The St. Louis area, which has a soft spot for mostaccioli and ravioli, has been one of the top-performing markets for Fazoli’s, the Italian quick-service restaurant chain based in Lexington, Ky.
That’s why Carl Howard, Fazoli’s chief executive, picked this region for the chain’s first new store in more than 3 years.
The new outlet, which opened this week in Edwardsville, is also the first to debut the chain’s new prototype. The new design is smaller than the old model, located in strip centers instead of a stand-alone building, and has a brighter, more modern decor.
"This is a fresh look for us," Howard said in an interview during a visit to the new store. "Our old facility is a little bit stale. We wanted to juice it up and have some fun."
Fazoli’s has undergone more than just a face-lift. In the last year, it has also overhauled about 80 percent of its menu, adding new items such as baked pasta dishes. It has also started using fresher ingredients and revamped everything, from the submarino sandwiches to the marinara sauce.
Fazoli’s had become quiet over the years, Howard acknowledged. Its menu hadn’t kept up with the growing sophistication of the public’s palate. And the previous leaders of the chain let the brand grow stagnant as they sought a buyer for the company, he said.
In 2006, Fazoli’s was finally sold to Sun Capital Partners. Howard came in as CEO two years later. When he took over, the chain had been grappling with declining customer counts for several years at its 280-plus locations. One of his first major decisions was to shut down dozens of underperforming stores. Fazoli’s now has closer to 240 outlets and does $239 million in sales.
"You get rid of your dogs and stick with your stars and all of a sudden your numbers and performance begins to improve," said Darren Tristano, executive vice president of Technomic, a Chicago-based food consultant group.
Now customer visits have been consistently rising since January 2009, Howard said, though he declined to say by how much.
The new Edwardsville site will be followed by six to eight other new Fazoli’s in the next year or so in other strong markets for the company such as Kansas City, and Dayton and
Columbus, Ohio, Howard said.
"We have a Midwest appeal." Howard said. "We have real comfort food."
St. Louis, which now has nine Fazoli’s locations, is the chain’s third-largest market in terms of number of stores, behind only Indianapolis and Lexington.
Kim Tucci, president of St. Louis-based The Pasta House Co., isn’t sweating it as Fazoli’s angles for a larger local presence.
The Pasta House has a very similar logo to Fazoli’s — a fat, red tomato — and has about 20 locations in the metro area and another dozen outside the region. Tucci said his competitors are more along the lines of Macaroni Grill — and not Fazoli’s, which he equated to a fast-food chain like McDonald’s.
"This is like apples and watermelons," he said. "You can’t compare it to what we have — nothing against them."
Tucci added that it makes sense for Fazoli’s to be aggressive in this economy because of their lower price points. The average bill per person at Fazoli’s is just under $6.
Like most other restaurants, Pasta House has been feeling the pinch of the recession as people eat out less. Tucci has responded by lowering his prices. In late December, Pasta House started a promotion offering six pastas for under $6.
"We’re hanging in there," Tucci said. "We’re hustling everyday, 24-7."
As a whole, fast food and fast-casual outlets have done well during the recession — better than the traditional, sit-down restaurants, Tristano said.
The prototype for the new Fazoli’s is about 2,100 square feet — roughly a quarter smaller than their older locations of between 2,700 and 3,100 square feet, Howard said.
"It’s a lot more efficient," Howard said.
By having these smaller stores in strip malls, Howard hopes this will be more attractive to franchises. The start-up costs associated with a new location will be closer to $500,000 compared with as much as $1.7 million for land and the building of the older standalone stores.
"It’s going to be easier to replicate," he said. "There’re a lot of shopping strips for us to go rather than fighting for the last great piece of real estate in a market."
Fazoli’s is also testing out some other innovations at the Edwardsville store — slightly lower prices on some items, a new line of pizzas and bringing back the "breadstick person" who goes table to table.
When it opens its new stores in Dayton in the next several weeks, Fazoli’s will try out other new ideas, such as having real tableware and silverware.
