nearly impossible for the company to police a site that now has 180 million members and 60 million items for sale at any one time.

Of course, fakes are sold everywhere, but the anonymity and reach of the Internet makes it perfect for selling knockoffs. And eBay, the biggest online marketplace, is the center of a new universe of counterfeit with virtually no policing.

EBay, based in San Jose, Calif., argues that it has no obligation to investigate counterfeiting claims unless the complaint comes from a "rights owner," a party holding a trademark or copyright. A mere buyer who believes an item is a fake has almost no recourse.

"We never take possession of the goods sold through eBay, and we don't have any expertise," said Hani Durzy, an eBay spokesman. "We're not clothing experts. We're not car experts, and we're not jewelry experts. We're experts at building a marketplace and bringing buyers and sellers together."

Company officials say they do everything they can to stop fraud. The company says only a minute share of the items being sold at any given time — 6,000 or so — are fraudulent. But that estimate reflects only cases that are determined by eBay to be confirmed cases of fraud, like when an item is never delivered.

Experienced eBay users say that the fraud goes well beyond eBay's official numbers, and that counterfeiters easily pass off fakes in hundreds of categories.

"EBay makes a lot of money from a lot of small unhappy transactions," said Ina Steiner, the editor and publisher of AuctionBytes.com, an online newsletter. "If you've lost a few thousand dollars, you might go the extra mile to recover it. But if you've lost $50 or $20 you may never be able to prove your case, and in the meantime eBay has gotten the listing fee and the closing fee on that transaction."

The Tiffany lawsuit, in addition to accusing eBay of facilitating counterfeiting, also contends that it "charges hundreds of thousands of dollars in fees" for counterfeit sales.

In 2004, Tiffany secretly purchased about 200 items from eBay in its investigation of how the company was dealing with the thousands of pieces of counterfeit Tiffany jewelry. The jeweler found that three out of four pieces were fakes.

The case will go to trial by the end of this year, said James B. Swire, an attorney with Arnold & Porter, a law firm representing Tiffany. The legal question — whether eBay is a facilitator of fraud — is a critical issue that could affect not only eBay's future but Internet commerce generally, said Thomas Hemnes, a lawyer in Boston who specializes in intellectual property.

"If eBay lost, or even if they settled and word got out that they settled, it would mean they would have to begin policing things sold over eBay, which would directly affect their business model," Mr. Hemnes said. "The cost implied is tremendous."

But eBay members like Ms. Rogers have little desire to wait for court decisions; they say that the uncontrolled flood of fakes is driving down the value of the authentic goods.

For the past few months, Ms. Rogers and three women she met on eBay who are also costume jewelry buffs have banded together to track the swindlers they say are operating in their jewelry sector. "People have faith that eBay will take care of them, but it doesn't," Ms. Rogers said. "EBay has done nothing."

Carrie Pollack, who sells jewelry from her home in Sudbury, Mass., and is part of Ms. Rogers's group, said an authentic Weiss brooch of good quality could command $150. But she said the profusion of counterfeits had confused the market and diluted the value of such a pin to as little as $30.

"It's a situation that's facing all of us in the jewelry world, and I suspect other decorative arts as well," said Joyce Jonas, an antique jewelry specialist in New York. "It's totally out of control."

Over the past few months Ms. Rogers and her team have reported to eBay more than a thousand jewelry listings they believe to be fakes; only a few listings have been removed.

The women say that by watching the listings they have uncovered a ring of a half-dozen or so counterfeiters, most of them living in Rhode Island within a few miles of one other. They say the sellers supply one another with fake jewelry, conceal the fact that they are buying from one another to boost their seller status, and regularly dole out positive feedback to each other to fool potential buyers.

Ms. Pollack was unaware of the abundance of counterfeit pieces on eBay when she paid $360 for what she thought were genuine pieces of Weiss jewelry. She demanded a refund from the seller, who refused.

Ms. Pollack said it wasn't until she filed a formal complaint with PayPal, eBay's online payment system, that the seller offered to refund her money. Since then, she has sent eBay officials a raft of evidence pointing out the presence of the counterfeits, including an independent appraisal from Gary L. Smith, a gemologist in Montoursville, Pa., who declared the five brooches Ms. Pollack sent him to be unmistakable fakes.

This reporter, too, sent a butterfly brooch with "Weiss" stamped on the back, purchased for $12.99 recently from one of the alleged counterfeiters, to Mr. Smith. He determined that there was nothing vintage about it — certainly not the very new glue used to hold in the glass stones. (In a subsequent phone conversation, the seller, Garnet Justice, who lives in Leesburg, Ind., said she had "no idea" whether the pin was authentic, and offered a full refund.)

Antoinette Matlins, another gemologist, also purchased five vintage pieces from the sellers tracked by Ms. Rogers's group to determine their authenticity. She found them to be cheap knockoffs worth less than 10 percent of their sale prices.

But she was not surprised. Whether online or off, she said, "fraud is rampant in any venue where you are looking for a steal."

EBay's feedback system that allows buyers to post negative reviews of bad sellers is supposed to protect customers like Ms. Pollack. Yet all of the alleged counterfeiters had consistently positive ratings.

Ms. Steiner of AuctionBytes.com said this situation was not uncommon. Buyers and sellers are often reluctant to leave bad reviews, lest their own reputations suffer.

EBay does not allow members to contact other potential buyers to warn them of possible fraud. Otherwise, said Mr. Durzy, it would be too easy for someone to try to ruin the reputation of a legitimate rival.

Ms. Rogers said she had no qualms about breaking the rules by contacting buyers about fakes she spots. In November, she even put up a listing that advertised a fake Christmas tree brooch from Eisenberg Ice, a vintage costume jewelry maker, just to make people aware of the fraud.

"The reason I am doing this is because eBay won't," the listing read. "Let's stop this madness — these fakes are pushing down the price of authentic jewelry."

"The frustrating part is that eBay just stands back and lets these people make thousands and thousands of dollars" while taking a fee for each transaction, Ms. Rogers said. (The company's profits rose 36 percent in the last quarter from the year before, to $279.2 million.)

