Category Archives: Business News

5 Big-Ticket Billionaire Sales

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Posted: February 28, 2011 11:22AM by Riya V. Anandwala 

The rich get richer as the market gets bullish. But when the market slumps, even the wealthy have to pay a price. Since the recent recession hit the world, several billionaires have decided to give up their lavish mansions or yachts. Not too long ago, Russian billionaire Sergei Polonsky sold his hotel Sungate Port Royal, yachts and the house on the Côte d’Azur to put all the proceeds into further construction of his projects. With the market’s ups and downs, the economic downturn is still hurting some of the rich and famous. (For related reading, also take a look at 6 Outrageous Billionaire Purchases.)

IN PICTURES: 6 Millionaire Traits That You Can Adopt

David Siegel’s $75 Million Mansion
In an effort to save money, chief executive officer of Orlando-based Westgate Resorts, David Siegel announced the sale of his unfurnished 90,000 square-feet mansion in July last year. The property in Windermere, Fla. has been listed for $75 million. Continue reading…

Warranties That Aren’t Worth It And Why

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Posted: February 15, 2011 9:21AM by Riya Anandwala

Remember your recent electronic purchase when the salesperson said, “we highly recommend protecting your item with our store’s extended warrantypackage that will cover all repair costs incurred within three years”? More often than not you get sucked into buying the package, as the investment in the electronic item is huge. But will you get the best returns? Chances are little to none. A recent Consumer Reports article released in December 2010 labeled extended warranties as bad deals in general and suggested buyers avoid them. (For more, see Extended Warranties: Should You Take The Bait?)

IN PICTURES: 6 Worst Financial Mistakes And Why You Made Them

Manufacturer Warranty vs. Extended Warranty
It seems as though almost every electronic item comes with an extended warranty plan that acts like an insurance policy, promising to cover all your repair and damage costs for a particular period of time after your purchase. How can that be a bad deal? In most cases the appliances you buy come with a manufacturer warranty that will cover your repair cost for a year. In that case, your retail warranty plan will more or less be a waste at least for the first year. Read More…

 

Tomatoes in short supply for central Illinois restaurants, grocery stores

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Harsh weather in Florida hurt crop, resulting in bare shelves and higher prices for consumers

Story on the Journal Star Web site

By RIYA V. ANANDWALA
OF THE JOURNAL STAR
Posted Mar 08, 2010 @ 07:53 PM
Last update Mar 08, 2010 @ 09:16 PM
PEORIA — Don’t be surprised to see fewer slices of tomatoes on a six-inch sub at the local Subway.

The loss of 70 percent of crops in Florida because of harsh weather has left the country dealing with a shortage of tomatoes. Local grocery stores and delis are bearing the brunt, too.

Haddad’s, a grocery store in West Peoria, would normally sell a pound of tomatoes for $1.50 but has increased the price to $1.99.

“The price went up last week,” said Jim Hoyle, produce manager for the store.

“Some of the supply was lost (last week). Our cost price more than doubled.”

Haddad’s buys a case of tomatoes for $25, Hoyle said, but has been spending $50 a case since a couple of weeks ago.

Hoyle expects the price to go up again. The shortage in Florida has strained the distribution network, with more businesses lining up for the same suppliers.

Regular tomatoes are the not the only high-priced tomatoes in the market. Rates of grape tomatoes have doubled, too. Though you won’t see a dearth of tomatoes in stores, the prices will be high.

“There are less tomatoes out there. Consumers will see higher retail,” said Schnuck’s spokesman Paul Simon.

Schnuck’s, which normally gets its primary produce from Mexico and Canada, also is getting supplies from New Zealand and Holland.

“They (tomatoes) are out of sight,” said Bob Ritt, 69, of Peoria, who was comparing prices of canned tomatoes with fresh ones at Kroger on Sterling Avenue.

Ritt said that he uses tomatoes every day and expected the prices to go up this year considering the weather last year.

Another customer shopping at Kroger said she is paying a dollar more for four tomatoes. She believes paying $3 for tomatoes is outrageous.

