It’s About to Go Down Between Aetna and the Dept. of Justice; Target in Need of Retail Therapy; Barnes and Noble Has a Job Opening. If You Dare.

Put up your dukes…

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And the gloves are off between the Department of Justice and Aetna. Aetna announced it would be reducing its role in the Obamacare exchange, stopping to sell individual insurance, and the Justice Department was apparently warned about such actions last month. You see, because ACA has been costing insurance companies so much money, Aetna wanted to scoop up rival Humana to help absorb costs. But the Justice Department was against the merger over concerns that it would increase prices for consumers and limit competition – your typical antitrust concerns. In a letter to the Justice Department dated July 5, Aetna CEO Mark Bertolini made it abundantly clear that Aetna  would drop out of the Obamacare exchange if the merger did not go his way. It didn’t. And so here we are. Aetna crticics have cried extortion and threats. Aetna , however, calls it a strategic business decision after eating a $200 million loss in its second quarter. Insurers feel that mergers alleviate the enormous costs brought on by Obamacare. They argue that Obamacare has put a major dent in their economics and the government is not holding up its end of the bargain to help mitigate the situation.

Buyer’s remorse…

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Target has missed its target in what the company called a “difficult retail environment.” Well, for Target anyway. The sixth largest retailer cut its full-year fiscal profit after quarterly sales fell more than expected. One of the culprits was a smaller demand for its tech offerings, specifically Apple products. Of course, it’s to be expected that the company is constantly losing ground to Amazon. After all, who isn’t? The company has also been making a push to redo its grocery division by bringing in more organics, gourmet and healthful offerings. That endeavor hasn’t quite hits its stride. And that’s a problem since Target’s grocery division accounts for a fifth of the company’s revenue. Target did turn up a profit of $680 million. Too bad it was a 10% decrease over the same time last year. Sales were down 7.2% to $16.2 billion which was almost on par with estimates. CEO Brian Cornell griped that customer visits went down and now expects a profit range of $4.80 – $5.20, when before it was between $5.20 – $5.40.  It seems his turnaround plan is taking a bit longer to actually um,…turn. In other Target developments, to address its transgender-bathroom policy, the retailer is plunking down $20 million to install single stall bathrooms to its remaining stores that don’t already have them.

Buh-bye…

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Shelve this one under history as Barnes and Noble booted its CEO Ronald D. Boire. The bookseller felt the exec, who had the job for not quite a year, was “not a good fit.” However, to be fair, he did previously fit in at Brookstone, Best Buy, Sony and Sears Canada. Executive chairman  Leonard Riggio will take over until a more permanent replacement can be found and Riggio can finally begin his much-anticipated retirement.  The board said of Boire’s untimely departure that the decision was in “best interest of all parties for him to leave the company.” Ouch. In B&N’s most recent quarter – under Boire – the company took in $876.6 million. Impressive, right? Wrong. B&N took in $910 million the year before. It also lost $30.6 million, far more than the $19.6 million it lost during the same time last year. As efforts to trim costs and turn the company around have yet to yield any meaningful results, shares of the company have also managed to tank to its lowest price in eight months. While B&N has 640 stores dotting the planet, it is still losing ground to that animal we call Amazon. And once again, who isn’t?

 

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Anthem Hits a Sour Note With Major Cyber Attack; Under Armour’s Over the Moon Ratings; Sony Executive Amy Pascal Down But Not Out

Cyber-sickening…

Image courtesy of chanpipat/FreeDigitalPhotos.net

Image courtesy of chanpipat/FreeDigitalPhotos.net

Anthem now joins the illustrious list of major companies to get cyber-hacked, although the health insurance company has yet to definitively say how many of its 80 million current and former customers are affected. It can definitively be said that all sorts of personal information was taken, including social security numbers, names, birthdays, employment data etc. – the kinds of details that can facilitate a very rude and inconvenient identity theft. Anthem says no credit card information was taken. Just everything else of significance. Customers can expect to be notified if they haven’t already been, and in keeping with corporate-cyber-attack tradition, affected customers will also get free credit monitoring and identity protection.  Anthem, which just happens to be the second largest health insurance company, with Anthem Blue Cross, Anthem Blue Shield, Amerigroup and Healthlink under its wings, just might earn itself the uncoveted distinction of having suffered the largest data breach in the health care industry. Ever. However, it’s still looking to sign up new customers for that pesky February 15 Obamacare deadline. Naturally the Feds are involved and if it’s suspected that information was stolen, the FBI has graciously established the Internet Crime Complaint Center website: www.ic3.gov. Anthem also wanted everyone to know that the data of its associates was also breached if that’s at all reassuring, though I don’t know why it would be. Now go and change your passwords!

Bringing it on…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Don’t you just love a good athletic apparel smackdown? Today’s  smackdown is brought to you by Under Armour and its CEO Kevin Plank, who not so graciously told Nike and Adidas to get used to being number two during a CNBC interview. Charming, right? But after posting some boffo earnings that boasted 31% revenue growth to $895 million, I guess he earned the right to say that. Except that Under Armour is, in fact, currently the number two fitness apparel maker, behind Nike. Just saying. In any case, CEO Kevin Plank’s numbers were no accident. The company’s profits were up 37% to $88 million coming out to $0.40 per share. That, my virtual pals, was one cent more than what analysts predicted. Plank’s fiscal logic for Under Armour is pure fitness genius: The more people exercise, the more exercise apparel they’ll need. To add to its fitness arsenal, Under Armour picked up not one, but two calorie-counting, fitness-tracking apps: MyFitnessPal for the very robust price of $475 million and Denmark-based Endomondo, for a cool $85 million. MyFitnessPal currently has 80 million users with Endomondo coming in at 20 million users, mostly in Europe, and with those two acquisitions under its svelte belt, Under Armour hopes to become “the world’s largest digital health and fitness community.” How nifty.

Hack Attack Comeback…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Sony Pictures Entertainment studio head Amy Pascal may be stepping down from her cushy spot at the top, but she’s not out of the picture. The executive, whose emails figured prominently in the Sony hack attack in December, if only because she made some racist comments about President Obama and called Angelina Jolie a spoiled brat (though she did say sorry), will now get a four year production deal with Sony.  While it’s safe to assume she won’t be working with Jolie, or Adam Sandler, or the President for that matter, she will get distribution rights to the the films she does. Not bad for someone who put her foot in her mouth, via email, subsequently earning herself some of the biggest A-list enemies imaginable. The movie “The Interview,” starring the cuddly duo of Seth Rogen and James Franco, was allegedly the source for all the hacking misery, as it poked fun at North Korean dictator Kim Jong Un. The scandal cost Sony $15 million which coincidentally is the same amount of money the “The Interview” made from 2 million digital downloads – in its first few days of its release.