If the innovations do well in these new stores, Fazoli’s hopes to roll out the changes to its other company-owned stores. As for the franchises, Howard hopes that the new elements will be such a hit that they will be motivated to follow suit.
OTTAWA–Prime Minister Stephen Harper will test drive his priorities for the G8 and G20 summits this week at an elite conference in Davos, Switzerland, and he’s expected to highlight the environment, development and global economic growth.
While Canada’s official agenda for the end-of-June summits is not yet finalized, climate change will figure prominently at both meetings, a senior government official said.
Economic recovery, banking regulations, aid for mothers and children in poor countries and global security are also top of mind for the prime minister as he leaves Tuesday night for a quick three-day trip.
His speech on Thursday will be the first public unveiling of how Harper sees the two summits unfolding – starting with the Group of Eight industrialized countries meeting in Huntsville, Ont., at the end of June, and followed immediately by the larger Group of 20 summit in Toronto.
While Canada has been widely pilloried for its lack of plans to reduce greenhouse gas emissions, Ottawa wants the two summits to push the world closer to a binding international treaty on emissions reduction, based on the agreement-in-principle reached in Copenhagen last month.
"We want to see a long-term agreement on climate change," said the Canadian official, speaking on background. He stressed that final decisions will need to be made through the United Nations.
The summits, he said, "can play a supportive role online payday loans."
For the G8 summit, Harper plans to make child and maternal health a central theme, several sources said, although it was unclear whether Harper was ready to focus on that topic in his Davos speech.
Ottawa wants to foster collaboration among the richest countries to improve hospitals and health care for mothers and newborns in poor countries.
The federal government also wants to set an example by increasing its own spending on maternal and child health in developing countries – although money has not yet been allocated for this effort.
Stopping the spread of nuclear weapons and other security concerns will also be on the G8 discussion list.
For the G20, Harper will use his Davos speech to signal that the Toronto summit in June will focus on entrenching the global economic recovery.
Specifically, Harper is expected to stress that the rebound is fragile, and that the world won’t really feel like recovery has taken hold until employment rises.
He is expected to signal that he wants all G20 countries to demonstrate that they are living up to their unprecedented commitments to stimulate their economies.
French business confidence rose more than economists forecast in January on signs that the recovery is gaining pace after the worst recession in six decades.
The index of sentiment among factory executives jumped to 92 from a revised 88 in December, Paris-based statistics office Insee said today. Economists expected a reading of 90, according to the median of 18 forecasts gathered by Bloomberg News.
France’s economy emerged from the slump last year, growing 0.3 percent in the second and third quarters. The Finance Ministry said this week that growth accelerated in the three months through December and raised its 2010 forecast, predicting that Europe’s second-largest economy will expand 1.4 percent.
“French industry is benefiting from the pickup in world trade,” said Joost Beaumont, an economist at Fortis Bank Nederland in Amsterdam. “Growth should mainly come from foreign demand.”
French bonds gained after the report, pushing the yield on the benchmark 10-year bond due in 2019 down 2 basis points to 3.43 percent. A basis point is 0.01 percentage point.
French 10-year debt yielded an average 37 fast cash online.18 basis points more than 10-year German securities in 2009, according to data compiled by Bloomberg. The spread today was 23.5 basis points.
“Manufacturers see business significantly improving,” Insee said. “Inventories of finished products are judged to be small and order books, overall and from abroad, are filling up, even if they are still considered much less than full.”
The level of orders from foreign clients now shows a reading of minus 48, up from minus 58 in December, Insee said.
Domestic demand may be restrained by rising unemployment. The Finance Ministry expects France to lose 71,000 jobs this year, mostly in the first half, after shedding 373,000 in 2009.
“We have a recovery and the only question is how strong it will be,” said Pierre-Olivier Beffy, chief economist at Exane BNP Paribas in Paris. “In the U.S. inventories are being re- built and in Europe we are positive on the prospects for France and Germany.”
