Virginia’s unemployment rate spiked to 5.2 percent in December, hitting its highest point in nearly 13 years.
Va. lawmakers push to limit investments in Iran (Virginian-Pilot)
The U.S. government calls Iran the world’s most active state sponsor of terrorism. Virginia’s public retirement system calls it, indirectly, an investment. The connection is relatively small. About 3 percent of the pension fund’s roughly $42 billion is in 30 companies that are partially invested in Iran’s oil sector. Some state legislators say that’s too much.
Textile dyeing company is closing (Roanoke Times)
Fred Whitaker Co. will shut its doors on March 31, laying off all of its 136 employees. Executives of the Roanoke industrial textile dye company made the announcement Wednesday, telling employees that the business was no longer viable.
Consumers cut credit payments, struggle to pay bills (USA Today)
Consumers are dramatically scaling back how much of their credit card balances they pay each month. Data released this month show that the credit card payment rate — the percentage of outstanding card debt paid — fell by 2.5 percentage points to 16.1%. The drop in November, the latest month available, is among the largest on record, according to CardTrak.com, a credit card research firm.
Economy Pinches the Billable Hour at Law Firms (NY Times)
Lawyers are having trouble defending the most basic yardstick of the legal business — the billable hour. Clients have complained for years that the practice of billing for each hour worked can encourage law firms to prolong a client’s problem rather than solve it. But the rough economic climate is making clients more demanding, leading many law firms to rethink their business model.
The Art of Alliances (Entrepreneur)
Whenever I consider new strategic alliances or expansion opportunities, I look for three things: good partners, good financing and good management. Whether we’re looking for investors, partners or vendors, we weigh their experience, expertise, track record and character. The quality of the businesses or individuals we align with directly affects our future.
Richmond gets extra time on ballpark (Times-Dispatch)
The developers pitching a minor-league ballpark for Shockoe Bottom are giving Richmond Mayor Dwight C. Jones an extra five months to swing.
Region’s new homebuilding hits lowest point since 1984 (Virginian-Pilot)
New home construction and sales in Hampton Roads last year fell to their lowest point in more than two decades, according to a report released Wednesday by Residential Data Bank, a Suffolk-based housing market research firm.
Wachovia’s new owners to cut back on staff (Roanoke Times)
Wells Fargo is cutting its retail loan servicing staff and will eliminate 35 jobs in the Roanoke Valley.
Data scams have kicked into high gear as markets tumble (USA Today)
Cybercriminals have launched a massive new wave of Internet-based schemes to steal personal data and carry out financial scams in an effort to take advantage of the fear and confusion created by tumbling financial markets, security specialists say.
What Red Ink? Wall Street Paid Hefty Bonuses (NY Times)
Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year.
Scenes From a Layoff: Tears Flow Among the Kilns at a Tile Maker (WSJ)
Huddled around half-century-old kilns for warmth, some workers masked their anxiety with nervous optimism. “I’ll go back to hang drywall,” said Dustin Bourne, a lanky 22-year-old, chatting with three high-school buddies. Of course, they all knew the truth: Mr. Bourne took a job here last year because drywall work had disappeared.
Opportunity for Sale (Slate)
Great Read, although I doubt it’s happening in Richmond: Inevitably, the internship-selling racket has slipped the surly bonds of philanthropy and entered the for-profit marketplace. An outfit called the University of Dreams guarantees placement or your money back. Summer-internship fees (the University of Dreams prefers to call it “tuition”) range from $5,499 to $9,499. For 3 percent extra, you can pay on an installment plan. The interns have been placed with firms like Hill and Knowlton and Smith Barney (did a rich, dumb intern start the credit crunch?) in Barcelona, Chicago, Costa Rica, Hong Kong, London, Los Angeles, New York, San Diego, San Francisco, Sydney, and Washington, D.C. For-profit consultants like Fast Track Internships are extending the principle of SAT prep to internships by teaching marginally literate students how to polish their résumés and cover letters and by guiding them to potential summer employers.
Top Secret: Get Your E-mail Opened (Entrepreneur)
When it comes to e-mail marketing, it’s all about the subject line. Make the most of your email.
How to Manage Your Team in a Downturn (and Come Out on Top) (BNET)
From the manager’s perspective, getting the most out of employees in this kind of environment can seem like a Sisyphean task. In fact, it’s a perfect opportunity to rejigger processes and fix what’s broken — and managers are uniquely positioned to do just that. Here’s how being candid with your employees, rewarding them in creative ways, and enlisting them to help make hard decisions can not only keep your team motivated but pull your company out of its slump.
RIC bucks passenger trend (Times-Dispatch)
Passenger traffic at Richmond International was down 4 percent last year compared with 2007, which was the airport’s best year, the Capital Region Airport Commission said.
Norfolk Southern Corp. delivers 13 percent profit (Virginian-Pilot)
Despite the sluggish global economy, Norfolk Southern Corp. rolled to a strong finish in 2008 as its income grew 13 percent to $452 million in the fourth quarter compared with 2007, the Norfolk-based railroad announced Tuesday.
Stimulus uncertainty: How fast will the impact be? (USA Today)
The goal of President Obama’s $825 billion economic stimulus plan is to spend money fast. Some of his favorite proposals, however, will take years to have full impact.
Turning Around a Struggling Business (Business Week)
From increasing your selling efforts to minimizing layoffs, business experts offer 11 practical tips to counteract economic uncertainty.
4 Mistakes Young Salespeople Make (Inc.)
They offer too much information, They don’t show deference, They immerse themselves in the wrong information, and they lose sight of the goal.
Richmond-area home sales at 10-year low (Times-Dispatch)
In all, 9,287 houses were sold in this area, lower than the 9,526 for all of 1998. Sales here tumbled 22.8 percent in 2008 from the previous year, according to the housing report. The average price fell 14.3 percent in the fourth quarter to $250,181 from the same period a year ago — below where it was in 2005.
Housing downturn hits Southwest Virginia (Roanoke Times)
Last year, foreclosure filings increased 262 percent for the Roanoke Metropolitan Statistical Area, according to RealtyTrac, a California-based online service that tracks and monitors foreclosures. There were 301 foreclosure filings in the Roanoke MSA, up from 83 in 2007. The increase was largest in December, when 115 foreclosures were filed in the Roanoke metro area.
Virginian-Pilot forces workers to take unpaid days off to cut costs (Virginian-Pilot)
The Virginian-Pilot, seeking to pare costs further to weather the recession, told its employees today that they would have five unpaid days off this year. The action will eliminate one week of pay, reducing annual salaries by about 2 percent. It will not affect daily publication of the newspaper.
Market Losses Tighten Screws On Colleges (Washington Post)
American colleges and universities lost an average of 23 percent on their endowment investments last semester, according to a national survey to be released today, a drop that is hurting the bottom line across the board, from major state institutions to the Ivy League
Layoffs Spread to More Sectors of the Economy (NY Times)
A year into this recession, companies across the board are resorting to mass job cuts. Home Depot, Caterpillar, Sprint Nextel and at least eight other companies announced on Monday they would cut more than 75,000 jobs in the United States and around the world — a gloomy start to the workweek for employees anxious about holding their own as the economy sinks. Caterpillar, the maker of heavy equipment, is slashing its payrolls by 16 percent. Texas Instruments said late in the day that it would eliminate 3,400 jobs, or 12 percent of its work force.
Auto Dealerships Prepare for a Major Shakeout (WSJ)
As Sales Plunge and Big Three Face an Uncertain Future, Closures and Consolidation Loom for Many Franchisees.
Four million jobs in two years? FDR did it in two months (Slate)
A great read for historical perspective. Roosevelt diverted not quite one-third of Ickes’ PWA budget to Hopkins’ CWA with the goal of putting to work 4 million people. As a percentage of the population, that would be the equivalent of putting 10 million people to work today. In his first weekly radio address, Obama pledged that the stimulus package would “save or create 3 to 4 million jobs over the next few years.” (His budget director estimates that 75 percent of the money will be spent within 18 months.) Hopkins got there within two months.
You Never Know Who “They” Know (Entrepreneur)
Pretty obvious, but good for a reminder: Don’t think a gardener can be a referral source to the rich? Think again. Discounting even one potential networking opportunity can be disastrous.
The final moments of Circuit City (Times-Dispatch)
A great article: time was of the essence: A court order unsealed the next day in U.S. Bankruptcy Court in Richmond gave them just a week, until Jan. 16, to make a deal. The meetings in Las Vegas — and then later the following week in New York City — were among the last-ditch efforts executives made to sell Circuit City after the nation’s No. 2 consumer-electronics retailer filed for bankruptcy protection in early November.
Nearly all wrapped up (Times-Dispatch)
For most of the 20th century, Chesapeake was a well-known player in the paper industry in Virginia. Founded here in 1918, the company owned about 300,000 acres of acres of timberland and a massive paperboard mill in West Point that remains the town’s top employer. By the mid-1980s, however, Chesapeake’s managers were looking for new ways to expand the company. A relatively small player in a commodity industry that suffered from severe price volatility, the company started looking for opportunities in new businesses.
Bank: Executive bonuses weren’t funded by bailout (Virginian-Pilot)
When Hampton Roads Bankshares Inc. reported this month that it paid $925,000 to two former executives of Gateway Financial Holdings Inc. in the midst of a merger, it was thrust under a national spotlight.
Pfizer reaches agreement to acquire Wyeth in $68 billion deal (AP)
Drugmaker Pfizer Inc. has reached an agreement to acquire Wyeth in deal valued at $68 billion. The New York Times and Wall Street Journal reported Sunday evening that Pfizer (PFE), the maker of Lipitor and Viagra, is working to finish financing for the acquisition. Wyeth employs thousands in Richmond.
Nationalization Gets a New, Serious Look (NY Times)
Only five days into the Obama presidency, members of the new administration and Democratic leaders in Congress are already dancing around one of the most politically delicate questions about the financial bailout: Is the president prepared to nationalize a huge swath of the nation’s banking system?
Selling Virtue (Slate)
When I go shopping for moral instruction, I don’t drive the family van to corporate America’s front door. Their job is to make good stuff for me to buy at a good price, not lecture me on the virtuous life. Yet that’s the tack a slew of companies have been taking with ad campaigns that march up to my front door like an army of Mormon missionaries and bang loudly.
The Ultimate Business Tune-up for Times Like These (Inc.)
Some helpful ideas: In a tough economy with credit extremely tight, big investments are not an option for most companies. Yet no business can afford to stand still. We asked our favorite entrepreneurs for the tips and tricks they have used to pilot their businesses through difficult times. The result: 23 things you can do right now to energize your employees, wow your customers, and get your business back on track.
Drop in new car sales has ripple effect (Roanoke Times)
The state auto dealers association recently released data confirming what its membership already knew: Sales of new cars and trucks fell dramatically in 2008 in Virginia, just like elsewhere. Automotive sales dropped 21 percent statewide. The drop was 18 percent in the Roanoke Valley, the same as for the nation, which saw auto sales fall to 13.2 million vehicles, the lowest level since 1992.
Downturn catches up with tech (USA Today)
Despite predictions — wishful thinking? — by some financial analysts that it would remain relatively unscathed, Silicon Valley and the rest of the industry buckled under distressing news Thursday. Microsoft announced 5,000 layoffs — its biggest cutback ever — and Sony said it will report an operating loss for the first time in 14 years: $1.65 billion. A day earlier, Intel said it will close several older factories, displacing 5,000 to 6,000 workers.
100 Best Companies to Work For (Fortune)
Even in this economy, some companies are going out of their way to please employees. This year, there’s a new no. 1, as Google slips to no. 4. See detailed profiles of the top 100 employers, including interactive maps, key perks, contact information, and more
Real-World Cost-Cutting Practices (Entrepreneur)
These 4 companies are saving money in day-to-day operations. And they’re doing it without affecting the customer experience.
Retail group chooses leader (Times-Dispatch)
Nancy Thomas yesterday was named president and chief executive officer of the Retail Merchants Association. She is the first woman to hold the position in the Richmond-based trade group’s 100-year history. Thomas, who was interim president since her predecessor retired, is a former chairwoman of the Retail Merchants board and was co-owner of Turn Key Interiors, a Richmond-based design firm.
Shockoe baseball’s sales pitch (Times-Dispatch)
Paul W. Kreckman, a vice president with Highwoods Properties, is making the rounds to community groups to solicit support for Shockoe Center, a proposed $363 million development for Shockoe Bottom.
S-A-T-I-R-E Internal Investigation Reveals No Chinese Food At Chop Suey (Tobacco Avenue)
Results of a five-minute probe of local store Chop Suey have revealed not a single portion of Chinese food, a Richmond man confirmed today. Instead, Virginia Commonwealth University sophomore Sean Tully reported only finding “a bunch” of eclectic, slightly-worn used books inside.
Chesapeake begins rehab for blighted properties (Virginian-Pilot)
The Chesapeake City Council in May appropriated $860,000 for the housing authority, which would identify and purchase “properties of concern,” said Mark Woodward, the city’s former housing coordinator.
House Urges Tighter Rules For Bailout Beneficiaries (Washington Post)
The House yesterday overwhelmingly approved a plan to place strict new requirements on banks and other financial institutions that accept government assistance under the Treasury Department’s $700 billion financial rescue program.
How Obama’s SBA Chief May Change the Agency (Business Week)
As the President’s pick to head the Small Business Administration, Karen Mills could transform the agency’s approach to funding
To Help Collect the Bills, Firms Try the Soft Touch (WSJ)
A must-read for small biz owners: Small businesses, hit by a wave of customers postponing payments because of the recession, are struggling to find ways to come up with enough cash to stay alive. The companies are hugely dependent on their cash flows. But if they push their slow payers too hard, they risk losing customers. Hiring collection attorneys is also expensive, and if late payers are pushed into bankruptcy, their small-business creditors may find themselves empty-handed, waiting at the end of a long queue. That’s why many businesses that are owed money are relying on cooperation rather than strong-arm tactics.
Richmond assessments stay fairly flat (Times-Dispatch)
The assessments that help determine Richmond real estate tax bills will be barely changed, on average, this year.
Judge sets auction date for Chesapeake (Times-Dispatch)
Richmond-based packaging company Chesapeake Corp. will close on a sale of its business units April 3, under a plan approved by a bankruptcy court judge yesterday.
Rail car maker to idle 40 percent of workers (Roanoke Times)
FreightCar America Inc., which last week released a plan to slash its Roanoke work force, reported losses for much of 2008 but a backlog of orders for more than $300 million of the company’s freight rail cars. The company, which began manufacturing in the former Norfolk Southern Corp. shops in downtown Roanoke in 2005, notified the state Jan. 14 of plans to lay off 120 workers there on or before March 14.
