Avon shares plunged 14 percent in premarket trading Tuesday after Coty dropped its $10.7 billion takeover bid for the cosmetics company.
Coty Inc., a privately held rival, had raised its original offer last week by about 6.5 percent, but set a deadline of Monday for the company to accept the bid.
Avon asked for more time to consider the bid over the weekend, but it appears that Coty would have not of it. It slammed that door shut on the troubled company Monday and investors are following suite even before the markets open Tuesday in some heavy trading.
If the current prices hold, Avon shares will be worth less than when Coty made its original offer back in April. Shares fell $3.06 to $17.90.
The big question now is what comes next for Avon?
The company is embroiled in a bribery scandal that led to the ouster of its vice chairman in January personal business card. The investigation, which initially involved executives in Asia, has spread and late last year federal regulators began looking into the New York company’s dealings with financial analysts.
Earlier this month, under the leadership of recently arrived CEO, Sherilyn McCoy, Avon reported that its first-quarter profit tumbled 82 percent, even worse that Wall Street had feared.
That has become the norm. Profits have been shrinking for three years and Avon is suffering even in places it had seen as strongholds.
Avon Products Inc. holds its shareholders meeting in two weeks.
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No one took issue with Antonio Hegwood’s dreadlocks when he worked for the temp service. Or the fast food restaurant before that.
But in mid-April, four months after a service station and convenience store hired him as an overnight clerk, Hegwood learned his hair style had suddenly became a problem.
Hegwood, 24, hasn’t been fired. But he hasn’t collected a paycheck since.
His supervisors at a St. Louis Petro Mart have told Hegwood that he’s welcome to return to work — if he shears the dreadlocks that run about halfway down his neck.
Hegwood doesn’t understand the fuss.
“It’s a gas station,” he said. “People aren’t going to not buy gas just because the clerk has dreads.”
Policies on the personal grooming habits of employees land on the edge of state and federal employment discrimination laws.
Companies doing business in Missourihave the right to terminate or suspend any employee that doesn’t meet established guidelines addressing hair, tattoos or dress.
“An employer may condition a job on an employee’s compliance with the employer’s hair styling preferences, unless the employee’s alternative hair styling preference is connected with the employee’s inclusion in a protected category,” Missouri Department of Labor spokeswoman Amy Susan explained in an e-mail. “For example, a particular hair style may be a tenet of the employee’s religion, or the employer may decline to hire a prospective employee because the employee is considered to be disabled because of his or her hair style (such as believing someone without hair to be suffering from cancer).”
The Equal Employment Opportunity Commission is a bit more exacting. It looks at how various groups of people wearing various hairstyles are treated in comparison to other groups.
“The baseline for evaluating grooming policies is to look at their overall burden on different groups of employees,” EEOC spokeswoman Justine Lisser wrote in a general overview of the Petro Mart matter.
“…If an employer prohibits a range of hair styles, such as both corn rows and mohawks, and the no cornrows/dreadlocks policy affects 30% of its African-American employees while the no mohawks affects only 3% of its white employees, we could say that the policy had a disparate impact on African-Americans, even if it applies to all employees.”
Hegwood has sported dreads on and off for years. The dreadlocks were in place when he applied for and was offered the $8.50-an-hour position at Petro Mart late last year.
“They didn’t say anything about it then,” he said.
Nor, Hegwood added, was there any mention of the dreads posing a threat to safety or the health of co-workers.
Owned and operated by Western Oil Co. in Earth City, Petro Mart does have a written policy stipulating that hair should be “kept neat and clean…immoderate styles… such as corn rows, braids etc. must be approved by a supervisor…dreadlocks and mohawks are unacceptable.”
Western Oil did not respond to requests for a response.
A father of three, Hegwood doesn’t know how long he can take a principled stand against Petro Mart and its grooming policy.
He needs a salary to support his children and pay for the remainder of his education at St. Louis Community College-Forest Park, where Hegwood hopes to earn a degree in business.
