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PUBLISHING NEWS A shopper‘s companion, Consumer Reports still going strong ................................................................ 1 Bluff Media acquires stake in Mid-States poker tour ............................................................................... 3 Garden and Gun publisher Barbara Bing named Vice President ............................................................ 3 Magazine launches up 23.8 Percent in 2011 ........................................................................................... 4

MARKETING NEWS Can QR codes in catalogs lower PPC costs? .......................................................................................... 4 Heavy mobile users are highly engaged print consumers as well ........................................................... 6 Microsoft opens its 2-D bar code system to rival QR codes .................................................................... 7 U.S. Cellular garners 4,000-plus QR code scans from college football promo ....................................... 9

RETAIL NEWS As 2011 closes, NRF reflects on legislative victories ............................................................................ 10 Sears to own 80% of OSH ..................................................................................................................... 11

ECONOMIC UPDATE

GDP: 2.0 % in Q3 2011

Unemployment Rate: The unemployment rate fell by 0.4 percentage point to 8.6 percent

Consumer Confidence: The Index now stands at 56.0 (1985=100), up from 40.9 in October

PUBLISHING INDUSTRY NEWS

A Shopper’s Companion, Consumer Reports Still Going Strong (The New York Times 12/14/2011)

BORN in 1936, Consumer Reports had a very happy 75th birthday this year. Its business has never been better. Well, ―business‖ is not the right word, as there are no profits or losses to track: it‘s a nonprofit. But the magazine and Web site generated $182 million in revenue in the 2011 fiscal year, which ended May 31. That pays for a lot of professional testing — of cars and trucks, washers and dryers, televisions, children‘s car seats, mattresses, treadmills and cellphone plans — all told, more than 3,600 products and services a year. Consumer Reports started its Web site in 1997; by 2001, it had 557,000 subscribers. That number has grown to 3.3 million this year, an increase of nearly 500 percent in 10 years. It has more than six times as many digital subscribers as The Wall Street Journal, the leader among newspapers. And in August, Consumer Reports started generating more revenue from digital subscriptions than from print — a feat that must make it the envy of the print world struggling to make that transition. Even more

December 19, 2011

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amazingly, Consumer Reports has enjoyed success on the Web without losing print subscribers — those have held steady since 2001 at around four million. Subscribers who sign up for access to the Web site pay $26 for a year or $5.95 monthly. A smartphone app is available, and this month an iPad version was introduced, with varying price levels. ―Five years ago, the Web site was just the magazine put online, word for word,‖ says Kevin McKean, Consumer Reports‘ editorial director. Formerly, products were tested in batches, but today testing occurs whenever a new model is released. Results are quickly available online, instead of being held up for the once-a-year roundup of reviews of a particular product category in the magazine. Consumer Reports‘ online success is not necessarily a bellwether for other Web sites seeking paying subscribers, says Bill Grueskin, dean of academic affairs at the Graduate School of Journalism at Columbia University and formerly managing editor of WSJ.com. ―It isn‘t much of a leap for people to pay $5.95 a month for access to a database that will help them make a wise purchase of a $500 dishwasher or a $25,000 car,‖ Mr. Grueskin says. ―It is much harder to get consumers — particularly those trained for the past 15 years to expect content for free — to pay for coverage of metro news, football games or politics.‖ Consumer Reports has been helped by consistency in its payment policy, he says: ―I don‘t recall them ever taking the subscription wall down and then rebuilding it the next year. So customers understand that they can‘t ‗wait it out‘ while the publisher vacillates between paid and free.‖ A consistent policy of not allowing advertisements has helped Consumer Reports protect a reputation for clearsighted recommendations, untainted by commercial considerations. It also keeps its name away from use as an endorsement. Merchants whose products earn a spot on the recommended list would like nothing better than to mention it, but Consumer Reports forbids them from doing so. Well before the term ―crowdsourcing‖ arose, Consumer Reports supplemented its lab testing with surveys of subscribers, asking them to report on their experiences with various products. Its 2011 annual questionnaire drew 960,000 responses, more than double those in 2001, and included reports on the respondents‘ 1.4 million vehicles. When it comes to helping consumers buy a used car, Consumer Reports owns the mother lode of useful data. But consumers can find useful, free information elsewhere on many products. Amazon‘s customers, for example, post reviews and all sorts of information that doesn‘t always fit into the slots used by Consumer Reports. Mr. Grueskin gave an example: when setting up a Wii game console recently for his daughter, he ran into a problem. ―I found the solution on an Amazon chat board, not on Consumer Reports‘ site,‖ he says. Consumer Reports is rather set in its ways. The confusing symbols it uses for its ratings — the filled-in, partially filled-in or empty circles, in red or black — violate plenty of graphic design principles. Mr. McKean says that he is aware of the shortcomings of the circle, referred to internally as ―the Blob,‖ but that it has been hard to discard because many subscribers regard it as ―a critical part of our DNA.‖ The organization has moved to inject some youthful creativity into its culture: in 2008, it acquired Consumerist Media. The Consumerist gets three million unique monthly visitors, who snack on summaries of news stories about defective products, horrendous customer service, billing outrages and other delectable morsels.

