Wednesday, October 31, 2007
Keep a close eye on Russo, the board and outside major shareholders as we go forward.
International Herald Tribune
Business Week Management IQ
New York Times
Tuesday, October 30, 2007
Value Vision has been struggling from inception. According to a story by Leslie Brooks Suzukamo for Pioneer Press,
Under Lansing, sales grew from $591 million in fiscal 2004 to $767 million in 2006 but lost money every year. Nearly all the company's revenue comes from its television and associated Web site shopping business, with jewelry the biggest category.Back in May of this year, the company reduced its workforce about 14 percent after posting an operating loss of $7.4 million in its first quarter. The company also closed two outlet stores and consolidated its distribution operations into a single warehouse facility. The cuts failed to stop the decline. In August, the company reported its second quarter loss increased to $5.5 million. Shortly thereafter,
It was not to be. Two months later the company's board felt compelled to act forcing Lansing to leave. Lansing, outside of institutional holders such as GE Asset Management (17.34%) and others is one of the largest individual holders of the company's shares (377,000 according to Reuters). Before Lansing was ousted, the company hired turnaround consultants Alvarez & Marsal to help the board develop ways to improve corporate performance. At the time, the board specifically went out of its way to emphasize the hiring of Alvarez and Marsal was not a turnaround situation. The company supposedly had a healthy balance sheet with $100 million in cash and no debt.
Keep a close eye on the moves the company makes over the next few months. If they manage to hire a very strong candidate with turnaround abilities and a thorough understanding of their specific business model there may be some real potential upside. As things stand, that might be a tall order.
Stan O'Neal, chairman and chief executive officer of Merrill Lynch & Co., Inc. (NYSE: MER), has decided to retire from the company effective immediately, the company announced today. Mr. O'Neal has been chief executive officer of the company since December 2002 and joined the company 21 years ago. The company said the board of directors has elected Alberto Cribiore as interim non-executive chairman.In what might be viewed as a bit of a surprise, Cribiore said that Ahmass Fakahany and Gregory Fleming would continue as co-presidents and chief operating officers. Fleming is considered one of the possible successors to O'Neal but Fakahany has been directly linked with O'Neal and the risk problems Merrill has been facing. It has been surmised by some that Fakahany could be next.
Merrill Lynch said Mr. Cribiore, who has been a member of the Merrill Lynch board since 2003, also will chair a search committee that will identify and evaluate chief executive candidates from within and outside of the company. Mr. Cribiore is managing partner and founder of Brera Capital, a global private equity firm, and former president of private equity firm Clayton Dubilier & Rice.
Mr. Cribiore said that Ahmass Fakahany and Gregory Fleming will continue as Merrill Lynch co-presidents and chief operating officers. He further noted that Mr. Fakahany will lead the company's global support, finance and human resources functions and that Mr. Fleming will lead the integrated businesses of Merrill Lynch & Co., including risk management.We just have to wait to see how this really plays out over the next few weeks and months.
New York Times
International Herald Tribune
Sunday, October 28, 2007
Merrill Lynch & Co. Chief Executive Officer Stan O'Neal has decided to leave the company, the Wall Street Journal reported, citing an unidentified person familiar with the matter.
An announcement may come later today or tomorrow morning. The company's board will look inside the New York-based firm as well as outside for a replacement, the newspaper said, citing the unidentified person.
Landon Thomas, Jr. and Jenny Anderson of the New York Times have remained on top of the story from the beginning and in their latest piece in The International Herald Tribune discussed what the board was up to over the weekend.
Having decided O'Neal should leave, Merrill Lynch directors met throughout the weekend to figure out who should succeed him. One possible course being considered is that Laurence Fink, the head of the asset management firm BlackRock, which is 49 percent owned by Merrill Lynch, would become chief executive with Robert McCann, the head of the brokerage unit, and Gregory Fleming, the current president, as co-presidents.For more details behind O'Neal's fall read the latest piece from Thomas and Anderson. Expect this story to have serious legs. Chuck Prince is one lucky fellow for the moment. O'Neal has stolen his thunder and moved Prince's problems to the back pages of the media. It won't be too much longer. For the moment, besides who the board gets to replace O'Neal there is a great liklihood that there will be more top management changes at Merrill, so stay tuned.
