American Apparel Drama Round 2. Or is it Round 3?; Very Merry Gas Pumping Days; Housing: What’s Up or Rather Down With it?;

Change can be good…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Someone – make that some entity – actually wants to buy embattled retailer American Apparel, drama and all. In the meantime, co-chairmen Allan Mayer and David Danziger stepped down to be replaced by Colleen Brown. Rumors of a takeover began swirling last week, sending shares of the stock up. Private equity firm Irving Place reportedly put in a very generous offer of between $1.30 – $1.40 per share, or between $227 million – $245 million. The offer was especially generous because the stock is currently hovering around  $1.10 a share as I write this. Yet its price is still a distant memory from the $15.00 stratosphere where the stock was trading back in 2007. And the company is on track to post its fifth straight year of losses. What’s even more interesting about this takeover offer is that Irving Place would like to see alleged sexual harrasser, Dov Charney, back in the corporate mix, even though he was unceremoniously ousted last week, much to the chagrin of over 30 executives. Charney, however, still remains the largest shareholder in the company, with a hefty 43% stake in it.

Come all ye’ gas guzzlers…

Image courtesy of Rawich/FreeDigitalPhotos.net

Image courtesy of Rawich/FreeDigitalPhotos.net

These days are looking very merry at the pumps as gasoline prices are, on average, at their lowest prices since May 15, 2009. Head on over to Tulsa, Oklahoma and you might just find yourself filling up your tank to the very merry tune of less than $2.00 per gallon. Other cities where miracles like that are happening are in Lubbock, TX and Kansas City, MO. But don’t get too giddy as the average price is hovering above the $2.00 mark in most parts of the country. It’d probably be best to steer clear of Long Island, where you’ll be paying over $2.80 per gallon, on average. Still, these prices are better than they were last year when we were shelling out approximately $0.79 more per gallon than we are now. If you’re holding out hope for these prices to fall even more, they just might. But only by a few cents. There is a dark side, though,  to falling gas prices, particularly in Texas, whose economy relies heavily on the energy industry. The Texas economy could actually take a brutal beating from these decreasing prices, losing perhaps billions of dollars in revenue, but more importantly, hundreds of thousands of jobs.

No home for the holidays…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Seeing as you’re saving all this money because of falling gas prices, perhaps as much as a whopping $550.00 a year, then maybe you ought to consider looking for a new home. Well, someobody ought to anyway, considering that purchases for previously-owned homes took a nasty little 6.1% dive with only 4.93 million homes being sold in the month of November. Forecasts, sadly enough called for a decline from October’s 5.25 million, but only to 5.2 million. So that 4.93 million figure was an unwelcome surprise being the weakest number posted since May. But it’s not all bad and gut-wrenching since that number is still a 2.1% increase over the same time last year. Yet a bit perplexing since mortgage rates are so low right now, with the average rate on a 30 year fixed topping off at 3.8% last week. Experts, me not being one of them, also say that the decrease could just mean that there are a lot of prospective buyers out there who just don’t like the current batch of housing inventory and are holding out for more properties to come on the market. Let’s hope that’s the case. The next few months ought to provide us with a few clues.

GM Says Nyet to Russia Deliveries; Start Spreading the News: Gov Cuomo Bans Fracking; Kraft-y New CEO

Rubles the wrong way…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Russian President Vladimir Putin gave his annual hours long press conference where he discussed the plunging ruble. He said the economic recovery could take up to two years and, of course, he made sure to point his country’s finger (presumably the middle one) at the US and the EU because he says plunging oil prices and economic sanctions are to blame. Oh and also the central banks messed up too because they apparently didn’t respond fast enough to economic issues as they arose. Darn central banks! Then GM went ahead and suspended deliveries to Russia, becoming one of the latest western companies to do so. And who can blame them. After all, when currencies drop, the companies lose big bucks.  But considering GM only sold 170,000 vehicles in Russia so far this year  – it sells more than that in a single month over here – its sure not to put any major crimp in their business. Apple also shut down operations while other companies, like BMW, took the route of raising their prices to make up for the drop in the ruble rate. Why his love life came up during the press conference is a mystery, but at least now we know that Vladimir Putin is in love –  and somebody even loves him back –  according to him anyway.