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Mr. McKean says the Consumerist pulls in younger people who are then exposed to Consumer Reports‘ promotions of subscription products. He doesn‘t expect them to sign up, though, until they find themselves ―enmeshed in sweaty-palms buying decisions.‖ Consumer Reports continues to supply the kind of authoritative information that can ease purchase-decision anxiety. Robust at 75 — and more digital than not— it‘s the spry graybeard of the information age.

Bluff Media Acquires Stake in Mid-States Poker Tour (Folio – 12/14/2011) Bluff Media, publisher of poker industry magazine Bluff, has acquired a stake in the Mid-States Poker Tour (MSPT), with plans to immediately rebrand the event the Bluff Magazine Mid-States Poker Tour and eventually the Bluff Poker Tour. The monthly magazine—which has a circulation of about 100,000, according to Bluff Media president Eric Morris—streams poker events live on its website and also operates an online tournament database, the pokerdb.com. ―We think it‘s just a matter of time before online poker is regulated, so we think there‘s going to be another bump in the market sooner rather than later,‖ says Morris. ―It‘s a good time to diversify our business a little bit to not just advertising in the magazine but developing our brand on the land-based level.‖ Bluff declined to offer further details on Bluff‘s stake in the tour. Currently, the Mid-States Poker Tour consists of nine events per year, mostly in Minnesota and Iowa. With Bluff, the tour will up the frequency to twelve to eighteen per year, extending into cities such as Las Vegas, Biloxi and Tunica, as well as others in Oklahoma and Florida, says Morris. Morris, with help from his web and editorial teams, plans to work closely with MSPT founder Bryan Mileski to run the events, which will also be broadcast on BluffMagazine.com using a Radio Frequency Identification (RFID) poker table that allows viewers to see players‘ cards. Morris says at this point, he doesn‘t expect to bring in outside sponsors beyond the casinos hosting the events. Bluff plans to announce in the coming months an online component allowing anyone to compete virtually. Garden & Gun Publisher Barbara Bing Named Vice President (MPA – 12/13/2011) Rebecca Darwin, President & CEO of the national lifestyle magazine Garden & Gun, announced today that Barbara Bing, Publisher, has been named Vice President of the magazine. Bing became Publisher of Garden & Gun in January 2010. During her two years, she has pulled together a team of national sales representatives who have continuously broken into new categories for the magazine. Under Bing‘s leadership, the magazine‘s advertising revenue is finishing the 2011 year up 137% from 2010. ―Barbara is one of the most talented people in the publishing industry. She continues to deliver sound strategic direction that is directly responsible for much of the magazine‘s growth. Her experience and track record have been a tremendous resource for the magazine,‖ Darwin says.

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Prior to becoming Publisher of Garden & Gun, Bing was Founder and President of the Media Company, an independent media sales and marketing company in the Southeast that represented national titles published by companies such as Condé Nast, Time Inc., Meredith, and Hachette Filipacchi. Included in her portfolio were award-winning titles such as the New Yorker, Vanity Fair, New York, GQ, Gourmet, Esquire, Golf, SKI, Skiing, House & Garden, Elle Decor, and Outside. ―The past two years with Garden & Gun have been one of the highlights of my career. To work with a publication of this caliber, with a readership base that is so passionate about the content, and an advertising community that is recognizing this more and more, has been such a pleasure for me. We are heading into the New Year with strong momentum and armed with a top-notch national team,‖ Bing says. The award-winning Garden & Gun will celebrate its fifth anniversary in the spring of 2012 and is finishing 2011 with record-breaking revenues for the second year in a row. The December 2011/January 2012 Sporting issue is on newsstands now.