In 2009, Layoffs Is the Business to Be In (NY Times)
As companies across the country eliminate hundreds of thousands of jobs, one field is hiring: the layoff industry. Businesses that specialize in “career transition” can barely keep up with the demand as corporate America cuts staff.
In ‘interesting alliance,’ Chrysler fills hole with Fiat (USA Today)
At first it doesn’t seem to make sense — Italian automaker Fiat Group, known in the U.S. for unreliable but sporty cars, acquires 35% of Chrysler in exchange for a promise to share its car designs, but no cash.But the experts think there could be something to the deal announced Tuesday.
Stimulus Projects May Be Slow, CBO Says (Washington Post)
Less than half the money dedicated to highways, school construction and other infrastructure projects in a massive economic stimulus package unveiled by House Democrats is likely to be spent within the next two years, according to congressional budget analysts, meaning most of the spending would come too late to lift the nation out of recession.
Obama’s message of confidence (Fortune)
The new president strives to assure Americans that, yes, they can. But reviving America’s economy will mean hard work and ‘unpleasant decisions.’
After the Honeymoon… (Entrepreneur)
You’ve built a successful startup–now everyone lives happily ever after, right? Guess again. Here’s what to do when the honeymoon is over and the shiitake hits the fan.
Media General suspends its 401(k) match program (Times-Dispatch)
The company, owner of the Richmond Times-Dispatch, said yesterday that it will stop matching employee contributions starting April 1, at least through the end of the year. The step is a cost-saving measure to deal with the economic recession and a slump in advertising revenue, the company said. The contribution will be reinstated when business conditions improve, President and CEO Marshall N. Morton said in a letter to employees yesterday.
Shuttering Circuit City is a big job (Times-Dispatch)
In the next several weeks, the liquidators will take over store management. They will hang banners, post displays and run ads to draw customers to Circuit City stores nationwide. Large-scale liquidations are not new territory for the companies involved. Together, they’ve worked on dissolving Linens’n Things, Steve & Barry’s, Mervyns and Shoe Pavilion chains in the past year.a
Banks Foreclose on Builders With Perfect Records (NY Times)
Although the housing crisis is nearly two years old, many banks had refrained from cracking down on small home builders. They are starting to do so, and a wide swath of the industry could be forced out of business in the next few years. Not only have new-home sales stagnated, but builders confront a rising wave of foreclosed properties coming to market at prices below the cost of building a new home. To move houses, they have to mark them down to less than the cost of construction. The convergence of these problems is bringing many small and medium-size builders — who account for about 70 percent of new-home construction in the United States — to their knees.
Many employers say inauguration now, work later (USA Today)
Employers are bracing for a major slowdown as employees take time off work to scroll the Internet, watch TV news and otherwise participate in Inauguration Day events. But because of the special historic significance of Barack Obama’s swearing-in, some employers accept that Tuesday won’t be business as usual. About 5% of businesses are closing altogether, according to the Society for Human Resource Management. That is more than those that close on Election Day and about the same as those closed the day before Thanksgiving.
Small Businesses Cut Costs by Renegotiation (WSJ)
Small companies are finding that almost everything is renegotiable these days. The economic downturn is prompting business owners — by necessity or by opportunity — to re-examine contracts with suppliers, vendors or landlords and come up with creative deals. And in many cases, they are saving a substantial sum of money.One thing that certainly helps is having the cash to pay your bills on time.
Caroline’s home decline (Times-Dispatch)
The rural county about halfway between Richmond and Fredericksburg has been hit hard by foreclosures, which are driving down prices for all homes. In Caroline, 18.6 percent of all home sales in the first 11 months of 2008 were foreclosed houses, the largest percentage in the Richmond region, according to an analysis by the Richmond Times-Dispatch. Caroline recorded 217 foreclosures in the first 11 months of 2008, up nearly 113 percent from all of 2007. By comparison, foreclosures in the Richmond region, which includes Caroline and 19 other localities, rose 84 percent in the 2008 period from the previous year.
Global footprint for the Richmond area (Times-Dispatch)
Since 2003, the Richmond area has seen 37 expansions or openings by foreign-affiliated companies. They amounted to about $1.9 billion in investments and created about 3,500 jobs, according to Virginia Economic Development Partnership records.
For Businesses Big and Small, It’s Lights Out (Washington Post)
The number of business bankruptcy filings rose sharply in 2008, with 31 percent more companies looking to liquidate — instead of just restructure their debt — in the third quarter than in the first. They have little choice. Many companies are loaded down with debt amassed in the days of easy money. Servicing that debt is harder because of falling revenue. Lenders, facing their own troubles, are not as eager to refinance. And the buyers that can afford an acquisition right now are few and far between.
Cost of Borrowing Zooms Up for Corporations (NY Times)
This year alone, more than $700 billion in corporate loans will come due, according to Standard & Poor’s. That is the size of the federal bailout of the financial sector. Many companies were counting on being able to borrow more money to meet those obligations and kick their debt further down the road.
The Obama Economy (Portfolio)
A back-of-the-spreadsheet estimate of just how much the rush to sell—and buy—all things Obama may be injecting into the troubled economy.
Planning a Start-Up? Help and Advice Abound (WSJ)
There’s no shortage of advice and resources for fledgling entrepreneurs. In fact, the biggest problem is figuring out whom to trust and what resources will be most useful. That involves scouting out what’s available and judging what is worth pursuing. Yes, it’s time-consuming. But one good piece of advice or personal connection can make or break your chance at success. Here’s a look at some possible places for new entrepreneurs to turn.
Beware the Business Saboteur (Entrepreneur)
Read the cautionary tales of 3 entrepreneurs who were duped into bad business decisions but continued to thrive.
LandAmerica victims sue executives and SunTrust (Times-Dispatch)
A $330 million class-action lawsuit accuses LandAmerica 1031 Exchange Services and SunTrust Banks Inc. of defrauding clients by using their money to pay off other clients.The lawsuit, filed Wednesday characterizes the companies’ actions as a Ponzi scheme.
MeadWestvaco will cut 2,000 jobs worldwide(Times-Dispatch)
MeadWestvaco Corp., a Fortune 500 packaging and paper-products company, announced yesterday that it would cut 2,000 jobs — 10 percent of its worldwide work force — by the end of the year to save money as it contends with the recession. About 800 of the cuts will come in the first quarter.
About 75 jobs of the total will be eliminated at the company’s headquarters on West Broad Street in Henrico County.
Economy casts shadow on hotel’s plans (Roanoke Times)
The plan for a major expansion at the historic Hotel Roanoke is progressing, but the state of the economy will determine how soon it happens.
Minneapolis’ ‘Star Tribune’ newspaper files Chapter 11 (USA Today)
ess than two years after it was bought by a private equity group, the Star Tribune has filed for reorganization under Chapter 11 bankruptcy.
A New Menace to the Economy: ‘Zombie’ Debtors (Business Week)
Call them “zombie” companies. Many more has-been companies will be feeding off taxpayers, investors, and workers—sapping the lifeblood of healthier rivals.
Confessions of Serial Entrepreneurs (Entrepreneur)
It takes a special kind of person to delve into the wilds of business startup. It takes an even more driven person to start business after business. Why do serial entrepreneurs do what they do?
Va. foreclosures tripled in 2008 (Times-Dispatch)
Last year, 49,011 households in Virginia were in danger of losing their homes, up 201 percent from a year earlier, according to a report released today by RealtyTrac. Nationally, 3.2 million filings were reported on 2.3 million properties last year, an increase of 81 percent from 2007. In the Richmond area, filings rose 468 percent last year from 2007, with 5,159 households receiving notices. That means 1.03 percent were delinquent with mortgage payments.
Circuit City on the block (Times-Dispatch)
Circuit City Stores Inc. lawyers and potential buyers worked into the night yesterday as an auction of the nation’s No. 2 consumer electronics chain ran well beyond schedule. Last night, a company attorney said negotiations with bidders would continue and that an announcement could come as early as 10 a.m. today.
Shoppers ‘Sidelined’ In Long Retail Slump (Washington Post)
Americans drastically curtailed their shopping last month, according to government data released yesterday, and consumers who have come to expect big price cuts are unlikely to increase their spending anytime soon, analysts said, causing trouble for retailers in the months ahead
Bank of America May Receive More Bailout Money (NY Times)
In a sign of deepening fragility among the nation’s largest banks, the government is preparing to throw a new multibillion-dollar lifeline to Bank of America, several people briefed on the talks said Wednesday, the latest effort to stem a tide of growing losses in the financial system.
You Have No Friends (Slate)
A provocative and well-written piece that may get me to sign up on Facebook: There is no longer any good reason to avoid Facebook. The site has crossed a threshold—it is now so widely trafficked that it’s fast becoming a routine aide to social interaction, like e-mail and antiperspirant. It’s only the most recent of many new technologies that have crossed over this stage. For a long while—from about the late ’80s to the late-middle ’90s, Wall Street to Jerry Maguire—carrying a mobile phone seemed like a haughty affectation. But as more people got phones, they became more useful for everyone—and then one day enough people had cell phones that everyone began to assume that you did, too.Everyone else is on Facebook. Why aren’t you?
3 Weeks to Startup (Entrepreneur)
Starting a business doesn’t have to take weeks or years.
How Hard Could It Be?: Thanks or No Thanks (Inc.)
An interesting small biz dilemma from the newest issue of Inc. Magazine: A young employee came up with an idea that added a million dollars to our bottom line. How do we reward him for the contribution? Do we even have to?
S-A-T-I-R-E CarMax CEO Deems Damn DVR Not Max Worthy (Tobacco Avenue)
A very funny post that gently pokes fun. Unable to get the damn stupid thing to record last night’s episode of The Office, CarMax CEO Tom Folliard told reporters that his home digital-video recorder is definitely not Max Worthy, the used-car retailer’s standard rating system for its automobiles.
Circuit City auction adjusted (Times-Dispatch)
The auction of Circuit City Stores Inc. as an ongoing consumer electronics retailer — a going concern — was moved from noon yesterday to 3 p.m. today. In a court filing posted on its bankruptcy Web site Monday night, the Henrico County-based chain said it was making the change because it had received “expressions of interest for going concern transactions and continue[s] to explore various financing alternatives.”Circuit City will take the best offer — whether it’s a combination that sells the company piecemeal or whole — to U.S. Bankruptcy Court in Richmond at 10 a.m. Friday. BizSense is looking at what this might mean for the scores of small businesses owed money.
Richmond’s Most Hideous Buildings (Style Weekly)
Richmond is handsome and distinctive architecturally with tremendous natural beauty in the surrounding countryside. These are assets that, like any investment, should be guarded jealously and enhanced intelligently. And while we boast buildings, parks and neighborhoods of aesthetic significance, there’s also considerable underwhelming architecture. Some buildings are just eyesores. Here are seven exasperating buildings that offer ideas in how not to build as we approach the second decade of the 21st century.
The Price is right (Daily Progress)
Bob Barker, longtime host of “The Price is Right,” has given the School of Law $1 million to create an animal law program. The Bob Barker Animal Rights Program will include an animal law class starting in 2009-10, guest speakers and independent study and externship opportunities. The program also will create a writing competition that may be open to all of UVa’s graduate students.
Complaint: Amazon.com should charge tax for sales in Va.(Virginian-Pilot)
When Amazon.com sells a book for $10 or a television set for $1,200 to Virginia consumers, the retailer charges no sales tax. Amazon.com Inc., based in Seattle, operates a fulfillment center and a data center in Virginia. According to federal and Virginia law, a company with a physical presence or “nexus” in the state must collect sales tax on purchases there, even if the business has headquarters outside the state. Sarah Pishko, owner of Prince Books in downtown Norfolk, said that means Amazon should have to collect the 5 percent state sales tax, as she does. She discovered Amazon’s operations in the state late last year and has asked state authorities why Amazon isn’t paying.
Banks in Need of Even More Bailout Money (NY Times)
Industry analysts estimate rising unemployment and business failures will lead to another $500 billion to $750 billion of losses in coming months. That could bring total losses from the credit crisis to $1.5 trillion to $1.8 trillion, twice as high as earlier estimates.
Autopsy of an Indie Bookseller (Business Week)
The rise and fall of Cody’s tells the story of the book business as a whole and offers a cautionary tale to independent retailers
Circuit City bankruptcy auction to begin today (Times-Dispatch)
Potential buyers will bid on the consumer electronics company as a whole, per store or on individual assets. The auction, being carried out in the Manhattan offices of Circuit City Stores Inc.’s attorneys, is scheduled to finish tomorrow.
Mortgage giant offers relief in Va. to buyers on brink (Virginian-Pilot)
Countrywide Financial Corp. has agreed to cut interest rates and provide relief to more than 8,900 troubled Virginia homeowners to help prevent them from going into foreclosure, the state attorney general’s office announced Monday.
Business of teaching business thrives in recession (Daily Progress)
business school officials say that recent events make this one of the best times to study the fundamentals of business, but the same environment also could create one of the toughest job markets in years for b-school graduates.
America Hunkers Down: A Nation of Savers? (Washington Post)
In ordinary times, Bill Rattner would be better off than most. The 50-year-old Richmond resident, however, is also the creative director for the e-commerce group at Circuit City, which recently filed for Chapter 11 bankruptcy protection. So Rattner, with three children — two of them in college — has started acting like a man making up for years of financial profligacy. He and his wife have cut their expenses by 15 percent. They’ve trimmed $70 to $80 from their monthly grocery budget. They switched car insurance companies to get a lower rate. They are staying home for dinner more often and are buying fewer clothes. Whatever they save, they stash in a high-yield money-market account.
Alternative-Energy Companies Grow Even as Others Falter (WSJ)
Alternative-energy firms are reporting an influx of inquiries and business from a wide range of companies looking to increase their energy efficiency, especially from those that believe the Obama administration will impose stricter regulations requiring them to conserve energy. President-elect Obama has spoken often of the importance of alternative energy, also known as clean technology, and his federal stimulus package is expected to include plans to beef up alternative-energy infrastructure and improve energy efficiency in government buildings. In a speech last week, he called for the U.S. to double the production of alternative energy in three years.
And the Money Comes Rolling In (Inc.)
This Inc. cover story is a must-read for anyone who works in a web-based business. It’s long, though. Markus Frind works one hour a day and brings in $10 million a year. How does he do it? He keeps things simple.
Kaine to offer green-jobs plan (Times-Dispatch)
Gov. Timothy M. Kaine will call today for state tax incentives and grants to promote environmentally friendly businesses and jobs. Kaine will lay out his proposals, which require General Assembly approval, this morning in Virginia Beach.
Genworth: Lays off 1,000; 400 of them at Henrico HQ (Times-Dispatch)
The 400 layoffs at headquarters came out of a work force there of more than 1,700.