The worst of the job crisis may be over — unemployment in the St. Louis region dropped to 8.1 percent in March.
But back in the hunt four months after starting a job “I really liked,” Hegwood fears landing employment remains a challenge.
“Maybe I’ll start my own business,” he said, looking ahead. “That way I can wear my hair anyway I want.”
QUOTE OF THE WEEK
“We’re all technology companies at heart. Whether you’re a law firm or a bank, the core of your company is technology. And that is kind of shaking the core of the office today.” — Thomas Vecchione, head of Workplace Design at Gensler, the global architectural firm, on the work space evolution that includes “free range” offices in which employees take a seat each day at whatever desk is available.
Source: The Point, WBUR/Boston
BY THE NUMBERS
3.9 million - The population of Oregon — and the number of Americans who continue to suffer the effects of unemployment lasting more than a year. The long-term unemployed represent 29.5 of the nation’s jobless.
Source: The Pew Charitable Trusts
FINAL WORD
“You know, how could you not look?” - Cardinals President Bill DeWitt III on whether he tracks the struggles of a former employee, Albert Pujols, in the box scores each day.
Source: St. Louis Post-Dispatch
There are various ways on how to get free credit report online; but there is only one official website that is mandated by the government as your certified source for your annual credit report for free.
McDonald’s ever-evolving mix of old menu standbys and new items like Chicken McBites lured in more diners who helped boost its first-quarter profit.
The world’s biggest hamburger chain said Friday that its net income rose 5 percent in the first quarter, in line with Wall Street expectations.
McDonald’s Corp. said global sales rose 7.3 percent at stores open at least 13 months, driven by gains from all regions. The metric is key because it excludes the impact of newly opened stores.
A big part of the McDonald’s success story in recent years has been the chain’s rollout of popular menu items such as coffee frappes and fruit smoothies, which have high profit margins and bring in customers throughout the day. Customers also love them because it’s a way to have a treat for a couple of bucks.
Other recent introductions by the fast-food chain include oatmeal and Chicken McBites, which the company said helped boost sales in the U.S. in the first quarter.
For the first three months of the year, McDonald’s reported a profit of $1.27 billion, or $1.23 per share. That compares with a profit of $1.21 billion, or $1.15 per share, in the year-ago period.
In the U.S., sales at restaurants open at least 13 months rose 8.9 percent, as new menu items like Chicken McBites, updated restaurants and warm weather drew customers. The results also benefitted from an extra day in the Leap Year.
McDonald’s said sales in Europe, its biggest market, rose 5 percent despite economic turmoil and severe weather in many parts of the region. Sales rose 5.5 percent in the Asia Pacific, Middle East and Africa region, where the company is focusing its expansion efforts in the coming years.
Although McDonald’s has consistently outperformed its peers in the fast-food industry, the company is facing the pressures of increasing costs for ingredients. The company’s is also seeing costs for labor and rent increase in some overseas markets.
The higher expenses are particularly problematic for a chain like McDonald’s, which risks driving away customers if those costs are passed on.
Still, the fast-food chain last year raised prices three times for a total price increase of 3 percent. The company has said it expects commodity costs to increase an additional 4.5 percent to 5.5 percent this year, which would be roughly in line with last year’s increases.
Because of its size, the way McDonald’s handles price increases can set the tone for the rest of the fast-food industry.
Shares of McDonald’s, based in Oak Brook, Ill., rose $1.72, or nearly 2 percent, to $95.28 in premarket trading.
The Times of London is being sued over email hacking, a lawyer said Friday, an indication that the scandal over media misdeeds at Rupert Murdoch’s British newspapers continues to spread.
Lawyer Mark Lewis told The Associated Press that his firm had filed suit against the 227-year-old publication over its hacking of police blogger Richard Horton’s email account.
“We did lodge papers,” Lewis confirmed in an email, adding that the suit was filed on Tuesday.
