Is Barnes & Noble Here to Stay?

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B&N- WSJ.com

Barnes & Noble chairman and biggest shareholder is considering purchasing consumer stores and the Barnes & Noble website but is not interested in picking up Nook Media LLC.  What does the split mean for Barnes & Noble?

The article points out that the company’s market capitalization was $2.2 billion in 2001 and is now only about $809 million.  Consumers are increasingly turning to digital forms of book-buying and reading- whether they purchase tangible books from Amazon or buy books for their e-readers and tablets, the physical bookstore landscape is facing a steep decline.  The company’s physical bookstores, however, remain profitable for the company with only 20 stores not turning a profit currently.  Whether or not the company’s stores can continue to be profitable remains to be seen and rests heavily on consumers’ views of e-readers and online book-buying.

Merging Two Corporate Cultures into One

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Merging 2 cultures- NYT

The magazines of Time Inc and the Meredith Corporation will soon be combined into one publicly traded company but how smoothly will the merger go for the executives and employees?  The corporate cultures of the two companies appear to be very different and when the former Meredith president took the reigns at Time Inc, he lasted just 6 months.  Time cited differences in approach and leadership style as the reason he was asked to leave. 

Ironing out the financial details in buy-outs and mergers can be extremely challenging but ironing out cultural differences in the executives and employees can be just as challenging.  Each company’s employees are used to conducting their daily work-lives in a certain manner and a merger does not automatically change corporate culture.  Rather, it is a slower process of employees adapting and fitting in as they see how their counterparts from the merging company do things.  A key component of employee happiness in the workplace is how well they ‘fit’ in the job.  When an employee experiences a merger, the ‘fit’ that they may have felt previously may no longer be there and they may have a tough road to finding a new way to fit in, if they are even able to do so.  Mergers can be difficult for top executives all the way down to line employees.

For further reading, an interesting article here about the 10 all-time best and worse company mergers.

Bringing Back the Women

WSJ online

This article shows some employers humanizing its employees and giving more consideration to their personal lives- in particular, those of women who choose to become mothers.  In 2011, about 76% of mothers with children under 18 were either already in the workforce or looking to enter the workforce.  Employers that are not willing to work with mothers are losing out on a lot of available talent that is willing and able to work and enhance the company. 

Consulting firm, McKinsey & Co. is reaching out to female employees no longer employed by the firm, to touch base and see how they feel about coming back to work.  This is not company policy, but rather something that the firm is doing quietly, presumably to regain some of its lost talent. 

The idea of bringing individuals who have not been employed for some time back to the firm seems to be catching on… Goldman Sachs has implemented “returnships”- described as jobs that are paid and short-term offered to individuals who have been out of the workforce for a few years.

Photo from Forbes.com

While a complex situation, hopefully more businesses will create a win-win situation by re-recruiting the lost talent of women workers who exited the workforce due to motherhood.  It is encouraging to see employers taking a more humanistic view of their employees as people and not just workers who generate income for the firm.

The photo on the left comes from a Forbes.com article about keeping women in the workforce that is also a good read.

Business Lending Picking Up Steam

http://online.wsj.com/article/SB10001424127887324449104578314140876408204.html?user=welcome&mg=id-wsj

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Business lending is picking up steam but are banks moving too fast?  Some banks are increasing the amount of business loans being granted offering cheaper and more flexible terms.  While this is generally a good sign, some are concerned that banks are relinquishing their tightening of credit too soon.  The trend is being seen in banks of all sizes- for example, Wells Fargo, the 4^th largest bank in the nation, is seeing outstanding loans increase by 12% in 2012.  The State Bank of Southern Utah, a community lender, saw a 9% increase for 2012.  Overall, commercial and industrial loans were up by 16% for 2012.

Wells Fargo says that the bulk of the increase it’s seeing in it’s commercial lending unit is coming from business owners who put off buying necessary equipment due to the recession, but now feel comfortable taking out a loan to make the investment in new equipment.

The chairman of Signature, Scott Shay, notes that he has seen a shift in the industry, saying “I do think some other banks are become more willing to make loans…” and added that they “are having a downward impact on prices.” The shift seems to be in the best interest of business-owners, large and small, as the article points out a few instances of banks practically fighting over who gets to make the loan to a business.  Certainly good news for business owners!

