Tuesday, June 30, 2009
Monday, June 29, 2009
Tony Hawk Skateboards at the White House
Tony Hawk made history on Friday by becoming the first ever person to skateboard inside the White House. Tony was invited to Washington D.C. to participate in a Father’s Day celebration with President Obama and took the opportunity to skate down the hallowed White House halls. “This really happened,” said Tony. “Thank you for the invite, President Obama. It was an honor.”patthe
Friday, June 26, 2009
Thursday, June 25, 2009
Sessions Sells Brand & Trademark To Newly Created Firm
Sessions announced today that it has sold its brand and trademark to a newly formed company, Sessions, LLC, which will design, market, and distribute apparel under the Sessions name. The new Scotts Valley, California based company’s ownership includes Samsung America, Inc., which will handle logistical and financial duties.
Joel Gomez, who opened the first Sessions store in 1983, will be transferring to the new entity along with President Cindi Busenhart, and the two will continue to be responsible for all design, merchandising, production, sales, and marketing at the new firm.
Gomez told us that this new relationship “will allow Sessions to focus on what it has spent 20 years developing – its product, brand, and customers. Samsung will provide financial support for production and logistics. They have been in the space for over 20 years and have developed some great systems.” Gomez says the benefits include that they “should not have any realistic financial constraints for production. It will [also] give us more time to snowboard and skate…but on a serious note, it will help us focus on sales, development and marketing.”
Sessions Founder Joel Gomez
Logistics and distribution of Sessions product will now be managed out of Samsung’s New Jersey facilities. Sessions, LLC has also relocated to a new office in Scotts Valley, the same town as the previous Sessions’ offices, and has been able to shed the costs associated with its warehousing facilities.
While details of the transaction were not revealed, Sessions says product quality and customer service should not be affected.
“Even in these difficult times, Cindi and I felt strongly that, with the right business model and team, we could capitalize on over 20 years of experience and brand equity” said Joel Gomez in a statement. “Cindi and I have great confidence in the viability of this brand. We have a strong and experienced team and with Samsung as a partner, we now have the necessary capital to assure a smooth transition and continued success.”
patthe
Adrenalina says it will take another run at West 49
Skateboard apparel retailer West 49 Inc. (WXX-T0.31----%) dodged a hostile takeover bid earlier this year, but the U.S. executive who chased the Canadian company says he'll be back for another run at the operation later this year.
Ilia Lekach, the 60-year-old chairman and chief executive of Florida-based Adrenalina Inc., said he plans to submit another bid to West 49's management before Christmas.
“Right now I'm in the middle of another acquisition,” said Mr. Lekach, who put forth the offer two months ago.
“I'm going to wait until I finish it, and then I'm going to go back to West 49.”
Mr. Lekach's comments appear to quash suggestions that he has bailed on his attempts to buy the Burlington, Ont.-based company.
Last week Sam Baio, West 49's CEO, told shareholders at the company's annual meeting that he hasn't heard back from Adrenalina since the initial offer, valued at $35-million, was rebuked in early May.
However, Mr. Lekach disputes that account, and said he has tried to negotiate with West 49 executives and schedule a meeting.
“After you call them and they don't call you back, and you write a letter and they send you a letter (saying) ‘We don't want to talk to you.' What else should I do?” said Mr. Lekach.
“The last letter I had from the chairman was that he doesn't want to hear from me, talk to me or see me.”
Executives at West 49 weren't immediately available for comment.
The West 49 bid has been controversial from the start, partly because Mr. Lekach's history runs a list of failed acquisitions, including privatization attempts for both Ecom Ventures (now Perfumania Holdings, Inc.) and Parlux Fragrances, a company at which he served as chief executive.
Last fall, Mr. Lekach and Adrenalina submitted a $300-million (U.S.) offer for teen surfwear retailer Pacific Sunwear of California Inc., which was nixed by the company. Adrenalina still holds five per cent of Pacific Sunwear.
West 49 executives have told shareholders they were primarily concerned about making a deal with a company like Adrenalina that is having trouble with its own finances.
Mr. Lekach reassured that his “affiliates” were able to provide sufficient funding to complete a deal.