“I can grow tomatoes in my backyard,” said Ashley Irons, 23, of Peoria.

Delis, too, are paying more for the vegetable.

“We got worried a week ago,” said Angela Alexandar, a local Subway store manager.

She said the company decided to put four slices of tomatoes on a foot-long sub, and two on six-inch sandwiches.

But if the customer asks for more, they don’t refuse them or charge extra.

Schlotzsky’s Deli is struggling with finding cheaper tomatoes, too.

“It is too expensive, but I need it in food,” said store manager Peter Patel.

Patel fears losing a lot of business if they don’t provide customers with extra tomatoes.

“They won’t come back,” he said.

3-D televisions coming to a store near you

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Story on the Journal Star Web site

By RIYA V. ANANDWALA
OF THE JOURNAL STAR
Posted Mar 09, 2010 @ 09:17 PM
Last update Mar 09, 2010 @ 09:20 PM
PEORIA — The latest in electronic innovation has hit the Peoria area, but no one seems to care – yet.

Samsung and Panasonic will start selling 3-D TVs in U.S. stores this week, inaugurating what manufacturers hope is the era of 3-D viewing in the living room.

A handful of stores in the Peoria area, including Best Buy in the Glen Hollow Shopping Center, have stocked the newly launched 3-D TVs. Samsung’s 55-inch 3-D TV, priced at $3,300, has been on display at Best Buy since Friday. Todd Murphy, the store’s assistant manager, has not received a lot of inquiries about the product.

Murphy believes customers who are into electronics and have read about the sets in magazines or on the Internet will inquire about it. The usual customers would learn about it when they see the demo in one of the stores.

American Appliances, Electronics and Furniture on War Memorial Drive is scheduled to receive a few models of 3-D sets in two weeks.

A salesperson at the store said that “LEDs have been attracting a lot of customers.” But as far as 3-D TVs are concerned, “It is expensive and might turn people off.”

Other stores are either skeptical of the product, or want to sit back and watch how sales go.

Sound of Peoria is one of the stores that is not expecting to stock the 3-D TVs for a while.

The target audience for such TVs, said owner Byron Yang, is mainly people without glasses and with decent disposable income.

One challenge will be that the 3-D effect requires viewers to wear relatively bulky battery-operated glasses that need to be recharged occasionally. They are not like the cheap throwaways that have been used in theaters since the 1950s.

When you’re wearing these 3-D TV glasses, room lights and computer screens may look like they’re flickering, making it difficult to combine 3-D viewing with other household activities. Anyone who’s not wearing the glasses when the set is in 3-D mode will see a blurry screen. (The sets can be used in 2-D mode as well, with no glasses required.)

“Peoria is usually behind in cutting-edge things,” said Yang.

Though most customers may be out of touch with the 3-D TVs, some are clued in and are willing to spend the thousands of dollars for the sets.

Aaron Lewis of Canton, a shopper at Best Buy, bought a 46-inch LCD TV for $1,500. If he likes the new 3-D TV, he will buy it, he said.

“I would really spend $3,000 on a 3-D TV,” Lewis said.

For Lewis, investing in a 3-D TV is cost-effective, as he often goes to the movie theater with his three children.

On the other hand, Arthur Lindsey of Bartonville said, “I don’t think people are interested in wearing glasses and watching TV all the time.”

Manual shooting for Class 2A state championship

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Story on the Journal Star Web site

By RIYA V. ANANDWALA
OF THE JOURNAL STAR
Posted Mar 12, 2010 @ 10:44 PM
Last update Mar 13, 2010 @ 12:24 PM

PEORIA — The cheering for the Manual High School boys couldn’t have gotten much louder Friday evening as the hometown team beat Breese Central to move on to the state championship game.

Manual won a close game, 39-38, and will play Saturday night for the Class 2A championship.

“It means a lot. They (Manual) have worked very hard to get there,” said Stormie Crus, 17, of Manual.

The night brought together Manual fans from different parts of the state. Some were Manual graduates, some Peoria residents and others just enjoyed the basketball game.

