Category Archives: Business/Economics

Business/Economics, Idaho, U.S.

What Economic Recovery? Idaho’s Coldwater Creek still losing money. New CEO? More stores to be closed, bankruptcy near

On 28 November 2012, women’s clothing retailer Coldwater Creek reported a loss of $20.5 million USD.  Investors were actually happy, because that was an improvement over the same quarter last year.

Coldwater Creek explained that their losses weren’t as bad as expected because sales actually went up, by 7.3% for same store sales.

Dennis C. Pence is stepping down as Chief Executive Officer, to be replaced by Jill Brown Dean (current Chief Merchandising Officer) on 01 January 2013.  Pence will stay on as Chairman, so actually no new blood is being added to the executive branch, so don’t expect any real changes.

A year ago Coldwater Creek had 366 stores, now it has 354.  They plan to close more stores throughout 2013.

According to GMI Ratings, Coldwater Creek is showing all the signs of going into bankruptcy within the next 12 months.

 

 

 

Business/Economics, U.S.

Corporate Evil: More evidence the demise of Sears & Kmart is all part of Romney/Bain style vulture capitalist scheme to intentionaly run the business into the ground!

“You make Sears sound like a liquidation play, not a retail recovery.”-from Fortune magazine

“The retail recovery is a potential upside. Regardless, you’ll see gigantic cash flows from the closing of locations, the pulling-out of the cash from inventory, work in process, and distribution centers. They’re not idiots when it comes to real estate. They understand that today’s standalone store can be tomorrow’s multi-use hotel/residential-retail center. I think Eddie Lampert [chairman of Sears Holdings] will end up being one of a few unbelievable case studies on what it means to be a long-term investor.”-answer from Bruce Berkowitz, a major stockholder in Sears Holdings

Fortune published a recent interview with Bruce Berkowitz, in which he basically said Sears and Kmart could make more profits for investors by being closed down and selling off their inventories and real estate.  I warned of this last year.

An InvestorPlace contributor, Will Ashworth, explained how the Romneyesque scheme is actually working.

For real estate, Ashworth says Berkowitz values the land property owned or leased by Sears Holdings to be about $17 billion USD.  Then there’s inventory.  Berkowitz estimates that a net profit of $2.5 billion could be made by selling off inventory. Ashworth himself is more conservative, thinking it be about a $1 billion net gain for investors.

Of course you can only sell off land and inventory by closing down the stores: “Many see Lampert using Sears as the next Berkshire Hathaway (NYSE:BRK.B), taking the proceeds of assets sales and reinvesting them elsewhere until Sears, the retailer, ceases to exist. It might take awhile, but Berkowitz is willing to patiently wait because deep down he knows Sears is worth far more dead than alive.“-Will Ashworth, InvestorPlace

 

Business/Economics, International, U.S.

Global Economic War: Japanese car production crashing in China! Japanese exports to China crashing!

29 November 2012, anti-Japanese sentiment in China is having a drastic effect on Japanese car production in the (supposedly) communist country.

Overall, the six Japanese car companies operating in China saw a 48.9% drop in production in October (compared to October 2011).  It’s even more drastic when you look at production for each company.

Mazda down 27.6%

Suzuki  down  32.6%

Nissan down 44%

Honda down 54.2%

Toyota down 61.1%

Mitsubishi down 84.6%

Even cars made in Japan for the Chinese market are not going anywhere fast:

Nissan exports to China down 75.9%

Toyota exports to China down 91.3%

Mazda exported zero cars to China in October!

There might be some good news for the United States.  Japanese car company officials say they will now shift focus of production of many vehicles to South East Asian countries, and the U.S.

Business/Economics, U.S.

Sears & Kmart news: Fail to pay off loans received in 2010! Kmart reneges on new layaway policy? Sears looking for independent store operators

29 November 2012, a retail real estate watchdog, CoStar Group, revealed that Sears, Kmart and even JCPenny have fallen behind in payments on loans they got back in 2010.

CoStar says about 24% of Commercial Mortgaged Backed Security (CMBS) loan payments are 30 to 90 days late, and that “…two of the largest three tenants were either a Sears, Kmart or JCPenney [mall] anchor.” 