West 49 was also never convinced that Adrenalina could be profitable in Canada, calling its approach an “unproven business model. “ Adrenalina operates a small number of flashy locations in the southern U.S., with stores that feature a surfing simulation ride which allows shoppers to step on a surfboard and ride a man-made wave in the middle of the store.
West 49 has said the concept is “highly expensive.”
theglobeandmailpatthe
Wednesday, June 24, 2009
Tuesday, June 23, 2009
The First Accurate iPhone Barcode Scanner - RedLaser
RedLaser developed by Occipital is going to be the first accurate barcode scanner app on iPhone. RedLaser can scan an item for you and you can have instant access to a bunch of online prices and information. Scan movies at the store and beam them to your TiVo. Scan a book and check for online reviews. Scan a food item and add it to your grocery list. Damn cool app. Check this video:
RedLaser from Jeffrey Powers on Vimeo.
patthe
Monday, June 22, 2009
Sunday, June 21, 2009
Molson brothers buy Montreal Canadiens for $500M
The Molson brothers - Geoff, Andrew and Justin - are proof that the early bird doesn't always get the worm.
The Molsons were the last group to enter the bidding for the Canadiens, but their efforts were rewarded yesterday when it was announced that they had reached an agreement in principle to buy a controlling interest in the team from George Gillett Jr.
The announcement yesterday ended speculation over Gillett's future in Montreal. On several occasions, he has denied that the Canadiens were for sale and said that he was merely reviewing his assets as part of an estate-planning exercise.
Gillett bought the team for $275 million in 2001, but his stake in the team and the Bell Centre is highly leveraged and he needs cash to pay down debt taken on when he and Texas billionaire Tom Hicks bought the Liverpool FC soccer team. Terms were not announced, but it's believed the winning bid could be as high as $550 million.
Included in the package are 80.1 per cent of the National Hockey League team and 100 per cent of the Bell Centre and the Gillett Entertainment Group. The remaining 19.9 per cent is held by Molson Coors.
"There are still a lot of details that have to be hammered out," said Donald Beauchamp, the Canadiens' vice-president of communications. He said a news conference to introduce the new owners was on hold until all the details are finalized. That could take several months, and final approval of the deal by the NHL is unlikely before August.
Geoff Molson first expressed interest in bidding for the team on May 24, but didn't confirm that the brothers were actively bidding until June 10.
While as many as seven groups expressed interest in buying the team, the final bidding was between the Molsons and a group led by Quebecor Media's Pierre Karl Péladeau. That group also included singer Céline Dion's husband, René Angélil, and the financial backing of the Fonds de solidarité, the $6-billion investment fund sponsored by the Quebec Federation of Labour.
There was no immediate indication of the other members of the Molson group, but it could include BCE and former Canadiens general manager Serge Savard, who dropped his own bid when the Molsons announced their intentions.
Savard has been mentioned as a possible executive under the new ownership, but he said two weeks ago: "I'm not looking for a job." He did say he would be open to making an investment and was available to offer his advice.
The Molsons can also count on several sources of financial help. Quebec Finance Minister Raymond Bachand has offered a $100-million loan to any successful Quebec-based bid, and the Fonds de solidarité said its deal with Quebecor was non-exclusive and it was available to support any Quebec bid.
Another possible source is the Caisse de dépôt et placement du Québec, the province's giant pension fund manager, which provided funds for Gillett when he bought the team in 2001.
The brothers are continuing a family tradition with the purchase. Senator Hartland Molson and his brother, Thomas, purchased the team from Senator Donat Raymond in 1957. Hartland and Thomas Molson sold the team to their cousins David, Bill and Peter Molson in 1964, and they owned the team until 1971.
Molson Breweries purchased the team from a company controlled by Peter and Edward Bronfman in 1978, and Eric Molson, the father of the new owners, was one of the driving forces in the construction of a new arena that opened in 1996 as the Molson Centre.
The brewery sold a controlling interest to Gillett in 2001. At the time, there were no Quebec bidders for the team. This time around, there were four, with Savard and Stephen Bronfman members of of the other two. There were also reports of three bids from outside Quebec, but none of them progressed past the tire-kicking stage.
Neither party was available for comment, but Gillett and Geoff Molson both issued statements in a news release.
