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Monthly Archives: May 2012

Rebranding, Promoting JC Penney

When former Apple (AAPL -0.25%) executive Ron Johnson was hired as CEO of struggling retailer J.C. Penney (JCP -2.92%), he outlined a strategy that spurned the company’s previous highly promotional approach in favor of more straightforward pricing.

To that end, the company implemented a three-level selling plan and scrapped its numerous sales and promotional events. The new approach was announced in January.

In the first leg of the strategy, J. C. Penney cut prices on all of its merchandise compared to last year’s regular pricing and called this “Every Day” low prices. Additionally, the company implemented sales that last a month, called “Monthly Value” discounts. J.C. Penney also holds sales on certain merchandise marked for clearance on the first and third Friday of each month. These sales, known as “Best Price” deals, coincide with many consumers’ paydays.

At the time of the announcement, Johnson was firm in his conviction about the change in strategy at the retailer. “We have made the decision to change our pricing strategy, and we’re going to stick to it,” Johnson said in January. After a disastrous first-quarter, however, it now appears that J.C. Penney is looking to revert back to a more promotional stance. The company held a Memorial Day weekend sale and is reported to be planning a Black Friday event. In all, the retailer has planned an additional five Friday sales this year, expanding its “Best Price Friday” program.

The catalyst for the move appears to be the company’s dismal first-quarter where total sales plunged 20% and same-store sales fell 19%, helping drive a steep operating loss in the period. The results sent JCP shares down nearly 20% on May 16 and have raised questions about whether the brand is fundamentally broken. In light of the new information from the company about additional sales, it is clear that Johnson and his management team are feeling the pressure.

The company told Charles Grom, retail analyst at Deutsche Bank (DB +0.93%), that it would be holding five extra strategically timed “Best Price Friday” events this year, including one on Black Friday, according to the Wall Street Journal. The other special Friday sales may be held during the Christmas and back-to-school seasons, the Journal speculated. According to Grom, the change — occurring so soon after the implementation of the straightforward pricing approach — could backfire.

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Was Pepsi Spying On Mexican Cartel?

MORELIA, Mexico (AP) – Banners signed by a cult-like Mexican drug gang say that cartel members launched firebombing attacks on a PepsiCo. subsidiary because they believe the snack company let law-enforcement agents use its trucks for surveillance.

Five Sabritas warehouses and vehicle lots were attacked Friday and Saturday in the Mexican states of Michoacan and Guanajuato. Officials say four alleged members of the Knights Templar cartel have been detained in the case, which they link to extortion. At least 10 banners hung around the city of Apatzingan on Thursday accuse Sabritas of ferrying government agents.

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John Edwards Not Guilty On 1 Count, Mistrial On Other 5

Updated at 4:34 p.m. ET — Capping a day of dramatic turnarounds, the jury in the campaign finance trial of former presidential candidate John Edwards found him not guilty on Thursday one one count and said it was deadlocked on the remaining five charges.

U.S. District Judge Catherine Eagles then declared a mistrial on the remaining charges. It was not immediately clear if prosecutors intend to seek a retrial on those charges.

The count on which the jury reached a “not guilty” verdict involved contributions from Edwards’ contributor Rachel “Bunny” Mellon.

WNCN, reported that when the decision came, Edwards closed his eyes, rubbed his face and smiled at his daughter, Cate. He then hugged his daughter and his elderly parents while whispering to them, “I told you this would be OK,” it said.

Earlier, the jury of eight men and four women told Eagles that it had reached a verdict on all six felony accounts against Edwards. But after the jury returned to the courtroom, the foreperson stated that jurors had reached a unanimous decision on only one count. Eagles then sent them back to the jury room to resume deliberations.

The charges against Edwards, 58, arose from about $1 million in donations while he was in the midst of the 2008 race for the Democratic presidential nomination from two wealthy donors, Fred Baron and Mellon, a billionnaire banking heiress. The money was used to support and hide Edwards’ pregnant mistress, Rielle Hunter.

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Discriminatory Lending is All the Rage

Remember the new saying is ‘do the crime and pay the fine’ as there is no real consequence to malicious and callous behavior…even if you break the law your safe.

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Thanks For The Bailout Suckers

The Bush and Obama administration are certainly at fault for not trying to get banks to do something right for the bailout America gave them. But as it turns out like corporate welfare there is no allegiance to fellow citizens and  the country that put them on the map.

With no strings attached we pay out and get shut out.

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The Bulls Have No Moxy; Say Goodbye to The Worst Month of 2012

The markets traded all over the place today. From down 100 DOW points to up as much as 60. Rumors of the IMF bailing out Spain turned the markets on a dime, but in the end the IMF did not confirm said rumors and the markets closed down.