There are other retail mall based businesses behind on their loan payments as well, click here to see the list.

In a report on The Consumerist, a frustrated Kmart shopper revealed that Kmart might be lying about their new no fees layaway policy: “…Kmart was not honoring the prices I agreed to pay or the no layaway service charge that is advertised on their website.”

She says she was told it was a software glitch, but when she tried to cancel the whole thing they wanted to charge a $10.00 per item cancellation fee!  She claims she even got a Kmart executive on the phone, but he hung up on her.

The Argus Press just posted a notice that Sears Holdings is looking for an independent owner to operate a Sears Hometown Store in Owosso, Michigan.

Business/Economics, Opinion, U.S.

Corporate Evil: After blaming Unions for their shut down, Hostess now wants to pay out big bonuses to their execs! Shut down really part of Romney style crony vulture capitalist plan!

29 November 2012, gee after saying they didn’t have the money, and blaming unionized labor for the shut down of Hostess, suddenly they’ve got the bucks to pay bonuses to their incompetent executives!

Hostess officials are asking a bankruptcy judge to approve the paying out of $1.8 million USD in bonuses to their 19 executives.  Company officials say it’s necessary to keep the execs on board until they finish selling off their brands.

It’s starting to look like the running into the ground and eventual shut down of Hostess is really a Romneyesque vulture capitalist plan to chop up and sell the company off.  Hostess officials say there are more than 100 potential buyers chomping at the bit.

Hostess product sales were down, but last week a company official told the bankruptcy judge they still had $2.3 billion in sales last year!

So 18,500 people lost their jobs, and Hostess wants to pay $1.8 million in bonuses to 19 executives, that’s about $94,736 each (if my math is correct).  And those execs are still being paid big salaries as well; for example, CEO Gregory Rayburn has a monthly salary of $125,000!

I don’t think the Hostess shut down is about not having enough money.

 

 

Business/Economics, International, Opinion, U.S.

Corporate Evil: Was Sears involved in counterfeit clothing? “Books” show Sears was client of illegal fashion factory! Don’t think 18 cents per hour is good money in Bangladesh, it’s not! Walmart blames you!

“It was my fault. But nobody told me that there was no emergency exit, which could be made accessible from outside. Nobody even advised me to install one like that, apart from the existing ones. I could have done it, but nobody ever suggested that I do it.”-Delowar Hossain, factory owner

Days after a fire killed more than 120 people (reports now say there will be more bodies found, as the initial body count was a guess) and injured 200, the factory owner accepts blame, and three of his supervisors are now charged with locking the workers in the building because they thought the fire alarm was fake (they actually believed the workers were trying to escape their wretched working conditions), another ‘illegal’ fashion factory goes up in flames (this time no one was locked in, but there were injuries), and the disaster reveals that unAmerican Corporate America is involved more than ever in slave wage factories (to get those high profits to make their investors happy, it’s not about keeping prices cheap for the lowly consumer).

The police and the Prime Minister of Bangladesh said they believe the fire was “an act of sabotage”.  A disgruntled employee perhaps?

Other reports say the factory was operating illegally anyway.  Both Walmart and Disney issued statements saying they canceled contracts with the factory at least 12 months ago, on the grounds the factory was dangerous.  Yet clothing with their brands on them were being made right up ’till the fire broke out.

Here’s some other companies/brands that were having clothing made at the illegal factory: ENYCE, Teddy Smith and Edinburgh Woollen Mill.  But another company was found listed in the factory account books: Sears.  If companies like Walmart and Disney swear they canceled their contracts a year ago, then who were those shirts, sweaters and hoodies (with Walmart’s Faded Glory label, and the Disney label) being made for?

I hear Sears is in big trouble money wise and has been struggling to get its profits up.  Just sayin’.  But of course Sears Holdings denies they’re involved, and yet at the same time plans to rectify the fire safety issue: “We can also confirm that Sears Holdings does not source from this factory….In addition, Sears recognizes that fire safety is a critical international issue that we intend to address through specialized training for management in those factories that produce merchandise for Sears Holdings.”-Sears Holdings statement

If they’re not involved then why is Sears in the fashion factory’s client account books and why did Sears say they will address fire safety at such factories?