"Our family has been very proud to be associated with the Montreal Canadiens over the past eight years and particularly to be a part of their centennial season. I am fully confident that the Molson brothers, who have been a great part of the heritage of the club, will ensure the preservation and development of this great sports institution," Gillett said.
Geoff Molson said he is conscious that the hockey club is a heritage asset and he and his brothers would endeavour to maintain the tradition while working with management to build a strong team on the ice and bring the Stanley Cup back to Montreal.
"This is a very exciting time for our family, and we are grateful to the many people and organizations who came forward to offer their collaboration in the development of our proposal," he said.
The sale was greeted with enthusiasm by NHL commissioner Gary Bettman and Paul Kelly, the executive director of the NHL Players Association.
"I think to the extent that they have been able to find people who are obviously passionate about the game and structure a transaction that makes sense for everybody, that's a real plus for the franchise and the fans of Montreal," Bettman said in Las Vegas.
"I know we had two or three very prominent and impressive groups that were bidding for the team," Kelly said. "I know that the purchase price got up there in numbers that are well above all of our pay grades. That's a great franchise and a great city.
"Mr. Gillett was really a fine owner," Kelly added. "We will miss him in the National Hockey League. I thought he brought a lot of creativity and ingenuity and colour to the sport."
patthetg
Saturday, June 20, 2009
Friday, June 19, 2009
Thursday, June 18, 2009
Active Ride Shop Auctioned Off To Florida Investors For $5.2 Million
According to reports from The Press Enterprise, A Florida-based limited liability company called Active Sports Lifestyles entered a winning bid of $5.2 million to purchase Active Ride Shop in an auction ordered by the US Bankruptcy Court in Riverside, California today. Zumiez, which recently showed interest in acquiring the chain of stores was not among the final bidders.
From Press Enterprise: “Mira Loma-headquartered Active Ride Shop, which sells skateboards, snowboards and related gear at six Inland stores, is being acquired by a group of Florida-based investors for $5.2 million.
A limited liability company called Active Sports Lifestyles USA emerged as the winner among five bidders in a Tuesday auction ordered by the U.S. Bankruptcy Court in Riverside. Attorney Marc Winthrop, who conducted the auction, said the buyers plan to keep all of Active’s operations intact, including its Mira Loma headquarters and warehouse, as well as its 21 Southern California stores.
Clothing retailer Zumiez had expressed interest last month in buying the chain for an estimated $7.2 million but was not among the final bidders. The sale is expected to be completed by the end of the month, Winthrop said.”
patthetw
Wednesday, June 17, 2009
Tuesday, June 16, 2009
Monday, June 15, 2009
A stony road
In both America and Europe, Ford faces government-backed rivals
SPARE a thought for Ford Motor Company, which lost $14.7 billion last year but is battling on, trying to fix its problems with hardly a shred of government help in either America or Europe. In America its two domestic rivals, General Motors (GM) and Chrysler, are using bankruptcy protection and $62 billion from the Treasury to shrink their debt, reduce the cost of their obligations to retired workers and prune their sprawling dealer networks. GMAC, the lender that provides loans to the customers and dealers of both firms, but not those of Ford, has received $13.5 billion of funding from the government. In the European Union, meanwhile, despite strict rules intended to stop states from giving an unfair advantage to “national champions”, France and Germany have rushed to prop up three of Ford’s main competitors.
Ford escaped the fate of the other two Detroit carmakers by tapping credit markets just before they began to freeze over. It risked everything by pledging all of its North American assets as collateral, raising $23.6 billion in 2006. But some think the gamble has backfired. The Supreme Court’s decision not to interfere in Fiat’s purchase of a stake in Chrysler, concluded on June 10th, should help Chrysler and GM emerge as more daunting competitors soon. In particular, a streamlined GM, shorn of several ailing brands and 2,600 dealers, and with its debts reduced to $17 billion, will be able to generate more cash to revamp its line-up while focusing its marketing budget on its best vehicles.
By contrast, Ford began the year with debts of $36 billion. Because of state franchise laws that bankruptcy circumvents, it has only been able to trim the ranks of its dealers by 15% since 2005 to 3,700. It is also unclear whether the United Auto Workers union is willing to offer Ford the concessions it made to GM and Chrysler under the pressure of imminent collapse.
