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Here’s how Walmart, Target, and Dick’s can end theft problems

All three retail chains have complained about theft and have taken some bold steps to solve the problem. But those efforts might not be the answer.

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2 weeks ago

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Walmart plans to reopen an Atlanta location with a police substation inside the store — an extreme response to the growing problem of retail theft.

And it's not an answer for the industry. 

Adding a police station to a store is not a solution that can be plausibly rolled out industrywide. It's a grandstanding move to bring attention to the problem, which has been sharply hurting a number of major retailers.

DON'T MISS: Another popular U.S. retailer files an unexpected bankruptcy

Target (TGT) - Get Free Report Chief Executive Brian Cornell has laid out the challenge between keeping employees safe and preventing theft. He also talked about how shrinkage — the industry term for theft — has pressured the company's profit margins.

His peer, Dick's Sporting Goods CEO Lauren Hobart, during the second-quarter-earnings call outlined some specifics about how shrink has affected her company.

"Based on the results from our most recent physical inventory cycle, the impact of theft on our shrink was meaningful to both our Q2 results and our go-forward expectations for the balance of the year," she said. 

Dick's Chief Financial Officer Navdeep Gupta called theft "a meaningful headwind which represents a third of our merchandise margin decline."

It was also fairly clear that like Walmart and Target, Dick's has struggled to figure out how to reduce theft while also keeping workers safe. 

"Shrink is an industry-level problem. It's actually, it's a problem for our entire country," Hobart said. 

"We are going to fight to the extent we can to keep our teammates, our athletes, and our stores safe, and that's with increased security, with lockup cameras, and working with local law enforcement and with our industry partners.

Target has seen an increase in theft.

Image source: Justin Sullivan/Getty Images

Here's where big retail stands on shrink

Walmart, Target and Dick's are not alone in sounding the alarm on theft.

Home Depot, Walmart, Best Buy, Walgreens, and CVS have also said that shrink has been a growing problem. That's not just political rhetoric; it's backed up by the latest Hayes International shrink survey, which covers 26 large retailers:

  • 81% of retailers reported a shrinkage increase in 2022.
  • The number of shoplifters apprehended was up 50.9% with recoveries totaling $237 million, up 90.5%. 
  • Dollars recovered from shoplifters where no apprehension was made was $485 million, which was up 44.1% in 2022.

So, while increased enforcement has had some success, shrink at big retailers has still increased significantly. 

TD Insights CEO Tony D'Onofrio, an expert in retail, security, and emerging technologies, believes he has the answer. 

Here's a real solution to the theft issue at Walmart, Target and Dick's

While D'Onofrio claims to know what will work to prevent retail theft, he also knows that one solution that Walmart, Target and Dick's have all used to some extent will not work.

"Locking up merchandise to reduce shrink reduces revenue and increasingly drives consumers to alternate retail models," he wrote on his website.

D'Onofrio says the multifactor answer to shrinking shrink is technology improvements, new laws, and industry partnerships with law enforcement.

"Retail technology solutions have not kept up with the growth of the problem," he said. 

He has the same opinion on the law. "The legal framework is stuck in the past and is not keeping pace with advancements outside the retail industry," he added.

D'Onofrio, however, does say that a solution currently exists and does not require extreme measures like locked-down stores or in-store police stations.

"To effectively tackle the problem of retail shrink, strong partnerships are needed across these boundaries, especially between retailers and law enforcement," he said. 

"The good [news: Successful] models are in place in various parts of the world, but it will take different more innovative thinking to evolve to broader global adoption," he shared.

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Popular retailer Party City survives Chapter 11 bankruptcy

In a year when many companies have moved from Chapter 11 reorganization to Chapter 7 liquidation, one company has averted that fate.

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8 mins ago

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October 16, 2023

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Filing Chapter 11 takes a company's fate out of its hands. Once a company involves bankruptcy court, it enables a judge to have a say in its future.

That's why many companies seek to avoid filing Chapter 11 — or at least they enter it with a plan. 

The problem with having a plan is that things can go wrong. A lender can pull out or a buyer less favorable to management could offer a higher bid.

Bankruptcy courts have to make decisions that best benefit multiple constituencies. An offer that's best for shareholders, for example, might not be best for employees. 

Vendors and other creditors, of course, also play a major role in whether a company survives a Chapter 11 reorganization. In many cases, creditors must be willing to take less money or extend borrowing terms to enable a company to survive.     

It's a difficult dance, where the best option is often forcing the company into a Chapter 7 liquidation. Three recent examples of that — Bed Bath & Beyond, Tuesday Morning, and Christmas Tree Shops — all had filed Chapter 11 with hopes of reorganizing their debts and surviving, but they all ended up being liquidated.

That's not uncommon, but it's more likely these days when the cost of money has made finding loans at reasonable rates (or at all) much more difficult. So, it's maybe a bit of a surprise when a company makes it through the Chapter 11 process and goes back to normal operations.

Party City has closed some stores but will survive.