This month saw the least amount of up days since 1969.

DOW dow 22

NASDAQ down 10

S&P down 2.7

Today’s story

[youtube://http://www.youtube.com/watch?v=oZdiXvDU4P0 450 300]

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Cage Fighter Rips out Training Partners Heart, Thought he was Possessed by Devil


A U.S. cage fighter ripped out the heart of his training partner while he was still alive after becoming convinced he was possessed by the devil, it was alleged today.

Jarrod Wyatt also cut out Taylor Powell’s tongue and ripped off most of his face in a brutal assault that police said looked like a scene from a horror film, officers said.

They claim they found the 26-year-old standing naked over his friend’s body with parts, including an eyeball, strewn around the blood splattered room in Klamath, California.

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Detroit Adopts Budget, $250 Million Cuts

MACKINAC ISLAND — For the first time in recent history, Detroit’s executive and legislative branches of government quashed potential squabbles over the city’s budget and agreed to make $250 million in cuts in an effort to steer Detroit back toward fiscal stability.

Detroit Mayor Dave Bing this morning said he intends Friday to formally adopt the budget, which contains key public lighting, transportation and public safety initiatives. Bing is attending the Mackinac Policy Conference on Mackinac Island.

“My administration fundamentally agrees with City Council’s recommendations for the 2012-2013 budget,” Bing said, speaking this morning from the porch of the Grand Hotel. “This budget supports my financial and operational restructuring plan that will restore fiscal stability to the city of Detroit.

“I believe this budget is a key indicator of our efforts to collectively transform Detroit and will help to spearhead our efforts to improve core services and the overall quality of life of Detroiters,” he said.

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Alcoa Cuts Capacity as it Has a Rough Go at Business Lately – $AA

“Aluminum manufacturer Alcoa is going through a rough patch as its profitability has taken a beating lately due to falling alumina prices arising from oversupply of the commodity.

Alcoa is a major global producer of aluminum and related products and could play a vital role in bringing prices back to previous levels if it continues to cut capacity. In April, it cut nearly 390K tons in smelting capacity and might have to cut more assessing the market, going forward.”

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Transport Sec. LaHood In Detroit Monday For Light Rail Proposal

WASHINGTON — U.S. Transportation Secretary Ray LaHood will be in Detroit on Monday to discuss the future of a proposal to build a light-rail line along Woodward Avenue.

His visit follows a federal review of the investors’ plans.

If LaHood announces money for the plan it could jump-start the rail project that supporters see as a way to revitalize the core of Detroit.

Rip Rapson, head of the Kresge Foundation, said he’ll be there and supporters Roger Penske and Quicken Loans’ Dan Gilbert changed travel plans to attend.

“I assume that wouldn’t be happening if LaHood is coming to give us bad news,” Rapson said.

The Kresge Foundation pledged $35 million toward the M1 Rail project.

The meeting is set for Detroit Mayor Dave Bing’s office; Gov. Rick Snyder and several investors in the M1 Rail group are expected to be on hand, a U.S. Transportation Department official confirmed.

Chris Brown, Bing’s chief operating officer, said he is “cautiously optimistic to see where things are going.”

“At the end of the day you’ve got to show a capital plan that works and how long-term operations and maintenance can be funded,” he added.

Private sector investors including Penske Corp., Quicken Loans, the Ilitch family and Peter Karmanos’ Compuware have contributed to the effort to build a 3.3-mile light-rail line on Woodward Avenue from downtown Detroit to New Center. The group submitted plans to federal officials in April, saying it raised most of the $137 million needed to build it and promising 80% of the estimated $5.1-million annual cost of operating it through 2025.

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Romney Makes Surprise Stop At Solyndra

Fremont, California (CNN) – In a tightly-guarded surprise campaign stop, Mitt Romney visited failed energy company Solyndra Thursday and invoked the building as a symbol of what he called President Obama’s misuse of taxpayer dollars.

The visit – kept a secret by the campaign until shortly before the candidate and the press arrived at the site – offered a hulking visual to accompany Romney’s repeated criticism of Obama over the Solyndra scandal.

Standing on a gritty embankment across the street from Solyndra’s edifice, Romney called the glass-fronted building the “Taj Mahal” of corporate headquarters and a symbol “gross waste” and accused the president of cronyism.

“This building, this half a billion-dollar taxpayer investment, represents a serious conflict of interest on the part of the president and his team,” Romney said. “It’s also a symbol of how the president thinks about free enterprise. Free enterprise to the president means taking money from the taxpayers and giving it freely to his friends.”