Moreover, GMAC can borrow more cheaply than Ford’s wholly owned finance arm, Ford Credit. On June 3rd GMAC (which used to be owned by GM, but now belongs mainly to the government and Cerberus Capital Management, a private-equity firm) borrowed $3.5 billion for three and a half years at a cost of 2.2% a year, with a guarantee from the Federal Deposit Insurance Corporation (FDIC). Just a few days earlier, Ford had issued $1.1 billion-worth of five-year bonds at 8% interest.
Yet Ford is still happy with its decision to avoid the government’s embrace. Polls show that some 70% of taxpayers disapprove of the bail-outs of GM and Chrysler. Research by Edmunds.com, an automotive website, suggests that Ford is likely to win much of the custom of those who would rather not buy a car from “Government Motors”. Moreover, if a scaled-down GM no longer floods the market with discounted vehicles, Ford should be able to raise its own prices. It has capitalised on each morsel of good news to swap debt for equity, gradually reducing its burden by $10 billion so far this year. The dilution does not appear to have hurt Ford’s share price, which is up four-fold since late February.
It is the European bail-outs that really rile Ford. Wolfgang Schneider, who handles its relations with European governments, says, “In the US, it is a level playing field because we could have chosen to go the route of GM and Chrysler, but in Europe it is not.” Although it has about 10% of the European market, putting it in third place behind PSA Peugeot Citroën and Volkswagen, Ford is nobody’s “home team”. It makes cars in Germany, Spain and Belgium. Britain, by far its biggest market, only provides engines and vans.
Ford has complained to the European Commission about the €6.5 billion ($8.4 billion) that the French government lent to PSA and Renault in February on terms no commercial lender would have offered. It is even more exercised about the €4.5 billion in loan guarantees that the German government has promised the new owner of Opel on top of the €1.5 billion in bridging finance it has already provided. “What are the conditions?” asks Mr Schneider, “There is no transparency.”
Ford’s protests are likely to continue to fall on deaf ears. One answer might be to move some production back to Britain, where, despite ending car assembly in 2002 (after 90 years), Ford is still the nation’s favourite automotive brand. Sadly, as Mr Schneider observes, “The UK is the only country that plays by the rules.”
patthe
te
Saturday, June 13, 2009
Friday, June 12, 2009
Thursday, June 11, 2009
Wednesday, June 10, 2009
The decline and fall of General Motors
THE demise of GM had been expected for so long that when it finally died there was barely a whimper. Wall Street was unmoved. Congress did not draw breath. America shrugged. Yet the indifference with which the news was received should not obscure its importance. A company which once sold half the cars in America, employed in its various guises as many people as the combined populations of Nevada and Delaware and was regarded as a model for managers all over the world has just gone under; and its collapse holds important lessons about management, about government and about the future of the car industry (see article, article).
Government and GM: a fatal mixture
GM’s architect, Alfred Sloan, never had Henry Ford’s entrepreneurial or technical genius, but he had organisation. He designed his company around the needs of his customers (“a car for every purse and purpose”). The divisional structure he created in the 1920s, with professional managers reporting to a head office through strict financial monitoring, was adopted by other titans of American business, such as GE, Dupont and IBM before the model spread across the rich world.
Although this model was brilliantly designed for domination, when the environment changed it proved disastrously inflexible. The problem in the 1970s was not really the arrival of better, smaller, lighter Japanese cars; it was GM’s failure to respond in kind. Rather than hitting back with superior products, the company hid behind politicians who appeared to help it in the short term. Rules on fuel economy distorted the market because they had a loophole for pickups and other light trucks—a sop to farmers and tool-toting artisans. The American carmakers exploited that by producing squadrons of SUVs, while the government restricted the import of small, efficient Japanese cars. If Detroit had spent less time lobbying for government protection and more on improving its products it might have fared better. Sensible fuel taxes would have hurt for a while, but unlike market-distorting fuel-efficiency rules, they would have forced GM to evolve.
