Whole Foods is Going 365; Chip Wilson Squeezes Out of Lululemon; Rupert Murdoch to Step Down But Not Out

Whole-y moley…

Image courtesy of  stockimages/FreeDigitalPhotos.net

Image courtesy of stockimages/FreeDigitalPhotos.net

It’s going to be tough now to complain that Whole Foods is too expensive and that going organic is for those with tons of disposable income. The grocery chain is set to open up its new line of stores, “365 by Whole Foods Market,” cleverly named after its house brand. Of course, 365 will also have other brands, as it would seem a bit lofty to fill an entire store with just the one band. The chain is set to open next year and not a moment too soon. Bigger chains, like Target and Wal-Mart have figured out ways to compete with Whole Foods’ 400 stores by offering organics too, except at much lower prices. Naturally, that has been putting quite a damper on Whole Foods’ sales and that ever-elusive group of organic-minded millennials let the grocery chain know it by taking their paychecks to chains whose organic fare is considerably less expensive. But 365 is expected to bring more bang for the millennial buck – and everyone else’s.  And bonus: President of the “365” division, Jeff Turnas aims to make the shopping experience at the new store “fun and convenient.”

On a sour note…

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Looks like Lululemon founder and former CEO Chip Wilson wants to get some fiscal closure from the yoga-retailer by selling off his family’s entire 14.2% stake in the company. Considering the company posted better than expected earnings earlier in the week, it probably seems like a good time for Mr. Wilson to unload his 20.1 million shares, which are valued at about $1.2 billion. However, even with the best of companies, when an announcement is made that a considerable amount of shares are getting dumped, the stock goes south. And Lululemon was no exception, losing around 2% of its value at one point. But at least this brings a little more stability to the line as Chip Wilson’s last few quarters with Lululemon were anything but…zen.

The end of an era?

Image courtesy of pakorn/FreeDigitalPhotos.net

Image courtesy of pakorn/FreeDigitalPhotos.net

The Chairman and CEO of 21st Century Fox has left the building. Well, not quite but a reorganization proposal is in the works. The 84 year old mogul, Rupert Murdoch, has finally decided to hand over the reins to his son, James Murdoch, much to the surprise of…no one. James currently reigns semi-supreme as co-chief operating officer of the company. However, since the elder Mr. Murdoch still controls a majority of the shares, he’ll still be around a’plenty. So what’s to become of older Murdoch brother, Lachlan? He’s not going far either as he will step into the role of executive co-chairman, working alongside his little bro.  As for the current co-chairman, Chase Carey, who also serves as president of 21st Century Fox, the plan is for him to step down, graciously, of course, and take on an as yet unidentified role, as part of the reorganization plan. Awkward. 

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Russia: Sanctions? Ha! I’ll Show You Sanctions! More Boffo Hits to BofA and Time Warner Not Feeling Foxy

Putin it out there…

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Russian president Vladimir Putin always has to have the last word, doesn’t he. He’s like one of those inflatable punch toys. No matter how you much you punch it, it just floats right back up. I am talking about sanctions, mind you. The ones that Russia is imposing on the West, including the United States. Russia majorly one-upped the entities imposing sanctions on it over tensions in the Ukraine by banning agricultural products from the US, the EU, Canada and even Japan. They plan to have this ban in effect for a year!  Apparently it’s a very very long list of items too. So yeah, if the West wants to send Putin a message it’s going to have to think way beyond that teeny tiny economic sanctions box. Of course food prices are sure to rise in Russia with a move like this. But make no mistake that there’s also a steep $1.3 billion price to pay in the US and the rest of the West. And that’s going to be awfully hard to swallow.

And it’s official…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Bank of America is out almost $17 billion (it will be anyways) all because it misled investors over mortgage-backed securities. This settlement comes just weeks after a New York judge ordered the bank to pay out $1.27 billion for its less than virtuous Countrywide Financial “Hustle” program which is just as bad as it sounds. Some of the settlement cash will actually go towards helping struggling homeowners by reducing their mortgages. The rest is fees fees fees and a few billion in penalties to various federal, state and local entities. BofA CEO Brian Moynihan and US Attorney General Eric Holder have been hashing out the details as of late. BofA was trying to get away with paying just under $13 billion but fate, the justice system and AG Holder’s impending lawsuit had other plans. Now BofA holds the dubious distinction of holding the record for the largest settlement payout, knocking JP Morgan off its $13 billion podium. But Bofa still comes out a winner since no criminal charges will be filed for what could arguably be considered awfully criminal behavior.

Time Warner is running out?

Image courtesy of dream designs/FreeDigitalPhotos.net

Image courtesy of dream designs/FreeDigitalPhotos.net

There was no shortage of love today on Wall Street for Rupert Murdoch and his 21st Century Fox empire now that his $80 billion bid for Time Warner has been scrapped. In fact, the media company’s stock surged while, ironically (or maybe not) Time Warner’s second quarter earnings took a hit. Sure its quarterly profits were up 10% with $6.8 billion in quarterly revenue. But the stock took an 11% dive thanks to Fox just because its interest in its rival came to a bittersweet end.

 

Dissing 21st Century Fox, BofA Not Feeling the Legal-ease and Hershey’s Not So Sweet News

Rejected…

Image courtesy of Ohmega1982/FreeDigitalPhotos.net

Image courtesy of Ohmega1982/FreeDigitalPhotos.net

Looks like Time Warner has no love for Rupert Murdoch. The media tycoon, who reigns over 21st Century Fox, put out an offer last month to buy its rival for $80 billion, or about $85 a share in stock and cash. He even graciously offered to sell off CNN, to avoid any anti-trust and regulatory issues. But he was still denied since it was “not in the best interests of Time Warner.” Many feel, however, that Murdoch was unfettered by this rejection and will likely come at Time Warner with an even better offer , especially because Murdoch is such a big fan of HBO. I’m sure he likes the hit show Girls, but it’s probably more about HBO’s $20 billion value that really makes him a super fan. That, and the fact that a “merger” like this could pull in $65 billion a year in revenue. Wall Street also appreciated news of the rejection and sent Time Warner shares up over 15%.

Banking on lawyers…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Bank of America came out with its earnings today and yeah…they had profits. Too bad they were down over 40% from a year ago, which means there was nothing for them to brag about today. Unless it wanted to brag about how its legal bills went up from $471 million last year to $4 billion this year. BofA can thank its lawyers for its $2.3 billion profit which was down from $4 billion a year ago. The Charlotte-based bank gained $0.19 a share instead of analysts’ predictions of $0.29 a share. Mortgage revenue was also down  but man, it was those legal bills that really put a crimp in profits. Good thing (or not?) that it reached a $650 million settlement with AIG for some outstanding mortgage bonds. However, the bank’s legal bills are far from coming to a halt. If it could just hammer out a deal with the DOJ for all the damage it caused leading up to the financial crisis by selling bad mortgages…

 

Not so sweet on this…

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Hershey’s is about to induce a migraine. With commodities like cocoa and dairy going up, the number one candy maker in the United States is hiking up its prices by 8%. It’s the first time in three years that they’re doing this and who can blame them (well, I can) since cocoa and its fellow chocolate making ingredients are almost at three year highs. You can expect other companies like Nestle SA and Kraft to follow (though maybe they wont, but they probably will). At least you’ll have some time to prepare as you won’t feel it in your wallets until next year, when the hikes are set to take effect.