Magazine Launches Up 23.8 Percent in 2011 (Folio– 12/14/2011) The number of magazines launched in 2011 jumped 23.8 percent, from 193 to 239, compared to 2010, according to magazine database Mediafinder.com. Meanwhile, the number of closures fell 13.6 percent, from 176 in 2010 to 152 this year. Like last year, the food category saw the biggest gains, with 25 new titles joining the 28 from last year. Also like last year, regional magazines followed with the second-highest number of launches, at 20, though the category also saw the largest number of closures, with 21 titles folding. Bridal publications took the second-biggest hit, with 19 titles shuttered, including regional editions of Condé Nast‘s Brides as well as Atlanta, Georgia-based Get Married. The b-to-b sector appears to have seen a much healthier 2011, with 62 new titles expanding the segment, compared to just 34 in 2010. Last year, b-to-b saw more magazines fold than launch, with 47 closures in 2010 compared to 38 this year. High-profile launches this year include crossover brands such as Hearst‘s HGTV Magazine, an offshoot of the television network, and Condé Nast‘s Style.com/Print, an extension of a formerly-standalone website.

MARKETING INDUSTRY NEWS

Can QR Codes in Catalogs Lower PPC Costs? (Multi-Channel Merchant – 12/12/2011) Many multichannel merchants experimented with QR codes in their summer catalog mailings to earn a discount from the U.S. Postal Service. But few merchants reported significant results. So are QR codes, as one merchant told me, merely a "solution looking for a problem?"

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That phrase may be closer to the truth than it seems. The secret to making QR codes succeed with consumers lies in providing added value and solving consumer pain. But this requires more than a single "shop now" QR codes pointing at your home page. QR codes as navigation QR codes are the ultimate shortcut, and that is what mobile consumers value most. One of the best shortcuts consumers had available until now is search, which, of course, costs marketers money to use.

As a long-time SEO/SEM guy, I’m familiar with the causal relationship of sending a catalog and the resulting increase in "search-as-navigation" queries. The catalog sparks interest. There are fewer keystrokes in typing a search term in a search box than typing a URL. So search engines provide - and profit from - this shortcut. Search-as-navigation queries make up a big percentage of keyword search volume, particularly after a catalog drop. But QR codes have the potential of making that information retrieval process seem so last-century for consumers. Why open your browser, type a query, and sort through search engine results page ads, when you can get there directly in one click? Just open your QR codes reader app instead and scan. Consider the benefits:

Consumers can get straight to the info in a fraction of the time and steps

It’s less frustrating than typing (or speaking) queries on a smartphone

It’s less time consuming than navigating the site from their smartphone

There is a higher perceived likelihood of getting the right page when compared to searching for it (81% of leading retailer pages indexed in search engines fail to connect mobile users with relevant mobile pages, according to original research conducted earlier this year by Pure Oxygen Mobile).

And QR codes scanning apps are freely available for download by the 100 million smartphone owners in the US

The point is this: if search-as-navigation continues to be a shortcut for typing your URL, then QR-as-navigation offers an even more attractive shortcut for reaching the exact URL faster and more efficiently. This opens up exciting new possibilities for QR codes marketing strategy. Rather than burden consumers with a single home-page QR, why not aim to help users shop the catalog by providing deep QR codes shortcuts throughout? If done right, this strategy may act as an advertising shortcut for marketers, as well. QR codes as SEM shortcut If "QR codes as navigation" resonates with consumers, it gives brands an opportunity to reclaim the consumer clickstream in order to reduce ad cost. Your analytics may illuminate the strategy: If your DM induces head-term keyword traffic, consider how "QR codes as navigation" can reduce those acquisition costs. By placing a functional QR codes in the catalog along-side each highly-searched product category or subcategory, search-inclined consumers could choose whether to take the QR codes shortcut, or take the longer "search" route.

