The daily business briefing: January 7, 2020

(Image credit: JACQUES DEMARTHON/AFP via Getty Images)

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1. Pier 1 to close nearly half of its stores
2. Ikea to pay $46 million to family of child killed by toppled dresser
3. U.S. stocks bounce back from sharp fall triggered by Iran tensions
4. Borden Dairy files for bankruptcy protection
5. Japan issues warrant for arrest of Carole Ghosn

published 7 January 2020

1. Pier 1 to close nearly half of its stores

Pier 1 Imports on Monday announced that it plans to close up to 450 of its 973 stores in the U.S. and Canada. The Texas-based home furnishings company's shares fell by 5 percent in extended trading after the news. "Although decisions that impact our associates are never easy, reducing the number of our brick-and-mortar locations is a necessary business decision," CEO Robert Riesbeck said. Pier 1 will also close some distribution centers. The company did not immediately say how many jobs would be cut as a result of the closings. A person with knowledge of the matter told Reuters Pier 1 has drafted a bankruptcy plan that it presented to creditors last month. It is one of many retailers struggling against intense competition from online and big-box rivals.

Ikea on Monday confirmed that it had agreed to pay $46 million to the parents of a 2-year-old California boy, Jozef Dudek, who was killed when one of the giant furniture company's dressers toppled over onto him in 2017. The attorneys for the child's parents said the settlement could be the largest ever involving the wrongful death of a child in the U.S. "While no settlement can alter the tragic events that brought us here, for the sake of the family and all involved, we're grateful that this litigation has reached a resolution," the company said in a statement. IKEA dressers have been involved in the deaths of at least nine children. The company has recalled 17.3 million dressers for possible instability issues since 2016.

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Stocks bounced back from sharp early losses to close higher on Monday, as rising tensions between the U.S. and Iran stoked fears of increased violence in the Middle East. The Dow Jones Industrial Average rose by 68.5 points or 0.2 percent, after falling by as much as 216 points earlier in the day. The S&P 500 closed up by 0.4 percent, while the Nasdaq Composite gained 0.6 percent. Big tech stocks gave Wall Street a lift, with Facebook and Amazon rising by more than 1 percent. Netflix and Google-parent Alphabet rose by 3.1 percent and 2.7 percent, respectively. Stocks dropped sharply on Friday after a U.S. drone strike approved by President Trump killed Iran's top general, Qassem Soleimani. U.S. stock index futures gained slightly early Tuesday.

Borden Dairy Co. filed for bankruptcy protection on Monday. Borden, one of the nation's oldest and largest dairy companies, is the second large milk producer to file for bankruptcy in the last two months as milk consumption falls. Dean Foods, the country's biggest milk producer, went first, in November. Borden, which employs 3,300, said it needed bankruptcy protection due to debt and pension obligations it could not afford. It tried unsuccessfully to renegotiate its debt agreements. U.S. milk consumption has fallen by 6 percent since 2015. More than 2,700 family dairy farms went out of business last year alone. Borden said that the decline in supply has driven up wholesale milk costs at the same time as falling consumption has held down prices, squeezing its profit margins.

Japanese prosecutors on Tuesday said they had issued a warrant for the arrest of Carole Ghosn, the American wife of ex-Nissan chair Carlos Ghosn. The move increased pressure on Carlos Ghosn to return to face criminal financial charges after he fled to Lebanon ahead of his trial. Mrs. Ghosn, 53, is accused of giving false testimony. Prosecutors said she testified in April that she didn't know someone involved in transferring money between companies, allegedly causing losses for Nissan, even though she was communicating with the person while the transfers were taking place. Carole Ghosn made no immediate comment. She is not in Japan.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.