After the spectacular case in 2000 when a fake Richard Diebenkorn painting was nearly sold for $135,000 on eBay, the company put in place a handful of safeguards, like the PayPal buyer protection plan, an improved system for spotting eBay policy violations, and improved detection of fraud in general. But when it comes to counterfeit goods, the problem has gotten worse.

Artwork is particularly vulnerable to counterfeiting. "The majority of things that appear on eBay are fakes," said Joel Garzoli, an art gallery owner in San Rafael, Calif.

Mr. Durzy argued that "if we began to automatically pull listings for things reported to us as fake, we could be pulling listings that are legitimate." He added that the company had to rely on trademark owners to "tell us something is counterfeit." Yet trademark owners like Tiffany say they have gotten no relief.

Ms. Rogers and her team say their efforts may be working. The number of bids on the fake vintage jewelry pieces has dropped sharply since they went into action, they say. Nonetheless, the seller who sold Ms. Pollack the knockoff is still in business and recently put up for sale a "beautiful Weiss brooch with lots of sparkle and shine." Starting bid: $9.99.

Let the Buyer Be Wary: Tips to Spot Knockoffs


Counterfeit goods are rampant on the Internet, and buyers using online auction sites like eBay are especially vulnerable. Artwork, jewelry, designer accessories, autographed sports memorabilia and other collectibles are popular among counterfeiters.

Here are a few tips for spotting fakes.

Know your merchandise. If you learn, for instance, that a certain cookie jar from the 1930's is a rare collectible and you see someone selling dozens of them at low prices, consider yourself warned that it is probably counterfeit.

Look at the starting bid price. If it is low, be suspicious. Prices that seem too enticing are a reason for wariness, according to Hani Durzy, an eBay spokesman.

Look for a certificate of authenticity from a reputable appraiser that has been scanned into the listing.

Know your seller. Take the time to look at the details of a seller's feedback. A good sign is a comment from a satisfied buyer who took the extra step to have an item appraised, then reported back on its authenticity.

If there is any negative feedback, scrutinize it carefully.

Be wary if you see that a seller has listed dozens of identical items.

If you buy an item that you believe is counterfeit, and you used PayPal, you are likely to have recourse under the PayPal buyer protection system (pages.ebay.com/paypal/buyer/protection.html).

In an effort to streamline the process of reporting suspicious listings, this spring eBay will include a "report this item" button on each listing.

Saturday, January 28, 2006

mid-season renewal

Good news! Big Green extended my employment contract through the entire tax season.

Originally, I was only supposed to work through February 17, but my office leader liked my work so much that I was the only "peak time" employee that took the short coure she wanted to keep.

Project May Lure Macy's, Wegmans

High-End Mall Proposed Near I-95

By Nikita Stewart
Washington Post Staff Writer

WOODBRIDGE, Va., January 26 - Macy's and a high-end Wegmans supermarket could be the anchor stores of an upscale mall proposed by a regional and national leader in outlet shopping that owns Potomac Mills Mall and wants to tap into Prince William County's burgeoning wealthy population.

The Board of County Supervisors will vote Feb. 7 on whether to approve a Mills Corp. proposal that includes the two retailers, a 150-room hotel and 500 luxury loft apartments. The project, called Potomac Center, would be near Potomac Mills, just east of Interstate 95 and south of Opitz Boulevard.

Board Chairman Sean T. Connaughton (R) said the public seems to want more expensive dining and shopping options.

"It's been an interesting proposal because normally we are told by folks that they don't want retail, but because this application puts forth some higher-end restaurants and retail, we've heard positive comment from citizens," he said.

The project, which the county Planning Commission passed 6 to 2 on Jan. 18, still needs supervisors' approval. "We're still trying to iron out some of the details on employment and transportation," Connaughton said.

The county's Comprehensive Plan calls for office space at the location where Mills wants to build, said Pat Thomas, a county planner for Potomac Communities, Prince William's revitalization plan for the Route 1 corridor.

The Mills plan, which outlines 100,000 square feet of office space so far, falls short of the 500,000 the county wants there, Thomas said. "It's in conflict with Potomac Communities," she said.

The county and the Arlington-based company are negotiating and looking at phasing in more office space than the current plan proposes, Thomas said.

"What we don't want them to do is build all the residential, build all the retail and then build all the office at the end," she said.

Mills issued a statement Tuesday saying it will accommodate the 500,000-square-foot requirement with 100,000 square feet to be built in the first phase of the project.

The company is following other developers in creating more high-end housing and retail as the county's population grows in size and wealth. Potomac Mills, built in 1985, remains one of Virginia's biggest tourist attractions. Mills surveyed county residents and found they are driving to Tysons Corner Center, Pentagon City in Arlington and Fair Oaks Mall in Fairfax County to shop.

Jo Natale, a spokeswoman for Wegmans Food Markets Inc., said the Rochester, N.Y., chain sees the Woodbridge location as a place for expansion because of "the new housing growth, access from I-95 and the proximity to Potomac Mills, a regional draw."

In recent years, Wegmans has expanded into the Washington area, opening supermarkets in Sterling and Fairfax in Virginia and Hunt Valley in Maryland.

Lerner Enterprises, the Bethesda-based developer of Tysons Corner and Dulles Town Center, is a partner with Mills in the Potomac Center.

Canada Losing A Piece of Its Past

336-Year-Old Hudson's Bay Co. Agrees to Buyout by U.S. Investor

By Doug Struck
Washington Post Foreign Service

TORONTO, Jan. 27 -- The Hudson's Bay Co., which once owned nearly one-third of North America and helped build Canada by feeding a 17th-century beaver-pelt craze, is being sold to a South Carolina billionaire.

The board of directors of HBC ended the search for a buyer for Canada's largest chain of department stores by agreeing Thursday to accept a $980 million offer from Jerry Zucker, a Charleston financier and HBC minority shareholder.