Julie Walker, 35, of Peoria came to watch the game with her husband and 5-year-old son.

“I graduated from Manual High School. He (her husband) was from the rival team,” Walker said. “But I married him anyway.”

At different times, Walker’s grandfather was a Manual coach, and her father, an assistant coach.

She hopes her son will play for Manual when he grows up.

“He (Weston) is a shooter. He is going to be the next Manual star,” she said.

For many, the game also was about enjoying the evening with family.

Marcia Tupper, 47, of Peoria chased her children outside the arena, who had a good time at the March Madness Experience.

Cheryl Williams, 43, of Peoria said, “Our team is faster, we hope for speed.”

There was a new rhythm in Manual’s cheerleaders squad, too. The girls sparkling in orange shouted a new slogan along with their regulars – Google Plays in Peoria – to which the fans hollered, too, swaying orange placards echoing the slogan.

Among the Manual fans were Jim Bixby, who was a student counselor at the school, and his wife, Susie Smith, who is a tutor at the school.

For Bixby, “Manual athletics are very special.”

“They have been a great catalyst for a number of men and women to achieve great (things).”

The couple has missed many Manual games, but they were happy to watch the team play Friday.

Smith loves watching Manual games. She feels the team has grown.

Bixby said, “They are well-coached.”

St. Louis-area hotels doing ‘significantly better’ than U.S. average

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By Riya V. Anandwala
ST. LOUIS POST-DISPATCH

12/04/2009

While hotels across the nation are facing revenue losses, industry analysts say the St. Louis-area hotel market is doing better than most.

Among the reasons for the area’s stability, experts say, are its attractiveness to driving travelers, its major medical and health care base, and St. Louis’ reputation for being a cheaper destination for conventions.

Through October of this year, the occupancy rate for St. Louis hotels had fallen 7.5 percent since the same time last year, compared with a 9.5 percent decline nationally, according to a report released by Tennessee-based Smith Travel and Research.

“Those numbers aren’t very bad,” said Jeff Higley, vice president, digital media and communications at Smith Travel and Research. “That is a significantly better performance than the U.S. as a whole.”

The revenue per available room — a barometer used by the hotel industry to gauge hotel performance — of St. Louis hotels declined 13.1 percent to $46.80 through October since the same month last year, compared with the national decline of 17.7 percent to $55.70.

Though American Airlines reduced its number of local flights recently, analysts say the number of people who drive to St. Louis from neighboring cities has resulted in some good hotel business.

Gary Andreas, a hotel consultant for H&H Consulting, said that during the past decade, nearly 70 percent of the hotel room nights in St. Louis were occupied by visitors who drove to the city instead of flying in.

Andreas said he anticipated the overall demand of the people who drove to St. Louis to increase a little bit this year with the flight cutbacks.

Robbie Hall, director of franchise development for Hilton Worldwide, agreed that leisure travel by automobile has been on the increase.

Hilton, which has 24 hotels in the St. Louis area, opened two new ones in the region this year: Hilton Garden Inn in Berkeley and Homewood Suites in Richmond Heights.

Our hotels in St. Louis have done very well despite the downturn,” Hall said.

The area, he said, has a very strong corporate, medical and health care base that keeps the business strong. Hilton’s hotels rely in part on family members or friends who stay in town while visiting hospital patients.

“Hospital facilities are less impacted by the downturn, because people don’t choose to get sick,” he said.

Stephen Stickford, senior vice president for sales and services for the St. Louis Convention and Visitors Commission, said St. Louis hotels had better occupancy rates and revenue per room numbers compared with areas such as Indianapolis; Houston, San Antonio and Austin, Texas; Nashville, Tenn.; Denver; and Minneapolis.

Brian Hall, chief marketing officer for the visitors commission, said St. Louis was a new destination for many people, which includes business as well as leisure travelers.

Many meeting planners are looking at second-tier cities such as St. Louis instead of Las Vegas or Orlando as places to hold their meetings, he said.

Hall says he expects the trend to continue.

“We do not anticipate that we are going to return to the previous normal,” he said. “This is the new normal.”

