European Stars And Stripes (Newspaper) - April 9, 1989, Darmstadt, Hesse                                Page 18 the stars and stripes business news expert  continued Safe for . Dollar Good news never seems to last very Long where inc Dollar is concerned. Just one week ago the Buck was toying with the idea of busting through the 1.90 Mark level. This week it seems to be heading in the opposite direction. And i ctr Oil economist with Citibank in Frankfurt West Germany thinks the Dollar could continue its fall. I Don t Sec much upside potential said olt who follows foreign Exchange markets closely for Citibank. Oil figures the . Economy is slowing Down and she expects interest Rales in Ameri Ca to begin falling by term. I expect to see inc Dollar in the 1.80 Mark to 1.90 Range and then As interest rates fall in the ., we ii see even More downward pressure on the Dollar of said. High interest rates in the United states com pare Wilh those available in Europe and the far East have been lending the Dollar its strength of late. In recent Days . Interest rates have held a four percentage Point Edge Over the prevailing rates in West Germany and a six Point spread Over those in Japan. " that interest Rale differential tends to attract investors to Dollar denominated investments and thai keeps the Dollar moving higher on world markets. /. To hear of Tell it though that interest rate Gap will be narrowing in the months ahead. As she sees it inflation will continue to be a probe can in West Germany and elsewhere in Europe later this year even As it comes under control in the United states West Germany reported significantly higher inflation figures for january and february Oil pointed out and that has set off inflation jitters in Europe. Oil s Uncertain whether the Wesl German Bundesbank will be. Able to get away without further interest rate increases in its backyard. But even if interest rates in West Germany Are held at their present level Oil expects american rates to fall by mid to late summer. All of that should serve to move the Dollar below 1.80 Marks Over the Long term olt said. Al midday Friday the Dollar was trading in the neighbourhood of 1.s690 Marks in Europe. That was Down slightly from thursday and Down significantly from the 1.8975-Mark level at which it started the week. Against other Curren cies the Dollar was trading in the neighbourhood of 132 yen and 6.307sfrench francs. The military Exchange rate also fell Over the past week moving from 1.87 Marks at the Start of the week to l.8i Marks for a Dollar at, end. Thai latter rate will apply to military Bank ing transactions at least through monday based on a Price fixing in Frankfurt Friday afternoon. One Factor that could influence the Dollar s value. Over the Short i rim was the release late Friday of . Unemployment and Job growth data for March unemployment fell to 5 percent from  in february and reached a 15-year Low in the process. Job growth however was Moder ate with Only 150,000 new jobs added. And most of those were in the service sector of the econ omy. It s Likely thai the jobs data will be widely perceived As an indication that us. Economic growth is abating. That would be in line with Oil s and Citibank s expectations. The last time monthly Job growth totals were any lower was in August 1988, when Only 154,000 new positions were added to . Payrolls. On said Citibank had been expecting 2 i 0,000 new jobs to be created on inc month com pared with 280,000 in february and a slight increase in the , unemployment rate 10 5.2 percent. Flagging a i5r i slower growth than expected res Europe stores source cafes Europe Sas maro.11 Joel Olast year s Exchange sales fell Short of expectations by Charlie Bowden Munich Bureau Munich West Germany last year was sup posed to be the Exchange service s third consecutive. Banner year in Europe but when All was said and done the Bloom fell from the Rose. Despite a nearly 6 Percy no increase in. Total sales at cafes s european exchanges concessions and food facilities Gross profit last year dipped 6 percent and net earnings fell a whopping 14 percent. Only food sales Mcl of Dicia Praise actions Alf other sales categories were less than cafes s planners had expected for the year. Army and air Force exchanges concessions and food operations tallied some $1.72 billion in sales last year 6 percent above 1987, but 4 percent below the $1.8 billion thai had been forecast. It was a disappointing year yes but not from the standpoint that our customers went away said Frank Hardt cafes Europe s chief of operations. Hardt blamed the mild weather for sales falling Short of the Mark. The major problem we be had the last iwo Yean in sales has been a Lack of cold weather which caused us to have a surplus of Winter