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.
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German business confidence rose to a 13-month high in October, improving the outlook for growth in Europe’s largest economy.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, rose to 91.9 from 91.3 in September. That’s the highest reading since September last year. Economists expected a gain to 92, according to the median of 40 forecasts in a Bloomberg News survey. The index reached a 26-year low of 82.2 in March.
The government, which is spending 85 billion euros ($127 billion) to haul Germany out of its worst recession since World War II, last week raised its economic forecasts, predicting growth of 1.2 percent in 2010 after a contraction of 5 percent this year. A separate report today showed the country’s manufacturing industries expanded in October for the first time in 15 months. Rising unemployment, the euro’s increase against the dollar and the expiry of stimulus measures may temper the recovery next year.
“We’re still bathing in the sunshine of the fiscal support, so the second half of this year looks good,” said Jens Oliver Niklasch, an economist at Landesbank Baden-Wuerttemberg in Stuttgart. “However, the recovery will likely lack vitality.”
Volkswagen AG, Europe’s biggest carmaker, predicts the worldwide automotive market won’t match pre-recession levels until 2013 at the earliest. “There are growing signs that the worst of the crisis may now be behind us, but it will take time for the markets to recover,” Chief Executive Officer Martin Winterkorn said on Oct. 8.
Fiscal Stimulus
In addition to the emergency stimulus measures, Chancellor Angela Merkel’s Christian Democrats are prepared to cut taxes by 20 billion euros after they form a coalition government with the Liberal Democrats, negotiator Steffen Kampeter said on Oct. 16.
“The economy still is on a drip but will return to sustainable growth next year,” said Carsten Brzeski, an economist at ING Groep NV in Brussels, who expects overall output to expand by 2 percent in 2010. “We haven’t seen the election effect so far and the support measures taken are also designed to spur private investment.”
Germany’s manufacturing sector returned to growth in October after 14 months of contraction, a survey of purchasing managers by Markit Economics showed today. Service industries expanded for a third month, the PMI report showed.
Mixed Picture
The picture remains mixed. While German factory orders rose for a sixth month in August and industrial output gained, exports unexpectedly fell. Investor confidence declined for the first time in three months in October amid concerns the recovery could falter.
The euro has appreciated 20 percent against the dollar since mid-February and reached a 14-month high of $1.50 this week, eroding export returns. Rising joblessness may also discourage household spending.
The European Central Bank has cut its benchmark interest rate to a record low of 1 percent and is lending banks as much money as they want for up to a year in an effort to get credit flowing through the economy of the 16 nations sharing the euro. President Jean-Claude Trichet has repeatedly said that it’s too early to withdraw monetary policy stimulus.
Initial public offerings will rebound only in 2010, despite a pick-up in activity that some investors say signal a resurgence, the National Venture Capital Association said on Thursday.
For those encouraged by such signs as the $340.4 million raised by battery maker A123 Systems Inc in its recent IPO, the trade association’s message in its quarterly report is that total IPOs “fell far short of historical norms.”
Three venture-backed IPOs worth a total $572 million were launched in the third quarter, down from the second quarter’s five deals worth $720 million.
“The fact that the many in the media are classifying three IPOs as a resurgence is evidence of how low our expectations have become,” NVCA President Mark Heesen said in a statement.
Still, that was more than the one deal worth $187 million in the third quarter last year.
The figures, based on an exit poll conducted by the association and Thomson Reuters, also showed acquisitions down from last quarter.
The third quarter had 62 acquisitions with a total disclosed value of $1.2 billion, less than half the second quarter’s 64 deals worth $2.5 billion. The 2008 third quarter had 88 deals worth $3 billion.
The dip in acquisitions “is not the direction we hoped to see. While the psychology of the market is trending positive, our original forecast of a true recovery not beginning until 2010 still unfortunately holds true,” Heesen said in a statement.
Dow Jones VentureSource put out its own numbers on third quarter deals on Thursday. Its findings were similar to the NVCA, but using a different methodology found that venture-backed liquidity was $2.7 billion in the third quarter, down 49 percent from the $5.32 billion of one year ago.
The director of global research for Dow Jones also took a more optimistic view than Heesen. Jessica Canning said she saw “signs of a significant thaw.”
“The trickle of venture-backed IPOs over the past two quarters appears to be growing into a steady stream, which is a welcome sign of recovery for investors,” she said.
The National Venture Capital association showed that so far in 2009, IPOs and acquisitions total up to $5.7 billion. By the same time last year, there had been $12.3 billion in deals, nearly all in acquisitions.
The report said the A123 Systems offering was the largest since March 2007, a year in which there were 86 venture-backed IPOs. That was a peak year since the dot-com bust of 2001.