Zucker, 55, whose holdings include chemical and textile companies and the South Carolina Stingrays hockey team, has promised to continue operating the unprofitable Bay stores and plans to reinvigorate them. But the purchase by an American of a company so long entwined with Canadian history is a blow to that nation's pride.

"I'm very upset about it. This is a Canadian store. It is the first Canadian company, and now the Americans are buying it," said Themi Kartakis, 54, as she browsed in the home-appliances section of the Bay store in downtown Toronto on Friday.

The store was festooned with yellow clearance-sale signs to move the winter stock, and shoppers who came in from the grip of Toronto's cold talked of their sentimental attachment to the Bay stores.

"It's so traditional Canada. It always felt like home here," said Stella Proestus, 57, a Canadian who now lives in Greece but makes a point to stop at the Bay when she returns. "It's our youth. Our memories. It's the gifts that you gave that were wrapped with paper that said 'The Bay.' "

The company's memories go back 336 years, when it secured a charter from the king of England to give fur traders in French Quebec some competition in the New World.

A group of gentlemen-adventurers set up a series of summer trading posts to collect furs from trappers and Indians. They gave the natives colored beads and silk ribbons, then knives, axes and sturdy blankets. The blankets are still sold at the Bay. In return, the company was able to load its ships with beaver pelts, which were then manufactured into a shiny felt cloth used to make hats that became a rage in Europe.

As creeks were "beavered out," trappers and the trading posts moved farther into the wilderness, exploring and claiming the land. Hudson's Bay Co. eventually laid claim to 3 million square miles. Three of its trading posts became provincial capitals -- Winnipeg, Edmonton and Victoria -- and the outposts served as a check against encroachment by Americans from the south.

"They helped keep out the infernal Americans for a long time," said Ian Radforth, a professor of history at the University of Toronto. "When some American fur traders started moving into what we call the northwest, Hudson's Bay was there to say, 'This is our monopoly.' "

In 1870, under pressure from the crown, the company reluctantly transferred most of its land to the new dominion of Canada. Slowly, the company shed its remote connections -- it sold its stores in the far north of Canada in 1987 to a chain called the Northern -- and concentrated on urban retailing. HBC is Canada's premier chain. In addition to the 98 Bay stores, the company owns 294 Zellers discount retailers, 56 outlets of Home Outfitters -- a kitchen, bed and bath box-store chain -- and 118 small general-merchandise stores called Fields. The company has 70,000 employees.

HBC was better at fur trading than retailing. The company's fortunes have declined slowly since 1981, owing to growing competition from U.S. retailers. The company lost $38 million in the third quarter of 2005. Zucker, who already owns a 19 percent interest in HBC, had publicly complained that the management of the company was lackluster and unresponsive. He offered to buy the whole company in October. The board refused, but when no other buyers were interested, they asked for and accepted a slightly sweeter offer this week.

"Hudson's Bay Company is a great Canadian icon," Thomas d'Aquino, president of the Canadian Council of Chief Executives, said from Davos, Switzerland, where he is attending the World Economic Forum. "It is arguably the Western world's oldest company."

He said it is "sad" that the company could not continue with Canadian ownership but noted that foreign ownership in Canadian firms may increase as a byproduct of free trade and open investment policies.

Canadians periodically wring their hands over the sale of their institutions to the Americans. The country's gold-standard hockey icon, the Montreal Canadiens, is owned by a Colorado investor, George Gillett Jr. Molson, the Canadian everyman's beer, merged with Coors. Tim Hortons, a ubiquitous sandwich-and-doughnut chain close to Canadian hearts, is owned by Wendy's, but the American fast-food giant said it would soon spin off its Hortons holdings and list the offering on the Toronto Stock Exchange.

But that fear "is largely misplaced in a globalized world," said Karl Moore, a management professor at McGill University in Montreal. "If someone thinks it's more valuable and they happen to live in the United States, that's life."

In fact, Canadians proportionately own more assets in the United States than the reverse, he said. In 2004, U.S. investors put about $217 billion into Canada, while investors in Canada, with a little more than one-tenth the population, put about $134 billion into their southern neighbor, he said.

Canadian companies own Learjet Inc. parent Bombardier Inc., Brooks pharmacies, Circle K stores and Aldo shoes, among other brands operating in the United States, Moore noted.

There was less public angst this week than there was when the Bay company was briefly courted by Target Corp. in August 2004. As the company continued to lose money, its fate became inevitable.

"I suspect there will be a bit of weeping and wailing, but not too much," said Richard Talbot, president of Talbot Consultants International Inc., a Toronto-based retailing expert. "It's really just nostalgia. At the end of the day, the Canadian consumer is looking for the best product at the best price. They don't care who owns it."

Friday, January 27, 2006

January 26 article - finally!

At long last, after a couple of edits, the article on Divinity Spa finally ran yesterday. I thought it came out pretty nice. See what you think.

song of the day | january 27, 2006

Lights - Journey Listen

Another Outsider Falls Casualty to Nike's Insider Culture


Nike executives, who are fond of starting meetings by playing videos of Olympic runners triumphantly crossing the finish line, say that it takes 20 years to become an insider at the famously insular sneaker company.

William D. Perez, Philip H. Knight's hand-picked successor as chief executive and an avid marathon runner, was given 13 months - enough time for a sprint.

After repeated clashes with Mr. Knight, Nike's founder and the father of the company's clubby, competitive culture, Mr. Perez stepped down and will be succeeded by the co-president of the Nike brand, Mark Parker, who has been at the company for more than 25 years.

One area of disagreement was Mr. Perez's effort to strengthen ties with Nike's biggest retail clients. Mr. Knight rarely spoke with executives at national chains such as Finish Line. In one of his first gestures as chief executive, Mr. Perez visited the headquarters of several chains, charming the stores but upsetting Nike's sales staff.

Mr. Knight, in a conference call yesterday, said that Mr. Perez had failed to "wrap his arms around this place" and that his tenure was "a situation where the cultural leap was too great."

But according to several former executives and industry analysts, the reasons for Mr. Perez's abrupt resignation - which Mr. Knight effectively ordered - say as much about the inability of Mr. Knight to adapt to his role as chairman as it does about Mr. Perez's ability to fit in.

