The news at a glance
Lululemon shares drop as CEO exits; Walgreens pays up in painkiller case; Google buys Israeli mapping company; Facebook holds first shareholder meeting; RBS CEO to step down
Retail: Lululemon shares drop as CEO exitsLululemon Athletica is looking for a new boss, said Serena Ng in The Wall Street Journal. CEO Christine Day announced last week that “she would step down as soon as a replacement is found.” Since Day took over in 2008, the yoga apparel company’s annual revenue “more than quintupled to $1.37 billion,” while “profits rose nearly nine times to $271 million, and the stock climbed more than five times higher.” Her departure comes three months after Lululemon had to make “an expensive and embarrassing recall of its top-selling pants.” One source said Day “told the board she had become exhausted working 18 to 20 hours a day.”
Investors were none too happy about Day’s departure, whatever was behind it, said Susanna Kim in ABCNews.com. The stock of the Vancouver-based retailer “plummeted” by about 17 percent as news broke that she was leaving the company she had led to strong growth. That steep drop reflected investors’ deeper jitters about Lululemon, which said in its most recent quarterly earnings report that it had taken a hit in profits over the pants recall. Its first quarter earnings rose by just 1.5 percent to $47.3 million, compared with the same quarter last year, despite a 21 percent increase in quarterly revenue to $345.8 million.
Settlements: Walgreens pays up in painkiller caseWalgreens will pay $80 million to settle allegations that it negligently allowed prescription painkillers to flow onto the black market, said Emily Jane Fox in CNN.com. The settlement is the largest in the Drug Enforcement Administration’s history and follows allegations that the company failed to report unusually large orders of prescription painkillers, such as oxycodone, from six pharmacies in Florida. The DEA said the pharmacies “knew the drugs were not for legitimate medical use and that there were tens of thousands of violations.”
Mergers: Google buys Israeli mapping companyGoogle will pay $1 billion to snap up Israeli mapping start-up Waze, said Alistair Barr and Edwin Chan in Reuters.com. The search giant said “it had closed the long-anticipated deal” and planned to use “Waze’s service to enhance its own Maps product.” Waze, which was founded in 2008, uses satellite signals from users’ smartphones to generate real-time traffic information. Waze’s technology is expected to “benefit from integrating Google-search capabilities.” For now, the company’s team will remain in Israel and operate separately.
Tech: Facebook holds first shareholder meetingFacebook CEO Mark Zuckerberg faced a tough crowd at his first shareholders’ meeting, said Scott Martin and Jon Swartz in USA Today. “We understand that a lot of people are disappointed in the performance of the stock, and we really are, too,” Zuckerberg told shareholders. The company’s share price is about 40 percent below the $38 it sold for during last year’s rocky IPO. Shareholders also raised questions about competition from Google+ and popular photo-sharing sites, and about “privacy in the wake of the NSA flap.”
Banks: RBS CEO to step downThe Royal Bank of Scotland, which was taken over by the British government in the wake of the financial crisis, said its chief executive will step down this year, said Patrick Jenkins and George Packer in the Financial Times. RBS said it would pay outgoing CEO Stephen Hester a year’s pay in severance but no annual bonus and would begin “an immediate search for a successor.” Hester’s ouster by the board comes as the government moves toward reprivatizing the bank. Hester has been largely credited with helping to turn RBS around after it received a $70 billion bailout during the 2008 financial crisis.