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Less expensive tail queries (product names, SKU numbers), could be reclaimed by placing a QR codes next to each product within a catalog that launches product pricing, reviews, etc. Consumers may still

decide to search of course, but they’re now given a choice of shortcuts. Unsure which category or subcategory page to link a print QR codes to? Consider A/B testing. Simply program the printed QR codes to dynamically alternate between a set of category, subcategory, or pre-loaded search result test page URLs, and default all users to the champion once established. You may want to vary the test based on platform (Android, iOS, Blackberry), time of day, geography, or combinations. The point is that by strategically integrating QR, marketers can begin to offer more compelling deep shortcuts for consumers, which then act as an alternative or a substitute for many "search-as-navigation" queries. In the process, you may be able to reduce SEM spend, improve yield, and lift margins. Marketing with QR codes may prove disruptive to SEM because it lets brands compete with, and in some

cases trump search engines. QR codes aren’t going to replace SEM, but it does bear some resemblance to SEO, providing a method for marketers to connect with search-inclined consumers at reduced cost.

QR codes are still in its infancy in the US, with many execution challenges to be overcome. It’s all too common to see catalog QR codes fail to launch due to improper URL encoding, inappropriate sizing, unnecessary QR codes bloat, or QRs that connect to error pages, inaccessible pages, or lack of mobile optimized content. However, these issues can be solved through smarter QR code technology. The more important issue for retail brands is QR codes marketing strategy: how to shape QR codes technology to help consumers accomplish their objectives in less time and hassle.

We don’t have to look very hard to see such problems. Mobile consumers know them. And I believe they’ll reward the innovative marketers who learn to see - and solve them. Heavy mobile users are highly engaged print consumers as well (Mobile Marketer – 12/15/2011) A new study from InsightExpress makes it clear that brands and retailers need to be incorporating some aspect of mobile into their print strategies. InsightExpress took a deep dive into how print media and mobile are playing together. The company found that heavy mobile users are highly engaged print consumers as well ―Based on our findings, it‘s clear that brands and retailers should be incorporating mobile into their print strategies,‖ said Joy Liuzzo, vice president and director at InsightExpress, Stamford, CT. ―If they are starting with QR codes then, they need to pay close attention to the best practices we‘ve outlined in the study. ―However, mobile and print can go beyond QR codes to take advantage of already established behaviors such as article archiving or sharing, getting more information on a product or topic and so on,‖ she said. InsightExpress looked at QR code awareness, usage and consumer desires around this content.

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When looking at publications subscribed to/read, the smartphone owners who do six or more activities daily on mobile are both subscribing to and reading more print materials than any of the other groups (smartphone or regular phone owners). This six or more mobile activities group is quite attractive as they are more engaged with print media. They have more varied interests and are more willing to connect with brands/companies via mobile. ―The biggest surprise to me was with the segment of smartphone owners that do six or more activities on their phone every day and their print media consumption,‖ Ms. Liuzzo said. ―This group is both subscribing to and reading more print materials than any of the other groups (smartphone or regular phone owners). ―For a highly engaged mobile user, this was a shock – why were they still relying on print,‖ she said. ―When we dug deeper, we found that they are more engaged with print media as well (e.g., tearing out articles to save for later, searching for a product mentioned in an article or ad, gone to a Web site mentioned in an article) which again caught us off guard. ―After looking at all this and more, it‘s apparent that print isn‘t dead in the eyes of this highly technology engaged smartphone group.‖ Engagement with print can take many forms, according to InsightExpress. Anything from tearing out an article to searching for a product online could fall into this category. InsightExpress investigated the different behaviors based on newspapers and magazines and found that magazines tend to encourage more engagement than newspapers across most activities and groups. Looking at smartphone owners who do six or more activities daily, their engagement with magazines is significantly higher than other groups. Based on this, publications and brands should consider expanding their mobile offerings to include things like QR codes and SMS. ―Bring your print and mobile teams together in 2012 and really start to explore how your consumers are interacting with print in general and your campaigns,‖ Ms. Liuzzo said. Microsoft opens its 2-D bar code system to rival QR codes (Internet Retailer - 12/13/2011) In a surprising move, Microsoft Corp.. today announced that its proprietary two-dimensional bar code system Microsoft Tag now can generate and read Quick Response, or QR, 2-D bar codes. This could be a sign that Microsoft has seen the writing on the wall—or perhaps the QR codes on the wall, not Tags. ―They have recognized that Tag will not be able to gain critical mass at this point,‖ says Dan Shust, director of emerging media at interactive marketing firm Resource Interactive. One need only look around to see that the freely available, standardized QR codes are by far the dominant player in the 2-D bar code realm. The black-and-white squares with patterns of much smaller black-and-white squares within appear on everything from magazine ads to product packages to the sides of buildings. Microsoft Tags, black squares with jagged colorful diamond patterns or images, are not much in evidence. A 2-D bar code links a shopper in the physical world to content in the virtual world. A shopper downloads a free 2-D bar code reader app on her smartphone. There are many that can read QR codes; Tags can only

