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Stocks open lower: A $44 million third-quarter loss at Macy's and a discouraging forecast by Best Buy will not help today. The Dow is down over 200 points after about an hour of trading.
Best Buy slashes outlook: CEO Brad Anderson said "seismic" changes in consumer behavior (translation: few sales) have created "the most difficult climate" ever seen by the company. Its new estimate for the fiscal year ending in February: earnings per share between $2.30 and $2.90. The prior estimate: $3.25 and $3.40. (AP)
GM low-keys L.A. show: Forget about plans for the automaker to debut its Buick LaCrosse and the Cadillac CTS Coupe at the Los Angeles Auto Show next week. The general manager says there are 20 percent fewer exhibitors than last year, though Ford, not exactly flush with cash either, still plans to introduce six vehicles, including two hybrids. From the LAT:
Those and other auto show cutbacks come as GM, Chrysler and Ford Motor Co. lobby for billions of dollars in federal aid. GM and Ford lost a combined $30 billion in the first nine months of the year, and GM said last week that it could run out of cash in the first half of 2009. Privately held Chrysler does not release financial results but is widely thought to be in dire financial straits.
Tribune rating cut: Standard & Poor's has dropped the Sam Zell-led company (and owner of the LAT) by two levels, to CCC (four levels above default). The sale of the Cubs may be delayed or the bids limited - meaning proceeds could be "significantly below" expectations of $1 billion or more. And Tribune needs that money to keep its lenders happy. (Bloomberg)
Downey stock at 50 cents: The Newport Beach-based mortgage lender warned in an SEC filing that it could be seized by regulators if it can't get more capital by the end of the year. That's not exactly a shocker - and Downey would hardly seem to be a strong candidate for government help. In the last year, Downey shares are down 99 percent. (LAT)
Private offering abandoned: L.A.-based CB Richard Ellis Group, which is largest provider of commercial real estate services, says it will sell more shares to the public instead of raising up to $400 million in a private offering. The company just couldn't get private investors interested. From Bloomberg:
U.S. sales of commercial buildings fell by 66 percent in the first half of 2008, research firm Reis Inc. said in an Oct. 3 report. The vacancy rate for office buildings nationwide rose to 13.6 percent in the third quarter, from 13.1 percent the quarter before, the biggest single-quarter jump since 2001.
Another Dov Charney lawsuit: This one is coming from a former accountant who claims that he was fired after turning down requests from the American Apparel CEO to inflate figures on the company's balance sheet. From the WSJ:
The latest case was brought by Roberto Hernandez, who handled accounts payable and computer issues for the company. He alleges that in 2006 Mr. Charney repeatedly "demanded that Mr. Hernandez pad the inventory" of the company in an effort to lure investors. American Apparel, then a private company, was seeking outside investment, according to Mr. Hernandez's complaint. In the court papers, Mr. Hernandez says he "refused to participate in any scheme to potentially defraud the investors," a position that he believes led to his alleged termination on Nov. 9, 2006, about a week after he claims he refused to cooperate.
New KNBC GM: Craig Robinson has been interim general manager since September, following the retirement of Linda Sullivan. (Television Week)
CNBC trims budget: Sources tell the NY Observer that cuts could total 10 percent - and that's despite posting its highest ratings ever.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.