Retail Sales Up

Posted on by Scott Hodges
Good news for the US retail business. Sales rose in August and consumer sentiment hit a 14 month high in September, according to data that was just released by the Commerce Department. They reported that retail sales, which account for a third of consumer spending, increased .6 percent last month. The only decline that they saw was at the gas pump, but this is more a reflection of declining gas prices which should actually help the economy.
Core retail sales increased .4% in August. This excludes the purchase of cars, gas, building materials and food and corresponds most closely with gross domestic product spending.
Showing similar findings, the Thomson Reuters/University of Michigan consumer sentiment index rose to 84.6 in early September. This is the highest reading since July of 2013.

The Race Against the Clock in India

Posted on by Scott Hodges
Talk about a strange real estate story. Indian tycoon Subrata Roy is racing against the clock to try to sell the New York Plaza and London’s Grosvenor House in order to raise the $1.6 billion that he needs…for bail.
Roy is currently in Tihar, a New Delhi prison complex that houses 12,000 inmates. He needs to post the 100 billion rupees in cash and bank guarantees to get released. He’s been jailed since March after failing to appear at a contempt hearing in a long-running dispute with the capital markets watchdog over the company’s failure to repay billions of dollars to investors who had outlawed bonds sold to them.
Now, Roy has been given a 600 square feet office space where he can have video conference calls and receive visitors while still in jail. It’s not easy to sell a lavish hotel from a jail cell, and Roy is hoping that now he’ll be able to wheel and deal his way out of the hotels and out of jail.
Time will tell is he manages to pull this off.

Vending Machines: Not Just for Sodas Anymore

Posted on by Scott Hodges

The world is constantly on the go and the business world understands that they simply have to keep up with this pace. To do so, some ingenious businesses have started added unusual vending machines to their repertoire. Here are some examples.


Get your cupcakes here: Sprinkles, a cupcake company in New York, is stocking its vending machine with as many as 750 cupcakes a day. For $4.25 you can choose from cinnamon chocolate, black and white and seasonal specialties such as Irish chocolate and maple bacon. They opened their first cupcake ATM in California in 2012 and now have machines in NY, Atlanta, Chicago and Dallas.

Flip-Flopping Away the Day: You never know when you’re going to need new flip-flops. That’s the idea, at least, according to Havaianas which has a flip-flop vending machine in Sydney, Australia’s city center.

Getting Caught in the Rain: It’s rarely fun to get caught in the rain, and the airport in Vancouver understands this. They have a vending machine for umbrellas that allows you, for $5 to get a pocket-sized umbrella.

 Life is Better with Caviar: At least those in Beverly Hills seem to think so. There are actually three caviar machines in Beverly Hills sold by Caviar Automated Boutiques. They offer more than a dozen types of caviar from around the world. Check it out at the Westfield Topanga mall.

Spotlight on: Kona Ice

Posted on by Scott Hodges

Many businesses and potential business people benefit from hearing about the paths that others have taken. Recently, the Fresno Bee did a story on Lisa Quiroz, the owner of the local branch of Kona Ice. Her Kona Ice business follows the Smart Snacks in School nutrition guidelines and provides low-sugar snacks to kids and adults.

The Kona Ice brand started in Kentucky. As Lisa recounts her story, “We found Kona Ice back in 2011. It just kind of struck us as a great business. We purchased our first truck in May 2011, and that was for Fresno. It quickly grew, and we ended up having to turn down so many events that we ended up getting a second truck in 2012. That was for Clovis. We have just continued growing. In 2013 we bought a little mini-cart that we use at Grizzly games and Fresno State football games. We’re hoping to continue growing.”

When asked what drew her to Kona Ice, Lisa said, ” My favorite time — I love when kids are screaming and they’re chanting “Kona Ice” — but my favorite is when I get a really tough guy that you wouldn’t want to see in a dark alley come up, you hand it to them, they take a bite and just smile ear to ear. And they may come back five times and are chatty as can be. It brings out the child in everybody, and that’s what I love about it.”

They serve two types of customers – those who come to their window and those who book them. And they try to create an experience for everyone involved.

Cisco Making Large Investment Plans

Posted on by Scott Hodges

Cisco plans to accelerate its investments into communications in the coming two to three years. They have recently announced that they will give $150 million to start-up companies in this time frame. Senior vice president for corporate development, Hilton Romanski, explained that this Internet-based focus will complement other investing themes that include big data and connecting mobile devices.

Cisco Investments is becoming on par with mid-sized venture capital firms with this investment strategy and with the $100 million that Cisco said in January that they would deploy to other start-ups.

Cisco invested $7 million in Everything, a London-based company that connects products to the Internet, and a $14.5 funding round for Ayla Networks, a California based company that helps companies to monitor devices using the Internet.

Cisco also plans to increase its investments in Alchemist Accelerator, which is a San Jose, California-based incubator for start-up companies.