The Times unmasked Horton as the detective behind the award-winning “NightJack” blog in a controversial 2009 piece which Horton unsuccessfully sued to try to suppress.
According to an account of the lawsuit published in Britain’s New Statesman magazine, Horton’s lawyer raised the possibility that the detective’s Hotmail account had been illegal accessed _ an allegation dismissed as “baseless” in 2009 by Times lawyer Alastair Brett pay day loans.
However, in public statements and in testimony before an official inquiry into media ethics, senior Times managers admitted that one of their reporters had accessed Horton’s account.
“‘Baseless’ was not the best word to use,” Brett told the inquiry last month.
Times publisher News International did not immediately return an email or a call Friday.
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JPMorgan Chase & Co. is being sued by a trader who says he accepted a contract from the investment bank because a typographical error made him believe he would be paid 10 times what was actually offered.
Kai Herbert, a Switzerland-based currency trader, is suing JPMorgan for about 580,000 pounds ($920,000), his lawyers said at a trial in London this week. The original contract said Herbert
Norway is moving closer to a housing bubble as the central bank
ST. LOUIS • A federal grand jury has indicted a former high ranking executive of a St. Louis area medical practice on charges that he embezzled millions of dollars and also broke the nation’s “stolen valor” law by posing as a war hero.
Dunard Morris, 48, the former chief executive of Chesterfield-based Metropolitan Urological Specialists PC, was indicted late Wednesday on multiple counts of mail fraud and wire fraud as well as violations of a federal statute that makes it a crime to falsely represent oneself as having received a U.S. military decoration or medal.
The indictment, which was made public this morning, says Morris “embezzled millions of dollars and concealed the embezzlement through a series of lies, misrepresentations and deceits to the doctor-shareholders” of the business, according to a statement from the U.S. attorney’s office.
Morris increased his salary without authorization and got the company “to pay him hundreds of thousands of dollars in unauthorized, undisclosed bonuses and reimbursements,” the indictment says. He used the money for expensive jewelry, cars, guns, designer clothes, wine and travel, according to federal authorities.
Morris told doctors he was a decorated Marine veteran and winner of the Navy Cross medal for extraordinary heroism, the indictment says. He didn’t receive that honor, and was in reality discharged from the military for misconduct “under other than honorable conditions,” according to the indictment.
The indictment caps an investigation by federal authorities into potentially millions of missing dollars from the lucrative urology firm.
Morris was terminated by Metropolitan’s board of directors in mid-September after suspicions arose about his management practices, including the delayed payment of federal and state taxes, and the possibility that some funds may have been diverted from bank loans to the medical practice.
In recent years, Metropolitan and its property affiliate have obtained bank loans and lines of credit totaling more than $10 million. The firm’s board of directors approved various projects, including the construction of a new medical office building on Big Bend Boulevard in Crestwood, the purchase of a linear accelerator for radiation treatments and the build-out and remodeling of other facilities.
According to his professional resume, Morris served in the Marines from 1980 to 1984, and also from 1990 to 1992. He lists his rank as E-5 (a non-commissioned officer’s pay grade), and claims to have served in the 3rd Reconnaissance Battalion of the 3rd Marine Division, and the Detached Marine Expeditionary Unit Fleet Marine Force.
The Stolen Valor Act of 2005, signed by former President George W. Bush, broadened the provisions of a previous federal statute that prohibits the unauthorized sale, manufacture or wear of military decorations. If convicted on this count alone, Morris could face imprisonment for up to one year and a fine up to $100,000, according to federal authorities.
The mail and wire fraud charges carry up to 20 years in prison and fines of up to $250,000 if Morris is convicted.
Morris worked for Metropolitan and one of its predecessor companies in the St. Louis area for the last decade. Metropolitan, which has about a dozen physicians on its staff, operates a sexual health clinic and offers surgical services as well as radiation treatments for prostate cancer. The firm has an imaging center, a laboratory and doctors’ offices in Creve Coeur, Florissant and Chesterfield, including offices on the campuses of Mercy Hospital St. Louis and St. Luke’s Hospital.