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be read by the Microsoft Tag reader. She opens the app, which opens the smartphone‘s camera. She points the camera at a 2-D bar code and the app reads it, automatically opens her smartphone‘s web browser and connects her to mobile web-based content. 2-D bar codes have been used for a wide variety of promotions in retail, from e-mail sign-ups to product demonstration videos to free music downloads. Microsoft insists it is not relenting to QR codes, and instead describes the move as an expansion of 2-D bar code services to give marketers more choice if they opt to go with Microsoft for 2-D campaigns. ―Consumer confusion as to which reader to use and overall market fragmentation was a significant factor in our decision to expand the Tag platform,‖ a Microsoft spokeswoman says. ―By adding support for reading and creating QR Codes, Microsoft Tag delivers the freedom for brands to select the recognition format most appropriate for their customers, and grants customers a single app to launch those experiences.‖ Microsoft declines to reveal the total number of Tag scans, but will say that the number of scans increased 390% between October 2010 and October 2011. There is no central QR code creator or monitor, but there have no doubt been tens of millions of QR code scans in recent years. For example, for the first three quarters of 2010, QR-driven company Scanbuy Inc.‘s ScanLife reader app read 3.7 million QR codes, the firm says. That number increased 440% to 20 million for the same period this year. Microsoft contends Tags are better than QR codes because Tags can be printed at smaller sizes than QR codes and still be read, which is true, and because they offer more reliable scanning, meaning the error rate is less than that for QR codes, though some experts say the difference can be marginal. Microsoft also says Tags are superior because they are more customizable—while QR codes can include logos and designs, Tags can mimic images and are indeed more vivid. Microsoft offers a free software development kit that integrates Tag reading functionality into a smartphone application. QR codes, which debuted long before smartphones were invented and were used mainly for inventory control, had a head start on Tags, which Microsoft launched in January 2009. Microsoft entered the 2-D market after QR codes had already seen significant uptake among pioneering marketers. And QR codes were created as an open standard, and thus can be read by virtually any 2-D bar code reader, thus making them more accessible than the proprietary Tags. Marketers can easily integrate any number of free QR code scanners into their smartphone apps. ―Based on feedback we‘ve heard in the industry, marketers wanted an easy way to use a full suite of recognition technologies all in one place,‖ writes Aaron Getz, general manager of Microsoft Tag, in a blog post today. ―And with so many formats and readers on the market, there is increasing frustration among consumers over not knowing which reader to use for which code.‖ This presumes the greater number of QR code creators and users will want to switch to or add Tags. That may be a tough row for Microsoft to hoe. But some analysts say that, while QR codes are indeed the dominant force, they‘re not writing off Microsoft. ―The No. 1 reason I hear that Microsoft Tag is not used is that companies are concerned about a proprietary technology and the usual risks—being held captive in years to come, pace of innovation, etc.,‖ says Julie Ask, a vice president and principal analyst at Forrester Research Inc. ―I think the move is smart—no downside. It removes a key barrier to adoption for marketers. It‘s what we need in some ways: one reader, all codes.‖ Microsoft‘s move could mean some portion of the millions of smartphone owners with QR code reader apps shifting to the Microsoft Tag reader app. However, making consumers shift from an app they‘re comfortable with to an app with which they are unfamiliar may prove challenging, some mobile analysts say.

