FTI Consulting Issues New U.S. Retail Report, Forecasting 4.5 Percent Increase in Holiday Spending

FTI Consulting Issues New U.S. Retail Report, Forecasting 4.5 Percent Increase
                             in Holiday Spending

Online Sales Again Will Capture Much of the Season's Sales Growth

PR Newswire

WEST PALM BEACH, Fla., Nov. 14, 2012

WEST PALM BEACH, Fla., Nov. 14, 2012 /PRNewswire/ -- FTI Consulting, Inc.
(NYSE: FCN), the global business advisory firm dedicated to helping
organizations protect and enhance their enterprise value, today released its
2012 Retail Report. The report, titled "A Real Cliffhanger," analyzes the
state of the retail sector in the United States and finds resilience in
consumer spending on goods despite ongoing global economic uncertainty and
threats posed by the impending fiscal cliff. Consumer confidence is
approximately 25 percent higher entering the 2012 holiday shopping season than
it was a year ago. Included among the Retail Report's highlights are the

  oU.S. Holiday Spending Will Increase 4.5 Percent: The report forecasts a
    4.5 percent increase in U.S. holiday spending for 2012 and a growing
    dominance of online sales during the season. Our retail industry experts
    expect fewer instances of extreme price discounts persisting throughout
    the season this year, a trend that accounted for a substantial portion of
    2011's 6.2 percent holiday spending increase, as the bottom line for many
    large chains did not benefit from such aggressive pricing strategies.
  oOnline Retail Sales Will Grow by 13.5 Percent in 2013: The report projects
    that online retail sales in the United States will grow by 13.5 percent in
    2013, surpassing $250 billion, and eventually will top $460 billion in
    2020. We also believe market share of online sales will approach 15
    percent of retail sales by 2020 and plateau near that percentage. The
    online channel has bounced back sharply from the recession and has
    consistently grown at about three times the rate of store-based sales.
    Consumers have become savvy using the Internet for research and shopping
    and implicitly trust it as a transaction medium. The broad use of
    smartphones and tablets gives consumers the unprecedented ability to
    comparison shop anytime, anywhere.
  oSome Retail Sectors Still Have a Way to Go: FTI Consulting estimates that
    if the economic recovery continues at its current pace, it will have taken
    between five and seven years for sales in many non-essential product
    categories to reach their pre-recession levels. While retail sales have
    improved since 2010, the progress has been relatively modest compared with
    the sharp declines experienced during the recession. Sales of autos and
    categories impacted by the housing bust, including home improvement,
    furniture and appliances, still trail pre-recession sales levels of 2007.
    Nominal sales growth in these categories remains positive but not strong
    enough to make up all ground lost in 2008-2009.
  oDepartment Stores — a Mixed Bag: Department stores have been more
    challenged than any other store category to stay competitive in today's
    cutthroat retail environment. While several department stores still are
    struggling, there have been enough turnarounds and encouraging stories to
    convince us that the department store can continue to be a vibrant
    shopping venue and that the right mix of pricing, service and selection
    can produce a winner, even if it's not a luxury chain.
  oOnline Channel Also Poses a Threat to Retail Real Estate: As the online
    channel continues to alter the way consumers shop and retail executives
    approach selling merchandise, a less obvious casualty is retail real
    estate. We find that the percentage of retail sales taking place in
    brick-and-mortar stores have been declining at an accelerating rate since
    2001 — a period that coincides with the proliferation of online selling.
    The traditional practice of opening new stores aggressively and tolerating
    underperforming ones continues to be altered by the success of online
    selling. Landlords in all but premier shopping destinations in major
    markets will be challenged to adapt to this new reality without
    diminishing the appeal and profitability of such properties. Many mall
    properties in smaller suburban and exurban locales that now are
    uncompetitive are at risk of becoming obsolete in the near future.

"Overall, consumer spending trends have been fairly impressive considering the
financial anxieties still felt by many Americans," said Bob Duffy, Global
Co-leader of the FTI Consulting Corporate Finance/Restructuring practice.
"Despite slowing momentum in recent months and lingering concerns over income
growth and employment prospects, sales growth trends have managed to stay
within the range of historical averages. We find consumer spending across a
number of product and store categories to be fairly encouraging and anticipate
this vigor will continue through the holiday shopping season. High-end
retailers, as well as deep discount and off-price chains, should perform well
in the current environment."

Steve Coulombe, Senior Managing Director in the FTI Consulting Corporate
Finance/Restructuring practice, said, "The online channel remains a game
changer for large retail chains, and many have turned what once was regarded
as a threat into an opportunity. Online is taking a bigger slice of the pie,
and we are seeing large product categories with smaller but sizable online
market shares such as apparel, home furnishings, toys and sporting goods
becoming the moving force behind today's growth of online sales."

The 2012 Retail Report considers retail sales in the GAFO categories (general
merchandise, apparel, furniture and home furnishings, and other miscellaneous
categories) and non-store sales for November 2012 through January 2013. The
report was conducted by our team of leading retail industry professionals with
deep expertise in corporate finance, strategic, operational improvement,
liquidity management, and turnaround and restructuring services. The full
report is available at www.fticonsulting.com/ftiretailreport2012.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping
organizations protect and enhance enterprise value in an increasingly complex
legal, regulatory and economic environment. With more than 3,800 employees
located in 24 countries, FTI Consulting professionals work closely with
clients to anticipate, illuminate and overcome complex business challenges in
areas such as investigations, litigation, mergers and acquisitions, regulatory
issues, reputation management, strategic communications and restructuring. The
company generated $1.56 billion in revenues during fiscal year 2011. More
information can be found at www.fticonsulting.com.

SOURCE FTI Consulting

Website: http://www.fticonsulting.com
Contact: Sherrie Weldon, +1-415-293-4408, sherrie.weldon@fticonsulting.com
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