Farm Fresh will close two markets, in Va. Beach and N.C. (Virginian-Pilot)
Farm Fresh is closing two of its 44 supermarkets, one on Kempsville Road in Virginia Beach and the other in Wilson, N.C.
Handful of New River Valley high-tech firms are growing and hiring (Roanoke Times)
Some companies are finding fortunes on the Internet. Others are bringing out products and services in support of other, innovative technologies. All while the economy is in a recession.
Economic downturn pounds commercial real estate market (USA Today)
Commercial property sales plunged 73% last year, according to Real Capital Analytics. Vacancy rates are rising, and hundreds of large properties are in default. The American Institute of Architects’ billing index, a leading indicator of construction six months ahead, is at a record low. Unemployment in the construction industry is 15.3%, well above the average 7.2% jobless rate.
Sorry Doc, the recession is going to be painful for you, too (Slate)
The health care industry was supposed to be recession-proof. So why is it in trouble? BizSense has been hearing from local physicians that business is slowing.
Financial scoundrels have little to fear from the law (LA Times)
Execs collected otherworldly salaries and bonuses for years on the grounds that their institutions could scarcely survive a week absent their wisdom and judgment. We know better now, but they haven’t given the money back.
Eight Mistakes That Doom Startups (Business Week)
A neat Podcast: Lots of people may be thinking about starting businesses in 2009, but the process can be fraught with mistakes. Ed Hess, professor of business administration at the University of Virginia, offers advice on avoiding the eight mistakes that doom startups.
Circuit City will meet today with creditors (Times-Dispatch)
Creditors of Circuit City Stores Inc. will sit down with the company at the federal courthouse in Richmond this morning to discuss options on settling outstanding debt.
Home sales in area fall 24 percent in 2008 (Daily Progress)
Home sales in the Charlottesville region fell by 23.7 percent in 2008, marking the slowest real estate market in a decade, according to a year-end report to be released today by the Charlottesville Area Association of Realtors.
New homes being built smaller (USA Today)
The American dream is shrinking. For the first time in at least a decade, builders are substantially reducing the size of new houses.
Holiday Sales Were Dismal, Data Shows (NY Times)
Judgment day is at hand for American retailers. On Thursday, many chains reported the worst holiday shopping season in decades, and the stores are entering the new year so weakened that some might not survive. A wave of corporate failures that has already taken out stores like Sharper Image and Linens ’n Things is expected to grow substantially worse in coming months, sending some of the well-known names of American retailing into bankruptcy.
What Obama’s Proposed Tax Cuts Mean for Small Businesses (Business Week)
Here’s a welcome report for entrepreneurs this new year: President-elect Barack Obama’s massive stimulus plan is expected to include three key tax breaks for small-business owners.
How to manage your business in a recession (Fortune)
There’s no script for running a company in this historic downturn. So what the heck do you do? Here are ten ways to weather the storm.
Smartbox acquires Calif. company (Times-Dispatch)
Smartbox, a Richmond-based portable-storage company known for its big, red boxes, is expanding its geographic reach with an acquisition. The company said yesterday that it has acquired San Diego-based Big Box Storage Inc. The deal will give Smartbox a stronger West Coast presence and expand its reach to 43 markets nationwide served by 26 franchises. It will also create as many as 20 new jobs in the Richmond area.
Owner of Richmond’s WTVR will trade station (Times-Dispatch)
WTVR is finally changing hands. Raycom Media Inc. will swap the Richmond CBS affiliate with Local TV LLC, which will give Raycom the Birmingham, Ala., Fox affiliate, WBRC. The exchange should bring Raycom into compliance with a Federal Communications Commission rule forbidding a television company from owning two stations in the same market.
Harnessing methane gas: Startup hopes to make cash from trash (Roanoke Times)
A green energy company believes it can make a little money for itself and help local government and the environment by making electricity from landfill gas. The lease has been signed for Green KW Energy to install a generator fueled only by the gas rising from within the Mid-County Landfill off Cinnabar Road in Christiansburg.
Google news (Fortune)
Metaphorically speaking, Google is killing the newspaper industry. Online news is quickly hollowing out the traditional paper – the Christian Science Monitor eliminates its print edition, Tribune Co. declares bankruptcy, Detroit’s two dailies slash home delivery to three days a week – while Google rakes in advertising profits. Turns out that Google CEO Eric Schmidt professes a passionate desire to lend a hand. In an interview with Fortune’s Adam Lashinsky, he shares some thoughts on how newspapers might yet survive – and how Google might help.
The Trials of the Auto Dealer (WSJ)
Long a Road to Wealth in Towns Across America, Selling Cars Has Turned Into a Struggle to Survive, Not Always Successful.
Jobless rate rises statewide (Times-Dispatch)
The statewide unemployment rate rose to 4.6 percent in November, the latest figures available, up 0.4 percentage point from October.In the Richmond area, the jump in the jobless rate was more dramatic, rising from 4.5 percent to 5 percent. That rate will rise when 1,200 Qimonda workers leave the company in coming weeks.
Pearson gets OK on Chrysler Jeep auto dealership (Times-Dispatch)
Haynes is selling its Chrysler Jeep franchise to Pearson. When finalized, Haynes will close its dealership at 9520 W. Broad St. The Chrysler Jeep franchise will be transferred to Pearson’s property at 8250 W. Broad St. It is not known how much inventory or how many employees will make the move.
Software venture radiates success (Virginia Gazette)
Solertium epitomizes the new wave of enterprise for the county. The small software company is lean and green. Each of its young designers has connections to the College of William & Mary. And the owners, Alison and Rob Heittman, settled on New Town for its proximity to public transit and pedestrian-friendly design.
Alcoa to cut 13,500 jobs, about 13% of its workforce (USA Today)
The Pittsburgh-based company also said 1,700 contractors will be cut as part of a broad-based plan to reduce costs that includes the planned sale of four business units and a global salary and hiring freeze.
Recession creates a load of problems for truckers (LA Times)
Tens of thousands of drivers who had been on company payrolls are now out to compete for slices of the smaller cargo pie with the nation’s independent owner-operator drivers, who were already struggling. It’s the reason for the desperately low bids facing many operations.
Why Wall Street could go to jail (Fortune)
Corporate officers were making reassuring statements about financial prospects just days before Armageddon hit their companies — and investors’ portfolios. Here’s some prominent cases. more
What’s Your New Year’s Resolution? (Entrepreneur)
In the face of layoffs, low consumer confidence and the sluggish economy, it pays to count your blessings of the last year and mark your goals for 2009. In light of the tough times ahead, we asked our community of entrepreneurs what their resolutions are for the New Year. Here’s what they had to say:
Magnolia Green developers are sued (Times-Dispatch)
Timmons Group Inc., a local engineering firm, is suing the developers of Chesterfield County’s Magnolia Green development and an affiliate company for more than $1 million, claiming unpaid services and fees.
Mall overhaul begins: Some business owners anxious (Daily Progress)
The four-month, $7.5 million restoration that the city says will lead to unbroken bricks, more benches and fully functional fountains has started without a hitch, with workers saying Monday morning that they were “making pretty good progress right now.”
Less supercenter, more supermarket (Virginian-Pilot)
The state’s first Wal-Mart Neighborhood Market, a grocery concept focused on convenience and low prices, is scheduled to open Wednesday morning on East Little Creek Road.
Company cost cuts put limits on business travelers (USA Today)
With the economy in full swoon, more corporate travel departments are requiring cost-saving measures. Employees are increasingly pressured by travel managers to book tickets further in advance, opt for limited-service hotels, take public transportation and refrain from paying for others’ meals. To be sure, revenue-generating trips, such as meeting new clients or appeasing repeat customers, are still high priorities at many companies. But others deemed less critical — internal meetings, trade shows and training sessions — are being shelved.
2009: The forecast for entrepreneurs (Fortune)
A helpful if overly general guide: Small companies ended 2008 with a laundry list of troubles, with sales slow, bank lending frozen, and health care and credit-card costs soaring. Here’s what to expect in 2009 on 7 key issues.
Recession Cost-Cutting No-Nos (Entrepreneur)
n a sluggish economy, running leaner is a must, but not every money-saving measure is a good one. These experts discuss the moves you shouldn’t make during tough times, even if they seem like easy ways to cut costs.
Chesterfield business carted off (Times-Dispatch)
Great business reporting from David Ress that explains how Chesterfield shopping cart manufacter Rehrig went under: At Rehrig International Inc., the slide started with something tens of millions of shoppers saw but few probably noticed. About three years ago, Wal-Mart Stores Inc., the world’s largest retailer, decided to switch back to shopping carts made of metal … Two days before Christmas, the 33-year-old company closed its doors and put more than 100 employees out of work.
Coping with a layoff (Times-Dispatch)
Job losses during the past year have shown no mercy, striking all levels, from data-entry clerks to department managers, from new hires to senior employees. What happens after a loss depends on attitude as well as aptitude. Some see an opportunity to start a business; others spend months looking for a new job. A solid story that looks at how a handful of women are coping with their lob losses.
For retailers, naughty or nice holiday season? (Times-Dispatch)
“It was the worst Christmas I’ve seen in 16 years,” said Jeff Hamilton, owner of Hamilton’s Pro Shop, a golf shop on Jefferson Davis Highway in Colonial Heights. He was one of three merchants the newspaper tracked during the holiday season to see how their strategies to bring in sales worked. The other stores were Moss House in Powhatan County and Saxon Shoes in western Henrico County.
Landmark sues over dispute with Cox about publications (Virginian-Pilot)
Landmark Media Enterprises LLC, parent of The Virginian-Pilot, filed suit last month against a unit of Cox Enterprises Inc., contending that its Cox Auto Trader Inc. violated an agreement to distribute certain publications featuring classified advertising.
College Degree No Shield As More Jobs Are Slashed (Washington Post)
College-educated workers have steadily become more vulnerable to economic downturns since the 1980s, as employers have resorted to cutting middle managers and older workers who may be more expensive. Older and more educated workers lost their jobs at a higher rate during the recession of the early ’90s than in the recession of the early ’80s, although younger, less-educated workers still had the highest rates of job losses, according to research by Princeton University economics professor Henry Farber.
As Vacant Office Space Grows, So Does Lenders’ Crisis (NY Times)
Vacancy rates in office buildings exceed 10 percent in virtually every major city in the country and are rising rapidly, a sign of economic distress that could lead to yet another wave of problems for troubled lenders.
The Rebranding Game (Inc.)
Many entrepreneurs find that their moniker becomes too limited and outdated as the business evolves and enters new markets. The problem is that changing names early in the life of a company can confuse customers. And the whole process is made more complicated these days by the need for a rebranded company to switch Web addresses. New dot-coms and dot-nets are being registered at a rate of 2.5 million a month, according to VeriSign (see “How to Buy a URL”).
In the Dumps (Style Weekly)
A must-read story: After one of the worst retail holidays in memory, the search for economic clues starts — and ends — in the garbage truck. Lambert says the guys in suits with the fancy academic titles couldn’t spot a recession if it hit them like a garbage truck. Maybe — just maybe — he suggests, those guys would have a better chance of offering insight before it’s too late to help if they were riding his truck.
Layoffs overload jobless system (Times-Dispatch)
In the first week of December, the commission paid out $14 million in unemployment benefits, compared with $8 million during the same time period of the previous year, Fogg said. “We have just been overloaded with phone calls.”
Colleges Profit as Banks Market Credit Cards to Students (NY Times)
Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back. The relationships are reminiscent of those uncovered two years ago between student loan companies and universities. In those, some lenders offered universities an incentive to steer potential borrowers their way.
Secondhand stores shine in weak retail market (Fortune)
As thrifty customers turn to secondhand goods, resale stores are profiting from the recession.
The Hope Indicators (Portfolio)
When will we ever see signs of a recovery? Here are 10 things to start watching for in 2009.
S-A-T-I-R-E Davis & Main Geographically Unable To Open New Location (Tobacco Avenue)
Though he sees enough demand to open a second Davis & Main location, restaurant manager Robert Noland said today that, without another appropriately-named local intersection, he is geographically unable to do so.Though the business could replicate its large mirrors, dark wood paneling, and “antique feel” in other parts of the city, Noland said he would have to choose from such names as Broad & Fifth, Allen & Main, or branch into the volatile Chamberlayne & Azalea intersections.
Security costs for Carytown New Year’s party (Times-Dispatch)
Doubling the number of Richmond police for Carytown’s New Year’s Eve party and making an emergency lane down the middle of the street have driven up security expenses. The festival will charge admission for the first time as it faces what organizers say is a more than three-fold increase in security expenses, which will exceed the security cost for the three-day Richmond Folk Festival. That even draws nine times as many people.
Ukrop’s closing supermarket in Lightfoot (Virginia Gazette)
Blaming slower than anticipated residential growth in the Lightfoot corridor, Ukrop’s announced Tuesday that it will close its new supermarket on Mooretown Road at the end of January. CEO Bobby Ukrop and local manager Dean Sculthorpe broke the news to employees at both stores Tuesday morning.
Local vodka distiller plans expansion outside mid-Atlantic (Times-Dispatch)
The economic downturn has been changing how much consumers want to spend on alcoholic beverages. But not all spirits are down in the industry. Take Paul McCann. More than two years after introducing a brand of vodka, he isn’t about to let an economic recession halt his plans to put Virginia-made vodka on the map.
Developers tangle as local land heads to auction (Daily Progress)
A Charlottesville homebuilder is facing foreclosure on 26 townhouse sites in Albemarle County — but the company says another prominent local developer is at fault. Weather Hill Development is losing to foreclosure a total of 27 properties, which were slated to become five rows of townhouses as part of the second phase of the Poplar Glen project off U.S. 250 just west of Charlottesville.
In 2009, Economy Will Depend on Unlocking Credit (New York Times)
The financial crisis began in the credit markets, and eventually it will end there. But as the financial industry rounds out one of the most wrenching years in its history, bankers and policy makers are struggling to see the way out of this mess. Despite triage by Washington and trillions of dollars of taxpayers’ money, credit is not flowing nearly as much as many had hoped.
Business Blunders (Portfolio)
The trillion-dollar mulligan and other embarrassing escapades of the year. Portfolio.com’s annual list of our favorite missteps.
The dumbest products of 2008 (Inc.)
A few fun ones in here, including the a portable urinal and a key for that office coffee cup.
Builder says 11 layoffs were necessary (Roanoke Times)
Andrew Kelderhouse, president of Fralin & Waldron, said that he recalls no other double-digit layoff during his 31 years with the construction and real estate development company. In late October and early November, the Roanoke County-based company laid off 11 employees. He cited a housing slowdown that began in 2006 and has recently reached a crawl.
