BI-LO (not that one) shuts up shop. We know now that the media and manufacturing are among the sectors being really hammered by the crunch and recession.
Retailing is hurting as well, especially in America, but mostly among the discretionary spending chains, such as luxury goods, clothing, sports goods etc. But food?
Overnight, a private equity owned US grocery chain filed for Chapter 11 bankruptcy in a pre-arranged move to stave off a debt payment.
The name of the chain was BI-LO — no, not the Coles Group-owned cheap chain — but a US chain owned by private-equity investor Lone Star Funds, and centred in the mid-Atlantic coast states of the US.
BI-LO said in its filing that it plans to use the voluntary Chapter 11 bankruptcy protection to “address an upcoming debt maturity.”
The chain has 215 stores in South Carolina, North Carolina, Tennessee and Georgia. All remain open. Eight stores are in the Charleston region. Headquartered in the aptly named down of Mauldin, South Carolina, Bi-Lo employs about 15,500. It has been on the market for more than a year and has closed a number of stores already and sold some off. Sales were estimated at around $US3 billion.
BI-LO said it had commitment for $US100 Million in debtor in possession financing for the bankruptcy.
Diamonds aren’t forever at Tiffany’s. Meanwhile, the reason why Tiffany’s turned to Warren Buffett for $US250 million in financial help earlier this year was made easier to understand with a 76% drop in quarterly earnings overnight.
The luxury jeweller’s shares rose sharply because the result wasn’t as bad as many investors had thought. Tiffany’s was probably lucky to report on a day when Wall Street soared because of the apparent successful unveiling of the latest bank bailout plan by the Obama Administration.
Same-store sales at US outlets open at least a year contracted by a third, more than in Europe or Asia, in the quarter and net profit fell 76% to $US31.1 million, on revenues that fell 20% in the quarter.
The company lowered its outlook and forecast an 11% fall in revenues over the rest of the year. Tiffany had 206 stores and boutiques worldwide including 76 in the US. One, in New York, is said to be have been responsible for up to 10% of all sales. But bankers, brokers and others have cut back on their purchases of trinkets and baubles, as have their trophy wives, partners and others who are no longer rich. Mortgage payments now rank higher than a trinket from Tiffany’s. Now for breakfast?
Walgreens takes on brown-hued tinge. America’s second biggest drugstore (chemist) chain, Walgreens, reported a 7% rise in revenues to $US16.5 billion, but an 8% drop in quarterly profit to $US646 million as it slashed prices and costs to remain profitable.
Investors liked the news (it too had the fortune to announce on the day of the Obama bank bailout plan’s announcement) and the shares had their best day in five months, as did Tiffany’s and Wall Street as a whole.
The chain cut prices on many non-drug products to lure cautious consumers who have cut spending amid the recession and job losses bite deeply into confidence and their pay packets. Walgreens is also facing rising competition from Wal-Mart which is slashing prices on more and more generic prescription drugs and driving down costs and prices.
Same-store sales edged up 1.3%, but sales of non-pharmaceutical items fell 1.2%.
Daily Mail hacks its hacks. And in London the leading media group, Daily Mail and General Trust (DMGT) has more than doubled job cuts to 1000 jobs this year, as revenue slumps and costs rise.
The job cuts will hit hardest at its UK regional publishing business, although the company said further cuts are planned “across all cost categories” at Associated Newspapers, owner of the Daily Mail and Mail on Sunday.
The group owns 113 daily, weekly and free regional newspapers including The Leicester Mercury, the Bristol Evening Post and the Derby Telegraph. The job cuts, over twice as many as forecast in November, come as advertising revenues continue to collapse as advertisements increasingly go online. First revenues this year at Associated Newspapers will be down around 24% on the same quarter of 2008, but at its regional business, the fall will be closer to 37%.
About 1000 jobs are to go at Northcliffe, the unit containing the group’s regional newspapers, which is double the number outlined last November. Other cuts will happen in the education and other parts of the consumer media and business to business operations. These cuts were not quantified.
Ann Arbor News stops the presses. And another American newspaper has tapped the mat and gone online.
The Ann Arbor News in Michigan revealed the switch overnight, following in the path of the Hearst owned Seattle Post-Intelligencer by abandoning its daily newspaper format in favor of life online. The paper was 174 years old and was operated by the Booth Newspapers arm of Advance Publications. Advance owns Conde Naste publications, which includes Vanity Fair and other magazines and newspapers.
The News‘ online life starts in July when the final paper will be printed. Michigan is among the US states hardest hit by job losses, with the unemployment rate swelling to 11.6% in January as the car industry collapsed.