"It is more about Phil Knight's ego than Perez's performance," said Jeffrey A. Sonnenfeld, an associate dean at the Yale School of Management who had spoken to Mr. Perez about once a month over the last year. "It is a question about identity. Some people won't relinquish until they die."

For his yearlong tenure, Mr. Perez will receive a compensation package worth more than $14 million, with Nike reimbursing him $150,000 for club memberships and spending $3.6 million to buy his house in Oregon and pay for remodeling.

Mr. Perez quarreled with senior executives over several issues, but at the heart of the disputes, according to several people briefed on the matter, was his failure to adapt quickly to a culture that prizes product innovation and the sanctity of the Nike brand.

Mr. Perez, for example, believed that the Nike brand had largely saturated the high-end market - Nike controls 90 percent of the market for sneakers priced over $100 - and should grow by introducing more exclusive lines to lower-end retailers.

So he lowered the minimum purchase requirement for chains like Famous Footwear and Shoe Carnival to 10,000 from 25,000. But some Nike executives believed the move "cheapened the brand," said John Shanley, an analyst at Susquehanna Financial Group who tracks the company closely.

At the same time, Mr. Perez upset both of Nike's co-presidents, Mr. Parker and a fellow veteran of more than 25 years, Charlie Denson, by seeking a review of the company's operations, particularly its European businesses, which have lagged behind those in the United States.

"Anything he was asking, anything he was looking at was upsetting the two co-presidents," Mr. Sonnenfeld said. "Basically, anything he did was not the way it was done."

Mr. Perez, the former head of S. C. Johnson & Son, the consumer products company behind Ziploc bags and Windex glass cleaner, was credited with trimming expenses at Nike while cultivating its brand in China, where Nike made products but had not sold them.

His short-lived tenure sheds some light on the cult of personality around Mr. Knight, who has become as much an icon of Nike as the swoosh that appears on its shoes. He stepped down as chief executive in 2004, but executives said he remained a dominant figure behind the scenes.

As a result, outside executives have been kept on a short leash - and, when they challenge the Nike orthodoxy, find themselves sidelined or forced to leave.

Ellen Turner, recruited by Mr. Knight in 1999 from Kinko's to become Nike's chief marketing officer, lasted six months. George Porter, persuaded to leave his job as president of Levi Strauss in 1997 to run Nike's American operations, only made it 11 months.

"It is a very insider culture," said one former Nike executive, who left the company within the last five years and spoke on condition of anonymity, citing a new employer's rules prohibiting media interviews. "If you don't win them over quickly, you're in trouble."

Mr. Parker, who succeeds Mr. Perez, is a consummate insider. He joined Nike in 1979 and has crisscrossed the company, holding management positions in design, product development and marketing.

Mr. Knight, who acknowledged that he sought the resignation of Mr. Perez, said that Mr. Perez's trouble fitting in at Nike "led to confusion."

"We were operating at 80 percent, and I did not see that getting any better."

Federated Department Stores sees room to upgrade merchandise

By Teresa F. Lindeman, Pittsburgh Post-Gazette

PITTSBURGH - The venerable, relatively conservative company that for decades operated the Kaufmann's department stores may have underestimated how much its customers were willing to pay for the right clothes.

That was the assessment of the staff at Cincinnati-based Federated Department Stores Inc. when they did a quick study last summer of the almost 500 department stores they were buying in a $17 billion merger with St. Louis-based May Department Stores Co.

In many cases, "We believe that May had been undershooting their customer," Chief Financial Officer Karen M. Hoguet told analysts yesterday during a discussion of Federated's earnings projections.

While analysts would welcome any success Federated has in nudging up average merchandise prices, the company's short-term financial projections were bleak enough to send its shares down $2.44 on the day, closing at $68.37.

The retailer predicted a loss of 5 to 15 cents per share for the quarter ending in April, far below the 73-cent average profit expected by six analysts polled by Thomson Financial Network. Officials said sales should pick up later in the year, with significant improvement in 2007 and a return to "historical peak levels of profitability" by 2008.

The company still expects to find $175 million in cost savings this year as a result of merging the organizations, plus another $450 million next year and beyond.

By September, officials expect all stores being converted to Macy's, including its landmark Downtown store, with new signs in place when a celebratory ad campaign begins.

Federated this weekend begins clearance sales at many of the 70-plus stores -- including three in the Pittsburgh area -- that it is weeding out because of overlap between its existing chain and former May stores. In the last week, it has said that more than 800 positions would be cut in Allegheny County with the closing of Kaufmann's stores at Monroeville Mall and South Hills Village and a Macy's at Ross Park Mall.

Federated officials have said they hope to hire the majority of the affected employees.

They also hope to start offering local customers more of what they want, using what they believe to be better systems than May for tailoring store merchandise assortments based on customer demographics and preferences.

For example, while Western Pennsylvania customers in general have a reputation as being value-oriented, those at the Monroeville Mall Macy's may turn out to be more traditional than those at Ross Park Mall's store, and the clothes would be stocked to fit those needs.

It's expected that the tweaking of merchandise will improve sales, partly by allowing Federated to sell more expensive clothes.

Thursday, January 26, 2006

Janette Carter Dies at 82

Associated Press

Janette Carter, the last surviving child of country music's founding Carter Family, who in recent years preserved her parents' oldtime style with weekly performances, has died. She was 82.

Family members said Carter, who had battled Parkinson's disease and other illnesses, was taken to the Holston Valley Medical Center on Tuesday. Her family said she appeared to be improving for a time, but died on Sunday.

Carter was the daughter of A.P. and Sara Carter. Her parents and her father's sister-in-law Maybelle Carter formed a singing trio discovered in 1927 when talent scout Ralph Peer came through the Tennessee-Virginia border town of Bristol to record mountain music.

When her brother Joe died last March, Janette Carter became the last surviving child of the original group's members. (The best known of her generation to present-day listeners was country star June Carter Cash, a daughter of Maybelle and wife of Johnny Cash. Carter Cash died in May 2003 at age 73. Her husband died later that year.)

