Newsletter: California Inc.: For sale, a slightly used L.A. clothing company
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.
Trading resumes Monday after the Dow flirted with the historic 20,000 milestone but came up 0.37 points short following mixed economic news Friday. On the one hand, the economy added just 156,000 net new jobs last month, down from an upwardly revised 204,000 created in November. On the other, average wages for all private-sector workers rose at the fastest annual pace since 2009, increasing 2.9%.
LOOKING AHEAD
Clothier for sale: The assets of Los Angeles clothing retailer American Apparel are scheduled to go up for auction starting Monday in Bankruptcy Court in Delaware. Among the items for sale will be more than 90 American Apparel stores across the country. Gildan Activewear, a Canadian sportswear firm, has already bid $66 million for American Apparel’s intellectual property rights and some distribution centers. Media reports say online giant Amazon and L.A. retailer Forever 21 are weighing offers.
Box vox: TV executives from CBS, Fox and other networks will gather in Pasadena this week at the Langham Huntington Hotel to promote their upcoming shows at the TCA Press Tour. The biannual event, which is organized by the Television Critics Assn. and runs through Jan 18, kicks into high gear Monday with presentations from CBS and Showtime.
Cash or credit? On Tuesday, the U.S. Supreme Court will hear arguments in a case that could have major implications for credit card companies and for retailers that want to charge different prices for cash and card transactions. Merchants in New York are challenging a state law that prohibits them from charging more for credit card purchases but allows them to offer a discount for paying in cash. The justices’ decision could affect similar laws in nine other states, including California.
Buying power: The Commerce Department and the National Retail Federation will issue separate sales reports Friday showing how well merchants did during the holiday shopping season. Retailers can sometimes rake in 40% of their annual sales during the period. There were early reports of strong online sales, but traditional department store chains Macy’s and Sears both announced store closures last week following disappointing sales.
Bank earnings: Wells Fargo will announce its fourth-quarter earnings Friday, with investors watching to see how the bank is doing in the wake of its sales scandal. The company has acknowledged a steep drop in new checking and credit card accounts opened since it agreed in September to pay $185 million to settle an investigation into the creation of millions of unauthorized customer accounts.
THE AGENDA
Monday’s Business section scours police reports for a look at theme-park crimes. Crime rates at Southland theme parks are extremely low, but each park wrestles with unique problems such as shoplifting at Universal Studios Hollywood and car burglary at Knott’s Berry Farm. At Disneyland, reports of counterfeit money are more common than incidents of grand theft or credit card fraud. The findings come from a Times analysis of more than 3,700 police reports for four theme parks from 2014 through the first six months of 2016.
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:
Tariff worries: Companies reliant on Chinese factories and suppliers are mulling over what it means if the incoming Trump administration makes good on threats to slap new tariffs on Chinese goods. The president-elect and his surrogates have floated the idea of import taxes as high as 45% to punish China for allegedly undervaluing its currency. Should the bilateral relationship with China sour, no state would feel the disruption more than trade-dependent California.
Child care: When the minimum wage in California rose to $10.50 an hour Jan. 1, more than a million people got a raise. But for an untold number of families across the state, that pay bump could price them out of child care. This year, for the first time, two parents working full time at minimum wage jobs, with one child, will be considered too well off to qualify for state subsidies for day care and preschool.
Credit crackdown: All credit scores are not created equal. That’s the upshot of federal enforcement actions levied against credit bureaus Equifax and TransUnion. The bureaus will pay penalties of $23.1 million as part of a settlement with the Consumer Financial Protection Bureau, which said the firms misled consumers into paying for in-house credit scores that might be dramatically different from the FICO scores used by lenders.
Media moves: Tucker Carlson will become the anchor of Fox News Channel’s 9 p.m. Eastern time slot as Megyn Kelly moves to NBC News. Meanwhile, Greta Van Susteren, who left Fox in September over a contract issue, has landed at cable news competitor MSNBC. She will anchor a nightly 6 p.m. Eastern time program, “For the Record with Greta Van Susteren,” for the NBCUniversal-owned channel.
Monster deal: The two leading players in the energy drink market, Red Bull and Monster, long have sponsored motor races and extreme sports events. But Corona-based Monster Beverage Corp. is hoping for a fresh sales jolt by taking it a step further: The company recently signed a multiyear deal to be the title sponsor of NASCAR stock-car racing’s top series, the nation’s most popular form of motor racing.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
New sheriff in town: Jay Clayton, a Wall Street attorney, has been tapped by President-elect Donald Trump to chair the Securities and Exchange Commission. As Quartz observes, “other presidents, even Wall Street-friendly ones, have balked at appointing attorneys who have represented or done business with major investment firms.”
Bad calls: The New York Times looks at how some Indian call centers have a new focus — swindling Americans. “Though India had no reputation as a large-scale exporter of fraud in the past, it is now seen as a major center for fraud.”
Wi-Fi wonderland: You may not have known it but, says Fast Co., there’s a wireless router renaissance underway. “Eero, Plume and others are trying to remove Wi-Fi’s pain points, but better reception is just the beginning of a broader strategy.”
Silent Spring: The New Yorker has posted Rachel Carson’s brilliant reporting on insecticides, “Silent Spring,” which originally ran in the magazine in 1962. “The most alarming of all man’s assaults upon the environment is the contamination of the air, earth, rivers and seas with dangerous, and even lethal, materials.”
Taco time: Hard to top this opener on Jack in the Box tacos from the Wall Street Journal: “More than 1,000 times a minute, someone bites into what has been described as a wet envelope of cat food — and keeps eating.”
SPARE CHANGE
That WSJ story has me humming Taco’s cover of “Puttin’ on the Ritz.” But just as fun is this video from BuzzFeed showing Mexican people trying Taco Bell food for the first time.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.