Times Online UK
Friday, October 26, 2007
(Parsons) is poised to announce that he will handover the top job at the CNN to Harry Potter conglomerate to longstanding number two Jeff Bewkes.Stay tuned for further updates.
The announcement of the end of the African-American’s five and a half year tenure could come as soon as next week, after the matter was discussed at a board meeting in London on Wednesday and Thursday of this week.
Technically, no final decision was taken by the board...
E. Stanley O’Neal, floated the idea of a merger with a large bank, a foray that angered Merrill’s board and could cost him his job, according to people close to the beleaguered Wall Street firm.The pressure on O'Neal ratcheted up to a fever pitch as this article and the story behind hit the news wires. More and more analysts and experts are floating possible names as O'Neal's potential successor should he be forced to go. Earlier today CNBC's On-Air Editor Charles Gasparino had a piece that stated,
Mr. O’Neal broached the possibility of a merger with Wachovia, the bank based in Charlotte, N.C., without first getting the approval of Merrill’s board, a major breach of corporate protocol at a time when directors were already concerned about the company’s performance, these people said.
Stanley O'Neal has told associates that he's likely to be ousted as CEO in the coming days as the big brokerage firm's financial problems mount ...Stay tuned
Thursday, October 25, 2007
Mother Merrill has typically pulled people from inside its own ranks, but recent turmoil and departures could cause the board to look outside, sources told The Post.According to a piece by Jenny Anderson and Landon Thomas, Jr., in The New York Times, O'Neal is safe for the moment.
The top internal candidate talked about yesterday was Co-President Greg Fleming, a Wall Street rainmaker who has run Merrill's successful investment banking and mergers business.
For the time being, its seems as though Merrill’s board is supporting Mr. O’Neal — although given the decline of almost 6 percent in the stock yesterday and the growing criticism over his management style and decision making, that support may not be infinite.Stay tuned as the story evolves.
Mr. O’Neal has turned over virtually the entire board. Only two directors, Aulana L. Peters and Joseph W. Prueher, were there when he joined the board.
While there has been some speculation that former Merrill executives, perhaps under the leadership of Mr. Tully, might band together to pressure Mr. O’Neal to step down, as happened at Morgan Stanley two years ago, there is no sign that any such movement has formed.
For more on the story:
The Chicago Tribune
Securities Law Professor Blog
Wednesday, October 24, 2007
"The Board of Directors and management team are focused on strengthening the organization and positioning the Company to take advantage of long-term growth opportunities through its Children's Place and Disney Store brands," said chief executive Chuck Crovitz in a statement. "We believe it is in the best interest of the company, our shareholders, and employees to initiate a comprehensive review of strategic alternatives."I bring this up because the latest announcement has a great deal to do with the previous resignation of the company's CEO. As discussed in my earlier blogs, Children's Place previous CEO, Ezra Dabah, the company's largest shareholder, has hinted he may be seeking ways to purchase the firm. Dabah had been forced to resign after a company probe found he had violated internal corporate policies for securities trades.
The company has been reeling lately and a purchase by Dabah would be a strange circumstance. Could he rest total control at a fire sale price? If so, how would this all be viewed? Who else at there might be interested in Children's Place?
Keep a close eye on this company, it could turn out to be story with innumerable angles.
For more on the latest:
I would not declare victory yet, if I were Zander. Stay tuned.
Best Graduate School Guide
Mobile Tech Today
Tuesday, October 23, 2007
If you are WSJ subscriber click here to read the full article. If you are not a subscriber, you can read the article on the Breakout Performance blog.
Monday, October 22, 2007
The real question is whether Mozilo can remain in power at Countrywide.
For more see:
Mortgage News Daily
If you wish to view the interview click here or go to BNN and scroll down to today's interview which took place around 10:05 AM EST.
For more on Forsee's Exit from Sprint see:
Kansas City Star
Friday, October 19, 2007
Hart's resignation came just after the company announced a revision in its previous guidance for the fourth quarter of fiscal 2007, which ended on September 30.