Tena Mayberry, the president of Brentwood-based Century II Inc., has been named as CEO of Century’s parent company, Indianapolis-based Fortune Industries Inc.
Mayberry, who was recently named one of Nashville Business Journal’s Women of Influence for 2010, will also continue to serve as president of Century II, and will remain in Brentwood.
She was named Fortune Industries’ president since last year, after the formerly diversified company decided to focus solely on providing professional employer organization services, such as payroll and human resources, to small and mid-sized businesses.
“I am excited to have the opportunity to lead the company through all the strategic plans we put in place,” she told Nashville Business Journal Monday.
She said she expects FFI to grow as the economy recovers, thanks in part to a continued emphasis on sales even while the company was cutting back on other costs.
“I think 2009 is the worst. We can’t have another 2009,” she said. “Everybody I speak with seems to be ready to start talking positively.”
Departing CEO John Fisbeck offered glowing words.
“Tena Mayberry is a proven top executive and one of the most knowledgeable senior managers in the PEO (professional employer organization) industry,” departing CEO John Fisbeck said in a statement. “Under her direction, FFI is one of the few PEO companies that has been profitable for the last year during this difficult economic environment. … She is an inspirational leader with boundless energy and will lead Fortune as it continues to expand in the U.S.”
Mayberry has more than 20 years of management experience, including time with Contract Sales Managers, Kroger Co., and Norrell Temporary Services. She holds a bachelor’s degree in marketing and business management from Tennessee Technological University.
Fortune Industries (AMEX: FFI) is the nation’s fifth-largest publicly traded PEO, representing 14,000 employees in 47 states.
Production in the U.S. rose for a sixth consecutive month, consumers gained confidence and price increases slowed, indicating the economic recovery is being sustained into 2010 without generating inflation.
Output climbed 0.6 percent in December for a second month, according to figures from the Federal Reserve issued today in Washington. The cost of living increased 0.1 percent last month, less than the median forecast of economists surveyed by Bloomberg News, and sentiment reached a four-month high in January, other reports showed.
Manufacturers may ramp up assembly lines in coming months to replenish stockpiles and meet rising global demand that’s lifting profits at companies including Intel Corp. The rebound so far has soaked up a quarter of the excess capacity created by the worst recession since the 1930s, giving the Fed scope to keep interest rates close to zero through the first half of the year.
“The economy is on a pretty good track on the recovery side and inflation is not a problem,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts, who correctly forecast the increase in consumer prices. “The Fed can be pretty relaxed, at least for the moment, and focus on making sure this recovery is sustainable.”
Stocks Drop
The Standard & Poor’s 500 Index dropped from a 15-month high after JPMorgan Chase & Co. reported a loss in its retail banking division and a stronger dollar pulled down commodity prices. The S&P 500 was down 1.2 percent to 1,134.75 at 12 p.m. in New York.
The increase in production matched the median forecast of 76 economists surveyed by Bloomberg. Estimates ranged from no change to a gain of 1.1 percent. The stretch of increases at the end of 2009 was the longest in a decade.
Production was propelled by a jump in utility use as temperatures turned colder. Utility demand climbed 5.9 percent, the biggest jump in two decades. December was colder than average, according to the National Oceanic and Atmospheric Administration, prompting Americans to turn up the heat.
Manufacturing dropped 0.1 percent as losses in auto and mineral production offset a 0.9 percent gain in business equipment. Demand for computers, communications gear and semiconductors improved, signaling investment may be picking up.
Another report today showed manufacturing accelerated in the New York Fed region this month. The Fed Bank of New York’s general economic index rose to 15.9 from 4.5 in December. Readings above zero in the so-called Empire State Index signal manufacturing expansion in the state and parts of New Jersey and Connecticut.
‘Solid’ Quarter
“We’re turning up,” said Joseph LaVorgna, chief U small personal loans.S. economist at Deutsche Bank Securities Inc. in New York. “Inventories are the spark of the recovery,” he said, and growth “looks pretty solid for the fourth quarter.”