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But the entire QR versus Tag battle might be moot. Some mobile technology experts see a not-too-distant future where it‘s the products or pictures, not codes, that are being scanned. ―QR codes are only a stepping stone to image recognition and we will see major use of image recognition within the next two years,‖ Shust predicts. ―With image recognition you don‘t have to visually augment packaging or print ads with a special code, and that is a plus to many designers and marketers. There are some issues that will still need to be worked out; for example, tracking two identical ads in different publications. Unique QR codes make that easy right now, but I see advances in image recognition that would allow for watermarks and such that will do the same thing.‖ U.S. Cellular garners 4,000-plus QR code scans from college football promo (Mobile Marketer - 12/15/2011) A recent U.S. Cellular mobile promotion that gave college football fans at games a chance to win instant prizes by scanning QR codes resulted in 4,321 scans. U.S. Cellular worked with mobile technology solutions provider 2ergo to launch the ―Tailgate for Tickets‖ mobile campaign at eight college football venues sponsored by the wireless carrier. Attendees could scan QR codes on Segways traveling around the events for a chance to become an instant winner and enter to win a grand prize. ―The customized QR codes designed by 2ergo were able to incorporate the college team‘s mascot and colors, which really made them stand out, and this campaign was a great opportunity to educate users on how to scan a QR code with a U.S. Cellular phone if they didn‘t already understand the process,‖ said Michael Scully, market unit director of 2ergo Americas, North Arlington, VA. ―Also, the QR codes brought the fans in to talk to the representatives,‖ he said. ―If the campaign would have been executed through a keyword-to-short code instead, the fans may have missed out on the opportunity to hear about U.S. Cellular phones from the team on the Segways.‖ The QR code bridge The campaign, which ran throughout the 2011 college football season, helped U.S. Cellular bridge an in-venue marketing channel to a mobile channel by providing an engaging way for football fans to interact with the U.S. Cellular brand while using their mobile phones. The goal was to enhance the fan tailgating experience with U.S. Cellular products while increasing awareness of the brand. For the campaign, U.S. Cellular representatives traveled through the events on branded Segways adorned with QR codes created by 2ergo. Tailgaters could scan the QR codes to reach a mobile landing page that dynamically displayed whether they were an instant winner of U.S. Cellular branded promotional items or gift cards. The mobile sites also included an entry form for the grand prize of two tickets to the National Championship Bowl Game. ―The uniqueness of having representatives riding around on Segways with team-branded QR codes was a great way to get attention and draw people in,‖ Mr. Scully said.

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―Then, the ability to have one-on-one conversations with each participant went a long way in bringing personality and positive energy to the U.S. Cellular brand,‖ he said. ―Plus, having a great prize like the trip for two to the Bowl Championship game certainly helped as well.‖ Consumers could also enter to win the grand prize by scanning a QR code at their local U.S. Cellular retail stores. Participating colleges were University of Iowa, Iowa State, University of Maine, University of Northern Iowa, University of Tulsa, Valparaiso, West Virginia University, and University of Wisconsin. U.S. Cellular was very encouraged by the participation levels it saw from the effort, with 4,321 consumers scanning the QR codes and 1,074 participants winning prizes. Additionally, 2,989 people entered to win the grand prize. ―U.S. Cellular will continue to work with 2ergo to leverage new and unique mobile marketing efforts in 2012 to enhance the customer experience while driving business results,‖ Mr. Scully said. ―From reducing churn of pre-paid customers to increasing consumer engagement at sponsored events, mobile gives U.S. Cellular a wide range of innovative marketing and CRM possibilities.‖