"The reduced guidance reflects ActivIdentity's dependence on large orders and the slippage of several large orders from fiscal Q4 into Q1. We are disappointed with our revised guidance for the fourth quarter; however, we do believe this to be primarily an issue of timing. We expect to receive the majority of these slipped orders during the current quarter of our fiscal year 2008," said Jason Hart, chief executive officer.Jahn appears to be well qualified to run the company, the big question remains can he bring something new to the table to get the company to perform. Jahn has vast experience in the field and has had a varied background covering all the necessary areas that would qualify him to be ActivIdentity's new CEO. I hope the board sees something about Jahn that's not readily apparent with regard to his ability to turn things around at the firm
Noble's net income increased to $318.3 million, or $1.18 per share, from $207.2 million, or 76 cents, last year. Revenue jumped 41 percent to $791.3 million, while contract-drilling costs climbed 27 percent.The company continues to insist there was nothing extraordinary in Jackson's departure. The current interim CEO and Chairman, William Sears, remains very upbeat on the company's future. Currently, the company has retained an outside executive search firm to assist in the permanent hiring of a CEO.
For more see:
Thursday, October 18, 2007
Ken Lewis, chief executive, said he would review every business that led to the dismal third quarter performance, which was much worse than analysts expected.In a piece by David Mildenberg on Bloomberg he stated that during yesterday's conference call Lewis said
“What I can’t say is that we will stay the course and go forward as we have in the past,” he said. “The probability of changes and elimination of some businesses and infrastructure reassessment is very high.”
... the company plans to scale back its investment banking unit after trading mistakes led to $717 million of losses.Keep an close eye on what Lewis and top management do to address the earning problems facing the bank. Unlike Prince, Lewis has been a master until now at managing BofA.
For more see:
Times Online UK
Wednesday, October 17, 2007
Monday, October 15, 2007
For more see:
Streetinsider.com 13D tracker
Friday, October 12, 2007
Citigroup announced that it would combine its investment banking and alternative investment units, bringing the groups together under one leader. Vikram S. Pandit, a former Morgan Stanley executive who runs Citigroup’s alternative investment division, will lead the new group, to be called the institutional client group.For full details on the changes see Citigroup's press release.
Prince remains under pressure and stays on our CEO Watch List.
For more see:
Times Online UK
Mr. Dabah fired off a testy letter last night to the acting chairwoman of Children’s Place, charging that his resignation was “solely attributable to a power play by certain members of the board” and upbraiding the company for making remarks “that have disparaged my good name and reputation.”As the stock has gone into a tailspin and rumors continue about a possible sale of the company, Dabah, who remains the largest shareholder, has succeeded in muddying the waters surrounding the firm even further. Dabah insists,
The two-page letter, by turns angry and boastful, suggests that a nasty behind-the-scenes battle played out at the company over Mr. Dabah’s conduct, resulting in a split board vote on whether he should remain in the job.
... he is innocent of any wrongdoing, that the board and he "mutually agreed" that he would resign and that his resignation "was without cause."This story has legs and will continue for some time.
For more on the story see:
Bloomberg Update 3
NY Times Dealbook
Thursday, October 11, 2007
Talbots is a leading international specialty retailer and cataloger of women’s, children’s and men’s apparel, shoes and accessories. The company operates a total of 1,364 stores, with 1,125 stores under the Talbots brand name and 239 stores under the J. Jill name which the company acquired. The company has been working hard to integrate J. Jill into its overall operations. Both brands target the age 35+ female population. Unlike many retailers who are always seeking to stay on top of the latest women's fashion trends, Talbots has followed a tradition of constancy. It may be that this concept of success for the chain has begun to wear thin under constant competition and changing tastes. Talbots like many of its direct competitors is a company in transition.
It's struggling with declining profitability and weakness in its core Talbots misses' brand, which, together with petites, accounts for $1.3 billion, or 79 percent of Talbots' overall retail sales. Comparable sales for all Talbots retail concepts grew only 1.3 percent last year.
J. Jill's comps have slid 4.4 percent since May of last year, a drop Talbots management believes is based on store merchandise that was not brand-appropriate.
In August, Talbots reported a second-quarter loss of $13.3 million, compared with a loss of $3.9 million for the same quarter in 2006.
In a short period of time, Sullivan has been working hard to put her stamp on the company. Up to now she has shown the right stuff during a very demanding time and declining profits. She has already made some top management appointments (named the president of its J. Jill group, Philip H. Kowalczyk, as it new chief operating officer), hired a global business consulting firm to work on ways according to Sullivan to make the brand "relevant, fresh and consistent". The company is already looking to find a new advertising agency.