Fallout begins for retailers after dismal holiday season (USA Today)
Retailers will close tens of thousands of stores in 2009, and several more will file for Chapter 11 bankruptcy protection as the effects of the worst holiday retail season in 40 years sink in.
Musician Finds a Following Online (WSJ)
Thanks to the buzz his online tracks generated on music blogs and social-networking sites, Justin Vernon has played at numerous venues and appeared on the “Late Show With David Letterman.” He signed a record deal in October 2007, and his first album, “For Emma, Forever Ago,” sold about 87,000 copies through mid-December, with about half of those downloaded online. With a band he formed early this year, called Bon Iver, Mr. Vernon is now playing sold-out concerts across the U.S. and abroad.
Year in Review 2008: Flameouts and Bailouts (Entrepreneur)
You don’t need me or anyone else to tell you it’s been a rough year in the business and financial worlds. But when it gets this bad, you can laugh or you can cry. In this case, you’ll probably do a little of both. Here’s our list of 2008’s lovable (and not-so-lovable) losers.
Eclectic mix buoys Carytown merchants (Times-Dispatch)
Merchants in this Richmond retail district exude a sense of optimism. Many retail experts and retailers believe the features that make the area a one-of-a-kind shopping destination, will help it get through difficult economic times.
Welcome words: You’re hired! (Times-Dispatch)
The news isn’t all bad for mortgage-industry professionals. Adecco USA, a professional staffing agency, says it is looking for more than 250 mortgage professionals in the Richmond area to fill temporary positions for clients.
Obama Tax Cuts Likely Soon (Washington Post)
President-elect Barack Obama’s economic stimulus plan will include an immediate tax cut for middle-class families, and the incoming administration hopes to enact permanent tax cuts soon thereafter, a senior adviser to Obama said Sunday.
Saying Yes, WaMu Built Empire on Shaky Loans (NY Times)
Great read that shows just how crazy the lending was … and how some people made millions on the bubble: As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.
NFL, Inc.: The Business Behind the Game (BNET)
A look at the savvy management playbook that makes a $6 billion business tick.
Richmond’s first Westin opens (Times-Dispatch)
The Richmond area’s newest upscale lodging, The Westin Richmond Hotel, has opened at West Broad Street and Forest Avenue just off Interstate 64. The 250-room hotel, which opened last week, is the first Westin in the Richmond area. Located in the Reynolds Crossing office development, it aims to attract business travelers visiting nearby corporate offices, such as the Altria Group Inc. headquarters.
New coal pier sits idle, calling for creative solutions (Virginian-Pilot)
When Kinder Morgan Energy Partners LP spent $58 million building a coal-import facility in Newport News early this year, the company hadn’t planned for it to sit idle for months at a time. Or handle export coal. Or unload ore to barges. But that’s exactly what Pier X has done.
As Property Values Plunge, Tax Bills Might Not Follow (Washington Post)
Homeowners whose property values have plummeted as much as 40 percent are unlikely to see a corresponding drop in their real estate taxes next year, and some might face a tax increase as the counties surrounding the District struggle with huge budget shortfalls.
Slump Batters Small Business, Threatening Owners’ Dreams (WSJ)
A great read from small biz owners: For many small businesses across the country, these are scary times. The dramatic pullback in consumer spending is only the latest blow threatening to push some strapped small businesses out of existence. Customers are paying their bills late, cutting off cash flow, the lifeblood of a small business. Even healthy companies are being choked by the lack of credit lines and bank loans. Others are still reeling from several years of high raw-materials prices.
Southwest Airlines adds cities, courts business travelers (USA Today)
Southwest will shrink overall next year — the first time it’s ever done that — but the nation’s largest low-fare airline will also expand aggressively in some big business markets because that’s where the most profitable travelers are.
After the Mall (Slate)
Shopping malls are a thing of the past with their buy-now, worry-later mentality that has been with us at least since the ’80s. Malls are a testament to the kind of consumer thinking that got us into this recessionary mess. And that’s why we need to close every single one of them.
Olympic facility proposed in Chesterfield (Times-Dispatch)
Construction on a $100 million, 50-acre Olympic training facility in the Waterford Business Center in Chesterfield County could begin in February. The project at Route 288 and Powhite Parkway, announced yesterday at Chesterfield’s Department of Economic Development, is the brainchild of Steve Burton, CEO and chairman of SportsQuest, a company he developed for this purpose. Burton, a psychologist who owns several businesses, says he will provide a large portion of the startup cost of the project with equity. RBS: Is he going to pay all the construction costs?
Region’s banks could get $175m from TARP (Inside Business)
At least $175 million worth of new bank capital from the federal government could be on its way to Hampton Roads. Five local institutions have announced during the past several weeks they received preliminary approval to participate in the U.S. Treasury Department’s TARP Capital Purchase Program, which provides a capital infusion from the government in exchange for shares of each bank or bank-holding company.
Home Sales Fell Sharply in November (NY Times)
Sales of previously owned homes, which make up most of the market, declined 8.6 percent in November, to a seasonally adjusted rate of 4.49 million, according to the National Association of Realtors, a trade group. The median price of a home fell 13 percent in November, to $181,300 from $208,800 a year ago, its lowest point since February 2004.
With IPOs at lowest level since 1977, firms run out of options (USA Today)
The frozen IPO market has a cascading effect that could prove costly in a recession, where jobs are fast evaporating. A major avenue for private equity and venture capital funds to cash out has disappeared. That has forced the firms to hold companies in their portfolio longer than they would like, leading to a logjam of funding. It will affect both start-ups and companies in their latter stages that need cash to remain in business, leading to fears of a rise in bankruptcies of those that need a lot of capital to function
Seller’s Remorse (Fortune)
Even though I had spent many stressful months negotiating the sale agreement with the help of a lawyer, the transaction was flawed. I had never sold a company or dealt with that kind of money before, and I was in way over my head.
LandAmerica sells most of itself (Times-Dispatch)
LandAmerica Financial Group Inc., ranked 582 on the list and honored by Fortune this year for its innovation and financial health, sold subsidiaries yesterday that accounted for 85 percent to 90 percent its annual revenue. Last year, the company reported $3.7 billion in revenue. Fidelity National Financial of Jacksonville, Fla., bought Lawyers Title Insurance Corp., Commonwealth Land Title Insurance Co. and United Capital Title Insurance Co. for $235 million.
It’s time to dump the myth of the Great Brand (Slate)
The Great Brand Myth says that the value of a great company rests not just in what it makes and sells, but in a carefully husbanded reputation that is somehow supposed to establish a relationship with customers that’s worth more than the sum of what the company does.Plain old marketing got spiffed up, turned into “brand consulting,” and made intellectually reputable—a worthy pursuit for clever liberal-arts graduates with degrees in anthropology and sociology … The trouble was that it was, on some important levels, bunk.
If You Fire People, Don’t Be a Jerk About It (WSJ)
Managers often take a clinical approach when breaking the bad news, fearing they’ll get sued if they say the wrong thing, or end up facing angry — even violent — employees. But being too cautious can make a boss seem downright heartless.
Getting Started in Government Contracting (Business Week)
To benefit from the coming bonanza in infrastructure work, it’s best for small businesses to start at the local level
nHelath sells new health-care plan (Times-Dispatch)
BizSense profiled nHealth in June: Paul Kitchen wanted to design a plan that would lower a company’s health-care premiums but still cover the medical services that represent the greatest risk of financial burden to individuals and families. The consumer-driven approach gives employees more control of their care by using a Health Savings Account. The account, built from pre-tax dollars, is used to pay doctors’ fees as well as the deductible portion of the covered services and other qualified expenses.
Sav-More Supermarket opens in Chesterfield (Times-Dispatch)
In a spot once occupied by a Winn-Dixie store, two area entrepreneurs are taking a stab at the grocery business. Mike Mazurski, who has a background in radio, and restaurateur Andres Moreria have opened Sav-More Supermarket at Beulah and Hopkins roads in Chesterfield County.
CarMax swings to 3Q loss as sales fall (AP)
Auto retailer CarMax Inc. said Friday it swung to a $21.9 million loss in the third quarter (it’s first loss in eight years) due to slumpCarMax also said it suspended its fiscal 2009 outlook, citing unprecedented declines in traffic and sales and volatility in the credit market. It also imposed a hiring freeze at the home office, temporarily suspended store growth to conserve cash and said it will further reduce store staffing by natural attrition.ing sales and store traffic, and loan loss write-downs in its auto finance arm.
Friction between a widely known provider of at-home and on-site computer repairs and some of its franchisees has spilled into the courtroom. Six franchisees of Norfolk-based Geeks On Call America Inc. filed identical lawsuits in federal court in Norfolk last week, alleging that the company breached its contracts and engaged in fraud. Four others filed suits with similar allegations on the same day in Norfolk Circuit Court.
Bankruptcies skyrocket in C-Ville (Daily Progress)
Between Oct. 1 and Dec. 19, there were 175 families from the Charlottesville area who filed for bankruptcy in the U.S. Bankruptcy Court of the Western District of Virginia. During the same period in 2006, there were only 22 such filings. In other words, local bankruptcy filings have shot skyward by 695.5 percent over the past two years, federal court records show.
More bank customers think smaller institutions these days (USA Today)
as the top tier of the financial services industry faltered, small and regional banks, as well as credit unions, started seeing their cash deposits rise dramatically as nervous Americans shied away from big banks. Some of these smaller financial firms saw an increase in small businesses knocking on their doors. And despite rampant headlines about a credit freeze and plunging housing market, they have even been writing more home loans this year than last year.
More Firms Cut Labor Costs Without Layoffs (New York Times)
A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor.
Obama taps new SBA head (Fortune)
Obama’s pick for the Small Business Administration’s new administrator, Karen Mills, has been both a business owner and a venture capitalist
Universal Leaf seeks new home (Times-Dispatch)
Universal Corp. is making plans to move its headquarters staff from the West Broad Street building the company has occupied for 40 years to an office on Forest Hill Avenue in South Richmond. The tobacco leaf company in May said it was planning to sell its nearly 90,000-square-foot property at West Broad and Hamilton streets in the city and find a smaller office in the region.
After merger, Hampton Roads Bankshares plans to buckle down (Virginian-Pilot)
The parent of Bank of Hampton Roads and Shore Bank will concentrate next year on preserving its credit quality and capital rather than pursuing continued growth, its president and chief executive officer told shareholders Thursday.
NOT SATIRE: Burger King launches beef-scented body spray (USA Today)
Burger King (BKC) may have just the thing. The home of the Whopper has launched a men’s body spray called “Flame.” The company describes the spray as “the scent of seduction with a hint of flame-broiled meat.
Slim Pickings: Meltdown business should be booming for lawyers. But it’s not (Slate)
Corporate law firms had one thought to console them in hard times: At least those bankrupt companies will need attorneys! But so far, those cases have been fewer than expected, and the fees have shrunk to a fraction of their former glory. Once-lucrative legal areas like structured finance, meanwhile, have died overnight. It seems lawyers will suffer like the rest of us.
The Weekly Wind Down: Mactini, the smallest computer in the world
Not our funniest, but still worth watching. The business presentation part towards the end is good for a chuckle.
Men’s stores Shevel’s, J. Altis Ltd. call it quits (Times-Dispatch)
Shevel’s and another venerable Richmond area men’s clothier, J. Altis Ltd., are passing into history, victims of a inexorable social trend away from dressing up for work, worship and play.
Governor: more cuts are possible (Times-Dispatch)
Here comes the pain. Gov. Timothy M. Kaine yesterday presented a recession-revised budget for the next two years that closes a $2.9 billion shortfall by eliminating more than 1,500 jobs, doubling the cigarette tax, freezing state wages and making deeper cuts to education, health care and public safety.
On Wall Street, Bonuses, Not Profits, Were Real (New York Times)
Scrutiny over pay is intensifying as banks like Merrill prepare to dole out bonuses even after they have had to be propped up with billions of dollars of taxpayers’ money. While bonuses are expected to be half of what they were a year ago, some bankers could still collect millions of dollars. Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street’s pay structure, in which bonuses are based on short-term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning.
Madoff Madness & why it’s worse than you think (Slate)
This fascinating story is a must-read for lawyers: The moment Madoff was revealed as a fraud, any money that these funds-of-funds would have managed to take back would become gains that have to be given back to be redistributed among all the losers in the Madoff scheme. Now, this sounds bad enough, but … again, there’s more. There’s no time limit on the gains they’d have to give back, so any fund that outed Madoff could be on the hook for any profits it had gained from its Madoff investments for years back. So, as my fund-manager friend puts it, “The question people have to ask is not, ‘Do I have money in a fund that has exposure to Madoff now?’ but, ‘Do I have money in a fund that that has ever invested with Madoff?’ ”is fund-manager friend pointed out, it has some pretty extreme implications.
Staying local pays off (Fortune Small Business)
A chain restaurateur follows his own advice and pursues expansion close to home.
Kaine would double cigarette tax (Times-Dispatch)
Gov. Timothy M. Kaine’s proposal for balancing Virginia’s recession-ravaged budget includes doubling the cigarette tax, delaying an environmental tax break, drawing nearly $500 million from the “rainy-day fund” and pruning 1,500 state jobs, including 530 new layoffs.
Retiree: ‘A lot of good people have been unduly hurt’
Like 2,000 people nationwide, Dawson lost his health-care and life-insurance benefits when LandAmerica’s board of directors voted Nov. 24 to cancel them immediately. The Henrico County-based company began to notify people Nov. 26, the day the firm and a subsidiary filed for bankruptcy protection. Now, retirees 65 and older must find supplementary policies to cover what Medicare does not, and younger people must find new insurance providers.
Restaurant in works at Rocketts Landing (Times-Dispatch)
An abandoned power plant that once provided electricity for Richmond’s trolley cars will become home to a restaurant with views of the James River as part of the ongoing Rocketts Landing development.
Ford’s Colony folks may oust Realtec (Virginia Gazette)
In a stunning affront, homeowners in Ford’s Colony are looking outside the gates to find a new management company. That threatens developer Realtec’s hold over the sprawling planned community. The potential shakeup is the latest wedge in a series of disputes that date back to an attempt to build 220 workforce homes across News Road. Realtec hoped to roll the project into the Ford’s Colony master plan, which homeowners vehemently opposed. Things went downhill when management pushed a big continuing care facility as well.
Construction Braces for Painful 2009 (Washington Post)
Earlier this year, as job losses related to the housing slowdown piled up, new construction of apartments and office buildings, hotels and hospitals continued at a steady clip. But now, with the economy sputtering and building loans harder to come by, the pipeline for new projects is quickly drying up, threatening to put as many as 400,000 more laborers out of work nationally next year, industry groups say.
Retail Prices Fall at Record Rate (New York Times)
Consumer prices fell at the fastest rate on record in November, while home construction skidded nearly 20 percent to its lowest levels in 50 years, according to government data released Tuesday.