Intel, the world’s largest chipmaker, yesterday projected bigger first-quarter sales than analysts had estimated, a sign the computer industry has shaken off the effects of the recession. The Santa Clara, California-based company, which supplies chips to more than 80 percent of the world’s computers, expects its profit margin to hit a 10-year high this year as consumers snap up laptops and businesses loosen the purse strings on technology budgets.
“My expectation for 2010 is that we’re going to see robust unit growth,” Chief Financial Officer Stacy Smith said in an interview. “The consumer segments of the market will stay pretty strong, and I do believe we are going to see a resurgence in PC client sales.”
Spare Capacity
Capacity utilization, which measures the proportion of plants in use, increased to 72 percent in December, the highest level in a year, from 71.5 the prior month, the Fed’s production report also showed. It was forecast to rise to 71.8 percent, according to the survey median.
The plant-use rate averaged 80 percent over the past two decades and reached a record low 68.3 percent in June. Excess capacity is one reason economists project inflation will remain low.
The increase in the consumer-price index last month followed a 0.4 percent gain in November, the Labor Department reported. The median forecast of economists surveyed projected a 0.2 percent advance.
Excluding food and energy costs, the so-called core index also increased 0.1 percent. Companies may have little success raising prices with unemployment projected to average 10 percent this year, the highest annual rate in seven decades.
“Consumer pricing pressures remain very subdued,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who accurately forecast the rise in the core rate. “It gives the Fed further leeway to continue keeping rates where they are well through 2010.”
The Reuters/University of Michigan preliminary index of consumer sentiment for January increased to 72.8, less than anticipated, from 72.5 in December. The gauge averaged 66.3 last year after reaching a record 28-year low of 55.3 in November 2008.
Kellwood Co., a privately held apparel company based in Town and Country, announced today that it has bought ISIS, an company that focuses on women’s outdoor apparel. Terms of the deal were not disclosed.
ISIS, which is based in Vermont, sells its clothes mostly through various outdoor retailers such as REI and the Alpine Shop.
Kellwood said in a news release that it has been impressed by ISIS’ consistent growth since its founding in 1998. Kellwood hopes to double ISIS’ sales over the next four years by continuing to aggressively expand its distribution channels through more speciality dealers and through its online business.
"In an otherwise challenging retail and fashion marketplace, ISIS continues to perform well, with solid operations, a loyal customer base, and a track record of growth," Michael Kramer, president and CEO of Kellwood, said in a statement.
Boeing Co. said commercial orders will pick up by 2012, after dropping to the lowest level since 1994 last year, as an economic recovery boosts air-travel demand and airlines return to profit.
"We’re starting to see the economy turn around after a really difficult year last year in terms of traffic," Randy Tinseth, Boeing’s marketing chief, said. Growth in travel and cargo shipments this year will translate into airline profits and "then we can start to see an increase in demand for new airplanes in 2012," he said.
Boeing had 142 net orders last year after 121 cancellations, the Chicago-based company said in a statement Thursday. That’s the fewest since 125 orders in 1994, according to spokesman Jim Proulx. The total also trails the 194 that rival Airbus SAS reported as of Nov. 30.
Boeing’s orders fell from 662 in 2008, when Airbus had 777, and from a record high of 1,413 in 2007.
"On a gross-order basis we’re probably in the same ballpark, but clearly we had challenges with some of our programs," with 83 cancellations for the delayed 787 Dreamliner, Tinseth said. The two rivals have generally split the market in the past few years and "I don’t see any major trends in terms of orders this year," he said easy online payday loans.
Airbus also kept the lead in deliveries, which are when planemakers get the bulk of payments. Boeing said it delivered 481 planes in 2009, while Airbus shipped 498, according to a person familiar with the Toulouse, France-based company’s production who declined to be identified because its figures won’t be released until Tuesday. Airbus has held the lead every year since 2003.