As for the health and pension costs which have helped sink GM, the company and the government bear joint responsibility for those too. After the war GM rejected a mutual scheme that the unions wanted because it smacked of socialism; and around the same time, the company agreed to give retired workers full pensions and health care for life. But if successive administrations had dealt with America’s expensive and inadequate health care—a problem with which Barack Obama is now wrestling (see article)—the cost of those union demands would have been far lower. None of GM’s competitors has had to shoulder costs per worker anything like as heavy: until an agreement in 2007 with the union, each car in Detroit carried about $1,400 in extra pension and health-care costs compared with the foreign-owned competitors in America.
GM, Ford and Chrysler tried to improve: by 2006 they had almost caught up with Japanese standards of efficiency and even quality. But by then GM’s share of the American market had fallen to below a quarter. Rounds of closures and job cuts were difficult to negotiate with unions, and were always too little too late. Gradually the cars got better, but Americans had moved on. The younger generation of carbuyers stayed faithful to their Toyotas, Hondas or Mercedes assembled in the new cheaper car factories below the Mason-Dixon line. GM and the other American firms were left with the older buyers who were, literally, dying out.
GM’s demise should not be read as a harbinger of doom for the car industry. All around the world people want wheels: a car tends to be the first big purchase a family makes once its income rises much above $5,000 a year, in purchasing-power terms. At the same time as people in developing countries are getting richer, more efficient factories and better designs are making cars more affordable. That is why the IMF forecasts that the world will have nearly 3 billion cars in 2050, compared with around 700m cars today. In the next five or six years the Chinese will overtake the Americans in terms of annual car sales: in 40 years’ time the Chinese will have almost as many cars as exist in the whole of the world now. Indeed, GM’s own experience abroad shows the promise of emerging markets. Brazil has long been a source of profits, and GM has a leading position in China.
Yet although the long-term prospects for sales growth look excellent overall, the car industry has a problem: it needs to shrink dramatically. At present, there’s enough capacity globally to make 90m vehicles a year, but demand is little more than 60m in good economic times. Even as the big global manufacturers have been building new factories in emerging markets, governments in slow-growing rich-world markets have been bribing them to keep capacity open there.
Because the industry employs so many people and is a repository of high technology, governments are easily lured into the belief that car firms must be supported when times are tough. Hence Mr Obama’s $50 billion rescue of GM; and hence, too, the German government’s financial backing for the sale of Opel, GM’s European arm, to Magna, a Canadian parts-maker backed by a Russian state-owned bank. German politicians have made it clear that they plan to keep German factories open even if others elsewhere in Europe have to close. At least the American rescue recognises the need to remove capacity from the market: GM will, as a result of the deal, lose 14 factories, 29,000 workers and 2,400 dealers.
It could still be a great business
For all its peculiarities, the car industry is no dinosaur—Toyota, for instance, is a byword for manufacturing excellence. But the unevolved GM deserved extinction. Detroit employed so many people and figured so large in American culture that governments felt they had to protect it; but in doing so, they made it vulnerable to less-coddled competitors from abroad. By trying to keep their car industry big, America’s leaders ended up preventing it from becoming good. There is a lesson in that which all governments would do well to learn.
patthe
te
Monday, June 8, 2009
Sunday, June 7, 2009
Moving on up
THE early part of the 20th century was not an easy time for the Ford Motor Company. Economic downturns were frequent and deep. Shortages of raw materials on the back of the first world war stalled assembly lines. And the motor industry’s supplier network was too small to keep pace with demand, making it hard to ensure that all of a car’s parts were ready for assembly at the right time.
Henry Ford tried stockpiling parts and materials, but found that the inventory costs were too high. The answer, he decided, was total control: owning the whole supply chain. By the 1920s his company ran coal and iron ore mines, timberlands, rubber plantations, a railroad, freighters, sawmills, blast furnaces, a glassworks, and more. Capping it all was a giant factory at River Rouge, Michigan (pictured), which built the parts and assembled the cars.
Library of Congress Against the flow
Ford's “vertical integration” solution was wildly successful. But the top-heaviness, complacency and stifling of competition that came to typify vertically integrated models eventually pushed them out of fashion. Today, supply chains have become global and complex. Yet the current recession has shown that they too are dangerously vulnerable to economic downturns.