The next big step for Sullivan will be to attract and appoint a replacement for executive vice president and chief merchandising officer Harold Bosworth who retired at the end of July. As one of the key positions in the firm, Sullivan needs to get the right appointment to demonstrate to the street and its competitors she means business and knows what is needed to get the brand back on track. Despite the tough women's retailing market, if Sullivan continues to make the right moves there may be real potential for the company's performance.
Keep an eye on Sullivan.
Wednesday, October 10, 2007
Monday, October 8, 2007
Even with new leadership, Sprint may have a tough time meeting the challenge of stitching together two networks after the $36 billion purchase of Nextel Communications Inc. in 2005. The stock has fallen 22 percent since the acquisition, customers still complain about dropped calls, and new ads haven't stemmed the loss of subscribers.
"The problems that Sprint Nextel has are bigger than Gary Forsee,'' said Chris King, a Stifel Nicolaus & Co. analyst in Baltimore who rates the shares ``hold'' and doesn't own them. "This is certainly not a story that's going to be turned around in six months or so, regardless of who's in charge.''
An earlier story in Computerworld summed up Sprint's situation succinctly:
Forsee's departure is good for the company, said Tad Neeley, a principal at Gemini Partners Inc. and a private equity investor in a mobile virtual network operator (MVNO).
"Sprint now needs to focus on developing its strategic plan and figuring out, really, what it wants to be," Neeley said. "Gary Forsee wasn't really providing that kind of leadership." Although it has valuable assets, such as a good [third-generation] mobile data network and the spectrum it's using for WiMax, Sprint hasn't made the most of the Nextel acquisition, he said.
BusinessWeek (more analysis)
"Sprint, reeling from news reports that it is searching for a new CEO, plans to announce that its chairman and CEO, Gary Forsee, is stepping down, according to people familiar with the board's plans.The question remains can a new management turn things around quickly enough? This specific issue was briefly covered by Monica Alleven in today's Wireless Week in Review.
Sprint, which could announce Forsee's departure as early as Monday, plans to appoint an interim successor until a permanent replacement can be found, these same sources said. They declined to be identified by name or affiliation because no official announcement has been made by Sprint."
Stay tuned as Sprint navigates into new and unsettling waters.
WSJ Deal Journal
Thursday, October 4, 2007
... quoted unidentified people familiar with the situation, that Sprint Nextel's board had begun quietly talking to industry leaders for a successor and hoped to announce a selection by early December.The real question remains, who could Sprint-Nextel come up with that could do a better job. If you have any ideas, let us know.
International Herald Tribune
Deal Journal (suggested possibilities)
As the company initiated an internal investigation top executives began to be ensnared in the issues surrounding the problems. With Lidlow's resignation the firm has already lost three top ranking management officials. According to a piece by Alex Pham in the Los Angeles Times:
Since launching its investigation, it has delayed reporting quarterly financial statements to the Securities and Exchange Commission. ...In July, the company dismissed then-Chief Financial Officer Michael McGee without explanation. At the same time, Robert Grant, executive vice president for global sales, resigned.At the time of Lidlow's initial leave of absence the company appointed general counsel Don Dancer as interim CEO. Dancer will continue in his role as acting CEO. As part of the company strategy to resolve the accounting problems it also announced plans to appoint a lead independent director (Jack Vance) and devise a special committee of the board to advise and support the acting chief executive officer. The company also changed reporting relationships at its Japan subsidiary, where the initial problems arose, to improve oversight, and added interim processes to help assure the unit adheres to proper revenue recognition policies.
The company has also engaged Korn Ferry to assist the firm in hiring a permanent CEO. It is difficult to ascertain at this point in time whether the firm can properly right the ship and get on with its business. So far the market has indicated a positive on the management moves but time will tell. Keep an eye on both Dancer and Vance to get a feel for how they plan to get the operation working smoothly again. Make sure to check out Michele Leder's piece on footnoted.org on International Rectifier.
Los Angeles Times
For more see:
Tuesday, October 2, 2007
For more on the growing story:
AOL Money & Finance