CEO Takes The Blame As Sales Continue To Fall At Vitamin Retailer GNC

Mike Archbold fell on his sword Thursday, calling an unexpected drop in first-quarter sales at GNC a “self-inflicted wound.”

Archbold, who was hired as CEO in August to turn around a yearlong slump in sales and profit, said he mistakenly cut the Downtown-based vitamin and supplement retailer’s advertising budget by $5 million.

“We intentionally did not deploy a full slate of marketing. … This caused us to talk to our customers less, a lot less,” he told analysts. “To be clear, this was a mistake.”

Not a factor in the decline, he said, was negative publicity from a probe by the attorney general of New York that questioned the purity and authenticity of some herbal supplements sold by GNC and other retailers.

Read more: http://triblive.com/business/headlines/8253719-74/sales-million-cents#ixzz3YuG3RfYW
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Could The Mall At Steamtown Reinvent Itself With An Open-Air Market Atmosphere?

SCRANTON, PA — The Mall at Steamtown hasn’t exactly been running at full power lately.

But a couple of brothers have gone to social media to pitch an idea to put more firepower in the ailing mall, and the public is starting to take notice.

Scranton natives Michael Boyd and his brother George think creating a marketplace similar to the long-standing Reading Terminal Market in Philadelphia could be the key to the city’s revitalization.

The downward spiral of the once-vibrant downtown mall has been apparent in recent years. A walk through the two-story structure on Lackawanna Avenue last week showed 47 active store fronts and 23 shuttered ones.

Read more:  http://www.timesleader.com/news/business/151922265/

Higher Property Taxes In Westmoreland County Ruled Out Despite $15M Budget Gap

Map of Pennsylvania highlighting Westmoreland County (Photo credit: Wikipedia)

Westmoreland County commissioners said Thursday that there won’t be a property tax increase next year despite a projected deficit of $15 million.

Commissioners revealed a preliminary $340 million budget for 2015 that anticipates declines in revenue and increases in proposed expenses, offset by dipping into the county’s surplus.

If enacted, the budget proposal would deplete the surplus fund to $10.7 million.

The surplus fund should end this year at $25 million.

Read more: http://triblive.com/news/westmoreland/7200570-74/million-budget-county#ixzz3JjUBjx9a
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EDMC Loses $664M; Executives Receive Six-Figure Bonuses

Education Management Corp. lost $664 million during a difficult year in which the operator of for-profit colleges struggled with declining enrollment and intense regulatory pressure.

Compensation for CEO Edward West and CFO Mick Beekhuizen plummeted, mostly on the lower value of stock options. But two executives hired last year to handle legal and compliance matters, issues that have dogged the company, received six-figure bonuses that were guaranteed by their contracts.

The year was a difficult one for EDMC, marked by ongoing lawsuits over its recruiting practices and pressure from lenders to collect on $1.5 billion in debt. The lawsuits could prompt potentially hefty financial penalties and add to the company’s financial troubles.

Read more: http://triblive.com/business/headlines/6981929-74/compensation-total-executives#ixzz3GVevqNX1
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Staples To Shutter 225 Stores As Sales Move Online

Staples (Canada) (Photo credit: Wikipedia)

FRAMINGHAM, MA (AP) – Staples will close up to 225 stores in North America by the end of next year as it seeks to trim about $500 million in costs annually by 2015.

The nation’s largest office-supply retailer said Thursday that nearly half of its sales are now generated online, so it will aggressively cut costs to become more efficient.

Company shares dropped more than 10 percent before markets opened.

The recession did heavy damage to the industry, which is now under increasing pressure from online retailers as well as discount stores.

Read more at http://www.philly.com/philly/business/20140306_ap_77eb92fd166d43918b55776a4cd110bf.html#y7MAZEw1cUTxW8ok.99

Flurry Of Campaign Ads, Holiday Mail Helped Post Office Some, But It Still Lost $1.3 Billion

English: U.S. Post Office Lincoln Branch in Madison Township near Mansfield, Ohio. This United States Postal Service branch closed its doors at 4:30 p.m. on Friday February 11, 2011 due to the fiscal crisis that the United States Postal Service is in as of 2010-2011 and the drastic decline in mail volume. (Photo credit: Wikipedia)

WASHINGTON — The U.S. Postal Service lost $1.3 billion in the final three months of last year, despite a blizzard of campaign advertising for the fall political elections and a big holiday mail and shipping season.

