The daily business briefing: August 25, 2017
Samsung heir gets 5 years for corruption, Hurricane Harvey forces coastal oil refineries to close, and more
Samsung heir Lee sentenced to 5 years for bribery
A South Korean court on Friday found Samsung Group heir and one-time de facto leader Jay Y. Lee guilty of bribery and sentenced him to five years in prison. Lee was charged in February with bribing South Korea's then-President Park Geun-hye, who has since been ousted, in exchange for business favors. He also was convicted of hiding assets abroad, embezzlement, and perjury. Lee denied wrongdoing. One of his lawyers said he would appeal. Chang Sea-jin, a business professor at Korea Advanced Institute of Science and Technology, called the sentence a "turning point" for South Korea's family-run conglomerates called chaebols, which have been credited with transforming the once war-ravaged country into an economic power and often benefited from cozy relations with politicians.
Hurricane Harvey threatens Texas, refineries with catastrophic flooding
Hurricane Harvey strengthened quickly on its way to hitting Texas late Friday or early Saturday, forcing energy companies to start shutting refineries. The Gulf Coast is home to half the nation's refining capacity, so the storm could have a ripple effect on prices and supplies. Residents on the Texas coast began evacuating on Thursday as the National Hurricane Center warned of potentially "life-threatening and devastating flooding" from storm surges and up to 35 inches of rain. The strengthening storm could reach Category 3 force by the time it hits, with top sustained winds greater than 110 miles per hour. That could make Harvey the strongest storm to hit the mainland U.S. since 2005.
Amazon to lower some prices at Whole Foods when deal closes Monday
Amazon and Whole Foods — which critics once jokingly referred to as "Whole Paycheck" due to its prices — said Thursday that they were preparing to offer discounts on many popular grocery items when the online retail giant's $13.7 billion acquisition of the high-end and organic grocery chain closes on Monday. The companies said in a news release that their marketing teams were working on integrating Amazon Prime into Whole Foods' system so that Prime members can start receiving special savings and in-store benefits. Amazon Prime will become the customer rewards program at Whole Foods, and Whole Foods' private label, 365, will be available at Amazon. "We're determined to make healthy and organic food affordable for everyone," said Jeff Wilke, CEO of Amazon Worldwide Consumer.
Markets await speeches by Yellen and Draghi at Jackson Hole
Global markets were on edge early Friday as investors awaited speeches by Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi at the annual meeting of central bankers in Jackson Hole, Wyoming. Analysts expect Yellen to leave expectations of further interest rate hikes alive despite growing concerns among Fed policy makers about low inflation. Draghi also is expected to tread lightly to avoid spooking markets. Willem Buiter, chief economist at Citigroup, said a "major risk" globally right now is a significant market correction, such as a dive in asset prices. "For now, we suspect that the risk of a major asset market correction is a reason for central banks to tread cautiously and only remove stimulus very gradually," Buiter and colleagues wrote in a research report.
Sears to shut another 28 Kmarts in turnaround bid
Sears Holdings said Thursday that it planned to close another 28 Kmart stores, bringing the total closings of Sears and Kmart outlets announced this year to 358. Sears is struggling to stay alive as its sales fall in the face of competition from rivals online and in brick-and-mortar stores. Sears sales fell by more than 13 percent in July, and Kmart sales dropped by more than 9 percent. The company announced earlier this year that it would start selling its Kenmore appliances on Amazon, and that it would sell off valuable assets such as Land's End clothing and Craftsman tools.