Following the death of her father in 1960, Janette Carter dedicated her life to preserving not only the Carter Family music, but the folk and country music of Appalachia.

One result of that effort was establishment of the Carter Family Fold in Hiltons, Va.

"It's good for younger people to know this kind of music," Janette Carter said in a 2002 Associated Press story. "There was a time when music told a story; it wasn't just some beat."

On his deathbed, she said, her father "called me over and said 'Janette, I want you to continue the music the way we'd done it.'"

At the time of the 2002 interview, she was still giving concerts every Saturday at the Carter Family Fold, an auditorium built from railroad ties and school bus seats near the family farm in Hiltons. She played autoharp.

"It's really remarkable how well Janette carried on her family's legacy by helping create the Carter Fold and what that has grown into from such humble beginnings," said Bill Hartley, executive director of the Birthplace of Country Music Alliance in Bristol. "Thanks to the foundation she built with the Carter Fold, her family legacy lives on."

In September, Carter was given the Bess Lomax Hawes award by the National Endowment for the Arts, which recognized her lifelong effort to preserve and perform Appalachian music.

A.P., Maybelle and Sara Carter recorded "Bury Me Under the Weeping Willow," "Little Log Cabin By the Sea," and "Poor Orphan Child" with a sound and harmony that was unheard of at the time and immensely influential on country music ever since. In 2003, the Library of Congress celebrated the 75th anniversary of their first recordings with a concert on the National Mall in Washington.

somebody agrees with me

One of my oft-repeated phrases these days is “I don’t know who, but somebody is reading Retail Therapy!” The first time I noticed it was after my spring fashion story last year. I suggested adidas Stan Smith tennis sneakers for the season, and there was a run on them locally. I couldn’t even get a pair!

Occasionally, I’ll get fan mail. Some of it is very positive, some is rather bitchy, but still, it proves the column is making a difference in the local media.

Last week was a first, though. Mention of my article on Kohl’s and Boscov’s made it to the Letters to the Editor page. Carol Amburgey of Goodview, Virginia, sung the praises of Boscov’s to the masses based on the prompting of my article. It was not directly aimed at me, of course, but it reinforced what I was saying, though she did a more thoughtful rendition of the accolades than my simple chart.

I am humbled. Maybe somebody from Boscov’s will read what we have to say and bring one of their fine stores closer to us.

costco has everything!


Proof positive that you can find anything under the sun at Costco: The warehouse retailer is now selling custom coffins.

We're not kidding! Check out the caskets at Costco.com.

Costco coffins can be purchased online and at selected stores at wholesale prices that range from $924.99 to $2,999.99 (shipping is included). It's a little more complicated than buying a coffee pot, but Costco helpfully explains the rules. For example, you have to notify the funeral home within one business day of placing your order, and the return policy is strict. You can only send it back if the coffin is damaged; don't even think about returning it used.

And for those of you who like to think ahead, you can pre-plan and pre-order in advance. Just make sure you have room in the basement to store the thing. Questions? Costco has a toll-free customer service number you can call 24/7 and talk to a licensed funeral director from the Universal Casket Co. While funeral homes must accept a Costco casket--the Federal Trade Commission requires this--caskets can only be purchased from and shipped to 25 states and the District of Columbia. You're out of luck if you live in the other half of the country.

"Costco's attempted end-run around the psychological walls and religious anxiety most of us have around death is simple, reductive and awfully persuasive," writes columnist Erin Aubry Kaplan in the Los Angeles Times. "Such naked truth in marketing would serve us well in other areas where taboos and emotion cloud our judgment and cost us money, like electoral politics."

Wednesday, January 25, 2006

Kroger muscles up store brands

Lisa Biank Fasig
Cincinnati Business Courier

In the retail industry, some of the biggest battles for shoppers are not occurring between supermarkets and mass merchandisers. They're taking place across the grocery aisle.

In few places is it as evident as at Kroger. Over the past several months, the 2,500-store chain has quietly been pulling its Kroger-branded fabric softeners, dishwashing liquids and other household products and replacing them with a more upscale, stylish-looking brand.

No, it isn't Mr. Clean or Lysol or Method. It is another in-house label, Everyday Living, and in a matter of months the line could approach as many as 2,000 of the more than 8,000 private-label goods Kroger produces.

The switch itself might be considered a minor undertaking, but the motivation is not. Every day, Kroger fights for consumers within its stores, on its own shelves. And increasingly, it is winning.

"Retailers are feeling a tremendous amount of power today because they are the ones in the driver's seat," said Brian Sharoff, president of the Private Label Manufacturers Association. "Twenty, 30 years ago, retailers were playing second fiddle to national brands promoted on TV. The balance is now changed and the pendulum has now swung to the retailers."

This is largely the result of the consolidation of the grocery industry, once populated by scores of regional chains but now dominated by a handful of national mega-merchants. Private-label brands, once known as no-frills, might have been introduced to distinguish retailers from their rivals, but now they're proving effective in competing against national brands. In turn, they've become more stylish, with selling points other than their low price.

These days, private labels make up about 15 percent of all product sales -- $51.6 billion in 2005, according to ACNielsen (that figure does not include Wal-Mart). That's up from $47.4 billion in 2001.

But at Kroger, private labels comprise roughly 24 percent of its $56.4 billion in grocery sales, and more than 31 percent of the items it sells. And while Kroger has yet to go full-force into the heavy-duty household items, such as laundry detergent, the advancement of Everyday Living could be an indication that Kroger will go head-to-head with mid-tier manufacturing brands, such as Joy.

"Kroger is making a superb strategic decision to move to the Everyday Living category because the brand has much more cachet," said Burt Flickinger III, managing director of Strategic Resource Group, a New York-based retail consultant. "The path to higher consumer satisfaction and profitability is through a bigger and better portfolio of private brands."