Watch for Next Games Next Game

Posted on by Scott Hodges
For those in the gaming world, it’s worthwhile to keep your eyes on Finland. The Finnish start-up Next Games has just raised $6 million in funding. This is the latest of many venture capital investments in the country which is booming with mobile gaming.
Next Games was founded in 2013 by former employees of Rovio and Supercell, creators of the smash games “Angry Birds” and “Clash of Clans.” They plan, now, to work on a mobile game based on the US TV series “The Walking Dead.”

The money for this series A funding round came from the US and Asia. Investors included IDG Ventures, IDG Capital and Lowercase Capital.

Potential Hot Water for Skechers

Posted on by Scott Hodges

If you love Skechers USA Inc. shoes, you might love them a bit less in a minute. That’s because the footwear maker is under the gun at the moment for its all-male board of directors. Criticisms logged from CtW, an adviser to union pension funds that has helped to shake up companies, described that the nine-member board “suffers from lengthy tenures and a lack of gender diversity.”

 As they wrote, calling for changes before Sketcher’s annual meeting this spring, “The CtW Investment Group urges a complete and immediate overhaul of Skechers U.S.A., Inc’s board of directors in light of several serious governance risks.”

Six of the company’s directors have been serving for at least 12 years and only five of them are independent.  Sketchers has said they are not available for comment. But CtW Executive Director Dieter Waizenegger has said that if Skechers doesn’t act, CtW may campaign against either some or all of the directors.

As Waizenegger said, “The longer you are on the board, the less obvious it is you can be independent.”

Skechers is certainly doing well in the market place, if not the board room. Their sales in 2012 reached $1.56 billion. Founded in 1992 by Robert Greenberg, who is still the chairman and chief executive, and his son Michael Greenberg, who is the president and a director, the family controls most shareholder decisions.

CVS Says No To Cigarettes

Posted on by Scott Hodges
In a move that will clearly have major financial implications, CVS Caremark Corp will stop selling all tobacco products at their 7600 stores by October 1, 2014. This will make CVS the first national drugstore chain in the US that won’t have cigarettes on its shelves.
Everyone from the President to the nation’s health care workers praised the decision. President Obama, a former smoker, said that the decision will help with efforts to “reduce tobacco-related deaths, cancer, and heart disease, as well as bring down healthcare costs.”
Certainly, CVS expects that its decision will hurt its profits in the beginning, but they hope that the decision will boost their appeal as a healthcare provider. They hope to recoup some of the revenue loss by signing up customers for smoking cessation programs and by continuing with their pharmacy healthcare provider services. They have more than 800 MinuteClinic locations where people can come to a walk-in clinic.
While CVS is optimistic, analysts are nervous about the short-term pain. CVS shares fell 1%, while two companies that plan to continue offering cigarettes rose. Walgreen Co.’s rose 3.9% and Rite Aid Corp. rose 2%.
As the U.S. Centers for Disease Control and Prevention Director Thomas Frieden told Reuters, “I think CVS recognized that it was just paradoxical to be both a seller of deadly products and a healthcare provider.”
Some US cities have already taken the lead on this initiative, banning the sale of tobacco products in pharmacies. This includes Boston and San Francisco. As Alexandra von Plato, president and global chief creative officer of Publicis Healthcare Communications Group said, “This is a trend we’re going to see many, many retailers and food companies jump on.”

A New Type of University Experience

Posted on by Scott Hodges
A new twist in the online learning model is emerging in California and it will become quite a test case for future programs. Minerva Schools of KGI, an experimental university in San Francisco, is starting to form its first freshman class for the coming fall. The school is a joint effort between Minerva Project (a for-profit company) and Keck Graduate Institute (one of California’s Claremont colleges).
The idea is as follows. While all classes will be held online, first-year students have to live in the residence hall in San Francisco and take some classes together in real time. Research has shown that online courses often fail to retain students and to create ownership over the work. This model is attempting to combat those issues. As Stephen Kosslyn, Minerva’s founding dean and the former dean of social sciences at Harvard, said “We are entirely focused on active learning.” As he explained, this would mean that, prior to each class, students will have to complete assignments that will require participation. They might need to prepare for a debate, present their work or other active activities.
For being part of a cutting-edge experiment, students in the first class will have free tuition for all four years. They will, however, need to pay $19,000 for annual room and board.
The university has been working on the new curriculum since Kosslyn came on board in March. They are also assisted by Minerva’s chairman, former Snapfish president Ben Nelson.
Some of the ideas at Minerva include programs that have fallen out of favor in many other spheres. For instance, all freshmen will have core classes and no electives. They will spend their first year taking four classes that will teach communication, creative thinking, collaboration and critical analysis.
After the first year, students will then select traditional majors in fields that include economics, philosophy and computer science.
Minerva already has the four deans for the core courses in place. They are still hiring professors for the other positions and plan to hire faculty from around the world. They will not, however, offer tenure but will have short-term contracts. It anticipates a ration of approximately 16-17 students for each faculty member.
There is one more catch. During the course of the four-year program, students will be expected to move to other cities where Minerva has resident facilities. As Nelson said, “Experiential learning is all about interacting with the world around you. That is done best when you are immersed in the best the world has to offer as opposed to living in a cocoon.”

They expect 15-38 students in their inaugural class. Time will tell if they succeed.