Sears Shakeup, Market Malaise
January 28, 2008
NEWS AT A GLANCE
Sears CEO stepping down
Sears Holding Corp. said that CEO Aylwin Lewis was stepping down Feb. 2 and would be replaced on an interim basis by company supply and operations executive W. Bruce Johnson. Lewis is also leaving the Sears board. “We are entering a new phase in Sears’ evolution as a multi-channel retailer,” said chairman Edward Lampert, “and the board has determined that now is the right time to put in place new leadership.” (MarketWatch) Sears will start the search for a permanent replacement immediately. Last week, Sears forecast a 50 percent drop in quarterly profits and said it was restructuring into more of a holding company for its different brands. (Bloomberg)
A blue Monday in Asian markets
Concerns about a slowdown in the global economy led stock markets in Asia to close broadly lower, with benchmark indexes in China, Hong Kong, India, and Japan all falling more than 3.5 percent. The Shanghai Composite index fell 7.2 percent, to its lowest level since August. (AP in Yahoo! Finance) European markets also carried last week’s volatility into this week, with French bank Societe Generale leading the financial sector down in early trading. “It’s stocks down, bonds up again,” said a trader in London. (Reuters) Bucking the trend, Belgian bank Fortis rose after reporting healthy capital reserves and a sound financial picture. (MarketWatch)
Rates rising for phone services
AT&T and Verizon are raising the rates for stand-alone services like caller ID by as much as 300 percent in some states, even as they seek more regulatory leeway to compete with cable companies. In California, for example, AT&T bumped anonymous call rejection to $5 a month, from $1.90, and boosted local toll calls by 200 percent. Both companies said that the prices had not been raised in years, and that prices on bundled services—Internet, phone, and cable TV—are holding steady or falling, although they often top $100 a month. Consumers “aren’t trapped in any way,” says Verizon spokesman Eric Rabe. “The reality is that people have lots of choices.” (USA Today)
Black sheep, golden fleece
Thanks largely to one woman, New Zealand resident Fiona Gardner, black sheep are no longer rejects in the high-end wool business. Starting the 1980s, British-born Gardner started breeding black and colored sheep to create high-quality wool, defying wool-industry orthodoxy. She was considered something of a “mad” outcast among sheep breeders until she won an exclusive contract with super-luxury Italian fashion house Loro Piano. Now the rare, naturally colored wool is the new luxury fabric. “She is a rebel,” says Pier Luigi Loro Piano, “the same way the black sheep are.” (Los Angeles Times, free registration)
Try 4 Risk-Free Issues of The Week magazine.
of The Week magazine.