Is it time to streamline the mortgage process? I know my customers think so!

Streamline mortgages?

Perhaps we have overcorrected our lending practices since 2008 and are disallowing well-qualified applicants from getting in the homes they deserve or from refinancing their current property.  It was absolutely necessary to tighten credit and strictly verify income and assets in order to avoid another financial meltdown but maybe we have over-complicated the process while ensuring we are more cautious in our lending.

I hear on a daily basis that the mortgage process is too difficult these days and people make jokes about having to provide a blood sample and their firstborn child just to get a mortgage.  Maybe this argument has teeth… On the other hand, I have only been in this industry since 2010 so the tight credit conditions are what I am used to.  No-doc loans and anything close to a no-doc loan sounds ludicrous to me.  But it would certainly make my job easier if credit were relaxed just a little.

Mobile phone sales are down but smart phone sales continue to grow

Mobile Phone Sales- WSJ

The article points out that mobile phone sales worldwide declined in 2012 by 1.7% due in large part to ‘tough economic conditions, shifting consumer preferences and intense market competition.’  While world-wide phone sales were down 1.7% from 2011 sales, sales of smartphones in the fourth quarter of 2012 were up 38.3% over Q4 2011.

Apple and Samsung continue to increase their market share… from 46.4% to 52% comparing Q3 2011 to Q4 2011.  Apple and Samsung, the article points out, have great success based on their brand recognition and reputation… their success is as much due to brand recognition as due to the quality of their actual products. In an economy where most people do not have a great deal of disposable income, customers who are loyal to Apple of Samsung will still pay the premium price for their products as opposed to customers of other companies who may be less loyal and may opt for a cheaper product.

I’m interested to watch what happens as the market becomes more mature and more highly saturated with smartphone users.  Additionally, it will be interesting to see in what direction the industry heads as the economy grows stronger and individual disposable income increases.

Hope for bookstore lovers!

Bookish.com

WSJ online- Bookish.com

Bookish.com has launched!  The website was created by three major publishing companies to fill the widening void left in the hearts of book-lovers everywhere.  As physical bookstores continue to close their doors while online bookselling continues to grow, the art of browsing is being taken away from booklovers.  Half the fun of visiting a bookstore is browsing through the shelves and tables of new books, judging books by their covers, and discovering new authors and new work by familiar authors.  Flipping through a new book at the store is a treat that I know I will greatly miss when there is no longer a bookstore within driving distance.

The aim of Bookish.com is to give booklovers a sort of online world in which to browse books… The site provides reviews, both professional and from online users, links to the author’s website, link to where you can buy the book (though some books are offered directly through the site) and provides a recommendation engine as well.  There will also be some original content on the site- generated by publishers and by the site’s own staff as well. 

I’m looking forward to spending some time browsing around Bookish.com and seeing where it takes me!

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U.S. Federal Government Suing S&P

US Gov Sues S&P

The U.S. government has alleged that S&P, the largest rating firm in the U.S., is guilty of “falsely” representing the ratings on complex securities as being “objective, independent” and “uninfluenced by any conflicts of interest.”  The charge is of civil fraud and is the first federal enforcement action against a credit-rating firm over the financial crisis.  The U.S. government is suing S&P for mail fraud, wire fraud and financial-institution fraud alleging they were intentionally slow in downgrading securities trying to hold onto clients and deals as long as possible.

S&P is vehemently denying the claims.  Not helping their case is the fact that on March 19, 2007, one of their analysts revised the lyrics to the Talking Heads’ “Burning Down the House” and sent them out to a few colleagues as follows:

"Housing market went softer/Cooling down/Strong market is now much weaker/Subprime is boi-ling o-ver/Bringing down the house."

At best, it seems the analyst was taking whimsical liberties with song lyrics to a popular song… at worst, it is condemning evidence that at least some of S&P’s analysts were aware of how grave the situation could become.

It will certainly be interesting to watch and see what comes of this lawsuit.

Click here to see Talking Heads' "Burning Down the House"

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