The curious factor in all this competition is that Kroger and its vendors happily use each other's resources. While 55 percent of Kroger's private-label goods are made at one of its 42 factories, many of its products, including its household cleaners, are made in plants owned by its vendors. Likewise, its suppliers have been known to enter into deals where Kroger will make specialty products for them and get exclusive distribution.

Kroger agreed that shelf space is at a premium. "We are always taking a hard look at our brand lineups and discontinuing those items that aren't moving," spokesman Gary Rhodes said in an e-mail. And he said Kroger's private brands are performing "very well" against manufacturers' brands, "as evidenced by the continued growth of our corporate brand shares."

Where does this leave companies such as Procter & Gamble? Company spokesman Terry Loftus said there is a place for both private labels and branded products. He said Procter competes by offering "price plus performance," as well as innovation, which is key in categories such as laundry soaps, experts said.

Image, they say, also is key. Goods hidden away in a pantry are more likely to be private label than those served to company.

"The more status-conscious a brand is in a category, the less likely private label works," said Charles Cerankosky, an analyst covering Kroger for KeyBanc Capital Markets. "They're much more likely to buy private-label aspirin than toothpaste. They're much more likely to buy private-label milk than serve private-label liquor."

But maybe not for long. Albertsons Inc., one of Kroger's biggest rivals, has won industry awards for its store-brand cognac, called Origine. Target's Archer Farms label easily looks like a small-farm alternative to Kellogg's or Stouffers.

And 13 of Kroger's Private Selection products, its top-shelf private-label, have earned the Good Housekeeping Seal of approval, a significant selling point.

"If the retailers are mega-retailers and they have power, then private label will be along for the ride," said Sharoff, with the Private Label Manufacturers Association. "The brands are a reflection of their power in the marketplace."

CBS, Warner to form new network, close UPN, WB


NEW YORK - U.S. television viewers will have one less commercial broadcast network to choose from next fall, as the struggling WB and UPN networks merge to form a single new entity aimed at capturing younger viewers.

The new CW network, to launch in September 2006, will be a 50-50 joint venture of UPN parent company CBS Corp. and Time Warner Inc. , which controls the WB.

Tribune Co. , which holds a minority stake in the WB, will not have any ownership interest in the newly merged broadcaster, which will combine such shows as UPN's "Everybody Hates Chris" and the WB's "Gilmore Girls" under one roof.

Executives said CW would be run more cost-efficiently than UPN or WB and would likely turn a profit at launch. They did not address how many layoffs or how much in cost savings would be created by the consolidation.

UPN and the WB, both formed 11 years ago, have each struggled to build their ratings and achieve profitability with programming aimed at younger viewers than the 18-to-49-year-old audience regarded as the advertising preference for the Big Four broadcasters -- ABC, CBS, NBC and Fox.

The merger comes as the most obvious sign yet that the increasingly fragmented U.S. television market is incapable of supporting as many as six commercial networks.

"Five might be one broadcast network too many," said Bob Thompson, head of Syracuse University's Center for the Study of Popular Television.

"UPN was approaching a point where we were hoping to break even, and we were getting close," CBS Chief Executive Les Moonves told reporters. "The long-range plan looked far better with this (new network)."

Barry Meyer, CEO of Time Warner's Warner Bros. Entertainment, added: "We saw coming down the pike a challenged landscape to keep (the WB) alive. There's a very good chance that the (new) network will be profitable from the get-go."

The companies expect the newly merged network to reach 95 percent of the country.

Tribune said its 16 UPN broadcast stations signed 10-year affiliate agreements with the new network. Similarly, CBS said its 12 UPN stations signed 10-year affiliate deals.

The two station groups reach 48 percent of the country. The companies expect the remainder of the affiliates for the new network to come from a combination of WB and UPN stations.

The Fox network, a unit of News Corp. Ltd. , owns nine TV stations that are currently UPN affiliates, and those stations will seek new programming, News Corp. spokesman Andrew Butcher said. "Every change is an opportunity," he added.

The CW will use the WB's current scheduling model, which consists of Monday through Friday nights from 8 to 10 p.m. Eastern time and Sundays from 5 to 10 p.m. Eastern. It will also will include a Monday through Friday afternoon bloc from 3 to 5 p.m. Eastern and a five-hour Saturday morning bloc of children's shows.

The WB (for Warner Bros.) and UPN (for United Paramount Network) both launched in January 1995 targeting younger, more female-skewing audiences than their larger network rivals.

The WB practically invented the 12-to-34-year-old demographic of teens and young adults, with an emphasis on female viewers, though 18 to 34 is considered its advertising sweet spot. Besides "Gilmore Girls," its prime-time lineup includes "Smallville," "Everwood," "Supernatural," "Reba" and reality show "Beauty and the Geek."

UPN likewise has focused on a female-oriented 18-34 crowd, with many of its shows -- including current shows "Everybody Hates Chris," "Girlfriends" and "Eve" -- aimed primarily at an African-American audience.

CBS shares rose 3.7 percent, or 95 cents, to $26.80 in late day trading on the New York Stock Exchange. Time Warner shares rose 1.4 percent or 23 cents to $17.32. Tribune shares fell 0.8 percent or 25 cents to $29.65.

(Additional reporting by Derek Caney)

Sneakers Get Higher Tech, Higher Priced

Air bags and motors, anyone? Makers are in a continual race for the flashiest athletic shoe.

By Greg Johnson
Los Angeles Times Staff Writer

The latest models are decked out with flashing lights, air bags and a speedy motor that delivers more torque.

It's not the hot new offerings from Toyota or BMW, but the next generation of high-performance athletic shoes.

Nike Inc. will begin selling a $160 running shoe today that, for the first time, incorporates a heel-to-toe air-filled cushion that offers more comfort and durability. In May, Adidas will counter with a $250 basketball shoe packing a motor with "153% more torque" and lights that blink when the heels are ready to run, jump or dunk.

The world's dominant athletic shoe and apparel companies are betting that buzz generated by their costly shoes will provide an updraft for the rest of their athletic gear.

But the high-tech sneaker war prompts the question, what's next?

