Category Archives: Business Reporting

COM 378 – Taught by a visiting MIT professor, this course was designed to introduce students to the ins and outs of accurately reporting on businesses, understanding stock market trends, and reading annual reports.

Wall Street Journal: May 9

The Wall Street Journal reported that the retail industry is struggling to come alive with Spring. As the weather stays chili, shoppers are staying home instead of heading out for seasonal shopping. The article, Poor Weather Pressures U.S. Retail Sales, also points to a few companies who have done well despite the lower rate of shoppers in malls. Gap, reporting a 7% rise in same-store sales, was among the few mentioned. Also featured was Costco Wholesale, with a 6% rise, and L Brands, a compilation of several stores that have overall done 2% better in their same-store sales.

When it comes to sales and industry, we don’t always think of weather as a key element. However, having worked retail, it’s easy to predict how busy a store will be based on season and weather. If it’s a beautiful Spring day, people pour in during their lunch hour or after work. If it’s raining and cold, the store may prepare to close early, knowing few people will feel like shopping after a long day at work.

Read the full article here

Barnes & Noble

All around the whispers of yet another dying industry have flown. The combination of new technology and a bad economy has led many to believe the book industry is heading in the way of cassette tapes and compact disks. As Borders closed down their stores and liquidated the company in 2011, the rest of the nation wondered if e-books were the only book of tomorrow. Eyes were on Border’s leading competitor, Barnes & Noble Inc., to see if they too would give way to larger, online companies like Amazon.

“I come into the store to browse for books I want to read, and then I order them on my NOOK.” said Susan, a Barnes & Noble customer in Durham, N.C.. “It’s hard to judge a book by its cover when you can’t hold the book, you know?”

It was not a miracle that saved Barnes & Noble, nor was it a curse that took down Borders. Just two years later, Barnes & Noble is hanging in there, with their 2012 annual report revealing the largest annual revenue, $7,129.2 million, in at least the past 10 years. Despite this growth, nearly 2% from 2011, the bookstore still finds itself in the negative as far as net income is concerned.

“It’d be sad to see our generation let these bookstores slip away from us,” a younger customer at the Durham Barnes & Noble said this past weekend. “I don’t even own an e-reader or whatever they’re called, but that’s obviously where the future is.”

So why, if Barnes & Noble is still holding on by the skin of its teeth, did Borders take the plunge? Financial analysts have asked this very question since the book superstore shut down 226 stores from February to May in 2011. One answer is pretty clear. As the industry grew, Borders and Barnes & Noble built many competing locations. While Barnes & Noble was able to stay on its feet, Borders was already deep in debt when the economy took a turn for the worse.

On top of that, Borders was behind technologically from the start. Visitors to were rerouted to Amazon, a move most perceived at the time to be clever. Amazon was already successful and why wouldn’t Borders partner with them? Ultimately, the association was bad for Borders, says Time Business reporter Josh Sanburn. “Relinquishing control to another company hurt Borders’ branding strategies and cut into its customer base,” Sanburn wrote in July 2011.

In late 2007, Amazon released their first e-reader, the 1st edition Kindle. In 2009, the Kindle was refined and Barnes & Noble joined the game, releasing the first NOOK tablet e-reader in November. To add to Borders’ technological failure, they missed the train on e-book technology. They didn’t have an e-bookstore until 2010, and the poorly advertised e-readers they did carry, Kobo and Cruz, never went far.

So it seems understandable that Borders didn’t make it, but what is Barnes & Noble doing now to assure they won’t be following in its competitor’s footsteps? Mitchel Klipper, in charge of Barnes & Noble’s retail group, announced in late January that the company has launched a long-term plan to downsize the company by closing 20 stores each year for the next decade. This would reduce the retail locations by nearly a third, from its current 689 stores, which does not include the 674 college bookstores they also occupy. Why spend the money on retail space when the real cash flow is coming more and more from technology?