According to the Associated Press, since 2006 at least 313 people have died in fashion factories in Bangladesh.

According to industry watchdog groups, labor rights groups and even the World Bank, the average pay for a fashion factory worker in Bangladesh is the equivalent to $38 USD per day!  And that’s double what they were being paid last year, they had to go on violent strikes to get the $38 per day!!!

Another report said they get paid the equivalent of 50 cents per hour in the United States!!!

And don’t think the fashion industry in Bangladesh can’t afford to pay more, last year they made $20 billion USD, making up 80% of Bangladesh’s Gross Domestic Product!!!

Companies that help retailers like Walmart hook up with fashion suppliers,  blamed the U.S. consumer:  “You have relentless pressure that consumers put on retailers and that retailers put on their suppliers to deliver lower and lower prices. And that pressure is a key reason why you see factories cutting corners.”-Josh Green, Panjiva

The only reason the average U.S. consumer “demands” lower prices is because their pay and benefits continue to go down year after year.  Blame unAmerican Corporate America!

 

 

 

Business/Economics, International, U.S.

What Economic Recovery? Mitt Romney’s Staples begins shuttering stores in Merry Olde England

“In September, Staples announced a strategic plan to accelerate growth and better serve the evolving needs of customers. As part of this plan, we are reshaping our business in the U.K. to serve customers who increasingly shop with us online. We are actively working to support associates through this period of change.”-Staples response to questions about the store closings

21 November 2012, a couple of months ago Staples officials announced plans to shut down or downsize more than a hundred stores around the world.

It’s been revealed that a store in Barnstaple at Roundswell will close after Xmas.  It’s one of 23 Staples stores in the United Kingdom to be closed.

Staples has been touted as the wunderkind of vulture crony capitalist Mitt Romney.

Business/Economics, International, Technology, U.S.

Corporate Incompetence & What Economic Recovery? HP suffers huge losses, blames their own take over of Autonomy! Former Autonomy exec says HP’s Whitman is a Liar!

“The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false.  It took 10 years to build Autonomy’s industry leading technology, and it is sad to see how it has been mismanaged since its acquisition by HP.”-Mike Lynch, former CEO of Autonomy

21 November 2012, that’s the response to Hewlett Packard’s Meg Whitman accusations that Autonomy tricked the struggling computer and printer maker into buying them in 2011 (Whitman was not running HP at that time).

Whitman is blaming a surprise 3rd quarter net loss of $6.9 billion(!) USD on the Autonomy purchase.  Compare that to same time last year when HP reported a $200 million profit.

The takeover of Autonomy was led by Leo Apotheker, who resigned as HP’s CEO a month later.

Whitman now says Autonomy officials used accounting tricks to hide gross “irregularities”.  But here’s the problem; HP hired an independent auditor to go over Autonomy’s books, then hired another auditor to verify the first auditor’s conclusions.  They both said the books were good to go!

Here’s another problem; the current board of directors for HP is still made up of almost every director that was involved in the Autonomy takeover.

Former Autonomy CEO, Mike Lynch, says HP is using the company he created as a scapegoat, to cover up other losses due to HP’s mismanagement.

HP also reported that almost all areas of their operation experienced drops in sales during their 3rd quarter, except for software which increased (and that included software from Autonomy).

Meg Whitman said 2013 is not going to be a good year: “Fiscal 2013 is going to be a fix-and-rebuild year for the company as critical changes to organizational structure take hold. We expect the underlying macro and industry head winds to continue as we enter 2013.”

Business/Economics, International, Opinion, U.S.

Class Warfare! Average Californian justified in voting for higher taxes for wealthy. Golden State has highest number of poor AND highest number of rich! Just ask the Chinese

“They will keep struggling until the economy levels off. This is just a reflection of the bad economic situation we’re living in with high unemployment and lower income.”-Maria Pia Chaparro, UCLA researcher

20 November 2012, according to reports from Rhodium Group, and Asia Society, California is now the top U.S. state for investments from Chinese investors, accounting for at least 25% of all Chinese investments (more than New York, Texas, Illinois and North Carolina combined).