Slower Holiday Sales Threaten Small Retailers (WSJ)
Retailers everywhere are expecting lousy holiday sales. But one group is bracing for an especially harsh season: small, independent businesses without the cash cushions or price-slashing abilities of the major chains. Many small companies already are struggling this year due to sharp drops in consumer spending, the credit crunch and the overall bad economy. Grim holiday sales could be enough to force many that rely heavily on the holiday season to shut their doors permanently.
Madoff mess exposes fund ripoffs too (Fortune)
Not quite rich enough and not quite smart enough, a certain investing class has for years paid through the nose for what was thought to be world-class money management by investing in funds that promise access to the best hedge funds. The Bernard Madoff scandal now calls into question the value of the so-called fund-of-fund industry.
10 Advertising Words to Avoid in 2009 (Entrepreneur)
Shun meaningless words like “a lot” and “guarantee” in your copy. It’ll help you out a lot–we guarantee it. BizSense has a few more: amazing, innovative, game-changing, revolutionary (unless it’s in reference to Colonial times), unique, exceptional, timeless, classic, and most annoying, luxury. Have you noticed how all condos are “luxury condos” these days. What happened to all the regular condos?
Deal for core of insurer moves on, but it’s an ugly picture (Times-Dispatch)
Creditors say neither offer is enough, and their attorneys will argue that point during a hearing in today U.S. Bankruptcy Court in Richmond. Also on the 20-page agenda for today’s bankruptcy court hearing is a request by LandAmerica for permission to hire a chief restructuring officer from the interim management firm Zolfo Cooper, which would earn a contingency of no less than $500,000. If the sale of any LandAmerica assets is more than $100 million, Zolfo Cooper would receive 1 percent of the proceeds. Also today, LandAmerica retirees are meeting to discuss healthand life-insurance benefits, which the company canceled last month.
Court Allows Suit Against ‘Light’ Cigarette Makers (Washington Post)
The Supreme Court said yesterday that consumers may sue over what they allege to be deceptive marketing of “light” cigarettes, a decision that opens tobacco companies to what could be billions of dollars in liability in court cases nationwide. The justices voted 5-4 in saying that a group of Maine smokers may proceed with their suit against Philip Morris USA, now owned by Altria. The marketing of what the tobacco companies had once called a more “healthy” cigarette is perhaps the biggest legal liability facing the industry, experts say.
Auto supplier creating 318 new jobs in Newport News (Daily Press)
Continental AG, a leading global automotive supplier, will transfer its South Carolina manufacturing operations to its Newport News facility, creating 318 new jobs. The consolidation will combine the diesel and gasoline fuel injector manufacturing operations into a single location. The company will invest $194 million to relocate diesel fuel injector manufacturing as well as expand the existing gasoline fuel injector business line.
Big merger, big risks; but these banks know the drill (Virginian-Pilot)
How soon will images of a stagecoach show up on Wachovia Bank statements and inside its branches? Wells Fargo & Co., the San Francisco-based bank that promotes its heritage with a horse-drawn vehicle, isn’t saying. Wachovia and Wells Fargo shareholders still must approve their companies’ merger agreement, so it’s premature to address what’s coming, said Mary Trigg, a Wells Fargo spokeswoman.
Alleged scam’s victims list includes famous names (USA Today)
The list of investors allegedly victimized by Wall Street money manager Bernard Madoff in what may be the world’s largest Ponzi scheme expanded rapidly Monday, adding both individual investors and some of the world’s largest financial institutions.
Some Firms Cut Costs Without Resorting to Layoffs (WSJ)
Part of a mini series on small business that you can read free at wsj.com. Some workplace experts say layoffs are a useful part of the business cycle, allowing employers to weed out poor performers, increase efficiency and promote a high-performance culture. Layoffs “are not inherently bad,” says Mark Nadler, a partner at management consultancy Oliver Wyman’s Delta practice. “Some people…are just more crucial to the survival of the organization than others.” Others say employers often underestimate or overlook the costs of layoffs.
LandAmerica subsidiary facing suits (Times-Dispatch)
Days before LandAmerica 1031 Exchange Services Inc. declared bankruptcy, the troubled business was still accepting money from customers. Now that money is tied up and allegations of fraud, misconduct and breach of contract have been leveled against the unit, a division of Henrico County-based holding company LandAmerica Financial Group in U.S. Bankruptcy Court.
Business debts more often gong to collection (Times-Dispatch)
Financially distressed companies unable to pay their bills increasingly are winding up in the hands of a collection agency. That’s also because businesses that are owed money are worried about getting paid, so they’re turning over more delinquent accounts to collections.
Philip Morris research requires constant tests, tweaks (Times-Dispatch)
Part 2 of a series looking at what goes on at Philip Morris’ new $350 million research center downtown: “the tobacco giant’s main active test-marketing effort is on smokeless tobacco — products you put in your mouth instead of lighting up — in what health advocates fear is an effort to recruit a new generation of nicotine addicts.
Mall project could come in under budget (Daily Progress)
With bids coming in for the various pieces of the Downtown Mall restoration, Charlottesville officials are saying the overhaul could feasibly cost 10 percent to 15 percent less than the amount allocated.
New managers hired at brewery (Daily Press)
Less than a month after the takeover by Belgian-based brewer InBev was finalized, Anheuser- Busch has shaken up the toplevel management at its Williamsburg plant.
Trade Groups Regroup (Washington Post)
Reflecting the economic turmoil of the industries they represent, many national trade associations based in Washington are hemorrhaging members who either have lost their jobs, run a financially distressed business or said they need to spend their dwindling discretionary dollars on necessities rather than dues.
Job cuts adding to growing number of housing defaults (USA Today)
Unemployment is now the cause of almost half of all foreclosures on conventional mortgages, raising concerns that mounting joblessness will stall any housing recovery and could cause more foreclosures next year.
Why Southern Republicans are happy to see Detroit Fail (Slate)
The tussle over the bailout has evinced what at first blush may seem a new kind of provincialism that pits Democrats and a few Republicans (like Sen. George Voinovich of Ohio) from heavy union and Big Three states against Republicans from right-to-work states in the old Confederacy. While McConnell & Co. oppose federal subsidies for the Big Three at the federal level, the states from which they hail have generously extended billions of dollars in subsidies to foreign automakers. But there’s a deeper cleavage at work here. Today’s Southern solons have watched their local economies blossom thanks to a younger, more-vibrant auto industry unencumbered by the Big Three’s legacy costs and union work rules—a sort of anti-Detroit that has the flexibility and ability to turn profits by making the types of cars that Americans actually want to buy.
The Unwritten Rules of Social Networking (Entrepreneur)
Is your social networking strategy actually costing you customers? Use these strategies to get it right.
Richmond trio buys slate firm (Times-Dispatch)
Three Richmond-area businessmen recently acquired Buckingham-Virginia Slate Corp., a 141-year-old business known for producing some of the world’s best slate for construction. The company has hired 38 employees in recent weeks, increasing its employment to 105 as its ramps up production.
Henrico-based S&K Famous Brands closing 58 retail stores (Times-Dispatch)
S&K Famous Brands Inc. is closing 30 percent of its 196 stores and has put its West Broad Street headquarters up for sale as it works to restructure its store base and operations.
Recycled paper plant closes (Times-Dispatch)
The housing slowdown and a decline in industrial demand led to the closure of a Caraustar Industries Inc. plant in Richmond and job losses for 52 employees. Carauster, a maker of recycled paperboard products based in Austell, Ga., announced yesterday it is immediately and permanently closing its South Richmond paperboard plant on Hull Street.
Local car dealers at risk of closing in crowded field (Virginian-Pilot)
Hampton Roads, like many parts of the country, has too many automobile dealerships, and those familiar with the local market acknowledge that some will close as the U.S. car industry restructures.
UVa president to forego pay increase (Daily Progress)
University of Virginia President John T. Casteen III will not receive a raise this year. Casteen, in his 19th year as UVa’s president, receives a base salary of $487,000. Of that, $176,000 is funded by the state, while $280,000 comes from private funds. Casteen also earns $31,000 for holding an endowed chair and received $23,400 as a bonus.
Tech team debuts Internet startup (Roanoke Times)
Internet startup Koofers Inc., an online academic community developed by two Virginia Tech students and a Tech graduate, is making growth plans now that venture capitalists have stepped up with a large investment in the year-old company based in Reston.
Bank of America to Cut 35,000 Jobs Over 3 Years (New York Times)
Bank of America said on Thursday that it planned to cut 30,000 to 35,000 positions — among the largest layoffs ever — over the next three years as it digests its acquisition of Merrill Lynch. That could amount to more than 11 percent of the combined firms’ global work force of 308,000.
Hope dims for deal to rescue carmakers as talks collapse (USA Today)
here will be no congressional lifeline for the American auto industry this year. The Senate on Thursday night failed to compromise on a $14 billion bailout for General Motors and Chrysler, after Republicans objected to a House bill passed Wednesday with White House backing.
Charles Schwab: It will get better (Fortune)
When will the market roar back? A lot sooner than you think, says the veteran investor.
Businesses Say Theft by Their Workers Is Up (WSJ)
Companies Find That Trusted Employees Often Commit the Crimes, and They Believe the Recession Is to Blame
Foreclosure rate rises again in Va. (Times-Dispatch)
One in every 567 Virginia households, or a total of 5,694, received a foreclosure filing in November, according to a RealtyTrac report released today. By comparison, one in every 488 U.S. households receiving a filing. Filings include notices of default, trustee sales and foreclosure sales, according to the online database. Filings here rose 121 percent last month from November 2007, while nationally they increased 28 percent, according to the report.
Media General, lenders reach deal (Times-Dispatch)
Richmond-based Media General Inc. said yesterday that it has reached new debt-agreement terms with its bank lenders to give the company more flexibility as the economic downturn cuts into advertising revenue.
Virginia Beach clothing shop is closing after 39 years (Virginian-Pilot)
After almost 39 years as a Hampton Roads retail pioneer, Debbie Rody has decided to close Cage and retire. The store at Pacific Avenue and 37th Street is holding a liquidation sale, with items up to 70 percent off, until all merchandise is gone. As with most retailers, Cage’s sales have dropped this year, Rody said. But she said the difficult economy merely solidified and determined the timing of her prior plans to leave the business, spend more time with family and acquire new talents such as master-gardening.
Chamber supports creation of transit authority (Daily Progress)
The Charlottesville Regional Chamber of Commerce is backing a plan to establish a transit authority for Charlottesville and Albemarle County. Local elected officials are seeking permission from the General Assembly to create the regional authority that would oversee an expansion of the bus system and direct money to transportation projects.
YouTube Videos Are Pulling in Serious Money (NY Times)
Making videos for YouTube — for three years a pastime for millions of Web surfers — is now a way to make a living. One year after YouTube, the online video powerhouse, invited members to become “partners” and added advertising to their videos, the most successful users are earning six-figure incomes from the Web site.
Letter to a Young Banker (Slate)
Michael Lewis on the difference between a job and a calling. RBS readers may remember we discussed his book, Liar’s Poker, last week.
Smart Moves in a Bad Economy (Entrepreneur)
When costs rise and customers wane, don’t let knee-jerk reactions kick you in the wrong direction.
A Perfect Storm? No, a Failure of Leadership (Washington Post)
Great column about an issue that has irritated RBS editors and reporters for a long time: A bit of unsolicited advice to business executives trying to explain why their company or their industry is suddenly in the soup: Please spare us the “perfect storm” metaphor. It’s hackneyed, for starters. It doesn’t square with the facts. And for people who fancy themselves leaders, it’s downright unbecoming.
Va. Beach store gets creative to lure holiday shoppers (Virginian-Pilot)
Deborah Probyn decided to design her front window by “making fun of ourselves.” She got a bunch of arms and legs from mannequins, spray-painted them silver so they’d complement the rest of the display, and hung them in the window with a sign that reads, “Shopping at Blanc won’t cost an arm and a leg.”
Fannie, Freddie execs ignored warnings about risky loans (USA Today)
The former heads of Fannie Mae and Freddie Mac told Congress on Tuesday that the firms bought questionable mortgages to keep pace with rivals despite subordinates’ repeated warnings of risks to the companies, borrowers and the economy.
The Newspaper Bubble, Too, Has Burst (New York Times)
Most newspapers still have earnings before interest, taxes, depreciation and amortization that are equal to 10 to 20 percent of their revenue. That is down from 20 to 30 percent in the middle of this decade, but tolerable — if not for the burden of making debt payments.
Is a $1 Salary Paid in Installments? (Slate)
Whole Foods’ John Mackey, Apple’s Steve Jobs, Yahoo’s Jerry Yang, and Google’s Eric Schmidt get paid a single dollar. Does a salary like that get paid out all at once, or do you get a check for 4 cents twice a month?
Can You Get an SBA Loan? (Inc.)
Under heavy pressure from lawmakers, the SBA swiftly relaxed its lending standards last month. Now, the Treasury and the Federal Reserve plan to create a $200 billion lending facility aimed at unfreezing the secondary market for SBA loans. So will the plan help credit-hungry small businesses? Inc.com asked Christopher Hurn, CEO of Mercantile Commercial Capital, an Orlando-based SBA lender.
Rat stirs rental disagreement (Times-Dispatch)
Alyssa Adkins realized she and her roommate had a problem when she reached for a shoe one night and felt something furry and squishy as a tail slipped through her fingers. Hours later, Charlotte Shartzer awoke in the middle of the night with blood dripping from two puncture wounds near her mouth. Now she and her roommate want to get out of the lease but the landlord says no way.
Times-Dispatch lays off 18 employees (Times-Dispatch)
The Richmond Times-Dispatch laid off 18 employees yesterday, citing the economic recession and a decline in advertising revenue that has hurt newspaper publishers. The job cuts included staff in the newspaper’s advertising, circulation, human resources, marketing, news and production departments, the company said in a statement. BizSense has learned that four reporters/editors were let go.
S-A-T-I-R-E: Philip Morris, Circuit City Announce One Wacky Merger (Tobacco Avenue)
In a move Wall Street analysts are calling “most perplexing,” Philip Morris and Circuit City announced a $7.2 billion merger this morning that will create the world’s largest – and only – consumer electronics retailing tobacco company.
Tight Credit Squeezing Small Businesses (Washington Post)
Loan volumes under the Small Business Administration’s main small-business loan program — called the 7(a) program — were down 30 percent in the year ended in October compared with the previous year. And more than 75 percent of the nation’s banks said they had tightened their standards for loans to small businesses over the past three months, according to a recent Federal Reserve Senior Loan Officer Opinion Survey.
Micromanaging Detroit (Slate)
Some great insight into why banks get bailouts and automakers get stern lectures.
