Way to go WestJet. Incredible idea. Incredible video.
Some really good news for Mayfair and Caswell. From the City of Saskatoon news release.
Saskatoon City Council has recently made possible the final step in creating Saskatoon’s newest Business Improvement District (BID), which includes both sides of 33rd Street from Alberta Avenue to Avenue G.
“We are tremendously excited about establishing a BID for 33rd Street. The business owners in this area have worked very hard to achieve this goal, and it has now become a reality. We couldn’t be more pleased with Council’s decision,” says Nicola Tabb, representing the 33rd Street BID Organizing Committee.
At its November 24, 2014 meeting, City Council approved Bylaw No. 9235 – The 33rd Street Business Improvement District Bylaw, 2014. A BID is an area of commercial and industrial property owners and tenants who work in partnership to create a thriving and competitive business area.
Over the past two years, a group of dedicated business owners on 33rd Street have worked toward organizing a BID, which is made up of a variety of unique businesses such as restaurants, shops, services, and a major grocery store. The business group saw the potential in forming a BID to improve and enhance the appeal and viability of the district now and into the future.
“The creation of a BID benefits not only the 33rd Street commercial district, but the city overall,” says Alan Wallace, Director of the City of Saskatoon Planning and Development Division. “The success of other BIDs in Saskatoon has directly resulted in thriving, attractive areas where residents and visitors alike can come to work, shop, and play. The 33rd Street BID will certainly create the same positive impact for their commercial area.”
The 33rd Street BID will begin operations in 2015.
Great job by the businesses that reside on 33rd Street. If they can accomplish a fraction of what has been done by the Riversdale BID; Mayfair, Caswell, and of course some businesses in the area are going to benefit greatly.
In the nineteen fifties, people with money began leaving the cities in unprecedented numbers. They were getting married, getting jobs, starting families, and buying houses—they were moving to the suburbs. A Time Magazine article in 1954 observed: “…since 1940, almost half of the 28 million national population increase has taken place in residential suburban areas, anywhere from ten to 40 miles away from traditional big-city shopping centers. Thus, to win the new customers’ dollars, merchants will have to follow the flight to the suburbs.”
They did, and the suburban shopping mall was born.
But the original idea for the mall was not just about retail. Victor Gruen, the father of the suburban shopping mall, envisioned something much bigger. He wanted outdoor areas, banks, post offices, and supermarkets; he wanted to give the suburbs a soul, one inspired by the public squares of European cities. But that never happened. Instead malls were faceless, sprawling. Gruen was so disappointed with what malls became, he gave a speech in 1978 in which he said, “I refuse to pay alimony for those bastard developments.” Malls turned out to be the very monoliths of soullessness that Gruen had tried to overcome.
It’s not just that there are better malls than Collin Creek in the Dallas area. It’s that there are so many malls; Dallas has more shopping centers per capita than any other city in the United States. And according to some estimates, fifty percent of indoor malls nationwide will die over the next two decades—partly because some shoppers are opting for newer, better malls, but also because, as a recent Guardian article put it, “the middle class that once supported” mid-market malls is dwindling. Or, put yet another way, by retail consultant Howard Davidowitz: “What’s going on is the customers don’t have the fucking money.” Which, of course, wasn’t always the case.
As these old malls die off, they’re being replaced more and more by upscale, outdoor shopping centers—with lofts, grocery stores, offices, public meeting areas, and day cares. At least four have popped up in Dallas within the past ten years, and they’re always packed. Sixty years after Gruen’s ideas were bastardized by short-sighted developers, they are finally seeing their day. Inklings, maybe, of the suburbs finding their soul.
To counter this, maybe there is some life for malls in winter cities.
You can hardly blame the Finns for wanting to shop in giant, self-contained malls. After all, winter tends to start early in Finland (like, November) and end late (say, in April). Temperatures in Helsinki, which is at the nation’s extreme south, with a relatively mild maritime climate, rarely get above freezing in the coldest months, and have been known to go as low as -30 degrees Fahrenheit. In late December, the sun in Helsinki doesn’t rise until well after 9 a.m., sets soon after 3 p.m., and stays low in the sky — only getting to about 6.6 degrees above the horizon on December 27, for instance (compare that to New York, where it reaches an altitude of 26 degrees on the same day).
So it’s no surprise that the idea of walkable urban centers are a hard sell in Finland. Still, some in the nation are calling for Finland to rethink its love affair with the shopping mall.
Yet recently I have been shocked at how quiet Confederation Mall is (a ghost town), Lawson Heights Mall, and Midtown Plaza is when I am in there. Then you look at how busy at the same time other places are. Maybe we are growing tired of malls as well.
In September, at a speech at NYU, Holder defended the lack of prosecutions of top executives on the grounds that, in the corporate context, sometimes bad things just happen without actual people being responsible. “Responsibility remains so diffuse, and top executives so insulated,” Holder said, “that any misconduct could again be considered more a symptom of the institution’s culture than a result of the willful actions of any single individual.”
In other words, people don’t commit crimes, corporate culture commits crimes! It’s probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases.
Fleischmann, for her part, had begun to find the whole situation almost funny.