Frack off…

Image courtesy of xedos4/FreeDigitalPhotos.net

Image courtesy of xedos4/FreeDigitalPhotos.net

Governor Andrew Cuomo (D) has made it official: New York has become the first state to ban the ever-controversial fracking process, a decision that puts a major chink in the oil and gas industry. The process, which involves tapping into natural gas by using high-pressure water blasts and, of course, chemicals, has been under a moratorium in New York State since 2008 after it was felt that more research was needed to see just how bad the process is for the environment and our health. At a press conference, Governor Cuomo handed the reins over to health and environmental officials who said the issues are too great to allow it to happen and conveniently had several studies on hand to back up their claims. Now if they could just do something about those traffic jams…

Nothing cheesy about it…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

In a move that shocked analysts, who generally make it a habit of predicting things, Kraft CEO Tony Vernon, who is but 58 years young, announced that his retirement from the company will officially take place on December 27. Vernon has been at the post since October of 2012 and will stay on as an adviser until March. His replacement will be John Cahill, who already has Pepsico  gracing his resume. Kraft, the intrepid force behind Velveeta cheese and the ever-malleable Jell-O, said that it needs to make big changes quickly if it wants to keep up with the constantly changing needs of the food industry. Sounds fair, considering Kraft saw an 11% drop in its third quarter profits.

 

American Apparel Battles; Not So FedEx-cellent Earnings; Cheerie-Woes

Gone but not forgotten…

Image courtesy of biosphere/FreeDigitalPhotos.net

Image courtesy of biosphere/FreeDigitalPhotos.net

Dov Charney may be officially ousted from American Apparel but wouldn’t you know it…the former CEO, who was booted over a number of misconduct allegations,  still has more than a few friends left at the company he founded. Thirty American Apparel executives just can’t bear the thought of manufacturing retail with provocative ad campaigns without Mr. Charney’s particular skill set. They are a bit peeved that their feelings were not taken into consideration and, in a carefully penned letter, asked the board to reconsider its decision adding, “he makes this thing tick.” A beautiful sentiment for a man who had a slew of sexual harassment allegations against him. Incoming CEO Paula Schneider will become Charney’s official replacement and she gets to plod through the mammoth task of trying to reverse the $300 million in net losses the company racked up since July of 2010. Charney, though, won’t be totally on the outs seeing as how he remains the largest shareholder in the company with a 43% stake in it. He does, however, have to share those voting rights with a hedge fund, presumably to keep him from exercising those rights exclusively for his  questionable benefits.

Shipping dipping…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

FedEx had a good quarter. Just not good enough for Wall Street. Earning’s for the shipping company were up a very merry 23% thanks in part to a drop in fuel prices. The company earned $616 million and $2.14 per share. That figure was up from $500 million and $1.57 per share the year before. Revenue was even up 5% to $11.94 billion. But the hardly-ever-content Wall Street analysts wanted to see $2.22 per share and revenues of $11.97 billion. Next quarter should be more telling as this is the company’s busiest time of year. Here’s hoping that FedEx won’t repeat last year’s shipping debacle when over 2 million packages failed to make it to their recipients by Christmas Eve – a gaffe that was attributed to some icy weather and an unforeseen rise in shipping demand. Which I suppose is the one of the reasons an additional 50,000 employees were added to its workforce this season.

Soggy…

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

General Mills, like many of its breakfast-oriented peers/competition, posted second quarter earnings that were nothing to crunch about. Profit for the maker of one the world’s most arguably famous cereals, Cheerios, dropped by a whopping 37%. With consumer tastes  changing, shoppers aren’t exactly spending as much time and money on cereals and other products from the company. But at least its Yoplait and snack divisions are up. A bit. General Mills earned $346 million and $0.80 per share. But Wall Street wanted to see $0.03 more on those shares. The company pulled in sales of $4.71 billion, which seems like a lot of Cheerios, except that Wall Street was gunning for $4.79 billion. Sales in the US alone came in at $2.86 billion but it was still a 4% drop.