RETAIL INDUSTRY NEWS

As 2011 closes, NRF reflects on legislative victories (Retail‘s BIG Blog – 12/15/2011) Earlier today, The Hill newspaper released its Top 10 Lobbying Victories of 2011. Listed at the very top is the National Retail Federation‘s campaign to block last-minute efforts by the banking industry to delay debit card swipe fee reforms. While swipe fee reform was a crucial win for retailers, NRF‘s legislative victories spanned a wide scope of issues. Here are some of the highlights: •In September, NRF launched an unprecedented Retail Means Jobs campaign, a multi-facted, multi-million dollar campaign to underscore the economic impact of the retail industry and push for policies that promote Jobs, Innovation and Consumer Value. In a short time the campaign has helped unify and advance the retail industry‘s public policy priorities and enhance the industry‘s voice in the political and economic arena. •Congress is heeding retailers‘ calls to level the sales tax playing field between online and brick-and-mortar retailers with the introduction of two bipartisan sales tax fairness bills, the Marketplace Equity Act and the Marketplace Fairness Act. NRF will continue its industry-leading calls to protect Main Street jobs and businesses and shutdown the $24 billion tax loophole. •We have been vocal on the need for corporate tax reform, taking a leadership role in the business community‘s RATE Coalition. NRF believes that the current tax code needs to be reformed and simplified so American companies and retailers can compete and succeed in the global marketplace. •Our leadership continues in coordinating industry action aimed at repealing the health care law‘s employer mandate and health insurance tax and managing development of the ―essential‖ health benefits package.

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NRF seeks to limit the adverse impact of the health care law in order to better accommodate the unique workforce needs of the retail and restaurant industries, and continues to push for smarter health reform that promotes higher-quality and more affordable health care coverage for both employees and employers. •In an effort to avert a potentially ‗devastating‘ freight rail strike during the critically-important holiday shopping season, NRF mobilized the supply chain community. After detailing the impact a freight rail strike could have on retailers and consumers, Congress swiftly responded. •Proposed changes to federal trucking regulations that seek to limit driver‘s hours of service could increase transportation costs, consumer prices and reduce safety. NRF continues to advocate for the current hours-of-service regulations that improve efficiency, safety and reduce accidents. •We led industry-wide efforts to restore balance and fairness in labor negotiations and opposed several pro-union and pro-labor regulations and decisions issued by the National Labor Relations Board. NRF chairs the lobbying committee which lead the fight on NLRB‘s ambush elections and micro-unionization decisions and will continue to try to halt implementation. •Along with other retail organizations and companies, NRF filed suit appealing two portions of the Federal Reserve Board‘s final debit swipe fee rules. The suit maintains that the Board unjustifiably increased the amount of swipe fees banks could collect and reduced competition among card networks in violation of the law. In 2012, NRF will begin to focus its attention on reducing the $30 billion a year retailers pay in credit card swipe fees as well. •We played a leading role in pushing Congress and the Administration to expand trade opportunities and open up new markets for retailers, and were pleased to see passage of the Free Trade Agreements with Panama, Colombia and South Korea. NRF will now focus now reforming the apparel standards in the ongoing Trans-Pacific Partnership negotiations in hopes on tearing down trade barriers. •An Internet Corporation for Assigned Names and Numbers‘ plan to hurriedly sell hundreds or even thousands of new ―top level‖ domain names was a major policy priority for NRF. Adding domain name extensions like ―.retail‖ could cost companies millions, increase fraud, harm some branding and marketing efforts, and confuse consumers. NRF has called on ICANN to proceed more deliberately and to provide further detail on the sale so retailers and consumers are better informed. •We strongly urged the Administration to move forward with reforming the travel visa process, joining a broad coalition of the business community in the Discover America Partnership. NRF welcomed legislation aimed at reforming and reducing the time it takes for foreign travelers to get American visas so that more foreign consumers can visit the United States and shop in the U.S. retail stores. •Overly broad consumer privacy bills brought serious concern, which could have prohibited retailers‘ from offering coupons and deals to their customers. NRF supports uniform laws that protect privacy and data and allow retailers to bring innovative services and products to market so that retailers can personalize the shopping experience. Sears to own 80% of OSH (Retailing Today – 12/12/2011) Reuters news service has reported that the shareholders of Sears Holding Corp. will end up with 80% of the common stock in Orchard Supply Hardware stores, following an attempt to spin off the California hardware chain into a separate unit.

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According to a regulatory filing, every 22.14 shares of Sears stock will entitle a holder to get one class A share and one preferred share of the new, separate company. Orchard Supply recently renamed itself ―Orchard‖ and embarked on an initiative to remodel its 89 stores, which stretch throughout California. The new stock will be distributed on Dec. 30. The company said it intends to list its Class A common stock under the symbol 'OSH' on Nasdaq.