Newsletter: California Inc.: Consumers remain wary of mobile payments
Welcome to California Inc., the weekly newsletter of the L.A. Times Business section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
It goes without saying that investors will be looking this week for some relief from Friday’s bloodbath on Wall Street. Seeing as how falling oil prices and disappointing retail sales sparked Friday’s sell-off, you’d need a crystal ball to predict whether investors will go on a buying spree — or if sell-offs will continue to roil the market.
LOOKING AHEAD
Netflix watch: Netflix posts its latest earnings on Tuesday and Wall Street will be watching to see whether the video streaming service reports big subscriber gains. Netflix’s stock price surged early this month when Chief Executive Reed Hastings announced that the Los Gatos, Calif., company had added 130 more countries to its service, bringing the number of nations it serves to a total of 190. But the stock surge didn’t last, with Netflix’s stock price slipping back.
Movie premieres: The Sundance Film Festival, a prime venue for bringing together movie distributors and independent filmmakers, kicks off Thursday for an 11-day run in Park City, Utah. This year’s slate of films includes 65 world premieres in narrative and documentary categories. Many of the festival films tackle issues often found on the front page of the paper: abortion rights, a prominent Islamic State victim, fraternity hazing, embattled LGBT teens, the current tech investment spree and the Sandy Hook tragedy.
Company for sale: Fuhu, the El Segundo manufacturer of children’s computer tablets that filed for Chapter 11 bankruptcy protection in December, will go up for auction in federal court on Wednesday. Bids have to be submitted in advance, and a leading contender is the hedge fund founded by Australian golfer Greg Norman, which has submitted a $10-million bid. The Great White Shark Opportunity Fund offer topped a $9.5-million bid from Mattel. Any deals are subject to court approval.
Music convention: The biggest gathering of the music-products industry will start a four-day run Thursday at the Anaheim Convention Center. The National Assn. of Music Merchants’ annual trade show — known as NAMM — is expected to attract nearly 100,000 industry representatives but is not open to the public. Keynote speakers will be Eddie Kramer, who engineered all the albums Jimi Hendrix released in his lifetime, and Tony Brown, a veteran Nashville producer and record label executive.
Jobs report: Economists and business leaders will be watching Friday when California’s monthly employment numbers for December are released. The last report was weak — the state added just 5,500 jobs in November, the lowest one-month increase in more than four years. Despite that lackluster report, the state still added jobs at a rate of 2.6% over the last year, faster than all but six other states and better than the national rate of 1.9%.
THE AGENDA
Monday’s Business section looks at the (potentially) brave new world at the checkout counter. A growing number of companies are offering technology for using smartphones to pay for goods and services. But the mobile-payments industry has not exploded in size because the notion of paying by smartphone is drawing a decidedly cautious response from American consumers.
STORY LINES
Here are some of the other stories that ran in The Times Business section in recent days that we’re continuing to follow:
Scope recall: Olympus Corp. said it will voluntarily recall and redesign a troubled medical scope that has been linked to scores of patient infections around the world, including some who died. The company, which sells about 85% of the duodenoscopes used in the United States, said it will redesign an internal mechanism in the device that had been almost impossible to effectively disinfect. A series of Times stories last year reported that Olympus knew of the potential flaws in the scope but failed to alert American hospitals or regulators.
Game on: The return of the Rams to Los Angeles has real estate agents working overtime to book players and coaches as clients. “I’ve been on the phone with the Rams’ offices, sports agents, business managers, players, players that aren’t on the team but that have relationships with players on the team,” said Manhattan Beach real estate agent Ed Kaminsky. He’s one of a handful of agents in town who specialize in working with professional athletes, helping them find new digs as they move from team to team.
Uber fine: The California Public Utilities Commission agreed with a judge’s recommendation to fine Uber $7.6 million for failing to meet data reporting requirements in 2014. Uber will appeal the decision but has agreed to pay the fine to avoid a 30-day suspension of its license in its home state. Although the fine is relatively small for a company valued at $62.5 billion, it underscores the regulatory and competitive conflict Uber’s business model repeatedly faces across the globe.
Walmart closures: Walmart said it would close 269 of its stores globally, including 154 in the U.S. and nine in California, as the company looks to reposition itself in a difficult retail climate. The closures include Walmart and Sam’s Club locations and will affect 16,000 employees globally, about 10,000 of whom are in the U.S. The Bentonville, Ark., company said more than 95% of the affected stores in the U.S. are within 10 miles of another of its stores, and it hopes employees can transfer.
Bid rejected: The board of American Apparel has rejected a $300-million takeover bid from investors who support the return of ousted Chief Executive Dov Charney, according to a person familiar with the matter. The rejection of an offer from Hagan Capital Group and Silver Creek Capital Partners is yet another dramatic turn for the Los Angeles retailer, which filed for bankruptcy in October. The investors, who had previously submitted a $200-million offer in December, could try to persuade unsecured creditors to back the deal and ask the presiding bankruptcy court judge to review the offer.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
High hopes: Want to make some money (with better odds than Powerball)? The Wall Street Journal offers this helpful advice: Build some apartments. Average rents nationwide were up 4.6% last year.
Shocking: Seems like just yesterday that people were writing obituaries for General Motors. Wired tells how the carmaker got its act together and beat Tesla in the race to build a true electric car for the masses.
Amateur athletics: It’s good to be a college-football commissioner. The Washington Post reports that average top-dog pay in the so-called Power Five — the Atlantic Coast, Big Ten, Big 12, Southeastern and Pacific-12 conferences — has soared to $2.6 million.
Toothsome issue: Nobody likes things getting lost when traveling. The Chicago Business Journal looks into efforts by United Airlines “for reuniting customers with misplaced items such as tablets, cell phones, stuffed animals — and even dentures (yikes!!).”
SPARE CHANGE
Ladies and gentlemen, your Los Angeles Rams, performing that timeless classic, “Ram It.”
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