In the past 12 years China has invested $1.2 billion USD into California.  According to Rhodium Group, that’s expected to rise as high as $60 billion in the next eight years! Yet, for all the money China is throwing at the Golden State, the U.S. Census Bureau (The Research SUPPLEMENTAL POVERTY MEASURE: 2011) says California now has the highest rate of poverty in the United States; 23.5%, or one in four Californians in poverty!  (Florida is second worst with 19.5%)

“We’re seeing a very slow recovery, with increases in poverty among workers due to more new jobs which are low wage…..California is struggling more because it’s relatively harder there to qualify for food stamps and other benefits.”-Timothy Smeeding, University of Wisconsin-Madison economist

The Census Bureau is using new poverty measures which finally take into account the cost of living (even including the taxes you pay), and California’s outrageous cost of living/taxation is the prime reason for the huge jump in official federal government poverty ratings.  (I used to live there, and between the cost of living/taxation and overwhelming number of ludicrous laws I am amazed the people haven’t held a full blown revolution. No problem going on the rampage after the Rodney King verdict, but when it comes to the economy and their livelihoods I guess they like being raped by the Man)

But other reports say that while more and more working class Californians are hitting the skids, the rich elites are not only still making money, they’re making more and more money!  Evidence of that is how much money rich Californians gave to political campaigns: “It’s very hard to pass an initiative, but it’s not that hard to defeat an initiative if you have money on your side.”-Kim Alexander, California Voter Foundation

According to MapLight rich Californians gave an estimated $350 million to support, or fight, the 11 propositions Californians just voted on.  And that’s got to be lowballed, because, according to the Associated Press, just two rich Californians spent nearly $100 million trying to influence the voters on such things as higher taxes on out of state companies and making it easier for insurance companies to change their rates.

But while rich Californians are willing to spend money on elections, they don’t seem willing to spend money on bettering the economy. Back to the Chinese investors.

According to Chinese media reports, continued Chinese investing hinges on the U.S. Congress’s recent extension of the EB-5 visa program: “Under EB-5, an applicant is given permanent U.S. residency if his investment of at least $1 million leads to 10 full-time jobs within two years. The threshold is just $500,000 if the jobs created are in a rural or high unemployment area of the U.S.”-China Daily

This means that Chinese investing also involves people from China being able to move to the United States, as one California mayor admitted: “This can guarantee a steady rate of return for stimulating purchases of bonds (for publicly funded development projects), and people are able to immigrate because of EB-5, so you’ll see more of this in California.”-Jean Quan, mayor of Oakland

The Oakland mayor said that Chinese middle and upper income earners want to take advantage of the EB-5 program, as did Oakland businessman, Tom Henderson, who said his Chinese clients want to move to California through the EB-5 program which will help create new jobs:  “We are bringing in $100 million to Oakland alone. Over the next 18 months, we’ll create 2,000 jobs in Oakland through the EB-5 program.”

The fact that California’s officials are putting so much of their hopes on China to save them economically, and that the U.S. rich have money but are spending it on things that do not stimulate the economy (California is considered the billionaire capitol of the world!), is proof that the elitist rich in the United States are unAmerican and a threat to U.S. National Security.

Business/Economics, U.S.

What Economic Recovery? Michigan hit by latest Sears/Kmart closing!

“It’s a shame they are closing here, I really like this place and I really like this one better than any of them. Big Lots is closed. Now Kmart is closed. Things are getting bad.”-Jerry Crossnoe, Kmart shopper in Flint, Michigan

20 November 2012, a Kmart on Dort Highway in Flint, Michigan, will close in January 2013.  Sears Holdings officials say the store management was notified in October.   Store management refused to comment to local media questions.

Here’s the updated closing list:

Arizona: Scottsdale Sears/Great Indoors, Chandler Sears/Great Indoors.