Mark Gottfredson of Bain & Company, a consultancy, argues that many company chiefs have overestimated the ability of their supply chains to cope. Those that have chosen partners on cost basis alone are suffering especially—in the past year, thousands of low-cost Chinese manufacturers have folded. Some big Western suppliers have failed, too, such as Smurfit-Stone Container, a cardboard producer, which filed for Chapter 11 bankruptcy protection in January.
So, as companies battle to survive, has the time come to revisit Ford's solution? Some firms are already moving in a vertical direction. General Motors, a company in trouble if there ever was one, is seeking to buy back operations run by Delphi, a bankrupt car-parts supplier it spun off in 1999. Chinese steel-makers, having endured soaring commodity prices, are buying up Australian mining companies. And investment bankers in Asia report discussions with clients seeking to purchase struggling suppliers.
But vertical integration's fans have a struggle ahead to overcome its poor image. Almost any MBA graduate (some of them are still worth listening to) will declare that companies should do best when they focus on the part of the business where they have an advantage, rather than expending money and time on the dozens of steps required to deliver the final product.
However, managers who want a greater degree of control may find vertical integration has its advantages. Some are unsavoury—as the early steel and oil barons discovered, owning raw-material sources can be a useful way of squeezing competitors. Yet expanding upstream or downstream can boost profits. In the apparel business, for instance, the owners of brands reap higher returns than those that produce the outfits. And in digital photography, it is not the camera-makers that have the widest profit margins, but companies like SanDisk, which makes camera memory cards.
When a company expands down the chain closer to the ultimate customer, it also reaps learning benefits, says Tom Osegowitsch, a lecturer in management at the University of Melbourne. For instance, Zara, a Spanish clothing company, finds that owning shops gives it insights into what its customers really want, helping make its manufacturing operations more nimble.
Still, the trend of the last few decades to focus on “core competencies” is no mere fad. Although reliance on supply chains has risks, owning parts of the chain can be riskier—for example, few clothing-makers want to own textile factories, with their pollution risks and slim profits. Big, complicated businesses are hardly agile, and when new technology emerges, the owners of factories bear the costs of upgrading. And the lack of competition in vertical operations can cause a certain bureaucratic stiffness to set in among company divisions.
For managers, vertical integration carries the uninviting prospect of forcing them to operate outside their comfort zones. Mr Gottfredson points to research by Bain arguing that when a company moves two or more steps away from its main business, it fails two-thirds of the time. (For example, a shoemaker that decides to sell directly to end customers will not only have to distribute its wares but operate shops, too—and running a factory doesn’t prepare a manager to do either one.) “There is a lot working against you,” says Mr Gottfredson. “You will be competing with your customers and selling to a new customer base through a distribution channel you don’t understand.”
Looking sideways
There may be a third way. A company can gain some of the benefits of vertical integration without full ownership. Consider Toyota, a motor company that has been a byword for decent management in a way that General Motors has not been. Toyota rigorously screens its suppliers for quality and financial health, and then spends time and money to ensure their efficiency and survival, sometimes taking minority stakes.
In the 1980s, when Toyota chose Johnson Controls to supply seats, it blocked the supplier from expanding its facility, fearing that the additional cost would harm Johnson's profits and effectiveness. Instead, Toyota’s engineers worked with Johnson to streamline production, rearrange the factory floor, and cut inventories, ultimately showing that expansion wasn’t needed after all.
To follow Toyota's example, argues Joel Sutherland, now of Lehigh University and once head of operations at one of Toyota's suppliers, is to create a supply chain with the stability and efficiency of vertical integration but with some of the flexibility of looser networks of suppliers. The approach is also far cheaper than the traditional vertical method of owning suppliers outright, a virtue at a time when cash and credit are rare.
Like the duration of the downturn itself, how well supply chains will endure is anyone's guess. But the return of deep economic cycles may cause many managers to discover that there’s comfort in keeping suppliers close. Recalling the days when Henry Ford ruled, vertical integration—in adapted form at least—may emerge from disgrace as an innovative solution in an era when innovation is sorely required.
patthe
te
Saturday, June 6, 2009
Friday, June 5, 2009
Thursday, June 4, 2009
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