business news in context, analysis with attitude

...with brief, occasional, italicized and sometimes gratuitous commentary...

• The Cincinnati Business Courier reports that Kroger does not expect the current shutdown of the federal government to affect the timing of its planned acquisition of Harris Teeter, which has to be approved by the Federal Trade Commission (FTC).

According to the story, the FTC "said in a document explaining its government shutdown contingency plans that it will continue to investigate antitrust implications of acquisitions even though the government is closed."

According to some folks, the shutdown isn't really affecting anything. And defaulting on the debt won't really happen, or won't really affect anything.

As Ernest Hemingway's Jake Barnes says in "The Sun Also Rises" ... Isn't it pretty to think so?"

• Jos. A. Bank has offered to acquire Men's Wearhouse for about $2.3 billion, an offer that Men's Wearhouse says it is considering.

Jos. A. Bank has more than 600 stores and a market value of $1.17 billion; Men's Wearhouse has more than 1,100 stores and a market value of about $1.68 billion.

It has been an eventful year for Men's Wearhouse. This past summer, George Zimmer, the founder, former CEO and spokesman for the company, was deposed by the board of directors after conceding that there were deep disagreements with the board; he argued that the company was moving away from a “guiding principle of servant leadership” that put a greater premium on employee satisfaction and customer service, rather than share price. The board shot back at him, saying that "Zimmer was let go in part because he wanted to take the company private by selling it to an investment firm, while the board did not want to take on the debt required for such a transaction."

Judge for yourself whether it seems like Men's Wearhouse's board might find the buyout offer to be attractive. I don't know enough about the business to be sure, but it certainly seems to me like an offer that is priced with a 36 percent premium over current stock value might be seen as welcome.

Bloomberg reports that Starbucks, looking to "encourage the U.S. government to reach a solution to the shutdown and pending debt crisis," is launching a "pay it forward" promotion that will run through Friday - buy someone else their favorite drink and receive a free tall drink for free.

“This is a different yet authentic way Starbucks can help our fellow citizens to come together by supporting one another during a particularly challenging time," wrote company CEO Howard Schultz in a memo to employees.

In other Starbucks news, the company has officially opened a $70 million factory in Southern California that "will be able to churn out 140,000 gallons of Evolution Fresh juice each week ... The Rancho Cucamonga facility will be Starbucks’ sixth manufacturing site in the U.S. and its first in California. The factory will also be the company’s only plant focusing on juice, made with ingredients mostly sourced from within 200 miles."

Bloomberg reports that there has been yet another garment factory in Bangladesh, killing at least nine people and causing sever damage at a facility that provided product to Loblaws and Hudson's Bay Co.

According to the story, "Bangladesh’s garment industry expansion has been marred by factories operated in buildings with poor electrical wiring, an insufficient number of exits and little fire-fighting equipment. That has put pressure on international retailers to improve work conditions. Last month, thousands of garment factory workers staged violent protests, seeking to more than double their monthly pay to $104 and forcing about 400 of the country’s 5,000 garment factories to close."

• The Los Angeles Times reports that a "salmonella outbreak in Foster Farms chicken contains several antibiotic-resistant strains that may explain an unusually high rate of hospitalization. The Centers for Disease Control and Prevention said Tuesday that some salmonella strains found in the outbreak were resistant to one or more drugs -- and that 42% of those sickened have been hospitalized ... The U.S. Department of Agriculture issued a public health alert Monday linking some raw chicken products produced in California to a salmonella outbreak.

"The agency’s Food Safety and Inspection Service found chicken produced by Foster Farms at three California facilities with strains of Salmonella Heidelberg. So far, 278 illnesses have been reported in 18 states, with 77% of those cases occurring in California, according to the CDC."

• Wegmans Food Markets said this week that it is offering early retirement - a severance package that gives select employees two weeks pay for every year they have worked for the company - to store workers in New York State who have worked for the company for at least 15 years and are at least 58 years old.

Health insurance for workers who take the deal will be continued for six months, with Wegmans paying 85 percent of the cost, as it does today.

• Ahold-owned Peapod said that it is now sourcing organic, aquaponic produce from Farmedhere, an indoor, urban grower that offers product sourced within 15 miles of the city and within 24 hours of being harvested.

According to the Farmedhere website, "Our vertical growing technology and local distribution methods reduce energy use, travel time and costs tremendously, making this model one of the most sustainable ways to guarantee access to fresh, healthy produce in city centers, in any season. On average a head of lettuce travels 1,200 miles to reach your plate, our greens travel just across Chicago, which is why they’re the freshest."

• Lund Food Holdings, Inc., parent company of Lunds and Byerly’s, announced its purchase of Village Market, a 35,000-square-foot grocery store located at 16731 Highway 13 in Prior Lake. The store is currently being reset with Lunds’ product selection and rebranded as Lunds Prior Lake.
“This is a great opportunity for us to grow our family of employees and extend our brand into an area of the Twin Cities where we previously lacked a presence,” said Tres Lund, president/CEO. “We look forward to providing Village Market customers with our brand of quality, service and expertise.”
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