The other two third-quarter IPOs were LogMeIn Inc, a provider of remote access applications, which raised $106.7 million in the communications and media sector, and Cumberland Pharmaceuticals Inc, a specialty pharmaceutical company in Nashville, Tennessee, which raised $85 million.
As for prospective IPOs, Heesen said that many companies with plans had failed to take an important step — registering with the U.S. Securities and Exchange Commission.
(Reporting by David Lawsky; Editing by Richard Chang)
Contrite U.S. Securities and Exchange Commission officials apologized for bungling five probes that should have uncovered Bernard Madoff’s $65 billion fraud and pledged to overhaul the way the agency operates.
A scathing report issued last week by SEC Inspector General David Kotz found that the agency missed numerous red flags, did not properly follow up on leads and dismissed tips and complaints that might have uncovered Madoff’s investment sham.
At a congressional hearing to examine the SEC’s shortcomings, top SEC officials said that in the Madoff case the agency failed in its “fundamental mission to protect investors.”
“It is a sobering and humbling experience,” said the SEC’s director of enforcement Robert Khuzami and John Walsh, the agency’s acting director of exams and compliance, in joint testimony to Congress.
“We deeply regret our failure to detect the Madoff fraud and pledge to continue to fix the problems that contributed to this failure,” said Khuzami and Walsh, both of whom described reforms underway.
Madoff pleaded guilty in March and is now serving a 150-year prison term.
Lawmakers expressed outrage over the SEC’s missteps. Richard Shelby, the top Republican on the Senate Banking Committee, threatened the agency with legislation if it refused to reform itself.
Democratic Senator Robert Menendez asked who should be held accountable and suggested that staffers who dropped the ball on the Madoff case be fired. “Where there is gross incompetence… the first thing you have to do is clean house,” Menendez said.
An SEC spokesman said the agency will thoroughly examine all of the conduct and take appropriate action”
Senate Banking Chairman Christopher Dodd said the SEC’s culture needs to be reformed to encourage aggressive investigations and said the agency should hire staff with real-world experience.
Khuzami and Walsh said this was underway and agreed with Democratic Senator Charles Schumer’s proposal to give the SEC a bigger budget and allow the agency to keep the fees it collects. Currently Congress appropriates the SEC’s budget.
Thursday’s hearing was in sharp contrast to a February hearing when a House of Representatives panel excoriated five closed-lipped SEC officials. Four of the five SEC officials that testified at that hearing have since left the agency.
REFORMS AFOOT
Kotz outlined dozens of recommendations to improve SEC procedures for handling tips and examining individuals and companies.
He urged the SEC to make sure that complaints were properly vetted, saying tips and complaints had to be reviewed by staff who had related experience.
Nouriel Roubini, a leading economist who predicted the scale of global financial troubles, said a U-shaped recovery is possible, with leading economies undeperforming perhaps for 3 years.
He said there is also an increasing risk of a “double-dip” scenario, however.
“I believe that the basic scenario is going to be one of a U-shaped economic recovery where growth is going to remain below trend … especially for the advanced economies, for at least 2 or 3 years,” he said at a news conference here.
“Within that U scenario I also see a small probability, but a rising probability, that if we don’t get the exit strategy right we could end up with a relapse in growth … a double-dip recession,” he added.
Roubini, a professor at New York University’s Stern School of Business, said he was concerned economies which save a lot, such as China, Japan and Germany, might not boost consumption enough to compensate for any fall in demand from “overspenders” such as the United States and Britain.
“If U.S. consumers consume less, then for the global economy to grow at its potential rate, other countries that are saving too much will have to save less and consume more,” he said business cards design.
“My concern is that for a number or reasons … (it is unlikely that) countries like China, other emerging markets in Asia, Japan, Germany in Europe, will have a significant increase in the consumption rate and a reduction in the savings rate.”
Roubini said he thought central banks should pay more attention to asset prices when deciding interest rate policy and encouraged U.S. Federal Reserve Chairman Ben Bernanke to follow this route.
“I think that asset prices, asset bubbles should become much more important in the setting of interest rates, in addition to concerns about inflation and growth. (Bernanke’s) views until now have been different. Hopefully this crisis has taught a lesson.”
Roubini’s outlook remains downbeat, however.
“I think that too many people are hopeful that everything is fine and unfortunately the road ahead is going to be at best bumpy, if not worse,” he said.
(Reporting by Jo Winterbottom; editing by Chris Pizzey)
ST. LOUIS — The Avalon Theater, dark for a decade and fallen into severe disrepair, is for sale — for $1 million, as is.
Bjaye Greer, listing agent for the property for the Realty Exchange, said that SOPO Corp. put the property up for sale last month. Some clarification of the building’s ownership still needs to be resolved in court, but Greer hopes a redeveloper or preservationist will soon buy the old theater, in the South Kingshighway commercial district near Chippewa Street.