The solar energy company based outside San Francisco went bankrupt less than two years after receiving a $535 million loan in 2009 from the Department of Energy.

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Google Wants .lol Domain

NEW YORK (CNNMoney) — Internet addresses are about to expand way past .com and .org, and Google wants in. It applied to grab not only .google, but also fun suffixes like .lol.

The company said it would like to operate “domains we think have interesting and creative potential,” citing .lol as an example.

Google (GOOG, Fortune 500) is just one of the hundreds of companies that have applied for new generic top-level domains (gTLDs) — the “.com” part of website addresses — in an upcoming massive expansion of the Internet’s infrastructure. The full list of applicants, and their proposed new domains, will be announced on June 13.

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Edwards Jury Reaches Verdict On One Of Six Counts

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The judge in former North Carolina Sen. John Edwards’ federal corruption trial has ordered jurors to continue deliberations after they announced they had reached a verdict on only one of six counts.

The judge will soon issue an “Allen charge,” which is essentially a request from the court for the jury to go back into deliberations and try again to reach a unanimous verdict on all counts.

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European Companies Retain Eur133 Billion from Leveraged Buyouts

The refinancing burden of unrated European leveraged buyouts (LBOs) remains challenging, says Moody’s investors Service in a new Special Comment published today showing that 254 companies face EUR 133 billion in LBO-related debt maturing through 2015. At least a quarter of these companies could default with the figure doubling if external factors close the high-yield market for extended periods.

The new report, entitled “Unrated European LBOs Remain Under Pressure from Refinancing Burden,” is now available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release.

“Over half the debt maturing through 2015 is concentrated in 36 companies, each of which has over €1 billion of debt, says Chetan Modi, Head of Moody’s European leveraged finance and author of the report. “While this debt is broadly dispersed across industries, there is a concentration of debt to be refinanced in 2014.”

The results of Moody’s study are consistent with the rating agency’s previous analyses, but these companies are now one year closer to the 2014-15 refinancing peak. This refinancing peak remains worrisome, given the weak macroeconomic environment and the generally low credit quality of this debt.

In the report, Moody’s notes that the key factors determining the type of refinancing method companies choose will be the amount of debt and its credit quality. Many larger companies will seek to refinance with high-yield bonds, however they will need to be sufficiently creditworthy to achieve this.

The openness of both European and US high-yield markets will largely determine how this refinancing burden is navigated. Market access will remain in “windows”, and Moody’s expects new-issuer pricing to remain expensive.
Moody’s anticipates that more companies will attempt to amend-and-extend (A&E) loans in 2012. Lending options for European collateralised loan obligations (CLOs), including for A&Es, will become increasingly constrained, particularly from 2013, as their reinvestment periods end. This restriction will precipitate more fundamental debt restructurings for weaker credits.

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COOKIE MONSTERS! SESAME STREET Allegedly Used to Torture Guantanamo Bay Prisoners


Forget waterboarding, Guantanamo Bay prisoners are now being tortured by BIG BIRD — at least according to a new documentary released by Al Jazeera.

According to the doc — called “Songs of War” — detainees at the U.S. Naval base have been forced to wear headphones blaring Sesame Street music on repeat for hours or days on end … to break their will (start at 2:00).


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By Matt Brooks

Every spring, the conspiracy theorists try to poke holes in the NBA’s annual Ping Pong ball party. From the New York Knicks landing the top pick and franchise-savior Patrick Ewing to the Cleveland Cavaliers coming up lucky in the wake of LeBron James’ departure, the NBA draft lottery winner seems to be the team with the best story.

Monty Williams was shocked to win the lottery. Just look at his face. (Jonathan Bachman – AP)

By Matt Brooks

Every spring, the conspiracy theorists try to poke holes in the NBA’s annual Ping Pong ball party. From the New York Knicks landing the top pick and franchise-savior Patrick Ewing to the Cleveland Cavaliers coming up lucky in the wake of LeBron James’ departure, the NBA draft lottery winner seems to be the team with the best story.

Last night was no different, and, predictably, talk of the lottery being rigged is drowning out the early mock draft frenzy.

The NBA-owned New Orleans Hornets earned the right to the No. 1 pick — which most assume will be Kentucky forward Anthony Davis — despite going in with thefourth-best chance of winningamong the 14 teams. The Hornets had a 13.7-percent chance compared to Charlotte’s 25-percent chance, Washington’s 19.9-percent chance and Cleveland’s 13.8-percent chance.

Now, after New Orleans Saints owner Tom Benson assured NBA Commissioner David Stern he would keep the team in the Big Easy, he has already begun to cash in on his $338 million investment.



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