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October 21, 2004
Holiday Spending Expected to Rise
The average American consumer will spend $702.03 this holiday season,
favoring DVDs over jewelry, discount chains over department stores and
low prices over customer service, according to a survey sponsored by the
National Retail Federation, The Washington Post reported.
The poll of 7,800 consumers predicts that holiday spending will rise 4.5
percent, or about $30, over planned spending in 2003, despite rising
fuel prices, and sluggish job and wage growth. “Consumers still
seem to be willing to spend, in spite of what may be some economic
challenges,” said National Retail Federation President Tracy
Mullin. The survey, and comments from other analysts, offered hope for
retailers that 2004 holiday sales will experience the same strong growth
as last year, the newspaper reported.
Bicycle Maker Huffy Files for Chapter 11
Huffy Corp. filed for chapter 11 bankruptcy protection on Wednesday,
as the 76-year-old bicycle and sporting goods company struggles with
mounting losses and a heavy debt load, Reuters reported. Huffy has total
liabilities of $161.2 million and assets of $138.7 million, the company
said in a bankruptcy filing. In August, it said it expected to post a
loss of $70 million to $72 million in it long-delayed first-quarter
results, including $53 million in noncash charges.
The company said it plans to focus on bicycles and golf equipment
after it restructures. Earlier this year, Russell Corp bought the
company’s Huffy Sports unit, which makes basketball equipment, for
$30 million. It also sold its retail services unit, the newswire
reported.
Trump Hotels Said to Reach Deal to Avoid Bankruptcy
Trump Hotels and Casino Resorts Inc. has reached a preliminary
agreement with its investors to restructure $1.8 billion in debt,
fending off a possible bankruptcy filing and leaving Trump as the
company’s chairman and CEO, the New York Times
reported. According to two people directly involved in the
restructuring, which is expected to be announced publicly as early as
today, Trump’s stake in the company will be reduced from 56
percent of the shares to about 27 percent. Bondholders will be swapping
about $575 million in debt in return for an equity stake that will leave
them in control of about 63 percent to 65 percent of the company’s
shares, the newspaper reported.
The Real Consequences of Pension Projections
G.M., the Ford Motor Company and the auto supply giant Delphi
disclosed this week that they were among six companies asked by the
Securities and Exchange Commission (SEC) to provide information as part
of an inquiry into corporate pension and health care accounting
practices, the New York Times reported. Yesterday,
Northwest Airlines identified itself as a fourth company. Officials at
the SEC have said that they do not know of violations at the companies,
but that they are generally examining whether corporations alter
projections for health care costs, pension plan returns and other
factors as a way of manipulating earnings.
Delta, American and Northwest Airlines Report Quarterly Losses
Delta Air Lines, Northwest Airlines and the parent of American
Airlines all reported losses yesterday, the Associated Press reported.
The largest loss by far was at Delta, where bankruptcy looms unless it
can quickly win concessions from pilots and debt-holders. Soaring fuel
prices were the main reason for the losses. All three airlines reported
higher revenue, the newswire reported.
Researchers Link Casinos With Bankruptcy, Crime
California communities with Indian casinos showed a noticeable
increase in personal bankruptcies and violent crimes compared to those
without casinos over the last decade, according to a working paper by
researchers at California State University, Sacramento Ascribe Newswire
reported. Findings are from county-level data on local tax revenues,
bankruptcies, employment and crime from 1990 to 2000. Read the full
article at
href='http://www.ascribe.org/cgi-bin/spew4th.pl?ascribeid=20041019.093238&tim…'>www.ascribe.org/cgi-bin/spew4th.pl?ascribeid=20041019.093238&time=09%20….
College Students Should Steer Clear of Credit Cards
Most young adults who qualify for a credit card while attending
college have smaller balances, lower credit limits and use their credit
cards less frequently than others in the same age range, according to a
research paper, which is being published in the November 2004 issue of
the Journal of Student Financial Aid, The Washington Post
reported. Student accounts, however, have also a higher rate of
charge-offs than those being used by older adults. Read the full article
at
href='http://www.washingtonpost.com/wp-dyn/articles/A50054-2004Oct20.html'>www.washingtonpost.com/wp-dyn/articles/A50054-2004Oct20.html.
NextWave Decides on Reorganization Plan
Bankrupt wireless company NextWave Telecommunications Inc. said
yesterday it had made a decision about how it wants to reorganize the
company and asked the court for more time to file its plan, Reuters
reported. NextWave said in a recent court document that it had been
preparing alternative plans as it was approached about “several
potential transactions” and had talks on “multiple
fronts.”