Boeing’s deliveries in 2009 rose from 375 in 2008, when factories had been shuttered during a two-month strike by machinists. Even with the recession, Boeing and Airbus combined built a record number of aircraft last year as the long lead time for jets and the threat of penalties for last-minute cancellations protected manufacturing rates.
Both companies are scaling back now to better match demand after airlines pushed back hundreds of delivery dates because of the global economic crisis.
Wall Street surged Monday, starting off the new year on a positive note, after a report showed manufacturing activity is picking up and the weak dollar propelled commodity prices and stocks.
The Dow Jones industrial average (INDU) rallied 156 points, or 1.5%. The S&P 500 index (SPX) rose 18 points, or 1.6%. The Nasdaq composite (COMP) gained 39 points, or 1.7%. All three major gauges closed at 15-month highs.
"The fact that stocks are up so much today is an encouraging sign, but we need to see a few days of follow through," said Will Hepburn, chief investment officer at Hepburn Capital Management.
He said the first few trading sessions of a new year are typically positive and that he wants to see several more days of gains on strong trading volume before he’s willing to say that the rally has recharged.
Stocks fell Thursday in a thinly traded session on the last day of 2009. All financial markets were closed Friday in observance of New Year’s Day.
The last month of 2009 saw stocks churning in a narrow range, managing modest gains, but not really charging ahead like in earlier months.
The market lost some momentum in November and December, Hepburn said. That slowdown coincided with the dollar beginning to firm up and investors opting to close the books early after a difficult year.
A tumultuous 2009 ended with substantial gains. The S&P 500 gained 23.4%, the Dow industrials gained 18.8% and the Nasdaq composite gained 44%.
Stocks are up even more substantially since bottoming in March at the height of the financial market crisis. After closing at a 12-year low on March 9, the Dow gained 59% and the S&P 500 gained 65% through year end. After closing at a 6-year low on the same date, the Nasdaq gained 79%.
Tuesday brings reports on factory orders, pending home sales and auto and truck sales.
Economy: The Institute for Supply Management’s manufacturing index rose to 55.9 in December from 53.6 in November, signifying a wider expansion in the sector. Economists surveyed by Briefing.com thought it would rise to 54.3. Stronger reports were also released in Asia, adding to bets that the global manufacturing sector is recovering.
A separate report from the U.S. government showed that construction spending fell 0.6% in November versus forecasts for a drop of 0.5%. Spending fell 0.5% in October.
On the move: Gains were broad based, with 27 of 30 Dow issues rallying, led by Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500), IBM (IBM, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500) business cards.
In other news, Swiss drugmaker Novartis AG plans to take control of Alcon (ACL) by paying $38.5 billion to buy the 77% of the eye care products maker it doesn’t already own. The deal involved Novartis buying out Nestle SA’s 52% stake in Alcon for $28 billion in cash and then merging with Alcon to access the remaining 23% held by minority shareholders.
Alcon shares fell nearly 6%.
Bernanke defends Fed policy: The Federal Reserve chairman said Sunday that the central bank’s decision to keep interest rates very low between 2002 and 2006 was appropriate and not the cause of the housing market bubble.
He said regulation would have been a better way to avert the collapse that ensued when home prices crumbled, leading to massive foreclosures, billions in losses for banks and the worst financial crisis since the Great Depression.
The Senate is currently considering Bernanke’s nomination by President Obama for another term as Fed chairman. The Senate Banking Committee already gave its approval last month. His current term ends on Jan. 31.
World markets: Asian markets gained, with the exception of the Hong Kong Hang Seng. In Europe, London’s FTSE 100 rose 1.6%, France’s CAC 40 added 2% and the German DAX rallied 1.5%.
Commodities and the dollar: The dollar tumbled versus other major currencies.
The weaker dollar gave a lift to dollar-traded commodities.
COMEX gold for February delivery settled up $22.10 to $1,118.30 an ounce. Gold closed at an all-time high of $1,218.30 an ounce earlier this month.