Car Dealers Brace for Closings, or for a Fight, as Detroit Seeks Help (New York Times)
It is possible fights could erupt between some dealers and the auto companies. Virtually every state has stringent laws that make it difficult for manufacturers to alter dealer contracts, even when they abandon brands, as General Motors is talking about doing. These laws have been a big impediment to auto companies in the past as they sought to cut their dealer networks. But this time, many analysts say the sheer scale of the economic downturn is reducing the likelihood that many dealers will fight to stay in what has become a money-losing business.
Official: Re-defaults are high after mortgage modifications (USA Today)
More than half of mortgages modified in a bid to avoid foreclosure fell delinquent within six months, a top U.S. banking regulator said Monday, casting doubt on a proposal to rewrite home loans en masse.
Next Little Thing 2009 (Fortune)
Each year Fortune Small Business celebrates entrepreneurs whose cutting-edge ideas will keep us talking for the next 12 months. Check out this year’s crop of flying cars, blimp power and GPS-enhanced cows.
SBA Loan Cap Sharply Limits Funds for Women and Minority Owners (WSJ)
The credit crunch has triggered an obscure congressional cap on some loans in the SBA’s flagship lending program, sharply reducing the number of those loans. In addition, since Oct. 1 the pool of people eligible for the loans has gotten much bigger.
Rollin’ on the river (Times-Dispatch)
the first journey of the 64 Express drew much attention from local, state and federal officials, who have committed public money to support the new barge service in the hopes of jump-starting container-shipping on barges between Richmond and Hampton Roads. The goal is to reduce traffic and air pollution on the I-64 corridor between Richmond and Hampton Roads. To become profitable, it will have to attract more cargo, which means attracting customers who now rely on trucking, the dominant mode of transportation for cargo containers arriving at or departing from the Virginia ports.
1031 exchange cause of LandAmerica meltdown (Inside Business — free after you sign in)
A great read that explains how LandAMerica fell apart and screwed homeowners who set aside money in escrow. At the heart of LandAmerica’s meltdown is the 1031 exchange, a tax code provision that allows sellers to postpone capital gains on the sale of property if the money is re-invested in another property within six months. If not, the seller is slapped with a capital gains tax from 15 to 25 percent, depending on the type of property. Intermediaries are free to do what they want with the money, even buying auction rate securities, as did LandAmerica. The market for those securities, a complex debt investment, froze in February, leaving LandAmerica with assets it could not sell or against which it could not borrow,
Virginia law students struggling to find work (Daily Progress)
At UVa, students are getting assistance and advice from alumni who once went through the process themselves. This year, less than 10 percent of the 385-member second-year class is seeking summer employment, according to Polly Lawson, the law school’s assistant dean for career services.
Luna Innovations lays off 20 employees (Roanoke Times)
A month after reporting the company’s research and development was not being adversely affected by the souring economy, Luna Innovations Inc. has laid off about 20 employees. The Roanoke-based technology company that develops and manufactures health care, telecommunications, energy and defense market products attributed the layoffs to the national economy.
Long, bitter journey nears quiet end (AP)
About 4,600 workers at Smithfield Foods Inc.’s slaughterhouse in the tiny town of Tar Heel, in one of North Carolina’s poorest and most rural regions, will vote next week on whether to join the United Food and Commercial Workers. Per the order of a federal judge, both the company and the union — neither shy about promoting their positions — are staying silent until the ballots are cast and counted.Long, bitter journey nears quiet end
Back at Junk Value, Recyclables Are Piling Up (New York Times)
The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals. Across the country, this junk is accumulating by the ton in the yards and warehouses of recycling contractors, which are unable to find buyers or are unwilling to sell at rock-bottom prices.
Ad Track: Negative PR in advertising travels fast online (USA Today)
With blogs, short-post forums such as Twitter, video sites and other social-networking sites, “bad (publicity) spreads faster” than ever.
The 12 Most Dangerous Words in Business (BNET)
Don’t worry about the jargon: at least we all recognise it when we hear it. The really nasty language in business are normal words with abnormal meanings. Twelve which should get any alert manager’s bullsh*t detector working overtime include:
Laid-off Circuit City workers could lose pay (Times-Dispatch)
Nearly 600 employees laid off by Circuit City Stores Inc. last month could be stripped of their pay and benefits if a group of creditors gets its way at a hearing today.
DuPont’s Richmond-area jobs shrink by nearly 300 (Times-Dispatch)
DuPont has cut nearly 300 contractor positions at its Richmond-area locations in recent months because of the global economic slowdown, a company executive said yesterday.
Capital One Awoke To Its Dream Deal (Washington Post)
For years, the chief executive of Capital One had looked out from his 14th-floor office in McLean toward a tower on the horizon, desirous of the landmark Washington bank, but he thought the privately held company was out of reach. Then, just a day after telling his business associates about what he had dreamed, Fairbank learned that a New York investment banker had called with news: Chevy Chase was on the block.
November retail sales are worst in 30 years (USA Today)
The Goldman Sachs-International Council of Shopping Centers index of 37 stores reported that sales dropped 2.7% for November, making it the worst month since at least 1969, when the index started.
Where will investment bankers go? (Fortune)
In the wake of this restructuring, investment bankers may need to look beyond big Wall Street firms for job opportunities, consider significant pay cuts, and even think about switching careers and leaving the banking field.
Smooth Moves (BNET)
How five industry leaders set themselves up not just to survive the recession, but move past rivals in a tough market.
The Weekly Wind Down: Don’t try to photo copy your but…
It’s not for the reasons you’d first think. Enjoy this video.
Roanoke Ukrop’s may close if business doesn’t improve (Roanoke Times)
An undeveloped retail center, a poor economy and competition from other grocers are thorns in the side for Ukrop’s Super Market, a family owned supermarket chain that opened its doors in Roanoke in June 2007. This week, Bobby Ukrop, president and chief executive officer of Ukrop’s, said the grocer cannot stay in Roanoke if sales do not improve.
Richmond Ford buys Lincoln Mercury firm (Times-Dispatch)
The deal was finalized this week and the dealership has moved the vehicles from the Pearson lot on West Broad Street in Henrico County several miles east to 4600 West Broad St. in Richmond.
Petersburg call center closing; 454 losing jobs (Times-Dispatch) link malfunctioning
The StarTek customer-service call center will close and lay off its 454 employees at the end of this month.
Capital One May Acquire a Rival Bank (NY Times)
In the latest sign of consolidation among midsize American banks, Capital One Financial plans to buy Chevy Chase Bank for about $520 million. The deal will allow it to rely more on customer deposits for financing. The deal, which is expected to be announced Thursday morning, would immediately add to Capital One’s operating earnings, though the purchase would require Capital One to write off $1.75 billion in anticipated losses from Chevy Chase’s big portfolio of toxic mortgage loans. Capital One will pay $445 million in cash and $75 million in stock based on Tuesday’s closing price of $29.29 a share, according to several people briefed on the deal.
Mortgage applications soar thanks to low interest rates (USA Today)
The number of home buyers applying for mortgages surged by a record amount last week in response to aggressive federal efforts to lower mortgage rates. Financial lobbyists advocated more of the same to stimulate the housing market.
Brand Makeovers: 3 Lessons in Reinvention (Entreprenuer)
Brands are like beauty queens: Even the most illustrious need makeovers from time to time.Target, Apple and Jack in the Box reinvented their brands through damage control, brand differentiation and broadening appeal. Put their strategies to use for your business.
What the Buck? Does it make sense to pay your CEO $1 a year? (Slate)
They’re giving up millions to take one for the team. Big Three automaker CEOs Bob Nardelli, Alan Mulally, and Rick Wagoner have pledged to cut their salaries to $1 a year as part of cost-cutting, Congress-pleasing measures at Chrysler, Ford, and GM. But does it actually help a company or have any impact on the bottom line? And can’t executives work around it?
Carytown jewelry store is moving (Times-Dispatch)
Schwarzschild Jewelers store in Carytown is moving from 3124 W. Cary St., to the spot last occupied by Carytown Wine & Beer at 3144 W. Cary. It will remaiin the Cary Court Shopping Center.
Prostitution ring was well-organized (Virginia Gazette)
$30 for 15 minutes, or $100 an hour. That’s what it cost to have sex with prostitutes at a brick rancher home on Richmond Road, west of Prime Outlets. A search warrant filed at the Williamsburg-James City Courthouse reveals that the occupants of the home operated an organized prostitution business. BizSense has repeatedly reported that for years Richmond’s prostitutes post their credentials on Craigslist. Now the number of postings is down to a handful a day from more than 60 after Craigslist got in hot water for the free-for-all.
Pursuing U.S. Aid, G.M. Accepts Need for Drastic Cuts (NY Times)
General Motors, increasingly desperate for a federal bailout to stave off financial collapse, told Congress on Tuesday that it was willing to drastically shrink every aspect of its operations to ensure its long-term survival. On the same day that the industry reported its worst sales month in 26 years, the three Detroit automakers delivered new business plans to lawmakers in the hope of winning support for $34 billion in federal loans.
Brokerage firm says Gateway owes it $2.4 million (Virginian-Pilot)
An investment banking and brokerage firm has sued Gateway Financial Holdings Inc., contending that the parent of Gateway Bank & Trust Co. refused to pay $2.4 million for work and expenses related to helping Gateway raise additional capital.
Magic Johnson on Succeeding in Business – and Finding Balance (WSJ)
A great Q&A with the bball legend-turned entrepreneur: Mr. Johnson, 49 years old, is CEO of Magic Johnson Enterprises, a closely-held company based in Los Angeles that brings retail outlets like Starbucks and movie theaters, to urban areas. “Never make your business about you, make it about the customer. I was the owner, and I was also the buyer, and when I went out I bought 50 of these and 100 of those because I liked them. I only bought what I liked. But then nobody bought anything from me. From that day on I made my decisions with the customer in mind. Your taste level only matters in terms of whether the customer likes it, and that includes whether they like how the store looks. If the customer is unhappy, you’ve made a crucial mistake that could cost you hundreds of thousands of dollars. It was a valuable lesson.”
Who’s the World’s Worst Banker? (Slate)
Carrying off mergers and acquisitions and calling them growth? Yes. Massive commitment of capital to investment banking, trading in funky securities, and poor credit controls? Yes, yes, and yes. Ill-advised, history-making, massive merger precisely at the top? Yep.
Advice for Startups Seeking Venture Capital (Business Week)
Venture firms are still investing, and they emphasize that they have plenty of money to back good business ideas. But for entrepreneurs running startups, the game has changed. Speculative business models won’t get funded. Startups also need to prove they can build lean organizations that use the money invested efficiently to get to profitability.
What’s Your Company Worth? (Inc.)
YouNoodle’s promise is both tantalizing and a little crazy: The company claims it can quantify the traits that make for a successful entrepreneur — such as education, work habits, and experience — to predict how much that person’s company will be worth three years from its founding. Log on to YouNoodle’s website and answer a detailed set of questions, and the program spits out a predicted valuation and a number from 1 to 1,000 that resembles a credit score.
Another healthy shot to the booze industry (BizSense)
Turns out booze really is recession proof. Retail sales at ABC stores statewide were up 12.3 percent in October compared to the previous year.
Shockoe store will sell reclaimed lumber (BizSense)
Local real estate developer Justin French hopes to draw designers, contractors and other passers-by into his new Shockoe Slip store that sells flooring made from reclaimed lumber.
Money Laundering (BizSense)
Last week local launderer HandCraft opened a 60,000 square foot facility dedicated to hospital linen. The company poured $9.6 million into the building, which is on Cofer Road in Richmond’s South Side. Construction started in March of 2007 after a lengthy closing process.
Franco’s will be men’s only (Times-Dispatch)
Franco’s Fine Clothier is selling off its inventory of women’s clothing as it reverts to men’s-only apparel. Founded in 1972, the company, which began selling women’s apparel in 1980, said it decided to exit that part of the business because of increased competition and a desire to expand its menswear offerings.
Cheesecake bistro at Stony Point has closed (Times-Dispatch)
Copeland’s Cheesecake Bistro in the Stony Point Fashion Park served its last meal Sunday night. It is the second major restaurant to close at the South Richmond mall in less than two years. Uncle Julio’s Rio Grande Café closed in early 2007.
Norfolk ‘express’ barge to Richmond has key benefits, official says (Virginian-Pilot)
After loading 24 cargo containers at Norfolk International Terminals, left, the 64 Express barge sailed on its maiden voyage to the port of Richmond late Monday afternoon, said Steve McGowan, operations manager for Norfolk Tug Co., which owns and operates the barge line. The barge is scheduled to arrive in Richmond at about 8 a.m. today and unload around 1 p.m., he said. From now on, the 64 Express is scheduled to make weekly trips along the James River, reducing truck traffic by as much as 58,000 trips by 2011.
Building Slowdown Turns Grand Visions Into Vapor (Washington Post)
The economic boom of recent years promised to deliver gleaming homes and high-end retail to struggling and newly forming neighborhoods across the Washington region. But that quest is running headlong into a withering economic slowdown and paralyzed credit markets, bringing new construction to a virtual stop and fueling anxiety among those who dreamed that their neighborhoods were the next frontiers.
Consumers flock to firewood to cut winter heating costs (USA Today)
Shipments of wood stoves and fireplace inserts, which can be installed in fireplaces to burn wood more efficiently, were up 54% in the first six months of this year compared with the same period last year, says Leslie Wheeler, spokeswoman for the Hearth, Patio & Barbecue Association. Final figures aren’t available, but the group’s analysis of recent sales show that demand remains high, she says.
Putting a Value on a C.E.O. (NY Times)
You, fellow taxpayer, are now an investor in Citigroup and other major banks. Whether you like it or not, you have a vested interest in Citigroup’s success. If this giant falls, we all lose. So how exactly can we link pay and “long-term performance” (the same long-term performance that we taxpayers will require since it’s unlikely we’ll be able to sell our stake anytime soon)?
The Model Made Me Do It (Slate)
A very interesting read: It is now widely understood that over the past decade risk management at financial institutions around the world failed on an epic scale, and that this failure helped precipitate a recession that will cost millions of people their jobs and their homes. The humbling question is: How could this have happened? Weren’t we—the banks and their advisers—supposed to be too smart to screw up in this way? The commentators who regularly cite Buffett’s maxim have a theory. The problem, they say, is precisely that we thought we were too smart.
From Servicemen to Businessmen (Entrepreneur)
Since its inception in June 2007, Patriot Express has opened doors that otherwise might have remained closed to veterans with entrepreneurial aspirations. During its first 15 months, the program guaranteed more than 2,200 loans totaling about $206 million, according to William Elmore, SBA associate administrator for veterans’ business development.