Greer said the 8,500-square-foot building could be sold for renovation and adapted reuse or torn down for redevelopment.
"That’s up to whomever buys it and what they are able to do within city and zoning parameters," Greer said. The entire lot is about 25,000 square feet.
"It was a beautiful building and supposedly one of the best Art Deco buildings in St. Louis to save," Greer added. "I was hoping someone could restore it and save it. But I also know that the area is a real prime spot for redevelopment."
The area around the Avalon, 4225 South Kingshighway, was once a hub of south St. Louis activities, a destination for shoppers as well as moviegoers. The theater opened in 1935 as one of St. Louis’ "movie palaces."
Now, the building is missing large sections of the shingled roof and has a barricade instead of a box office. The property is now condemned, cited scores of times by the city for building code violations.
LANDMARK STATUS?
The Landmarks Association of St. Louis last spring put the theater at the top of its list of most-endangered historic properties. Many neighbors see it as a significant neighborhood landmark that should be preserved.
Others call it an eyesore and a threat to the health and safety of the neighborhood. They want it torn down as soon as possible.
The area’s alderman, Stephen Gregali, believes the building is probably doomed. He called the theater a "a never-ending story."
"I’d like to see some venue there, but we have made numerous attempts," he said. "We’ve tried to take it off their (the owners) hands, but they blew us off."
Gregali said the city also offered business assistance.
"Since the building has deteriorated, we may have no alternative but to tear it down," Gregali said. "The last time I was in the building 18 months ago, I had to wear a mask and a hat — the mold is that bad. It’s like ‘The Blob’ movie come to life.
"It’s really a shame because other than the Chase and Moolah and Hi-Pointe, we don’t really have movie theaters in the city. I have had theater and club groups approach me … but unfortunately, they want the building for nothing."
Richard Dempsey, an attorney representing SOPO, could not be reached for comment.
The attempt to sell the building is proceeding even though the building is the subject of a suit filed by the city in May in St. Louis Circuit Court.
The suit seeks to clarify the property’s ownership.
That is complicated because SOPO Corp., which has owned the theater since 1977, has been defunct since 1983, and its last known principals, Constantin and Kay Tsevis, are deceased.
"We don’t believe anybody has clear title to the Avalon Theater so we’ve asked the court to assign somebody to speak for the defunct corporation and take the necessary steps to transfer title to an actual person or valid legal entity," said Erika Zaza, an assistant city counselor.
Zaza said that at the city’s request, Circuit Judge Robert H. Dierker last month appointed one of the Tsevises’ heirs, Larry Tsevis, as the trustee to act on behalf of SOPO. His role will be to distribute assets to shareholders, or wind down the business. That will require the probate estate to be reopened. Once the probate matters are clarified, city officials say, there should be a clear title, allowing for the sale.
Also the city would have a legal owner that would be responsible for the current condition of the property. City officials said they wanted to make sure there was a clear title and if necessary they want to be able to hold the owners responsible for any neglect.
Dierker will hold another hearing on the matter on Sept. 14.
The German government might drop its opposition to Belgian-based financial investor RHJ International as a buyer for General Motors’ GM.UL European unit Opel, Bild newspaper reported on Thursday.
Berlin could be willing to accept RHJ if it teamed up with an international partner from the car industry, the mass-selling daily said, without saying where it obtained the information.
Germany’s Economy Ministry was not immediately available for comment.
The German government had so far favored Canadian car-parts supplier Magna over RHJ, which aims to shrink the carmaker to return it to profit.
Talks to sell Opel have dragged on for months and are a political hot potato ahead of German elections in September, because of the state support required for the eventual buyer.
GM’s board of directors on Friday postponed a decision on proposals by GM’s management to relinquish a controlling stake in Opel either to Magna or RHJ.
A GM source told Reuters on Monday the company was considering a third alternative that would see it inject billions into Opel to hold on to the company, though people close to the talks have said this might be a bargaining tactic.
(Reporting by Peter Dinkloh, editing by Will Waterman)
The U.S. government’s “cash for clunkers” autos sales incentive program may be wound down as soon as early September, the Wall Street Journal said, citing a person familiar with the matter.
The U.S. government is expecting a surge in last-minute clunker deals when a closing date is announced and wants to avoid a situation where dealers agree to sales after the program’s funds have been exhausted, the person told the paper.
Under the program, the government gives consumers a rebate of up to $4,500 for trading in older, inefficient vehicles for new, fuel-sipping ones car insurance quotes. Washington scrambled early this month to add $2 billion when the popular program’s initial $1 billion funding was quickly spent.