St. Louis is also seeing a trend of multi-year bookings for big conventions. For instance, First Robotics, which will hold its first convention in St. Louis in April 2010, has a struck a three-year deal with the visitors commission.

“There are many cities who are attempting to do that,” Stickford said.

Daniel McCoy, vice president for the Dallas office of HVS Global Hospitality Services, said that market performance and financing conditions had slowed the pace of new hotel development but that some new projects were still able to find financing and move forward.

HVS provides consultation for the hotel and gaming industries.

Thirty-two hotels have opened in the area since 2005, with a total of 5,053 rooms, a 14.8 percent increase, according to a HVS report. About nine hotels opened this year.

Although there is some stability in the St. Louis hotel market, not all the new hotels that have opened in the area this year are doing well.

Steve and Mike Roberts, owners of Robert Cos., opened Hotel Indigo in the Central West End in July. Steve Roberts says the hotel’s performance has been “slower than expected.”

“Since it is a new brand, we realistically had no significant expectations,” he said.

Even though the business is down, Steve Roberts says he is happy about the location of the hotel. They attract people doing business in the Central West End, such as Barnes-Jewish Hospital, he said.

The brothers are planning a second Hotel Indigo in downtown St. Louis. It is still in the development stages and is planned to open in 2011, Steve Roberts said.

Moonrise, one of the area’s newest hotels, in the Delmar Loop, is thriving despite the tough economy. Joe Edwards, the owner of Moonrise, said he was surprised at the number of St. Louisans staying at the hotel since it opened in April. A businessman, Edwards is known for his contributions to the Loop. He is the owner of the Blueberry Hill bar, the Pageant nightclub and founder of the St. Louis Walk of Fame.

The Moonrise, because of its location, can draw crowds from parties nearby, Edwards said.

Katie Maguire, a Minnesota resident who often visits St. Louis, stayed at Moonrise for a few days recently with a group of friends. Maguire usually visits St. Louis to see her son, who is enrolled at St. Louis University. The Moonrise provides convenience because of its proximity to the school, she said.

Drury Hotels Co. LLC is also revving up its marketing strategies in order to pull more crowds to its hotels. The St. Louis-based company will start serving free hot food and cold beverages at 5:30 p.m. by February.

The hotel group has 21 hotels in the St. Louis area, with a new Drury Inn & Suites under construction in Arnold, and a total of 130 hotels in 20 states across the country.

Eric Strand, vice president sales and marketing said, “We have held up reasonably well.”

Strand said he was now seeing a pick-up in demand.

Returning a gift? Stores tweak policies to reduce fraud

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By Riya V. Anandwala
ST. LOUIS POST-DISPATCH

12/25/2009

If Aunt Janet doesn’t like the watch you bought her this Christmas, it’s OK. Just be aware of the return policy on it.

Retailers either tighten or loosen their return policies each year. And this year, like every year, their motivation for making adjustments is the same: to stem the tide of return fraud.

The retail industry is expected to lose an estimated $2.7 billion in return fraud this holiday season and an estimated $9.6 billion this year, according to a National Retail Federation survey.

The survey also said that 6.4 percent of holiday returns are expected to be fraudulent this year, down from 7.5 percent last year.

Also in the study, 69 percent of the 134 retailers interviewed said they have changed their company’s return policy to combat fraud. While 16.9 percent of retailers said they will tighten their policies, 3.8 percent said they will relax theirs.

Target Corp. usually allows customers to return items within 90 days of purchase, However, the company will accept returns on purchases made during the holiday season for up to 12 months. Target limits and periodically adjusts the monetary amount of the total purchases returned. This year it stands at items totaling less than $70, but that amount has ranged from $20 to $100 in the past few years.

“The reason we went through so much change in our return policy accommodations is that we continually seek feedback from our guests regarding their service expectations,” said Sonja Pothen, a spokeswoman for Target.

Sears has extended its time period slightly for holiday returns, said Tom Aiello, a spokesman for Sears Corporate Holdings.

The store will accept items purchased between Nov. 14 to Dec. 13 for up to 120 days. But home electronics and mattresses will have to be returned within 60 days.