 

Walmart’s Court-ing Big Problems; What’s in a Name? Ask Chrysler, If You Can Still Call It That; Stuyvesant High Schooler Fails in Lying;

 Hitting a Wal…mart…

Image courtesy of nirots/FreeDigitalPhotos.net

Image courtesy of nirots/FreeDigitalPhotos.net

Walmart’s lawyers have been especially busy this year. But not to Walmart’s advantage, it would seem. The retailer just got word that a Pennsylvania supreme court upheld a lower court’s ruling from 2007 that it has to pay over $150 million to approximately 187,000 employees who sued the the company in a class action suit. According to the lawsuit, Walmart stiffed employees by not compensating them for rest/meal breaks, or actually making them work through those breaks and then not paying the unrested, hungry employees for that time. Of course, Walmart is considering appealing the ruling, whose amount is sure to put a major dent in its quarterly earnings. I’m guessing you’re not as choked about that as Walmart execs are. Then there was last weeks’ decision by a National Labor Relations Board administrative law judge who found that the US’s largest employer also threatened employees in California because they tried to organize. Back to today, the lawyers and family of John Crawford, who was shot inside a Beavercreek, Ohio Walmart , named the corporation in a lawsuit. The lawsuit alleges that Walmart did not provide a “reasonable place to shop” because a bb gun involved in the shooting was left unpackaged in the store for two days.

What’s your name again?

Image courtesy of olovedog/FreeDigitalPhotos.net

Image courtesy of olovedog/FreeDigitalPhotos.net

Chrysler Group LLC it isn’t. Well, it was. Up until Tuesday morning when the automobile manufacturer announced it was changing its name  to “FCA US LLC.” Got that? Neither did I. But apparently this name fits in better, globally, anyway, with its parent company Fiat Chrysler Automobile NV. But it’s okay if you forget and call a Chrysler a Chrysler, because those cars will still be made and be called Chryslers, along with Jeeps, Dodge and Fiats, who are all also keeping their names. The company – and name – which originated in 1925, with some vision and assistance from the very industrious Walter P. Chrysler, employs 77,000 people all over the world and has 36 manufacturing facilities, with 23 in the United States alone.

He lied! He lied!

Image courtesy of africa/FreeDigitalPhotos.net

Image courtesy of africa/FreeDigitalPhotos.net

Looks like Mohammed “Mo” Islam is not such a whiz kid after all. After a story appeared in New York magazine about a 17 year old Stuyvesant High Schooler who was rumored to have pocketed $72 million in the stock market, it turns out none of it was true.  The story was picked up by just about everybody, including this blog, and the young man and a friend were even scheduled to do an interview on CNBC to discuss their non-existent success.  However, New York Observer’s Ken Kurson, and a team of media and legal professionals uncovered the hoax, after noticing how so many many people questioned the story, which first picked up steam inside the hallowed halls of Stuyvesant High. Apparently the only trades Mohammed ever made were simulated ones and his fortune is more akin to the fake kind you might find in a board game. New York magazine did issue an official apology, but it seems that it’s the wrath and disappointment of Mohammed’s parents who will make Mohammed come to rue his dubious actions. According to Mohammed, his dad, “wanted to disown me. My mom basically said she’d never talk to me.” And who can blame them.

 

Über’s But a Hot Global Mess; PetSmart’s New Leash on Life; Who Wants to be a High School Millionaire?

Ügh, Uber…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Über has once again made itself the star of yet another publicity disaster. As the hostage crisis raged in Sydney, Autralia’s central business district, many people fled the city via Über, only to discover that the company’s fares spiked to about four times the usual rate. Classy, huh? Following some epic social media backlash, Über undid the deed, blaming the mishap on the company’s algorithm which automatically increases fares based on demand. And in this particular emergency, you can bet demand increased. Über, however, is graciously offering to refund its users up to $200. But over in France, ÜberPop has been banned. The Inetrior Ministry argues that it’s because there is no required training, background checks and other basic requirements for ÜberPop drivers. Taxi drivers there simply feel that it’s unfair competition. A court still has yet to decide on a final ruling. ÜberX drivers, though, are in the clear since they do require permits. In Rio de Janeiro the service is illegal and you can forget about using it in the Netherlands too. Perhaps things might start to improve in the United States, where the company has apparently enlisted the help of over 160 lobbyists in fifty different cities.