The U.S. Department of Transportation did not immediately respond to a Reuters email seeking comment.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Hans Peters)
Reader’s Digest Association Inc, publisher of the widely-read Reader’s Digest magazine, said on Monday it would likely file for Chapter 11 bankruptcy for its U.S. businesses to cut its debt load.
The media company, known worldwide for its family-friendly namesake magazine, been trying to slash costs and boost growth since it was taken private in 2007 by an investor group led by Ripplewood Holdings LLC.
The bankruptcy would take the form of a so-called pre-arranged filing, Reader’s Digest said in a statement. A pre-arranged filing comes after a company has already reached deals with its lenders to cut its debt.
The Chapter 11 filing will apply only to the company’s U.S. businesses. Its operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand will not be affected.
“Restructuring our debt will enable us to have the financial flexibility to move ahead with our growth and transformational initiatives,” said President and Chief Executive Officer Mary Berner, in a statement.
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The Pleasantville, N.Y., media company said the bankruptcy would help facilitate an agreement with lenders to exchange a portion of its $1.6 billion in senior secured debt for equity, and transfer company ownership to the lender group.
The agreement, which is subject to court approval, also includes a commitment from some members of the senior lender group to provide $150 million in debtor-in-possession financing, which would help fund operations during the reorganization. The pre-arranged plan proposes to cut debt by 75 percent to $550 million, from the current $2.2 billion.
The company has offices in 44 countries, marketing books, magazines, educational products, recorded music collections and home video products. It also publishes food magazine Every Day with Rachael Ray.
(Reporting by Chelsea Emery, editing by Gerald E. McCormick and Tim Dobbyn)
Bob Wamhoff tries to be accessible to his clients. He’s a financial adviser; one of the few places he asks not to be interrupted is on the golf course. But he broke that rule last fall when he got a call from a panicked client, just as the stock market began its sharp descent.
The psychologist’s role Wamhoff plays has been especially important in these rough economic times. The hardest part of his job, he said, has been helping investors remember that the cyclical nature of the stock market indicates that even this downturn will pass. That need to provide a feeling of security is part of why he talks so frequently with clients.
The only other time Wamhoff is unreachable is when he’s working with schools he helped to build in Honduras. Shortly after his wife visited with a church group in 2003, the couple began supporting a small village by helping provide proper nutrition and building schools and homes. Wamhoff visits about six times annually to do philanthropy that he said is more of a privilege for him.
What were your first years in business like?
Business is rough. When I went into business for myself, I sold my home. Took the equity out of my home and moved into an apartment. I borrowed $5,000 from my mother. I was 26. I started the business in 1975.
The initial years were interesting. What happens when you’re starting out in business is you make a deposit, you make a withdrawal. I used to keep the check registers to show I put $150 in and took $100 out to survive. So the first few years are tough. You’re young, and back then I looked young so it was very difficult for people to take me seriously. With my own father it took a couple of years before he (asked) me to do his taxes, and he had the utmost confidence in me.
What’s your most difficult job as a financial adviser?
My most difficult job, when the stock market is going down, is holding their hands and telling them its going to be OK. That’s the toughest part because you’re dealing with emotions. And you also have to deal with your own emotions. If you go back to October 2008, the stock market is crashing, I’m losing money for my clients. The clients are calling; they’re concerned. And even somebody like me starts to doubt — do I believe what these people are saying on TV? That’s the difficult part totally free credit score.
But we hold their hands and tell them its going to be OK. And 98 percent of our clients held in and this year we’re up 15 percent through (late July). The people who got out in October don’t have that 15 percent and they’ll never get it.
Is there a difference in your strategy with the swing from the hot stock market of a few years ago to today’s stock market?
I tend to be contrary. I still diversify and do the proper things. … But when the market is hot, I’ll underweight the stock market, because I feel that what goes up will go down. So from 2003 through 2007, the market was up and I was saying to my clients, "Take some money off the table. Let’s put some money into real estate and … other investments." Now, what I have been saying since November 2008 is, "The market is way too low. Get your money in now."
Does that mean your business tends to do better in poor markets?
No, 2009 is going to be a worse year (for my business) because I can say (buy) all day long, but clients sometimes won’t respond because they’re scared. They’ll hear me and they’ll stay the course. But will they put new money in? Most of them will not. They’ll put it in when everything goes up.
You invest quite a bit in your volunteer work in Honduras. What do you feel you get out of it?
Everybody says you’re the greatest person in the world for doing this. I say I’m the luckiest person in the world to have this.
I can raise money … but then I can see the end result. I can see these kids smiling. I can see their grades up. I can see the children (who get scholarships) have a chance (for further education). Nobody gets to do that, so I’m the luckiest guy in the world.
I have to give the credit to my wife. Would I have stood up and said I’ll do that? I don’t know if I would have had the courage.
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