“We want to make it as convenient as possible for the consumers,” Aiello said.

Among the retailers who have not changed their return policies is Amazon.com. The online retailer gives customers until Jan. 31 to return items purchased between Nov. 1 and Dec. 31.

But returning items to online stores requires a lot of care. Most online retailers expect customers to return the merchandise with its original packaging and in unused condition.

Mark Griffin, the general counsel for Overstock.com, says Overstock.com operates much like its online competitors, and incidences of fraud are rare on returns.

“We monitor the process carefully,” he said.

When a product is returned Overstock.com tries to refund the money without any credit or discounts, Griffin said. While most of the time the company will give customers the benefit of the doubt, if the item returned is opened or used, it will reduce the amount of the refund.

With the changing return policies, returning the gift can turn out to be more of a hassle than choosing a gift for a loved one. But the key to simplifying the process is reading the fine print when purchasing a gift.

Lyndsey Shaw, who works at the customer service center at the Best Buy in Brentwood, said many people don’t know about Best Buy’s extended return policy during the holiday season and expect a store credit instead of money back when they make returns. Items bought between Nov. 1 and Dec. 24 can be returned for a full refund until Jan. 31.

“They get excited to get their money back instead of the store credit, which usually people don’t want,” she said.

Dunkin’ Donuts sweetens to area again under new plan

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By Riya V. Anandwala
St. Louis Post-Dispatch

11/13/2009

Dunkin’ Donuts, which pulled out of the St. Louis area in early 2000, is returning early next year with a new strategy for success in the Midwest.

The national chain plans to open its doors to more franchise owners with fewer stores. Under the strategy, not only could franchisees agree to standard 10- to 12-store deals, but they also could agree to two- to four-unit contracts.

Reggie Wright, the director of franchising in the Midwest for the company, said this approach will allow Dunkin’ Donuts to move into the St. Louis market less aggressively than in the past, and drive sales in the next three years.

Traditionally, Dunkin’ Donuts has never signed a franchise owner for fewer than five stores, Wright said.

With a huge base on the East Coast, Dunkin’ Donuts has been rapidly signing franchise owners in the Midwest. The company announced several deals this year with franchise owners in Ohio, Tennessee, Minnesota and Mississippi. Based in Canton, Mass., the company has grown from 7,988 shops worldwide in 2007 to 8,835 stores, including 6,395 in the United States.

Dunkin’ Donuts’ strategy is largely a response to the economic downturn, according to Scott Watkins, a senior consultant in market and industry analysis with the Anderson Economic Group.

He added that several companies are exercising flexible agreements with franchise owners in order to grow.

However, he says Dunkin’ Donuts could run into managerial and cost challenges with its new approach. Under its standard system, fewer franchise owners handle more stores, and there are fewer people for the company to manage, he said.

Dunkin’ Donuts plans to open its first three stores in the St. Louis area by early 2010, and one by the end of spring. Two stores would be at Lambert-St. Louis International Airport, one in Kirkwood and another in Rock Hill.

Wright said the company is looking to sign one more franchise owner for the St. Charles area, which would complete its activity in St. Louis for the next three years.

The two Lambert stores, owned by Deli Enterprise’s Milan Patel, will occupy 550 square feet in East Terminal and 380 square feet in Terminal A.
Patel, who has a four-store deal with Dunkin’ Donuts, plans to open the East Terminal store in early 2010.

Baskin Robbins and Dunkin Donuts will be housed in a single store in the East Terminal, Patel said.

His other two stores are at the Baltimore airport.

Michael Geller, who has a 12-store deal with the company, plans to open his Kirkwood store in mid-January. Construction began a few weeks ago.

Geller, a Washington University law school graduate who has lived in the city for several years, said the St. Louis area was a natural choice.

His location, he said, will be very different from the ones that were in the area previously.

He plans to open his second location, in Rock Hill, by the end of spring, which will be followed by other locations in the region, he said.