Gone to the dogs…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

Things are looking up at PetSmart now that a London-based equity firm picked up the Phoenix-based pet supply company for $8.7 billion, or “ruffly” $83.00 per share. That number, by the way, is at a 39% premium – nothing to bark at, mind you. Back in July, activist investor Jana Partners was looking to pick up the company, after all, it had close to a 10% stake in the company. Apollo Global Management was an even more recent contender. But BC Partners emerged as the new owners. PetSmart currently has close to 1,400 stores across the US, Canada and Puerto Rico. The pet industry is expected to be a $59 billion business this year.

Most likely to graduate a multi-millionaire…

Image courtesy of  David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It seems high school lunch time was getting in the way of Mohammed “Mo” Islam’s career. So he did what any teenage financial whiz kid would do: he parlayed his financial acumen into a rumored $72 million fortune. While that number can’t officially be confirmed, the high-schooler did acknowledge his net worth is in the high eight figures. Not bad for someone who’s not even old enough to vote. The Stuyvesant High Schooler first started trading penny stocks at the age of nine years old, with money he made from tutoring. But he got badly burned in that lesson and took break allowing himself to get more well-versed in the stock market, particularly with crude oil and gold futures. His “studies” paid off and now he has his own apartment, which his parents won’t let him live in, and a new BMW which he is not legally allowed to drive. The only thing that’s standing between him and his broker-dealer license and hedge-fund dreams is his age –  he’s only 17.

Is the Banking Industry About to Get Turned on its Fiscal Head?; Lululemon Posts Some Zen Earnings; Noah’s Ark is in Park;

Want to join the “Club?”

Image courtesy of nuchylee/FreeDigitalPhotos.net

Image courtesy of nuchylee/FreeDigitalPhotos.net

It’s time to welcome New York Stock Exchange’s latest IPO darling, Lending Club, trading under the ticker symbol LC (catchy, huh?). The banking industry, however, might not be giving it the warm reception that the rest of Wall Street will be showing it. The Lending Club, whose stock price had been set at $15 per share (and is trading at $23.79 as I write this), sets people up, but not quite like Tinder or match.com. The Lending Club matches borrowers with lenders of money. Founded in 2006 by Renaud Laplanche, Lending Club set out to make borrowing cheaper…and easier, than traditional banks and lending institutions. How very considerate.  Lending Club gets a fee per loan transaction and a  loan transaction can be for as little as $25.00. But with $6 billion in loans, thus far, the loan transactions probably tend to be a bit higher. The company is being watched by the alternative lending industry – and banks, no doubt – because if Lending Club does well – or not, it could indicate success – or failure – for other companies with similar models.

Assume warrior position…

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

See-through yoga pants be damned. It seems design flaws and a fallout with Lulelemon Athletica Inc. founder Chip Wilson could not stop the yoga wear maker from kicking some analyst estimate bootie. Profits for the company came in at close to $60.5 million and $0.42 per share. Online sales were up 27%, as well. Analysts had the company pegged for $0.38 per share. Still, it’s hard to overlook the fact that those numbers were down 8.5% from a year ago when the retailer posted $66 million in profits and $0.45 per share. So it must be a good thing then that the company has big plans to outfit men all over the world in its athletic gear. In fact, Lulelemon hears a $1 billion opportunity knocking with that idea. That’s probably why it opened its first men’s store in New York City last month.  Namaste.