Alabama: Gadsden Kmart (50 jobs lost), Mobile Sears (at least 40 jobs lost), Auburn Kmart (at least 40 jobs lost).

California:   El Monte Sears (at least 40 jobs lost. Damien Arrula, El Monte’s economic development director, said the store manager had lied about what was going on: “The general manager of the store had just indicated to me that they were remodeling.”), two San Diego Sears (at least 80 jobs lost), Pleasant Hill Kmart (more than 50 jobs lost).

Colorado:  Broomfield Kmart (at least 40 jobs lost), Glenwood Springs Kmart (at least 40 jobs lost), Lone Tree Sears/Great Indoors, Longmont Sears (at least 40 jobs lost), Pueblos’ South Side Kmart (52 jobs lost),  Denver Kmart (number of jobs lost have not been made public at this time, but could be at least 40).

Georgia: Macon Sears (at least 40 jobs lost), Buford Kmart (at least 40 jobs lost), Douglasville Kmart (at least 40 jobs lost), Atlanta Kmart (at least 40 jobs lost), Columbus Kmart (at least 40 jobs lost), Jonesboro Kmart (at least 40 jobs lost), Cartersville Kmart (74 jobs lost).

Florida: Fernandina Beach Kmart (at least 40 jobs lost), Callaway Kmart (at least 40 jobs lost), Orange City Kmart (at least 40 jobs lost),  Deland Sears (at least 40 jobs lost), Stuart Sears (at least 40 jobs lost), West Palm Beach Sears (at least 40 jobs lost), Port St. Lucie Sears (at least 40 jobs lost), Crystal River Sears (at least 40 jobs lost), New Smyrna Beach Kmart (at least 40 jobs lost), Saint Augustine Kmart (at least 40 jobs lost), Pompano Beach Kmart (at least 40 jobs lost),  Jacksonville Kmart on 5751 Beach Boulevard (71 jobs lost), second Kmart in Jacksonville on 4645 Blanding Boulevard (83 jobs lost), Ocoee Sears (102 jobs lost), Pensacola Sears to be closed by 03 February 2013 (69 jobs lost), Hialeah Kmart (67 jobs lost).

Idaho: Lewiston Sears (at least 60 jobs lost).

Indiana:  Anderson Sears (at least 40 jobs lost), Saint John Kmart (at least 40 jobs lost), Indianapolis Kmart (at least 40 jobs lost).

Illinois:  Alton Sears (at least 40 jobs lost), Melrose Park Sears parts and repair center (50 jobs lost), Zion Kmart (at least 40 jobs lost), Oak Lawn Kmart (at least 40 jobs lost), McHenry Kmart (at least 40 jobs lost), Peru Kmart (at least 40 jobs lost), Lombard Sears/Great Indoors (at least 40 jobs lost), Fairview Heights Kmart (81 jobs lost), Freeport Kmart (45 jobs lost), Pontiac Kmart (more than 47 jobs lost), Homer Glen Kmart (82 jobs lost), Streator Kmart (45 jobs lost).  By the way, Illinois elected officials gave Sears Holdings/Hoffman Estates a $150 million USD tax break to keep their headquarters in the state.  The tax break was not tied to any promise not to close stores.

Iowa:  Cedar Rapids Kmart (at least 40 jobs lost), Davenport Kmart (at least 40 jobs lost), Burlington Kmart (50 jobs lost), Coralville Sears (94 jobs lost, this is a store sold to GGP earlier in the year).

Kansas: Lawrence Sears (at least 40 jobs lost).

Kentucky: Middlesboro Sears (in September 2012 the Sears store re-opened under independent ownership, official grand re-opening scheduled for November), Winchester Kmart (back in May, Rankin Paynter bought out what was left of the inventory and gave it to charity), Hazard Kmart (at least 40 jobs lost).

Maine: Lewiston Sears (60 to 70 jobs lost).

Maryland: Ellicott Sears (at least 40 jobs lost), Gaithersburg Sears/Great Indoors.

