QUOTE OF THE DAY
“There’s still reason to suspect that home prices will rise — credit availability, on the margin, is actually getting better.”
Michael Gapen, Barclays Capital Inc. senior U.S. economist
Article, 1D
Wal-Mart Canada alters worker format
Wal-Mart Canada has implemented a new management structure that resulted in the elimination of 750 jobs, the promotion of 1,300 workers and the addition of about 200 storemanagement positions, the company said in a news release. The number of displaced workers amounts to fewer than two employees per each of Wal-Mart’s 400 or so Canadian stores.
“The new management structure makes more of our associates available during peak shopping periods when our customers need us the most and gives our associates greater access to their managers for their ongoing career development,” Wal-Mart Canada said in the release.
Workers whose jobs were eliminated will receive severance packages and are encouraged to apply for positions at other stores. According to the company’s recently released annual report, Wal-Mart Canada is in its 20th year and is that nation’s fastest-growing retailer in the grocery and general-merchandise sectors. Next up: adding more stores and expanding Wal-Mart Canada’s food and eCommerce business.
Cornerstone Bank expands to Huntsville
Cornerstone Bank is building a bank branch in Huntsville, its first location outside Carroll County.
The bank has purchased a 1.4-acre parcel on U.S. 412 near the Wal-Mart Supercenter that is under construction. The bank intends to build a full-service facility at the location, once design and construction plans are finalized.
“We are pleased to continue our bank’s aggressive growth strategy with a full service banking facility in Huntsville,” Charles Cross, president and chief executive of Cornerstone Bank, said in a release Tuesday. “It is a market we have coveted and admired for quite some time, and we are excited to bring our brand of true community banking into that community.”
The Madison County location will be Cornerstone Bank’s fifth location. It has operations in Eureka Springs, Holiday Island and Berryville. The bank is locally owned and chartered in Carroll County.
Low inflation risk is seen for eurozone
SINTRA, Portugal — European Central Bank President Mario Draghi said Tuesday that he is mindful of the danger of inflation remaining low in the 18-country eurozone and is committed to reducing it to more tolerable levels. The central bank is widely expected to offer some monetary stimulus at its next policy meeting June 5 to support the European recovery and nudge inflation higher. The inflation rate among countries using the shared euro currency has been below 1 percent since October. The central bank’s inflation target is 2 percent. “We are aware of the risk of a too-prolonged low-inflation period,” Draghi said at a business forum in Portugal, but he did not elaborate. Low inflation makes debt reduction more difficult for people and governments. Deflation, an extended drop in prices that can stifle growth as consumers put off spending, has also become a concern. “Price stability in the medium term is sacrosanct,” he said. “We are confident we’ll deliver … close to the 2 percent objective.” Draghi did not specify what steps the central bank might take. Analysts say it could cut its interest rates or start new programs to increase credit to companies. Draghi indicated he had no immediate worries about deflation in a slow eurozone economic recovery after its debt crisis. The European Commission, the European Union’s executive arm, predicts the eurozone economy will grow 1.2 percent this year. Draghi said the European Central Bank did not see signs of a sharp drop in prices or the spending behavior that is typical of deflation, such as deferred household spending.
$88 million bid wins Philadelphia papers
PHILADELPHIA — Businessman Lewis Katz and philanthropist H.G. “Gerry” Lenfest are taking over Philadelphia’s two largest newspapers with an $88 million auction bid.
Katz and another businessman, George Norcross, had bought The Philadelphia Inquirer, the Philadelphia Daily News and the Philly.com news website for $55 million in 2012. But they began feuding and competed to take control at Tuesday’s auction.
Katz made his fortune investing in the Kinney Parking empire and the Yankees Entertainment and Sports Network in New York. He supports the investigative reporting favored by current Inquirer editor Bill Marimow.
Norcross had owned just more than 50 percent of the company. Katz held a 26 percent stake and his ally Lenfest, a former cable magnate, a 16 percent stake.
— The Associated Press
Starbucks’ dinner chain to test burgers
NEW YORK — Starbucks is dipping its toe into the burger business, with plans to open a location of its La Boulange chain that caters to the dinner crowd. A spokesman for Starbucks, Linda Mills, said the Los Angeles restaurant is to open June 11 and will be open until 10 p.m. Starbucks had purchased the La Boulange chain of bakery-cafes in 2012. The cafes are based in the San Francisco Bay Area and primarily focus on breakfast and lunch with soups, salads and sandwiches, along with baked goods. The test restaurant adds build-your-own burgers to La Boulange’s formula and will serve beer, wine and cocktails. The new location will be the first outside the San Francisco area and will have more of a “modern farmhouse” feel, Mills said.
— The Associated Press
Bank of America resubmits plan to Fed
NEW YORK — Bank of America is resubmitting its capital plan to the Federal Reserve, a month after it discovered errors in its initial report and was forced to suspend a bigger dividend payout and a stock buyback. Shares in the bank slumped 4 percent April 28 when it said it had made an error in how it valued securities obtained in its acquisition of Merrill Lynch during the financial crisis in 2009. The bank said Tuesday that changes will lead to less than a 1-basis point reduction in reported capital ratios for the period that ended Sept. 30 and will have no effect for the period that ended March 31. Shares in the Charlotte, N.C., bank rose 50 cents to close at $15.22.
— The Associated Press
Business on 05/28/2014