Steep discounts drive retail sales up

The WSJ on B1 writes that April retail sales are expected to look better in a report this morning than they have in months, but they’re being driven by steep discounting—even at above-the-fray luxury merchants like Neiman Marcus—that could end up hurting retailers. An analyst says a measure of promotions has increased by a third from last year.

Retailers generally try to maintain profits by selling as much as they can at full price. But sales have fallen more sharply than many anticipated since orders were sent to suppliers several months ago…

Faced with higher food and fuel bills and sagging home prices, consumers have cut back on discretionary spending. Overall, retailers are expected to report that April sales at stores open at least a year rose 2.2% from a year earlier, according to researcher Retail Metrics. But the numbers are deceptive: In addition to padding by heavy discounting, April sales this year were buoyed by an extra shopping day due to an early Easter holiday.

Wanted: Cayne and Greenberg cage match

The NYT has an interesting story on the eruption of high-level hostilities at what’s left of Bear Stearns. Seems old-timer Alan “Ace” Greenberg and Jimmy “Bridge Man” Cayne are fussing as their “fortunes have now sharply diverged.”

Mr. Greenberg, who cashed out the bulk of his Bear fortune through regular sales over the years, has just signed a lucrative agreement with JPMorgan to stay on as vice chairman emeritus. He will be paid 40 percent of the trading commissions he generates. And he recently began work on his memoirs.

Mr. Cayne, by contrast, has become a public piñata — blamed by Bear employees, a presidential candidate and others for the firm’s untimely end. His ties with Bear will be formally severed in June.

Although he still holds the title of chairman, he spends his days in relative seclusion, seeing few outside of the tight circle of his family, his two assistants and his lawyers. He personally lost about $900 million when Bear Stearns’s stock price collapsed.

Mr. Greenberg wonders about Mr. Cayne’s continued presence at Bear Stearns. “I don’t understand why he comes in,” Mr. Greenberg said. “He is not employed here anymore.”

Ouch.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.