Michigan: Novi Sears/Great Indoors, Brighton Sears Grand/Essentials,  Harper Woods Sears Full line, Monroe Sears Full line, Adrian Sears Full line, Washington Township Kmart, Chesterfield Kmart, Woodhaven Kmart, and recently revealed Flint Kmart (46 jobs lost).

Minnesota: Willmar Kmart, Duluth Kmart, New Hope Kmart, White Bear Lake Kmart.

Mississippi: Jackson Sears Full line, McComb Sears Full line, Columbus Sears Full line.

Missouri: Lee’s Summit Sears Grand/Essentials, Saint Louis Sears Full line.

Montana: Missoula Kmart (50 jobs lost).

New Hampshire: Nashau Sears Grand/Essentials, Keene Sears Grand/Essentials.

North Carolina: High Point Sears, Moorehead Sears, Rocky Mount Sears, Statesville Sears, Durham Kmart (79 jobs lost), Asheville Kmart (53 jobs lost),  West Smithfield Kmart (59 jobs lost).

New Jersey:  Lawnside Kmart (about 80 jobs lost).

Ohio: Chagrin Falls Kmart, Springfield Kmart, two Toledo Kmarts, Medina Kmart, Columbus Kmart, Columbus Sears/Great Indoors, Zanesville Sears (67 jobs lost), Trotwood Kmart (71 jobs lost).   Also, Van Wert Sears franchise bought out by Kirk Berryman, owner of Computer & Networking Technologies (CNT), who plans on moving the store to a new location.

Oklahoma: Oklahoma City Sears (98 jobs lost, GGP owned).

Oregon: Roseburg Sears (at least 40 jobs lost), Tualatin Kmart Center (new property owner from California is tearing everything down for new shopping center, so far no indication the Kmart will be part of the new shopping center).

Pennsylvania: Upper Darby Sears Full line, Pottstown Sears Full line, Pittsburgh Kmart, Wilkins Sears.

South Carolina: Sumter Sears (at least 40 jobs lost), Orangeburg Sears (approximately 50 jobs lost).

Tennessee: Antioch Sears (at least 40 jobs lost), Cleveland Sears (at least 40 jobs lost), Oak Ridge Sears (at least 40 jobs lost), Hendersonville Kmart (at least 40 jobs lost), Morristown Sears (about 70 jobs lost).

Texas: Two Sears parts and repair centers closing in The Woodlands (117 jobs lost), rebuild center in Garland (58 jobs lost), Farmers Branch Sears/Great Indoors, Houston Sears Great/Indoors.

Virginia: Norfolk Sears (at least 40 jobs lost),  Midlothian Kmart (at least 40 jobs lost), Richmond Kmart (at least 40 jobs lost), Lynchburg Sears (84 jobs lost).

Washington: Walla Walla Sears Full line (in August 2012, it was reported that an independent owner of Sears Hometown stores will open a store in Walla Walla), Lacey Kmart (at least 40 jobs lost), Kelso Sears (47 jobs lost), Lakewood Kmart (59 jobs lost), Bellingham Sears (92 jobs lost).

West Virginia: Oak Hill Kmart (59 jobs lost).

Wisconsin: West Baraboo Sears (at least 40 jobs lost, local village officials say the store generated 3% of local tax collections), Rice Lake Kmart (about 71 jobs lost).

On top of that, Sears Holdings sold stores to General Growth Properties (GGP), of which it has been reported that most of those stores will be closed.

Here’s the list of 11 Sears stores now owned by GGP:

Iowa: Coral Ridge Mall (it’s official the Sears is closing, see above), and Mall of the Bluffs

Texas: The Woodlands Mall (this does not involve the two repair centers being closed by Sears)

Florida: West Oaks Mall

Utah: Fashion Place, and Provo Towne Centre (note the evil British empire way of spelling town & center. Due to a favorable lease agreement the GGP owned Provo Sears will continue to stay open under Sears Holdings management)

Oklahoma: Quail Springs Mall (it’s official, the Sears will be closed, see above)

Hawaii: Ala Moana Center

Washington: Bellis Fair Mall (Bellingham store, see above)

Minnesota: Apache Mall

Illinois: Market Place Shopping Center