Get your raincoats…

Image courtesy of njaj/FreeDigitalPhotos.net

Image courtesy of njaj/FreeDigitalPhotos.net

It seems  state funds have dried up for the Kentuck-based Noah’s Ark Encounter, as the $18 million in tax breaks and government funding was just yanked from the folks who are attempting to bring that famous biblical episode to life. The museum, which will be located  conveniently next to the “Creation Museum,” will boast a 500 foot recreation of the famous wooden ark, taking into account the measurements specified in the book of Genesis. However, the reason for the fund-yanking is the company behind the museum, a non-profit subsidiary of Answers in Genesis, plans on hiring based on religion. Meaning if you’re not religious enough, you need not apply – a veritable problem if you are looking to get state funds for a tourist attraction. Naturally, like any money-centered deal that goes south, legal options are being explored by the Creation Museum group with a billboard campaign in Kentucky and…New York (go figure) to counter criticism. In the meantime you can check out the 700,000 square foot Creation Museum, which has attracted some one million visitors since it opened its pearly gates back in 2007.

Where in the World is Über?; Harvard Professor Gives Whole New Meaning to Chinese Take-out; See Which Company Made “The List”

Mo’ money, mo problems…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Über just picked up another $1.2 billion in funding and is now valued at $40 billon. Awesome, right? Not even close. On the heels of its most recent “tracking-customers” scandal comes even more…problems. So on which part of the globe should we begin? How about Portland, Oregon? You might have downloaded the Über app there but don’t bother using it. Hours after it launched, the city put the kibosh on the ride-sharing device. In Über’s home state of California, San Francisco D.A. George Gascón and Los Angeles D.A. Jackie Lacey have filed suit against Über for, among other issues, not being totally honest about the quality of the background checks it conducts on its drivers. Which brings us to Chicago where an Über driver allegedly raped a female rider. And just because gambling and prostitution is legal in Nevada, that doesn’t mean Über is. Yes, oddly enough, it’s banned there too. On the other side of the pond, good luck finding an Über ride. Denmark and Norway have filed complaints, a Dutch court ruled it illegal, France has yet to decide, while Spain already but the brakes on Über’s operations. In Asia, Thailand also nixed the service and India’s having huge issues with it as well. But on his blog, Travis Kalanick did mention that Über operates in 250 cities on 50 countries. He must mean on a different planet.

Can I get the sauce on the side?

Image courtesy of patrisyu/FreeDigitalPhotos.net

Image courtesy of patrisyu/FreeDigitalPhotos.net

If you’re going to overcharge your clientele, you best make sure they aren’t professors from Harvard’s Business School. Just ask Sichuan Garden’s Ran Duan. Except, he’s not so talkative lately. When Professor Benjamin Edelman ordered four dishes from the Boston eatery, he was over-charged a dollar more than the advertised price on the restaurant’s website.  So Professor Edelman, who, by the way,  fiercely and diligently took on the airline industry for misrepresenting fees, did the same with Mr. Duan. First, the professor suggested that Sichuan Garden refund him three times the amount of the over-charge. Mr. Duan, instead, offered to refund $3.00. After several emails were exchanged, which seemed to only fuel Professor Edelman’s irritation, he decided it was time to take the issue to the regulators, just as he had done with the airlines.  The lesson is? Well, there are several, aren’t there.

You call this work?

Image courtesy of portal/FreeDigitalPhotos.net

Image courtesy of portal/FreeDigitalPhotos.net

Is your company on Glassdoor’s 2015 50 Best Places to Work list? If not, maybe it’s time to polish your resume and start spending lots of time on LinkedIn, which by the way, takes the number 23 spot. It’s no surprise, I guess that Google made the list. After all, didn’t Vince Vaughn and Owen Wilson make a movie just about being interns there? However, this was the first time Google took the top spot. Among the many storied perks behind the company is twelve weeks maternity leave…for the father. So where does that leave mom? With an additional six weeks’ quality time with baby. Thinking of trekking down to Antarctica? Bain and Company, which ranks second, has got an expedition with your name on it. Just make sure they have a position you can fill. Facebook ranks at lucky #13 with one employee writing about it: “Transparency. Trust. Compassion. Food.” ‘Nuff said. Got IT problems? Great. Grab a beer and talk it over at Zillow’s “IT Happy Hour.” The real estate site ranks 33. Who is not in the top 50? Glad you asked. Twitter is noticeably absent from top 50 this year presumably thanks to some management “changes.”