No office party this year (Times-Dispatch)
The gloomy economy has forced companies to cut back or cancel holiday parties as businesses enter the season with tighter budgets, a decline in discretionary spending and looming layoffs.
Startup firms on the rise (Times-Dispatch)
As layoffs continue nationally and in the Richmond area, one bright spot is that those displaced workers may buy a franchise or go into business for themselves. Yet starting a business hinges on getting the necessary finances.
Broken Circuit (Style)
A very thorough (and long) story about how Circuit City slowly fell apart: “A national financial crisis pushed Circuit City into bankruptcy, but years of missteps and inattention to the founding father’s vision — electronics at bargain prices — sealed its fate.”
Holiday sales slow for small retailers (Fortune)
While Big Box stores draw huge crowds with massive discount sales, independent shops are struggling with tight consumer spending.
As gas prices fall, gas stations’ profits actually rise (USA Today)
Although retail gasoline prices have fallen 55% since mid-July, wholesale prices have plunged even more sharply — 68%, according to the Oil Price Information Service. As a result, retailers have enjoyed record profit margins since mid-September.
How Private Equity Strangled Mervyns (Business Week)
Mervyns, a midrange seller of apparel, housewares, and other department-store fare, might have weathered the economic storm that’s battering so many of its rivals. Much of the blame for its demise lies with three private equity titans: Cerberus Capital Management, Sun Capital Partners, and Lubert-Adler. They stripped it of real estate assets, nearly doubled its rent, and saddled it with $800 million in debt while sucking out more than $400 million in cash for themselves, according to the company. The moves left Mervyns so weak it couldn’t survive. Mervyns’ collapse reveals dangerous flaws in the private equity playbook. It shows how investors with risky business plans, unrealistic financial assumptions, and competing agendas can deliver a death blow to companies that otherwise could have survived. And it offers a glimpse into the human suffering wrought by owners looking to turn a quick profit above all else.
The Long, Slow, Torturous Death of Zima (Slate)
Many drinkers assume that Zima vanished shortly thereafter and has since existed solely as a punch line. But Zima actually survived for more than another decade, until MillerCoors pulled the plug on Oct. 10. Rarely has such a famously maligned product enjoyed such a lengthy run—a testament to its brewers’ Madonna-like knack for reinvention. The Zima that died a quiet death last month bore little resemblance to the malternative that swept the nation during President Clinton’s first term.
AirTran will end RIC-NYC flights in Jan.(Times-Dispatch)
AirTran Airways will drop its two Richmond-New York City flights in January. The discount airline is losing its leased arrival and departure slots at LaGuardia Airport, officials said. The Orlando, Fla.-based carrier’s last Richmond-LaGuardia flights will be on Jan. 5
In Sale to RoomStore, Mattress Discounters’ Price Is Slashed (Washington Post)
Richmond-based furniture firm RoomStore and another investor have agreed to buy the bulk of Mattress Discounters for about $4.5 million, dramatically less than its $80 million price tag in a deal that fell apart last year.
Drug used by ALS patients gets closer to distribution (Virginan-Pilot)
A drug that some patients with a degenerative nerve disease have been clamoring to get for more than a year has moved a step closer to being freed for distribution. Iplex, made by Richmond-based company Insmed, had been used in an off-label fashion by some patients with amyotrophic lateral sclerosis, commonly known as Lou Gehrig’s disease.
Day Trade Believers (Slate)
These days, almost nobody wants to be called a “day trader.” Yet the sheer volatility of the current market upheaval, a period in which daily swings of 500 points in the Dow have become quite common, is contributing to a return of day-trading practices, according to several brokerages that cater to active investors.
The new way to meet payroll (Fortune)
For years, small firms like DH Marketing had just two options. The first was to calculate their outgoing checks and taxes by hand or with desktop software, keeping track of every arcane twist in local, state and federal tax law – and risking government fines or a lawsuit if they got something wrong. (Each year, about one in three small businesses is penalized by the IRS, according to surveys done by Intuit (INTU).) The second option was to outsource the entire process to a payroll firm that would assume legal responsibility for any errors it made but that could also be slow and unresponsive. Now there’s a third option: a do-it-yourself online service. Hagglund chose the latter and says she saved 40% on her payroll costs – not to mention her
12 More Things to Avoid on a Sales Call (BNET)
When you are on a sales call NEVER, EVER be rude to the admin. This story has nine other solid tips.
Title insurer’s stock plummets (Times-Dispatch)
Stock in Henrico-County-based LandAmerica Financial Group Inc., the third-largest U.S. title insurer, plunged yesterday after its planned sale to rival Fidelity National Financial Inc. was terminated Friday night.The insurer may be required to pay Fidelity a termination fee equal to $7.5 million or reimburse Fidelity for its out-of-pocket transaction-related expenses up to $2.5 million credited against the termination fee, LandAmerica said in a regulatory filing earlier this month.
Carrier loss would equate to $800m (Hampton Road’s Inside Business)
The Navy is expected to make a decision Dec. 22. Hampton Roads’ lawmakers are fighting any such proposal, saying it would not be in the national interest to move an aircraft carrier from Hampton Roads to Mayport, Fla.
Existing home sales fall in October, prices plunge (USA Today)
A report Monday by the National Association of Realtors found that home sales dropped 3.1%, from a seasonally adjusted rate of 5.14 million in September to 4.98 million in October — a much larger decline than many economists had predicted.
Don’t Get Depressed, It’s Not 1929 (Slate)
Why all those Great Depression analogies are wrong.
Lifeline for Franchisees (WSJ)
More Franchisers Help Franchisees Ride Out Credit Crunch With Financing, Waivers or Assistance Getting Outside Loans
How to Make a Powerful First Impression (Entrepreneur)
Learn the art of presence and small talk from communications experts who swear you can do it even if you don’t think you can.
LandAmerica deal dead; firm’s future precarious (Times-Dispatch)
The Nov. 7 merger agreement with Fidelity National Financial Inc. had offered LandAmerica a way out of a financial jam caused by the housing market collapse that has already taken down several financial giants. For $128 million, Fidelity would have acquired a competitor that had $3.7 billion in revenue last year. The deal broke down Friday night when Fidelity, which had a due-diligence period to examine LandAmerica’s books, opted out.
Gas prices loosen grip (Times-Dispatch)
Businesses are finding relief in gas and diesel prices also are easing up on fuel surcharges. But not in every case. BizSense reported two weeks ago that businesses are slow to remove fuel surcharges, seeing them as a way to recoup from months of higher prices.
Virginia lawyers brace for boom in bankruptcies (Virginian-Pilot)
In Hampton Roads, the number of businesses filing for bankruptcy this year is likely to be the highest since 1998, when the total reached 205. Through the end of October, 142 businesses had filed, more than double the 67 that did so during the comparable period last year. Despite the sharp rise, this year’s total will be a fraction of the volume witnessed during the early 1990s, when a collapse in commercial real estate and the effects of the first Gulf War hobbled many businesses in the region. More than 1,200 businesses filed for bankruptcy in Hampton Roads in 1990. Another 1,351 filed the following year.
Democrats’ Stimulus Plan May Reach $700 Billion (Washington Post)
Facing an increasingly ominous economic outlook, President-elect Barack Obama and other Democrats are rapidly ratcheting up plans for a massive fiscal stimulus program that could total as much as $700 billion over the next two years. That amount, more than the nation has spent over the past six years in Iraq, would rival the sum Congress committed last month to rescuing the country’s financial system. It would also be one of the biggest public spending programs aimed at jolting the economy since President Franklin D. Roosevelt’s New Deal
New Way To Rate Charities Sought (Washington Post)
An alliance of prominent philanthropists and entrepreneurs is developing a rating system that they hope will radically alter the way donors evaluate whether a charity is worth their money.
Does Detroit Deserve a Bailout? (Inc.)
A Big Three collapse could cripple many small businesses with ties to the automotive industry. We asked several Inc. 500|5000 CEOs for their opinions about a possible bailout and how it may affect their companies
Biotech firms face cash shortages (USA Today)
Almost 40% of small and midsize public biotechnology companies in the U.S. are in danger of running out of cash within a year and government help is needed to encourage investment, industry leaders say.
Airborne Porn (Portfolio)
In-flight internet service means access to adult content in close quarters—and a problem for airlines.
Better Collection Policies Are Past Due For Many (WSJ)
Small businesses are notoriously lax about their collections processes. Many worry about imposing strict payment policies or chasing deadbeat customers for fear they’ll lose potential business. What’s more, collecting money generally isn’t too problematic when times are good. But when the economy is bad, businesses that aren’t savvy and aggressive about collecting payments get toppled by the domino effect of delinquent customers. Here are some strategies that collections experts say will bolster payment success in a bad economy:
Agreement might delay Circuit City investor (Times-Dispatch)
Even though he might want to, a Mexican billionaire will not be allowed to serve as an officer of Circuit City Stores Inc. or sit on its board of directors for nearly three years. The reason is a 2005 run-in with the Security and Exchange Commission. Ricardo Salinas Pliego last week became the largest single stakeholder of the Henrico County-based consumer electronics retailer. In a filing with the SEC yesterday, he noted that he “acquired the shares with a view towards possibly seeking influence over the management, business and operations of [Circuit City].”
More than 130 to lose jobs in region (Roanoke Times)
The largest layoff — 73 jobs — is planned at the least known employer, ABX Air Inc., which works for DHL. German-owned DHL is getting out of the U.S. package delivery business in the face of strong competition from UPS and others. The best known of the downsizing companies, HCA Inc., plans the smallest trim — 20 people at its various hospitals. Meanwhile, Hubbell Lighting will cut its payroll by 39 in response to curtailed construction activity.
Bear market swipes at more than just stocks (USA Today)
This bear has trashed nearly every investment strategy and asset class. It has humbled some of the most powerful names in the stock market and blown holes through long-held tenets in investing. Market historians strain to think of previous bear markets that have disproved so many investing philosophies at the same time.
Oil Closes Below $50, Lowest Price Since May 2005 (NY Times)
Oil prices fell to their lowest level in more than three years, dropping below $50 a barrel on Thursday, after shedding close to $100 since July as an ailing global economy pared consumption.
Should We Be Scared of Deflation? (Slate)
We just stopped wringing our hands over $4.50 gas and $4 milk? Don’t we want low prices? Well, yes and yes, but no. Low prices are good when they stem from an increase in production efficiency or market competition. When deflation is the reason, those prices aren’t falling in a vacuum. Along with reverse sticker shock, you’re getting paid less, your house is worth less than it was a few years ago, and your 401(k) tanks. The only thing that hasn’t gone down is your debt, and there’s the rub: Whatever you owed on credit cards, student loans, and your mortgage before deflation doesn’t change, although now you have less money to pay it off.
A Step Down That’s a Step Up (Entrepreneur)
No matter how high up you are on the corporate ladder, it’s never too late to start your own business–even if you’re heading into a different industry.
The Weekly Wind Down: Zillionaire.com infomercial
This one isn’t as funny as last week, but still worth a gander.
In the RBS hopper: If you work at Altria and have been offered a buyout, call us
BizSense is investigating how the Altria buyout packages are affecting local families faced with a huge decision: take the buyout and look for a new job or play what seems to be a game of Russian roulette. We want to hear from any Altria employee who has been offered a buyout. Or any business that may be looking to poach middle managers from Altria, many of whom have to make their decision by Monday. Please email [email protected] RBS will not quote any source who does not want to appear in a story.
Food plant planned in Chesterfield (Times-Dispatch)
A kosher, vegetarian food manufacturer plans to invest $59.3 million to build a food-processing plant at the Ruffin Mill Industrial Park just north of Colonial Heights. An estimated 260 jobs will be added when Sabra Dipping Co. opens its 110,000-square-foot-plant by mid-2010. Based in Astoria, N.Y., Sabra is a joint venture between PepsiCo and Strauss Group, which is Israel’s second-largest food and beverage company and employs more than 11,000 people in 19 countries.
Contractor’s $205 Million Lawsuit Against City Awaits Mayor-Elect (Style Weekly)
A well-known minority contractor, A. Hugo Bowers charges that Wilder and his staff conspired to undermine his business, telling local contractors and companies doing business with the city to refrain from doing business with Bowers’ firm, BFE Consulting.
Big Tobacco Seeks Safer Cigarettes (NPR)
Tobacco giant Philip Morris has staked its future on its Center for Research and Technology in Richmond, Va. With its whimsical, bright-colored furniture, the $350 million compound more closely resembles an art school than a research facility. The glass building boasts cantilevered stairways, quirky activity stations and Pablo Picasso quotes near the elevators — all aimed at stimulating innovation.
More layoffs may number hundreds (Williamsburg’s Virginia Gazette)
unlike last week’s elimination of 280 positions, 140 of which involved actual terminations, the foundation said Tuesday’s reductions aren’t permanent. Instead, they are the annual seasonal layoffs, and more this year than previously.
Despite economy, grad students mastering expectations (Virginian-Pilot)
The economic downturn has readjusted expectations for most everyone, including the young adults who hope to enter, and conquer, the business world.
Websites Wage Holiday Price Wars (NY Times)
Internet retailers, trying to navigate what is shaping up to be the first truly dreary holiday shopping season ever on the Web, are engaging in price-cutting and discounting so aggressive that it threatens their profit margins and, in some cases, their very survival.
The Most Effective Way to Downsize in a Downturn (BNET)
One of the biggest mistakes companies can make when downsizing is the “death by a thousand cuts.” Look at Sun, for example. Not only is the company in a multiyear turnaround struggle, but flailing CEO Jonathan Schwartz can’t even restructure right.
What entrepreneurs are feeling: Fear (Fortune)
In tough times, entrepreneurs have every reason to feel anxious. Don’t let those feelings slow you down.
The recession special (BizSense)
Local advertisers are hesitant to acknowledge the recession in their advertising campaigns. That’s not the case with many national advertisers. But at least one local bakery is having some fun with the downturn. The Baker’s Lady jumped on the marketing craze last month by creating a Bailout Bites menu featuring Poor Man’s Caviar, S&P steak and potatoes …
But wait, there’s more (BizSense)
A Richmond business that has found some success selling collapsible bakeware on QVC is running a contest – complete with a $500 prize – for users to submit video commercials. Duncan Fang, who invented Foldtuk, said he has already received a few videos, including one showing a customer using the units as a drum set of sorts. The contest started this month on the Foldtuk website.
Add your résumé to the pile (BizSense)
Local investment banks are being flooded with résumés from MBA students and recent graduates.
A year after Crupi report, what has changed? (Times-Dispatch)
Last year consultant James Crupi challenged the Richmond community to spend the next 12 months developing a plan for the future. He said the region must improve city schools and work to foster regional cooperation. He charged a tidy $150,000 for his report. But the plan for the future has not materialized.