Barnes & Noble has also down sized their employee count in the last four years. In 2008, the company reported approximately 40,000 employees. In their most recent annual report, they are down to just 30,000.

When Borders fell, they began selling off pieces of the company. As a result, when consumers now go to they are rerouted to a Barnes & Noble webpage that contains a letter from CEO William Lynch. To read that letter in full, click here.

In a generation of hipsters, housewives and hopeless romantics, the demise of bookstores doesn’t seem immanent. According to Reuters, rumors have spread that Microsoft Corp. is looking to acquire Barnes & Noble’s NOOK and e-book business. These rumors spiked sales 22% last Thursday, a sign that even if the book industry is changing, it hasn’t fallen yet.

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Borders Heat Map

Above: A density map of Borders stores in 2010, before they began closing up shop

B&N Heat Map

Above: A density map of Barnes & Noble stores in 2012.

Eric Henry brings environmental mindset to Burlington

Eric Henry has lived in Alamance County for the last 50 years, and his overwhelming involvement in the Burlington community in that time has made him a face for the town’s future. As the president and founder of TSDesigns, a local, eco-friendly t-shirt design company, Henry has spent the last thirty years learning the ins and outs of the business world. Fortunately for Burlington, he has committed his knowledge and experience to bettering the once vibrant town, and restoring the beauty of what used to be a bustling city center.

Henry’s most recent project is the cooperative grocery store, Company Shops Market, where he sits on the board of directors. Henry’s commitment does not end there. He also founded the Burlington Biodiesel Co-Op, and serves on the boards for NC GreenPower, Alamance County Chamber of Commerce, Specialty Graphic Imaging Association, Elon University Environmental Science and the Burlington Downtown Corporation.

Company Shops Market, now occupying the old A&P storefront on Front Street, is one small step in Burlington’s rebuilding. Henry explained the goals of the co-op are “to revitalize our downtown, create a business owned by our community and connect the local food.” He also reinforced these ideas by saying,  “As we have a broken manufacturing system, over the last 20-30 years we also have a broken food system, because we forgot where food comes from. So, what we want to do with Company Shops is create a venue where we could support our local farmers and our local community can connect with them.”

Now open for about a year and a half, the co-op is holding strong financially. When Henry and his partners initially proposed the store, the business plan projected a $3.2 million budget, but six-months in it became clear that they had to reevaluate. With a new budget of $2.3 million, the shop is back on schedule to be making money by their original three-year goal. “We had to reduce the staff a little bit, we had to change some product offerings. We had to make the business work at $2.3 and not $3.2, and it was bumpy for the first six months. We were burning through a lot of cash, but you know now we’ve got it stabilized and we’re bumping up to about 60,000 bucks a week. It’s where we need to be,” Henry said.

Over lunch at the Company Shops’ deli, Henry spoke freely about the company’s start-up. As an already busy guy, running on an eco-friendly and community platform, Henry attended an annual Business Alliance for Local Living Economy (BALLE) conference in Burlington, Vermont in 2006, alongside friend and colleague, Charlie Sydnor. After visiting City Market, a co-op grocery store in Vermont, the pair began to formulate plans for a co-op in their own Burlington. With the help of Sam Moore, an Elon University graduate, the concept continued to grow. In 2007, the team sought out the help of Melissa Frey, the brains behind Chatham Marketplace, a cooperative grocery store in Pittsboro, North Carolina. After that, the project was rolling.

“We talked to every garden club, book club, rotary club, whoever – we talked about why we need to do this. Why we need to create a cooperative grocery store in downtown Burlington. So we went out and sold it, started to get people to become owners, and then as it was we had an angel investor come in that actually bought the building for us,” Henry said. The angel investor’s contribution was vital, providing the space for the physical store and securing the project. From there, the rest of the money had to be raised.

In North Carolina, a co-op has it’s own filing regulations. Because Company Shops is a for-profit organization, they are not exempt from taxes. While they did receive some grants for start-up, most of the investment was out of pocket from the original investors, including Henry, and the start-up team raised the rest.