The loss announced Friday was far less than the $3.3 billion in the comparable quarter the previous fiscal year, but still showed the effects of a continued decline in first-class mailing as customers continue to flock to the Internet for emailing, bill paying and the like.

In releasing their financial report, postal officials pleaded anew with Congress to give them the flexibility to better manage the agency — including to free it from a mandate that they prepay for expected retiree health care costs.

Considering its operations alone, the agency actually made $100 million delivering the mail — earning $17.7 billion in revenue against $17.6 billion in operating expenses. But the health care funding and some other expenses pushed it to a net loss.

Read more:  http://www.washingtonpost.com/politics/postal-service-lost-13-billion-package-deliveries-up-mail-continues-to-migrate-to-internet/2013/02/08/3b00ca50-720d-11e2-b3f3-b263d708ca37_story.html?hpid=z3

Journal Register Co., Parent Company Of The Mercury, Files For Chapter 11 Bankruptcy

NEW YORK, N.Y. – Digital First Media, which operates MediaNews Group, Journal Register Co. and Digital First Ventures, on Wednesday announced that JRC filed voluntary petitions for Chapter 11 bankruptcy in U.S. Bankruptcy Court for the Southern District of New York and will seek to implement a prompt sale.

“We expect the auction and sale process to take about 90 days, and we are pleased to announce the company has a signed stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC,” said John Paton, CEO of Digital First Media.

The filing enables JRC to continue normal business operations during the sale process.

Read more: http://business-news.thestreet.com/the-mercury/story/journal-register-co-parent-company-the-mercury-files-ch-11/1

Atlantic City Casinos In Slump From Increased Competition

Image via Wikipedia

I am not surprised to learn that Atlantic City is taking a huge hit from all the recent casino development in surrounding states.  Rising gas prices and a major recession are not helping things either.

Pennsylvania, under Fast Eddie, became a gambling state.   Our casinos are spread out across the state, not all in one place.  This seems to be a better strategy than New Jersey.  10 casinos are now operating in Pennsylvania.  Atlantic City has 11. 

I am sure Atlantic City depended on throngs of people from Pennsylvania coming there to gamble and spend money.  Pennsylvania may very well pass Atlantic City as the number two gambling market in the U.S. in the years to come.  Pennsylvania casino income is expected to grow to $2.7 billion dollars in 2011 while Atlantic City’s 2011 casino income is expected to fall to $3.09 billion dollars.

The last time I drove to Atlantic City, it was a ridiculously expensive trip.  Bridge tolls, Atlantic City Expressway tolls, parking and gas made it a $50 trip before I set foot in a casino or shop.  I went down for an afternoon to meet friends from high school who were staying at a casino.  I will not be making that trip again. 

Time will tell if Atlantic City can rebound or if Pennsylvania will unseat Atlantic City as the number two spot in the U.S. for gambling.

Even Limerick Township Is Not Recession Proof

Image via Wikipedia

When one thinks of communities that would have budget woes, Limerick Township is not normally a place that would pop into your head. 

The 22.6 square mile township has 13,534 inhabitants (2000 census).  85% of Limerick’s residents own a home.  The estimated median house/condo value in 2008 was $271,583.  The estimated median income in 2008 was $81,877.  Only 1.9% of its residents live below the poverty level.  These numbers are well above the state averages.

Somehow, the township found themselves with an $850,000 deficit going into their 2011 budget process.  Declines in land development and permits (recession) were blamed.   The end result was making some hard decisions about purchases and facility upgrades along with the elimination of two staff positions.

Bottom line here is that taxes will not increase for 2011 and the budget trimming will not reduce services for residents.

Demographic information is from City-data.com