"In their attempt to build in such sophistication and functionality, they could get to the point where consumers basically say, 'I give up,' " said Peter Sealey, chief executive of Los Altos Group, a Bay Area consulting firm.

Like previous models, the high-end shoes will appeal mainly to hard-core athletes and trend-conscious consumers. Shoes that retail for more than $100 accounted for just $611 million of the $8 billion that Americans spent on running and basketball footwear during 2005, according to NPD Group, a Port Washington, N.Y., market research company.

Marshal Cohen, the company's chief industry analyst, says that only 24% of running shoes sold are worn by runners and that just 34% of consumers who buy basketball shoes step onto a court.

Shoe companies will keep chasing the perfect blend of technology and fashion. Engineers and designers talk of future footwear that would be as comfortable as form-fitting socks and made from ever-lighter materials that are increasingly durable.

"If I knew what the magic blend was, I'd be talking to you from my yacht in St. Tropez," said Richard J. Heckmann, chairman of Carlsbad, Calif., sporting goods company K2 Inc., which manufactures performance-oriented shoes for skateboarders. "It sometimes comes down to magic, luck or who's wearing it on 'The OC.' "

Twenty-five years ago, engineers at Nike, based in Beaverton, Ore., first replaced relatively heavy foam cushioning with a lighter, more durable air bag. The Air Max line made its debut in 1981, and sales got a significant boost in 1987 after a designer cut a window into the sides of shoes so that customers could see what replaced the cushioning.

"It's hard bringing a new shoe to market unless it first has shelf appeal, something that sets it apart from the others," said Tim Geis, senior vice president for Indianapolis-based Finish Line Inc., which operates more than 500 stores. "If the shoe looks good and the technology is there, people will buy it."

Some marketers use a bit of show and tell.

Finish Line is inviting consumers to tread on oversize air bags stationed in its stores to get a feel for Nike's most expensive running shoe, the Air Max 360. Nike commercials will feature tennis player Maria Sharapova, baseball star Alex Rodriguez and quarterback Tom Brady to extol the virtues of running on air.

Adidas-Salomon of Germany added a window last year to display its first "intelligent" shoe so that consumers could see the equipment in the sole, said Stephen Pierpoint, the project manager for the adidas_1 shoe.

The shoe, which will be launched this year, will have a key card so that wearers can activate a microprocessor-controlled motor to experiment with the heel, which automatically adjusts itself.

And, given the increasingly short shelf life of shoes, both companies soon will be back with new models.

Apple Computer Inc.'s iconic iPod has proved that technology isn't enough — the product also has to look stylish.

In the performance athletic gear market, "it's a given that the product is going to function," Pierpoint said. "Fashion doesn't come first, but if we get the [performance] formula right, we'll create a great-looking product."

Nike and Adidas have picked a relatively good time in the industry's economic cycle to introduce their new shoes. Sales of basketball and running shoes that cost $100 or more tumbled by 19.4% during 2004 but soared by 46.4% last year.

Athletic shoes had dropped by 6% to a four-year low in the American Customer Satisfaction Index. "The culprit is price," said University of Michigan professor Claes Fornell, who directs the survey. "Customers perceive declining value for money throughout the industry."

Fornell noted that although overall athletic shoe revenue was up during 2005, so were prices — 5% higher for men and 10% for women.

Though consultant Sealey suspects that many consumers will tire of the technological tweaks, history suggests that the new-and-improved parade won't slow. "Gillette introduced the first two-edged safety razor in the 19th century, and I read something the other day about them coming out with a five-blade razor."

"How hairy can we be?" analyst Cohen said with a laugh. "If the second and third blade don't do the trick, will the fourth and fifth really do any better?"

Federated changes boost Web site

By Bloomberg News

Federated Department Stores Inc.'s conversion of stores to the Macy's brand name is giving a boost to Macys.com, CEO Terry Lundgren said.

"I used to think of it as a decent sized store," Lundgren said of the Web site. "Now, I think of it as a very, very big store with the single best potential." He was speaking on a panel on online retailing at the National Retail Federation annual convention Tuesday.

Federated, the second-largest U.S. department-store operator, is selling chains it acquired as part of its $11 billion purchase of May Department Stores Co. and converting more than 400 May stores to the Macy's nameplate by September. Online sales in 2005 probably climbed 22 percent to $172 billion, said Carrie Johnson, research director of Forrester Research Inc., who was moderating the panel.

When Federated converted its own Rich's and Burdine's nameplates to Macy's last year, "Macys.com went up substantially," Lundgren said. The Web site has several hundred million dollars of annual sales, he said, without being more specific.

Macys.com's growth rate is well above the average for Federated's stores, with bridal and home merchandise important parts of that business, he said. Apparel and accessories also are growing.

"There is zero limit for what resources we are using to reinforce the Macys.com business," Lundgren said. "Eventually, it could be a very important business for us. We are more focused on it because we have a brand we are growing nationally."

It will be a while before the online business is as profitable as the department stores, he said.

Under Federated's restructuring, 11 of May's nameplates, including Marshall Field's and Filene's, will disappear, and Federated has said it will shed 80 stores. It also has said it will cut 6,200 jobs.

The retailer had sales of $21.5 billion in the first 11 months of its fiscal year, which ends this month.

Cincinnati-based Federated's shares jumped $1.78, or 2.4 percent, to $74.73 in New York Stock Exchange composite trading Jan. 13. They have climbed 30 percent in the past year. U.S. markets were closed Monday for the Martin Luther King Jr. holiday.

Forrester is based in Cambridge, Mass.

Tuesday, January 24, 2006

Steely Dan Man Goes Solo

Fagen to bow first solo effort in a decade, first-ever solo tour

Rolling Stone

Steely Dan frontman Donald Fagen will release his third solo album, Morph the Cat, in March. Whereas his 1982 debut The Nightfly viewed the future from an adolescent's eyes, and 1993's Kamakiriad viewed it from middle age, Morph, says Fagen, "is looking toward the endings of things."

Despite the subject matter -- with songs like "Security Joan" (about a sexy airport agent) and "Brite Nitegown," as well as fabulous Steely-esque phrases like "Rabelaisian puff of smoke," "Artic mindbath" and "ten milligrams of Chronax" -- Morph is by no means glum.