In 2010 and 2011, the company had cash flow problems, including the buildup of about $1.3 million in delinquent federal, state and local taxes, interest and fees, St. Louis County records show.
On Sept. 16, 2011, the Internal Revenue Service filed an $855,291 tax lien on all property belonging to medical practice as well as all of its property rights, federal records show, because the firm fell behind on its quarterly payments of money withheld from its employee’s paychecks.
Also in 2011, the Missouri Department of Revenue placed three tax liens on the firm totaling $154,103 involving overdue withholding taxes, state records show. And the company’s property affiliate — Metropolitan Urological Properties LLC — owed more than $338,000 in delinquent property taxes, interest and penalties to state and local tax authorities on two of its parcels in St. Louis County.
But in recent months, the medical firm and its property affiliate have paid their tax obligations.
The medical practice also maintains that Morris subleased a $5,475-a-month luxury apartment using company funds without approval of the firm’s board of directors. According to the rental agreement, Morris leased the apartment at the Mansions on the Plaza complex at 8300 Delmar Boulevard in March 2011.
Metropolitan’s new interim chief executive, Bob Lawson, and several of Metropolitan’s doctors have not returned calls seeking comment.
The medical firm’s attorney, Mayer Klein of St. Louis, said the firm is current on all of its bank loan obligations and that the new management is making sure that the firm’s bills are being paid on time.
Robert Patrick of the Post-Dispatch contributed to this report.
Picture it: Save for a few disposable point-and-shoots, Kodak is exiting the camera business.
Eastman Kodak Co. said Thursday that it will stop making digital cameras, pocket video cameras and digital picture frames in a move that marks the end of an era for the beleaguered 132-year-old company.
Founded by George Eastman in 1880, Kodak was known all over the world for iconic cameras such as the Instamatic. For the last few decades, however, the company has struggled. It was battered by Japanese competition in the 1980s and failed to keep pace with the shift from film to digital technology.
The company sought bankruptcy protection last month in a case that covers $6.7 billion in debt. It has a year to devise a restructuring plan. Citigroup Inc. was approved to lend the company $650 million to continue operating.
Exiting the digital camera business is especially poignant for Kodak. In 1975, using an electronic sensor invented six years earlier at Bell Labs, a Kodak engineer named Steven Sasson created the world’s first digital camera. It was an 8-pound, toaster-size device that captured low-resolution black-and-white images.
Reached at home Thursday, Sasson told The Associated Press that seeing Kodak exit the business is “a bit sad” but part of a transition facing all companies that use evolving technology.
“The average person probably owns more digital cameras than they realize,” he said. “It’s just the reality that digital imaging is a part of our lives and you can capture images in a lot of different ways. There’s a lot of choices people have, cellphones being one of them.”
Through the 1990s, Kodak spent some $4 billion developing the photo technology inside most of today’s cellphones and digital devices. But fearing that it might cannibalize its celluloid film business, Kodak waited until 2001 to bring its own digital cameras to the market. By then, it faced strong competitors like Sony Corp. and Canon.
These days, digital camera sales are suffering as consumers increasingly take photos on smartphones. Certain smartphone makers such as LG, Nokia, Motorola and Samsung have agreed to pay Kodak to license its digital camera technology, while companies like Apple are fighting its patent claims.
Before Thursday’s announcement, Kodak had already been trying to shrink its product line and sell in fewer retail venues, but as sales declines worsened, the company saw no way to make the business profitable.
“We made the logical conclusion that there was no clear path to profitability, and we have to focus on generating profits at this point,” said Kodak spokesman Chris Veronda.
Kodak sees home photo printers, high-speed commercial inkjet presses, workflow software and packaging as the core of its future business. Since 2005, the company has poured hundreds of millions into new lines of inkjet printers. Once the digital camera business is phased out, Kodak said its consumer business will focus on printing.
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