So, why a co-op? The typical business mindset would be to put the investment in, and pocket the money that comes in the door, but that was never the vision these men had. “The cool thing about what Co-Ops do, and the reason we set it up this way, is that when Charlie, Sam and I originally got started, this could be, Eric, Charlie & Sam’s grocery store. I mean it’s our idea, and it’s our money. The problem you have with that, and I think this is my 30-years experience and what we were talking about earlier, money is important, profit is important, but when you focus all your money in a small group of people, they might not have the community’s best interest in mind. Not from a malicious or wrong way, they just don’t have the perspective.” Henry’s commitment to the community goes deeper than his desire for personal success, and he sees his generation’s inclination to focus on the self rather than the community as a major failure.

This commitment extends beyond Henry’s professional life. Him and his wife recently moved out of downtown Burlington, to a small farm where they raise chickens and horses and he hopes to do some farming. Even his Volkswagen Golf runs solely on biodiesel, bringing this concept of global wellness full circle. Perhaps if more company owners and community leaders saw life with the mindset that Eric Henry does, our global economy would be in better shape. Not to mention the improvement it would make in our health, happiness and quality of life.

Wall Street Journal – March 7, 2013

Facebook Unveils Changes to Its News Feed

 The Wall Street Journal reported today that Facebook Inc. is preparing to launch fairly significant changes to the news feed feature of the social media outlet. The changes will slowly adapt Facebook into a personalized newspaper that features larger photos and company/news posts from hosts that users have liked or subscribed to.
While Facebook attempts to revamp and freshen up their website, I wonder what they’re worried about. Reports say users are becoming tired of the same old Facebook and that other social media tools are outselling them. They also report that many users have canceled or deactivated their account at one point or another. While some of this may be true and more users may not be joining rapidly, Facebook has become a staple in our society like phones and email. For my generation, giving out your Facebook is as common as getting a number, and receiving an inbox message is as common (if not more common) as getting an email from a friend.
Other updates to the beloved social media tool will also include updated location tracker and a fresh look for business and news on the timeline. Analysts are apparently pondering what the reaction to the updates will be. Because Facebook has been around for so long, users tend to be set in their ways and don’t like things messed with. Last year, Facebook remodeled the timeline and people were not happy, although now it’s become another norm. It will be interesting to see these changes come in and see if it helps Facebook stay in the game and ahead of their competition.
The other two articles I read were

Pandora Revenue Climbs 54%; CEO to Step Down


Gap’s Sales Released Early

Wall Street Journal Article Analysis & Summary

The three articles I read in the Wall Street Journal were “In India, iPhone Lags Far Behind,” “Dreamworks Animation Posts Loss On Big Charge,” and “J.P. Morgan Pulls Belt Tight.”

The article, “In India, iPhone Lags Far Behind,” was really interesting considering the popularity of iPhones in the states. The reporters, a collaborative team from India and the U.S., examined the rise of India as the country with the third most smart-phone users, behind China and the U.S.. They look at Apple’s last quarter and note that they shipped more than 252,000 phones to India, three times the number they sent in the preceding quarter.

Samsung currently leads the smartphone business in India, having taken the initiative to broaden their standings there sooner. Apple has struggled to break into the Indian market due to regulations and market structure. While they would like to open up one of their legendary storefronts, India holds strict regulation on market standings for international businesses and Apple doesn’t currently meet the requirements.

The article also briefly discusses Steve Jobs’ adoration and respect for India. By incorporating this, the heart and soul of the company suddenly seems more invested in this expansion. But although India held a special place in Jobs’ heart, the country doesn’t seem to hold him in the same regard. Some analysts blame the high price of iPhones, which range from $500-$850 while the Samsung phones run closer to $100.

As an American, it’s difficult to imagine a world without iPhones and other smart phones, but many people in India and all around the world are still using basic feature phones. Apple seems to be working to change some of the regulations in India in order to make their products more accessible.