Employee theft is growing & costly (Virginia Gazette)
With the recession, experts expect employee theft to rise. John Hughes, a Williamsburg area forensic accountant, took questions about embezzlement and how to prevent it.
Schlitz comes to Hampton Roads with a fresh brew (Virginian-Pilot)
Brown bottles of Schlitz are on their way to bars and grocery stores in Hampton Roads, and people who remember the beer from the 1960s should find the taste familiar. Pabst Brewing Co., which now owns Schlitz, conducted some beer archaeology and reconstituted the recipe for “the beer that made Milwaukee famous.” The company is targeting Hampton Roads among its first markets because the beer had strong sales here in the ’50s and ’60s.
Boar’s Head to unveil huge meeting space (Daily Progress)
The Boar’s Head Inn’s Pavilion includes a 5,600-square-foot grand ballroom, a 1,200-square-foot boardroom, a full-service business center, a commercial kitchen and other spaces that aim to serve business and social gatherings.
Virginia may rein in funding for schools, health care as budget shortfall deepens (Roanoke Times)
The House Appropriations Committee received bleak economic and budget outlooks during the first day of its annual policy retreat at the Hotel Roanoke & Conference Center, underscoring the grim decisions that lawmakers will face when the legislative session begins in January. Gov. Tim Kaine and lawmakers must adjust the state’s two-year, $77 billion budget to account for a $2.5 billion revenue shortfall, and they have warned that no state program will be exempted from spending cuts.
Mall Restaurants Brace for Fewer Customers (WSJ)
restaurant chains with a bulk of their locations in malls and retail centers are bracing for a holiday shopping season that is expected to bring fewer potential customers past their doors.
Home builder sentiment tumbles to another low (USA Today)
Fear of job loss, financial market upheaval and recession hammered U.S. home builder sentiment to another record low in November, the National Association of Home Builders said Tuesday. The NAHB/Wells Fargo Housing Market index slumped 5 points to 9 in November, lowest since the measure was started in January 1985. Readings below 50 mean more builders view market conditions as poor than favorable.
Advantage of Corporate Bankruptcy Is Dwindling (NY Times)
More companies that file for bankruptcy protection are shutting down, lawyers say, because they cannot obtain enough financing to operate while they reorganize.
Raising Capital from Customers (Business Week)
Selling shares in your business to customers via a private placement can be a great way to raise capital. And there are other benefits
Check this out: The RBS Guide for small business checking (BizSense)
Welcome to the first installment of a series we’re putting together to save business people time and money. Each month we’ll find out where in Richmond you can get the best deal or service for a universal business need. This month: business checking accounts. We found that First Market Bank and Eastern Virginia Bankshares have the best plans for startups or cost-conscious small businesses. RBS has a comprehensive list, too or area banks.
Talent pool is deepening, but who can afford to plunge in? (BizSense)
The vicious cycle driving down the stock market and forcing major local employers to shed thousands of jobs also is preventing some of those laid-off workers from being hired by smaller companies, especially those that rely on venture capital.
Tryouts: BizSense is looking for a few guest columnists (BizSense)
If you enjoy thinking deeply about ideas and think you could help broaden our business coverage by writing thought-provoking columns, we want to hear from you. We’ve grown tremendously in our 11 months of life. And we have lots of major improvements we will be implementing in 2009. In particular, we want to start running Friday editorial Op/Eds. Think of it like the Wall Street Journal’s Editorial Page, only for Richmond.
Investor raises his Circuit City stake (Times-Dispatch)
A Mexican billionaire who made a portion of his fortune in consumer electronics has become Circuit City Stores Inc.’s largest shareholder.
Saxony, Qimonda in talks about financial aid (Reuters)
Germany’s state of Saxony and Infineon’s loss-making unit Qimonda are in talks about a possible rescue plan, a spokesman for Saxony’s Economics Ministry said on Monday. Struggling computer chip maker Qimonda has a factory in Eastern Henrico. The company announced last month that is was laying of more than 1,000 workers in Richmond and closing one of its plants.
MeadWestvaco to shut plant, lay off 120 workers (AP)
Packaging company MeadWestvaco Corp. on Monday said it will close its MWV Packaging plant in Grover, N.C., early next year and lay off 120 workers in an effort to cut costs. Some work done at the facility, which makes packaging for the media and entertainment industries, will be transferred to other plants. MeadWestvaco said its capacity to supply those products will not be affected.
Office space continues to build up as demand teeters (Virginian-Pilot)
In the past year, the office vacancy rate in Hampton Roads climbed to 10.7 percent from 10.1 percent, and it is up from 8.4 percent in 2006, according to a report by real estate firm CB Richard Ellis. Donald Crigger, senior director of office properties for another firm, GVA Advantis, said he expects the rate to rise to 12.5 percent by the end of March. A rate between 15 and 18 percent is considered to be oversupply. The national office market has a vacancy rate of about 14 percent.
Future ‘unclear’ for site of planned Whole Foods (Daily Progress)
Work has ceased, at least for now, on the site of Whole Foods’ planned new store adjacent to Kmart and Gold’s Gym. The preliminary plans were approved in July.
Western Sizzlin dishes up rise in profits (Roanoke Times)
The Roanoke-based restaurant company cooked up a 19 percent increase in profits, while sales declined, during the third quarter of this year. Western Sizzlin, a holding company, franchises and operates 113 restaurants in 19 states. It closed five franchise restaurants during the quarter and opened one company-operated eatery.
GM: The Case Against a Bailout (Business Week)
Jack and Suzy Welch say that bankruptcy reorganization, with the U.S. as financier, would open the doors to meaningful structural change. “The boards of the automakers should take the courageous step of putting their companies into bankruptcy. Some creditors might make the case for liquidation, but given the diminished worth of the automakers’ assets, that’s an unattractive scenario. Instead, creditors would most likely opt for the government stepping in as the debtor-in-possession financier supporting the reorganization.
SEC accuses Mark Cuban of inside trading of Mamma.com (USA Today)
Flashy billionaire Mark Cuban found himself in a different kind of spotlight Monday when the Securities and Exchange Commission charged him with illegal inside trading for his sale of a dot-com stock.
Connect the Branding Dots (Entrepreneur)
Logos, websites and marketing materials have to work together to create a positive impression–and put money in your pocket.
The Gift That Stops Giving (Inc.)
a lot of employees are going to find coal in their holiday bonus stockings this year. And for CEOs, that presents a problem: How do you retain your best employees if they aren’t receiving bonuses? It’s particularly painful now, given that many companies are coming off several boom years, when targets were relatively easy to meet.
From the Rich Wire: Capital TechSearch to hold emergency workshop for out-of-work IT(BizSense)
Two identical workshops are scheduled on Wednesday that will include small group career counseling with a recruiter from Capital TechSearch. The topics: What are companies looking for right now, what skills should you highlight on your resume, and What are networking skills that will give you an edge?
Genworth trims expenses, pays off debts, plans to buy Minnesota S&L (Times-Dispatch)
Genworth Financial Inc. is trying to ride out an economic storm that is battering its stock value and forcing it to take painful steps, including likely layoffs, to stay afloat. The storm has come from two directions, whipped into a fury by a housing-market collapse that has forced Genworth to make huge payouts on failed mortgages that it insures and a stock-market meltdown that has cut deeply into the company’s investments while decimating its own stock price.
Tallying the destruction (Times-Dispatch)
The Times-Dispatch’s John Reid Blackwell provides a helpful summary of what’s happening at the major publicly-owned companies. With two financial firms that insured parts of the housing market, and with a retailer that sells TV’s, Richmond is suffering from the fallout from all those subprime loans.
S-A-T-I-R-E Horrible Blogger Blames Lack Of Readers On Bad Economy (Tobacco Avenue)
“I can see that gas prices are heading down, which could be good for me,” said Irwin, who does not realize that her blog, which had two readers yesterday – her parents – has no relation to the financial crisis
Penny-pinching buyers push local businesses to breaking (Virginian-Pilot)
The credit crunch and a deteriorating economy have mounted pressures on small businesses that already struggle to survive. Since July, several small businesses have closed in Hampton Roads, including Chesapeake Hardwood Products Inc., seven David Nygaard Fine Jewelers stores, Green Alternatives in Norfolk, Portsmouth’s Comfort restaurant and Bobby Huber’s Bobbywood restaurant in Norfolk. Tidewater Sports & Collecti bles Inc. also filed for bankruptcy.
More Holiday Job Seekers, Fewer Spots on Sales Floor (Washington Post)
Faced with plummeting sales and spooked shoppers, retailers have cut back on holiday hiring at a time when their pool of applicants is swelling with those who have been laid off from other industries. About 272,000 retail jobs were open at the end of September, according to government data released last week, down 24 percent from the same month last year. Those numbers are expected to drop further as retailers cut back on opening new stores and close those that don’t perform well.
Small Firms Shiver as Health Premiums Rise (WSJ)
Already struggling in a tough economy, many small employers are about to face another big hit: markedly higher increases in health-insurance premiums as they head into 2009. For many of these companies, the steeper increases couldn’t come at a worse time, when the economy is weakening and credit is harder to come by
Credit crisis sends economic forecasters’ views downhill fast (USA Today)
Forecasters’ views of the economy are deteriorating rapidly, with economists now expecting job losses to be deeper and last longer and consumers to cut back spending at a far more rapid pace than earlier thought. The U.S. economy is contracting at a 2.6% annual rate in the last three months of the year and will fall at a 1.3% pace in the January-March quarter, according to a survey of 50 members of the National Association for Business Economics taken Oct. 28-Nov. 7 and released Monday.
Alternative Places to Network (Entrepreneur)
Look beyond your standard groups and cocktail receptions for business connections that really work.
Chesterfield accountant gets prison in theft from firm (Times-Dispatch)
one-man embezzlement scheme that drained $757,000 from a Henrico County cleaning-supply firm put the firm’s former accountant behind bars yesterday.Fifteen months after he was arrested and released on $75,000 bond, John N. Sacco received a 28-month prison sentence.
Bank financing Landmark Hotel sees tough times (Daily Progress)
At the end of the third quarter of 2008, Silverton Bank disclosed that slightly more than half of its portfolio was invested in construction or real estate. Of these loans, 17 percent were in nonaccrual status — meaning they were 90 days or more in default. At the beginning of the year, only 4 percent of the bank’s loans were in nonaccrual status, according to an analysis by SNL Financial, a Charlottesville-based business analysis firm.
Minor league baseball in Salem gets new identity (Roanoke Times)
A year after being bought by a sister company of the Boston Red Sox, Salem’s minor league baseball franchise is changing its name to the Salem Red Sox. The new name and a new logo, with the iconic red socks dangling in front of a stylized background of the Blue Ridge Mountains, will be unveiled this afternoon at a news conference, general manager John Katz said.
Lower Gas Prices Don’t Make Americans Feel Rich (NY Times)
But even as worry about gas prices fades, it is being replaced by fear about the broader economy. Each 10-cent drop in gasoline prices puts $12 billion a year back in consumers’ pockets. Instead of spending that cash, people are trying to save it or cut their debt, many said in interviews.
Sellers Offer a Financial Hand to Their Buyers (WSJ)
For small companies looking to cash out, this may be an ideal time — if they are willing to give sellers a financial hand. The reason is that fewer businesses are on the block these days as owners fret over the ability to live off their proceeds during the economic and market downturn. A smaller supply of sellers means those companies that show stability, profits and steady cash flow can command a premium price. But there’s a catch: Buyers are generally finding greater difficulty getting commercial loans from banks. Loans backed by the Small Business Administration have dropped off precipitously in recent months. Even private equity firms — long known for taking a chance on scrappy young companies with high growth potential — are acting more conservative.
Changes may make SBA lending profitable again (Baltimore Business Journal)
The Small Business Administration hopes to encourage lenders to resume making 7(a) business loans by letting them charge higher interest rates to borrowers.
The big three are a national disgrace but we still need to save them (Slate)
Allowing the listing Big Three to keel over would be a triumph of free markets. It would punish failure and invite new managers and investors to enter the field. I’m a big fan of creative destruction and its wondrous benefits. (I wrote a book about it.) But I also think the no-bailout folks are being too cavalier.
The Weekly Wind Down: The Stupidest Exercise Machine You’ll Ever See
This week we’ve found a business that has produced perhaps the most ridiculous exercise device yet. And that’s quite a feat considering some of the products out there. The music is just as good. Enjoy.
Luck Stone announces cuts (Times-Dispatch)
A housing slowdown, the financial crisis and cuts to state transportation funding have prompted Luck Stone Corp. to lay off or reassign nearly 17 percent of its work force. Of the 150 people affected, most were notified yesterday, the company said. Layoffs were immediate. Around 40 of those who were let go work in Goochland.
Area homes losing value (Times-Dispatch)
Local home values fell 1.6 percent in the third quarter from the same period a year ago, compared with 9.7 percent nationally, the report stated. The median home valuation, meaning half were valued for more and half for less, was $222,306 in the third quarter, down from $225,863, according to the report. The peak was $228,608, in the second quarter of 2007.
APM chooses Portsmouth as company headquarters (Virginian-Pilot)
APM Terminals Inc. is moving its Americas headquarters to Portsmouth and has already relocated 16 senior executives and support staff, spokeswoman Allison Enedy said Wednesday.
Some Firms Suspend Their 401(k) Match (WSJ)
As the economy worsens, a growing number of small businesses are suspending their 401(k) match, and, in some instances, closing the retirement plans altogether. While only about 15% to 20% of small businesses offer a 401(k) plan, many added them in recent years to attract and retain workers and to help business owners save for retirement. But the economic downturn and higher health-insurance costs are forcing companies to cut back on retirement benefits.
U.S. Shifts Focus in Credit Bailout to the Consumer (New York Times)
The Treasury Department on Wednesday officially abandoned the original strategy behind its $700 billion effort to rescue the financial system, as administration officials acknowledged that banks and financial institutions were as unwilling as ever to lend to consumers. But with a little more than two months left before President Bush leaves office, Treasury Secretary Henry M. Paulson Jr. is hoping to put in place a major new lending program that would be run by the Federal Reserve and aimed at unlocking the frozen consumer credit market.
Five Tips for Managing After Lay-Offs (BNET)
Lay-offs are at their highest rate since the economic slump that followed 9/11 and the popping of the tech bubble, so one company is looking back at that time for five lessons on how to manage survivors after heavy job cuts.
The Look of Despair (Slate)
It’s difficult to illustrate many business stories, especially an economic collapse. All of the action takes place nonvisually—stock prices dribble downward, mortgages go unpaid, and jobs go missing. Newspapers, Web sites, and television news crews are left searching for a way to offer a tangible face to a nebulous crisis. Left with no choice, they’re forced to turn to the same worn animal over and over again: The Broker With His Hands on His Face