Image source: Shutterstock

Party City emerges from bankruptcy

The covid pandemic put Party City in a difficult place. People weren't having parties, so the chain basically sold merchandise that wasn't essential, or even relevant, to anyone.

That created a situation where the company, which was already struggling, burned through a lot of its cash reserves simply to survive. And even when pandemic lockdowns ended, there was no major comeback for the chain. People went back to having parties, but they did not go back to celebrate the events they missed.

Party City lost more than a year of birthdays, holidays, graduations and other celebrations, which forced the company into Chapter 11. That process enabled the company to make needed changes to emerge and get back to its prepandemic business. 

Party City Holdco Inc. has completed its restructuring and emerged from Chapter 11 financially stronger and well-positioned for the future, the company said in a news release.

"Through its restructuring, PCHI has substantially strengthened its capital structure by eliminating nearly $1 billion in debt, enhanced its liquidity, and optimized its Party City store portfolio by having negotiated improved lease terms and exited less productive stores. The company will move forward with nearly 800 Party City locations nationwide," PCHI wrote.

Party City changes leadership

Party City Chief Executive Brad Weston plans to step down as of Nov. 3 and will be succeeded on an interim basis by the chain's president, Sean Thompson.

"PCHI has emerged with an excellent foundation in place to drive long-term growth," Weston said in a statement. "At this juncture, with the restructuring now behind us, the timing is right to pass the baton to Sean, who I'm confident will build on the significant strides that have been made as PCHI continues to expand its market leadership and enhance the customer experience." 

The company emerges from bankruptcy with a new asset-based-loan facility of $562 million and $75 million in new investment to fund its ongoing operations.

PCHI has not publicly discussed its plan to search for a new CEO and whether Thompson will be a contender for the position.

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New research points out ways to improve tuberculosis vaccines

A new study from the University of Pittsburgh Center for Vaccine Research published today in the Journal of Experimental Medicine describes a previously…

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9 mins ago

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October 16, 2023

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A new study from the University of Pittsburgh Center for Vaccine Research published today in the Journal of Experimental Medicine describes a previously unappreciated role for a class of immune cells in the early stages of tuberculosis (TB) infection.

Credit: University of Pittsburgh

A new study from the University of Pittsburgh Center for Vaccine Research published today in the Journal of Experimental Medicine describes a previously unappreciated role for a class of immune cells in the early stages of tuberculosis (TB) infection.

The researchers found that innate CD8+ lymphocytes – a subtype of white blood cells involved in rapid immune response – are essential for curbing the disease. They also discovered that an inflammatory molecule called Interleukin-15, or IL-15, plays an important role in infection control and could potentially be used to boost the efficacy of existing and future TB vaccines.

“This is an unusual finding,” said senior author JoAnne Flynn, Ph.D., distinguished professor and chair of microbiology and molecular genetics at Pitt. “No one before us has shown that CD8+ lymphocytes make a difference early in the infection in a translatable non-human primate model, but our findings suggest that these innate immune cell populations are actually playing an important role in restraining the initial infection.”

Tuberculosis, or TB, is an airborne lung disease caused by a bacterium called Mycobacterium tuberculosis. After entering the lung, these bacteria bury deep into the tissue and begin to spread, causing the body to launch an immune response and build up clumps of immune cells surrounding the bacteria, called granulomas, in an effort to control the infection and minimize damage to the lungs.

The immune response over the course of tuberculosis infection has two phases. The first six weeks after the infection are characterized by the influx of quick-acting immune cells that rush to the site of infection, be that the airways or the lung, to kill the bug and limit the damage quickly, by all means necessary. Unlike the early innate immune response, the adaptive immune response that emerges after eight to 10 weeks of infection is more fine-tuned and aimed at precisely targeting the specific infection-causing pathogen and killing it as efficiently as possible. In general, though, the exact dynamics of the immune response in tuberculosis, and the role of fast-acting CD8+ lymphocytes was unclear.

Flynn and her team found that the infection was developing a lot faster and spreading further in macaque monkeys whose innate CD8+ cells were depleted than in monkeys whose total CD8+ T cell population was intact, or whose adaptive CD8+ T cells were removed, suggesting that innate CD8+ cells play a crucial role in limiting the infection in its early stages.

Using a technique called bacterium barcoding, researchers tracked the lineages of bacterial granulomas that formed over the course of the disease. In animals lacking innate CD8+ cells, researchers identified more bacterial dissemination across lungs and lymph nodes, suggesting that innate CD8+ cells create a “bottleneck,” preventing bacteria from establishing active infection.

Curiously, researchers found that in monkeys with depleted innate CD8+ cells, other immune cells tried to take over the function of fast responders, probably in response to IL-15. But because those cells lack the natural machinery that would enable them to deliver molecules that could kill the bacterium, the infection-clearing immune response was incomplete.

As a next step in their research, scientists are studying whether IL-15 administered together with an existing TB vaccine can increase protection and make the vaccine more effective. 

