Colt Arms Itself With Chapter 11 Protection; Target Teams Up With CVS; Another One Bites the Sawdust as Lumber Liquidator CMO Ousted

Out with a bang?

Image courtesy of vectorolie/FreeDigitalPhotos.net

Image courtesy of vectorolie/FreeDigitalPhotos.net

The maker of everybody’s favorite M16 rifle, gunmaker Colt Defense, has filed for bankruptcy. Famous for perennial firepower darlings, the Colt .45 and the “Peacemaker” – aka the gun that won the West – Colt saw delays in orders from both the US and foreign militaries, not to mention less demand for the company’s sport rifles, that caused its numbers to go into the red. Filing for chapter 11 in Wilmington, Delaware, the arms company already hit up Morgan Stanley for a $70 million loan, back in November, just to make an interest payment. Colt currently has about $500 million in assets and Chief Restructuring Officer Keith Maib wants to assure the public that “Colt remains open for business” while it attempts to figure out how to redo its balance sheets. Incidentally, this is not the company’s first trip down bankruptcy road. Colt, which was started by Samuel Colt back in 1836, also hit the bankruptcy skids back in 1842. The company rebounded and Samuel Colt went on to become one the country’s wealthiest men.

If you can’t beat ’em, join ’em…

Image courtesy of dream designs/FreeDigitalPhotos.net

Image courtesy of dream designs/FreeDigitalPhotos.net

Target’s ditching its pharmacy business in a $1.9 billion deal with CVS. The retailer came to some conclusions about the whole operation which basically had to do with money, and how much of it the pharmacy division wasn’t making. In fact, Target was actually losing money on it. Part of the problem is that the Affordable Care Act was just making everything so darn complicated and well, CVS is more equipped to handle the constantly changing landscape of healthcare while Target is best suited to sell stuff that consumers want and need but that don’t require prescriptions. So basically, Target is taking the pharmacies it already has housed in its locations and magically transforming them into CVS stores. Target expects that will bring in more traffic to its stores as CVS enthusiasts will flock to Target/CVS stores to get their prescriptions filled and then be compelled to step inside the store, filling up their red shopping carts with the kind of merchandise on which Target intends to place an increased focus to increase sales. Funny how that works, huh?

Saw it coming…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

The latest executive to bite the Lumber Liquidators’ sawdust is Chief Merchandising Officer William Shlegel. The executive was on the job for four years before that scathing “60 Minutes” report aired back in March accusing the company of using formaldehyde-laced laminate flooring form China. Shlegel will be replaced by Chief marketing Officer Marco Pescara, who will pull double duty as he stays in his post while assuming his soon-to-be-former colleague’s role as well. No statement or comment was offered by Lumber Liquidators as to why Shlegel was shown the door, nor were there any comments about what, if any, his role was in the formaldehyde-laced flooring disaster. Of course, this latest switcheroo doesn’t even begin to solve the company’s tsunami of problems as the Justice Department is still seeking criminal charges against Lumber Liquidators, while it faces more than 100 class-action lawsuits. Sales of all the toxic flooring from China has been halted at the 360 locations. In the meantime, Lumber liquidators founder Thomas Sullivan has been playing CEO since the previous one, Robert Lynch ungraciously bowed out last month. The stock, to the surprise of…no one, has lost over 70% of its value in the last twelve months.

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2 responses to “Colt Arms Itself With Chapter 11 Protection; Target Teams Up With CVS; Another One Bites the Sawdust as Lumber Liquidator CMO Ousted

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