U.S. light crude oil for February delivery gained $2.15 to settle at $81.51 a barrel on the New York Mercantile Exchange, the highest close since October 2008.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.81% from 3.84% late Thursday. Treasury prices and yields move in opposite directions.
Market breadth was positive. On the New York Stock Exchange, winners beat losers four to one on volume of 1.02 billion shares. On the Nasdaq, advancers topped decliners by over three to one on volume of 1.92 billion shares.
Fewer Americans than anticipated filed claims for unemployment benefits last week, pointing to an improvement in the labor market that will help sustain economic growth next year.
Initial jobless claims fell by 22,000 to 432,000 in the week ended Dec. 26, the lowest level since July 2008, Labor Department figures showed today in Washington. The number of people collecting unemployment insurance fell in the prior week to 4.98 million, and those receiving extended benefits jumped.
Companies are retaining staff as sales improve and production picks up. Gains in consumer spending, which accounts for 70 percent of the economy, may encourage more hiring in coming months, helping to bolster the rebound from the worst recession since the 1930s.
“It’s boding well for outright job growth,” said Stephen Gallagher, chief U.S. economist at Societe Generale in New York, who forecast claims would drop to 430,000. “It seems that some of the layoffs that took place in the early part of the year were excessive.”
Treasury securities fell after the report, pushing the yield on the benchmark 10-year note up to 3.84 percent, from 3.79 percent late yesterday. The Standard & Poor’s 500 Index dropped 1 percent to 1,115.1 at 4:09 p.m. in New York. The S&P 500 gained 23.5 percent this year, the biggest annual advance since 2003.
Unexpected Drop
Economists forecast claims would rise to 460,000 from a previously reported 452,000, according to the median of 29 projections in a Bloomberg News survey. Estimates ranged from 430,000 to 490,000.
“What we’ve seen is definite stability and just a hint toward things trying to get better,” Jeffrey Joerres, chief executive officer of Manpower Inc., said in a Bloomberg Television interview today. The world’s second-largest provider of temporary workers, is experiencing “slow but steady increases in people who are out on assignment,” he said. “It’s a little in every office, which is a good sign because it’s broad-based.”
A Labor Department spokesman said last week’s figures were “consistent” with recent trends and were not influenced by any unusual factors. Even so, the week of the Christmas holiday is difficult to adjust for seasonal variations, he said.
The four-week moving average of initial claims, a less volatile measure, dropped to 460,250 last week from 465,750 the prior one. Claims are down from a 26-year high of 674,000 in the week ended March 27.
Continuing claims decreased by 57,000 in the week ended Dec. 19, reaching the lowest level since February. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Extended Benefits
Today’s report showed the number of people who’ve use up their traditional benefits and are now collecting extended payments climbed by about 199,000 to 4.82 million in the week ended Dec. 12. Twenty-nine of the states and territories where workers are eligible to receive government extension have begun to report that data, a Labor Department spokesman said. Two states have started reporting data on the latest emergency extension, he said.
President Barack Obama this month signed into law legislation that included a stopgap provision to ensure that unemployment benefits weren’t cut off over the holidays.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.8 percent in the week ended Dec. 19, today’s report showed.
State Breakdown
Twenty-seven states and territories reported a decrease in claims, while 26 reported an increase. These data are reported with a one-week lag.
The government is scheduled to release its December payrolls report on Jan. 8. In November, the economy lost the fewest jobs since the recession began two years ago and the unemployment rate receded to 10 percent from a 26-year high of 10.2 percent the prior month.
Even so, Americans are concerned about their financial future. Fewer consumers in December believed their incomes will increase over the next three to six months, the Conference Board’s confidence report this week showed.
Warren Buffett’sBerkshire Hathaway Inc. is among companies that slashed employment in 2009. The Omaha, Nebraska-based company last week said it cut 21,000 workers from its payroll amid a slump at the firm’s manufacturing and retail units. The company and its subsidiaries now have about 225,000 workers, it said in regulatory filings.
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