Fagen will support the record with his very own theater tour -- his first solo show since high school. "I've never done it before," he says. "I might do a few Steely Dan things that I particularly like, but it'll mainly be my stuff."

Speaking of Steely Dan, Fagen reports that Walter Becker, the other half of the Rock & Roll Hall of Fame duo, is at work on an album of his own.

January evolves into a hot month for retail sales

Lorrie Grant

At one time, January was a month for staging huge sales promotions to clear merchandise, but now it's a key selling period for retailers.

As recently as a year ago, retailers would incrementally discount merchandise during the month, ratcheting down prices to move out holiday and winter inventory. They'd keep clearing goods until mid-February before filling racks and shelves with spring offerings. The extended period of discounting meant they closed the fiscal year (Jan. 31 for most) with a period of slim profit margins.

But several factors have come together to raise the importance of January in the retail year and cause retailers to give it more attention. This year, merchants began displaying fresh spring goods at full price alongside clearance items in early January.

"Consumers benefited from a new round of markdowns and new product flows," says Todd Slater, retail analyst at Lazard Capital Markets.

Reasons for January's lift:
*Gift-card redemption. Sales of gift cards for holiday gifts continue to increase. The majority -- up to 80% -- typically are redeemed by the end of January. Anticipating millions of consumers armed with gift cards showing up after the holidays, retailers moved to stimulate that spending by putting out more fresh merchandise.

It's a profit opportunity because gift cards are frequently used to buy full-price items, and consumers often spend more than the value of their gift cards, says Pat Conroy, national managing principal of the consumer business practice at Deloitte Research.

"Retailers that quickly begin to identify what gift-card holders are buying and stock sufficient quantities of merchandise should reap stronger sales and margins," he adds.

Department stores stand to gain from the trend because they tend to sell a great quantity of gift cards -- and can make the most from full-priced goods. "Department stores should be the biggest beneficiaries of gift-card redemptions in January," Citigroup retail analyst Deborah Weinswig said in a recent report, noting that the transaction total for a gift-card redemption tends to be about 40% greater than the card's value.

*Expected middle-class spending. Consumers earning $22,500 to $75,000 are expected to loosen their grip on their wallets after spending cautiously during the holiday shopping season, according to management consulting firm Retail Forward.

"Better incomes, investments and home buying among these households, which account for nearly half of total spending, have triggered the expected improvement in spending for January," says Steve Spiwak, an economist at Retail Forward.

*The football effect. Consumer electronics were among the hottest segments in retailing for the holidays, and fancy new flat-screen and high-definition televisions were among the most popular.

Mix the fancy new models with January's glut of high-stakes football -- from the college championship, through the National Football League playoffs and the Super Bowl -- TVs have just kept selling.

"This year, probably more than others, the growth in high-definition and flat-panel televisions in particular is attracting more people to the marketplace more than anything else," says Michael Vitelli, senior vice president of consumer electronics at Best Buy.

Food Lion Plans 2 New Store Brands in D.C. Area

Ylan Q. Mui
The Washington Post

WASHINGTON - Food Lion LLC, the area's third largest grocery chain, said yesterday that it will convert some of its stores to new high- and low-end brands, an unusual strategy driven by the splintered demographics of food shopping.

By the end of the year, some of the chain's 60 stores in the Washington area are to be transformed into high-tech gourmet markets named Bloom while others will become Bottom Dollar, a no-frills discounter. Some stores will continue to operate as Food Lion.

"We realize that the Washington market is so diverse," Food Lion spokesman Jeffrey Lowrance said. "It is definitely not a one-size-fits-all market."

The company said it has not determined which stores will be converted.

Traditional grocers have been under attack in recent years. Big-box stores such as Wal-Mart have undercut them on price and sales volume while high-end chains such as Whole Foods Market and Wegmans Food Markets Inc. have beat them on quality and customer service, leaving grocery stores languishing somewhere in the middle.

The area's two largest chains, Giant Food LLC and Safeway Inc., are redesigning stores to fight back. Giant plans to open eight stores this year under a new prototype with expanded meat, bakery and seafood departments. Safeway has remodeled about 30 of its local stores and plans to turn all of its locations into "lifestyle centers" within five years.

Food Lion's approach is the most dramatic so far, covering the entire spectrum of shoppers. Lowrance said the company is not worried that its new stores could end up cannibalizing the old ones. "They're differentiated enough that they can serve a broader range of customers, and that's the whole idea," he said.

Food Lion spent two years studying international trends and grocery store concepts to develop Bloom, which features upscale offerings, such triple-cream St. Andre cheese. Products are grouped by category -- breakfast items such as milk, eggs, cereal and pancake mix would all be found in the same aisle, for example.

The stores also employ cutting-edge technology, such as handheld scanners and updated self-checkout lanes. Wine kiosks would be able to call up information electronically on appropriate food pairings.

Bottom Dollar takes the opposite strategy. Its stores have no frills -- no bakery, no deli and customers bag their own groceries. Products are displayed on pallets or in bins. Lowrance said the stores are aiming for a fun environment: Employees are to wear T-shirts with slogans like, "I work here and still can't get better prices."

Food Lion operates 1,300 stores in southeastern and mid-Atlantic states. It opened five Bloom and three Bottom Dollar stores in North Carolina last year, but the Washington area would represent its first use of the strategy in a major market.

Food Lion, owned by Brussels-based Delhaize Group, is the third most-frequented grocery chain in the Washington area, according to Scarborough Research. In a recent poll of shoppers, the market research firm found that 27 percent had visited a Food Lion within a week. Fifty-eight percent had gone to Giant, while 40 percent shopped at Safeway.

Though Delhaize does not release sales information on its Food Lion subsidiary, chief executive Pierre-Olivier Beckers in a statement credited the chain for much of the firm's U.S. sales growth. The fourth-quarter gain from U.S. operations rose by 4.4 percent to $16.6 billion from 2004.