clothing ski Wear and related sports equipment he said. In fact cafes was forced to slash prices on much fits Winter Slock by up to 50 percent in order to Clear it from the Shelve. Vij i nothing accounts for about 20 percent of total retail sales in european exchanges and Winter Wear accounts for 13 percent of clothing sales Hardt said. The Wimer Clear Ance sales thai were instituted to Clear the shelves stripped s20 million off cafes s Bottom line for 1988, Hardt added. That actually represents losses from the past two Winters because both sales periods were put into fiscal year 1988 for accounting purposes. A / an increase in personnel costs and operating expenses and an unusually nigh inventory shortage of lost stolen or otherwise unaccounted for items affected the earnings picture last year. All of these Cut directly into earnings. Personnel costs were up 6 percent to $304.8 Millie in. Operating expenses increased 7 percent to s71.3 million. Year end inventory shortages were nearly.$14 million almost double the previous yearly y. The drop in net earnings 1aslycar reversed a Strong upward trend that began Tii late-1985 when the Dollar began its nose dive and  returning to cafes exchanges to do their shopping. Exchange service earnings nearly doubled Between 1985 and 1987. Those increased earnings meant More Money contributed to army and air Force morale support coffers. How Ever that will change this year As the morale welfare and recreation dividend for1988 probably will be aboul$l9 million less than projected at the beginning of the year according Loon Exchange official the Exchange service s dividend is normally based on projected earnings for inc year with inc two services Retina half to support their programs the other half is Tun noted into capital improvements such As renovations and construction of new facilities. The cafes dividend to mar in 1987 was 1130 million Here s a Quick look at other fiscal facts from a fes s 1988 annual report from a customer standpoint credit shopping was up in i9ss, continuing a trend started in july 1986, when european exchanges began accepting credit cards. Customers in Europe charged $85.5 million Worth of purchases last year up 6.7 percent and they used the Exchange s deferred payment plan to buy $147 million in goods an increase of 5 percent. Credit purchases including deferred payment a. Counted for 16 percent of total retail sates in 1988, food sales last year provided the brightest spot for cafes with sales increasing 10.5 percent to $193 million. That was it Tine with Exchange officials projections prior to the Start of the year.  that positive trend should continue this year hard said As the Exchange continues to expand its food operations. Plans Call for the opening of 100 fast food outlets in the year ahead ranging from Chicken shacks and pizza Parlours to mexican Cansinas. We expect continued very Strong growth in the food business Hardt said. He predicts another Dou ble digit sales increase this year. I among retail sales in european exchanges watches showed the greatest gains last year spurred by the introduction of the $39.95 dress watch that department re corded a 56 percent increase in sales As customers bought roughly 300,000 of the specially priced watches. The Only other department that came near that gain was recorded music and videos which turned in a 28 percent sales increase. Computers now a separate retail department had an 18 percent gain in sales last year and Hardt predicts that it will continue to be a major growth area for european exchanges looking ahead Exchange officials arc hoping to regain much of the ground lost my 988. Strong Spring clothing sales have gotten this year off to a Good Start Hardt said. But the Exchange service official said he expects Winter clothing sales to be weak again this year. Even with a cold Winter we expect Winter clothing sales will be soft hard said. Because of discount offered by cafes inc past two Winters most  cars already have their cold Walher shopping needs taken care of for a few seasons. Merchants offering new special on cd Frankfurt. West Germany is merchants Dank will hold a two Day special on certificates of de posit monday and tuesday offering up to 10.625 per cent interest to depositors willing to invest their Money for 12 months. The limited offer is the third investment special offered by merchants in the last six months. The offer is Good at All Community Bank branches in West Ger Many Greece and the Netherlands rates offered vary by tie amount of Money a depositor is willing to invest and the length of time for which it s invested Rales Range from 9.i percent interest for a $1,000 three or six month certificate to 10.625 per cent interest on a Deposit of $50,000 for a full year