In the 1990s, Dunkin’ Donuts had as many as 12 to 13 stores in St. Louis. In 2001, the last of the franchised shops shuttered, and there have been none in the area since.

The company’s renewed interest in the St. Louis market isn’t striking fear into its competitors. Neither Starbucks, Krispy Kreme nor locally owned doughnut shops seemed worried about the chain re-entering the market.

While Krispy Kreme would not comment on another company’s strategy, Starbucks said that choosing coffee is a personal choice.

Starbucks has 75 stores in Missouri; Krispy Kreme, 7.

Erma Klepzig, who owns Donuts Stop Inc. on Lemay Ferry Road in south St. Louis County with her husband, said she is aware of people who like Dunkin’ Donuts, but she also knows people who like The Donuts Stop.

“Nobody hurts us,” she said. “We are doing fine through the recession and will continue to do so.”

St. Louis police get lift truck, mainly for surveillance

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By Riya V. Anandwala
ST. LOUIS POST-DISPATCH
11/22/2009

 

ST. LOUIS — The St. Louis Police Department has a new crime-fighting weapon: a 37-foot bucket lift mounted to the back of a Ford F-550 truck.

The vehicle, donated Saturday to the department by AmerenUE, will be primarily used to get a bird’s-eye view of crime scenes and for surveillance. It will also have more mundane uses: changing lights on parking lots, replacing upper-story windows and installing and servicing surveillance cameras.

“Currently we don’t have a truck like that,” Police Chief Daniel Isom said.

The vehicle, a 2001 model that originally cost $75,000 to $85,000, was recently removed from service by AmerenUE.

AmerenUE has donated 14 vehicles this year to health departments, schools and universities.

Director of new preschool speaks four languages

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By Riya V. Anandwala
ST. LOUIS POST-DISPATCH

12/11/2009

 
Carolina Diaz-Silva says she believes that learning a foreign language at an early age can give children a cognitive
advantage in the future. Diaz-Silva is founder and director of International Schoolhouse, a Spanish-immersion preschool in Olivette. She started the school in August with 10 children and will be adding eight more in January.

Diaz-Silva, who speaks in English, Spanish, Italian and German, hails from Peru and moved to St. Louis 16 years ago. She spent her time teaching Spanish at MICDS in Ladue and also at Washington University.

In 2006, she received a master’s degree in Spanish Literature from Washington University and received an MBA from the university in May. She serves as an adjunct lecturer in the romance languages department of Washington University, teaching Spanish.

Diaz-Silva says she is trying to weather the economic challenges that come with her new venture and the competition from other preschools in the area.

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We have a lot of diversity in our student body as well as our teachers. Out of 18 students, we have four Hispanic children, one Indian and one African-American.

What kind of economic challenges are you facing with the school?

I would say that I had a lot of interest in the school, because it is not a day care, it is only a preschool that has part-time hours.

But in today’s economy, preschool has become an option for a mother who stays home with her child. A lot of families are choosing not to make that expense. And that has an impact on the enrollment.
But I am happy that we are small and are able to gradually grow.

Has the performance of the school, so far, met your expectations?

I was naive. I thought the school would fill up from the first day, because it is such a great idea.

It is also important to realize that I have to build trust with the parents. And that is exactly what we are doing right now.

We had an open house for children coming in January and we had the current parents be at the open house and talk to the prospective families. That made all the difference in the world. Because it wasn’t the director or the teacher selling what a great program we have, but the parents telling them how delighted they were with the program and how fantastic the teachers are.

Who are your competitors?

Preschool is very local. We did a lot of market research before starting the school and found out that families drive less than three miles for a preschool and a lot of families just walk.

There aren’t any Spanish-immersion preschools in our area, but there are a couple in St. Charles and Ballwin. My direct competition are other preschools in the area.

How do you publicize the school?

Most of our publicity comes from word-of-mouth. But we also do some advertising, like in St. Louis Kids Magazine, Ladue News, direct mailing, postcards.

We need to do more effective marketing. But I don’t believe marketing is going to get me more students. It is going to be my current families talking to their friends. Basically, I have 10 advocates, and I will have 18 in January.