This study was a collaboration between Flynn’s lab and Philana Ling Lin, M.D., of UPMC Children’s Hospital of Pittsburgh, Dr. Alex Shalek, Ph.D., of the Massachusetts Institute of Technology, and Sarah Fortune, M.D., of Harvard University.

This research was funded by National Institutes of Health grants R56 AI139053, K12 HL143886 and 75N93019C00071, the Bill and Melinda Gates Foundation, Harvard University Center for AIDS Research (P30 AI060354) and the Harvard Clinical and Translational Science Center (KL2 TR002542).

Journal

Journal of Experimental Medicine

DOI

10.1084/jem.20230707

Article Title

CD8+ lymphocytes are critical for early control of tuberculosis in macaques

Article Publication Date

16-Oct-2023

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SwRI’s new aerospace acoustic testing system can simulate the deafening noise of a rocket launch

SAN ANTONIO — October 16, 2023 —Southwest Research Institute’s aerospace acoustic test chamber can now simulate the complex and harsh acoustic environment…

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9 mins ago

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October 16, 2023

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SAN ANTONIO — October 16, 2023 —Southwest Research Institute’s aerospace acoustic test chamber can now simulate the complex and harsh acoustic environment associated with the thunderous noise of a rocket launch to ensure that space systems can endure blastoff conditions. The test chamber is the newest addition to SwRI’s 74,000-square-foot Space System Spacecraft and Payload Processing Facility, created to rapidly respond to customers needing to design, assemble and test spacecraft, particularly small satellites.

“During lift off, rocket engine vibrations compress the air inside the rocket fairing, pulsating around the spacecraft stored within,” said Institute Engineer Kelly Smith, who oversees the facility. “During takeoff, complex acoustic waves create turbulence in the fairing, conditions we can now simulate in a test chamber right here at SwRI.”

Sound waves emitted during a rocket launch are so powerful that they are hazardous to humans and can damage a spacecraft and its payload before reaching outer space. Shaker tables can evaluate vibration effects. Evaluating whether a spacecraft can withstand powerful sound waves requires an equally powerful acoustic system, which now exists at SwRI.

The high-decibel acoustic chamber’s six speakers collectively produce up to 150 decibels, which can instantly perforate an eardrum. Each speaker is about 3.5 feet tall and weighs 1,617 pounds. All six are housed inside a high-decibel acoustic testing chamber at SwRI’s San Antonio headquarters.

“These are not ordinary speakers that you’d find at a concert,” Smith said. “These tests help ensure that systems don’t fail, with potentially mission-critical and financial implications.”

During testing, the speakers typically encircle a test article but can be moved into custom configurations, depending on the application.

“It’s rare for systems like these to exist at a research and development institute like SwRI,” Smith said. “Normally, these evaluations require third-party testing at significant expense and involve moving hardware offsite, risking damage during transport. Keeping as much of the environmental testing inhouse minimizes risk and costs.”

The system is now conducting inhouse testing, which is available to external clients.

For more information, visit https://www.swri.org/industries/space-engineering.

Credit: Southwest Research Institute

SAN ANTONIO — October 16, 2023 —Southwest Research Institute’s aerospace acoustic test chamber can now simulate the complex and harsh acoustic environment associated with the thunderous noise of a rocket launch to ensure that space systems can endure blastoff conditions. The test chamber is the newest addition to SwRI’s 74,000-square-foot Space System Spacecraft and Payload Processing Facility, created to rapidly respond to customers needing to design, assemble and test spacecraft, particularly small satellites.

“During lift off, rocket engine vibrations compress the air inside the rocket fairing, pulsating around the spacecraft stored within,” said Institute Engineer Kelly Smith, who oversees the facility. “During takeoff, complex acoustic waves create turbulence in the fairing, conditions we can now simulate in a test chamber right here at SwRI.”

Sound waves emitted during a rocket launch are so powerful that they are hazardous to humans and can damage a spacecraft and its payload before reaching outer space. Shaker tables can evaluate vibration effects. Evaluating whether a spacecraft can withstand powerful sound waves requires an equally powerful acoustic system, which now exists at SwRI.

The high-decibel acoustic chamber’s six speakers collectively produce up to 150 decibels, which can instantly perforate an eardrum. Each speaker is about 3.5 feet tall and weighs 1,617 pounds. All six are housed inside a high-decibel acoustic testing chamber at SwRI’s San Antonio headquarters.

“These are not ordinary speakers that you’d find at a concert,” Smith said. “These tests help ensure that systems don’t fail, with potentially mission-critical and financial implications.”

During testing, the speakers typically encircle a test article but can be moved into custom configurations, depending on the application.

“It’s rare for systems like these to exist at a research and development institute like SwRI,” Smith said. “Normally, these evaluations require third-party testing at significant expense and involve moving hardware offsite, risking damage during transport. Keeping as much of the environmental testing inhouse minimizes risk and costs.”

The system is now conducting inhouse testing, which is available to external clients.

For more information, visit https://www.swri.org/industries/space-engineering.

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