“I thought, ‘I swear, Eric Holder is gas-lighting me,’ ” she says.
Ask her where the crime was, and Fleischmann will point out exactly how her bosses at JPMorgan Chase committed criminal fraud: It’s right there in the documents; just hand her a highlighter and some Post-it notes – “We lawyers love flags” – and you will not find a more enthusiastic tour guide through a gazillion-page prospectus than Alayne Fleischmann.
She believes the proof is easily there for all the elements of the crime as defined by federal law – the bank made material misrepresentations, it made material omissions, and it did so willfully and with specific intent, consciously ignoring warnings from inside the firm and out.
She’d like to see something done about it, emphasizing that there still is time. The statute of limitations for wire fraud, for instance, has not run out, and she strongly believes there’s a case there, against the bank’s executives. She has no financial interest in any of this, no motive other than wanting the truth out. But more than anything, she wants it to be over.
In today’s America, someone like Fleischmann – an honest person caught for a little while in the wrong place at the wrong time – has to be willing to live through an epic ordeal just to get to the point of being able to open her mouth and tell a truth or two. And when she finally gets there, she still has to risk everything to take that last step. “The assumption they make is that I won’t blow up my life to do it,” Fleischmann says. “But they’re wrong about that.”
Good for her, and great for her that it’s finally out. But the big-picture ending still stings. She hopes otherwise, but the likely final verdict is a Pyrrhic victory.
Because after all this activity, all these court actions, all these penalties (both real and abortive), even after a fair amount of noise in the press, the target companies remain more ascendant than ever. The people who stole all those billions are still in place. And the bank is more untouchable than ever – former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC. As for the bank itself, its stock price has gone up since the settlement and flirts weekly with five-year highs. They may lose the odd battle, but the markets clearly believe the banks won the war. Truth is one thing, and if the right people fight hard enough, you might get to hear it from time to time. But justice is different, and still far enough away.
Writers will be paid advances around $100,000 to produce stories that will be longer than long magazine articles but shorter than books, she said. There will be “one perfect whale of a story” each month and it will be available by subscription.
Four of its 12 casinos have closed in the last year, including the Revel, the newest and glitziest, despite a $260 million, taxpayer-funded gift courtesy of Gov. Chris Christie. A fifth, the Trump Taj Mahal, is on the brink. The gaming industry—proponents never call it gambling—has lost nearly 8,000 jobs since the beginning of the year and its revenue, which hit a high of $5.2 billion in 2006, is down nearly 50 percent. Add to that the city’s $65 million budget shortfall, pending layoffs of as many as 300 city workers and a tax base in free fall.
Sure, the still-sluggish U.S. economy is a factor. The loss of the East Coast gambling monopoly that Atlantic City enjoyed for nearly 20 years is another. Poor planning, lack of foresight and the failure to expand the city’s attractions beyond casinos are part of the mix. Even acts of God played a role: Though the city wasn’t devastated in 2012 by Hurricane Sandy the way other Jersey Shore towns were, tourism plunged in the immediate aftermath at a time when the city could least afford it.
But there is something else at play, something in the city’s DNA that is painfully obvious to anyone who’s lived or worked there.
Even during its halcyon days, Atlantic City was an enterprise built around blue smoke and mirrors. Think, Nucky Johnson, the inspiration for HBO’s Boardwalk Empire, and the wide-open rackets of gambling, booze and prostitution during Prohibition.
It was all about grabbing whatever you could, whenever you could from whomever you could. The city worked on a 12-week economy, Memorial Day to Labor Day. Get the tourists and vacationers into town. Sell them the beach and the Boardwalk and then send them home broke. The Miss America Pageant, held in Atlantic City for most of its years, was part of that con. It was the 1920s brainchild of a city huckster looking for a way to extend the summer season for another week. The city was born as a come-on, a fugazy.
Wonder why Atlantic City is failing? The better question, the one asked by people who know the town: Why did anyone think it would ever succeed?
The community that epitomizes the pollution warehouses can bring is Mira Loma.“Our quality of life is in the tubes,” said Gene Proctor, 73, who has lived in Mira Loma Village for 43 years. “I wish people shopping in Tucson, Arizona, in other places, I wish they could see the little kids around here, their respiratory problems.” His great-granddaughter has asthma, and his 3-year-old great-grandson, he said, “coughs like a smoker.”
Population 21,000, Mira Loma is so small and poor it doesn’t have a movie theater, a community center, or even a moderately upscale restaurant. What it does have are 90 warehouses and a whole lot of big rigs: Trucks rumble through 15,000 times every day. In just half an hour on a recent afternoon, 269 trucks passed by the big plate glass window in the front of the Farmer Boys truck stop on Etiwanda Avenue.
That is more than one every seven seconds.
Avol, the professor at the USC Keck School of Medicine, began visiting the town in the early 1990s as part of a study of air pollution and children’s health across Southern California. Back then, he said, researchers chose Mira Loma because it sits at the “end of the tailpipe” of the Los Angeles basin, meaning the prevailing winds off the Pacific Ocean blow L.A.’s infamous smog east until much of it arrives in Mira Loma. So it was rural yet had a lot of ozone and smog. Other places in the study, such as Santa Barbara and Long Beach, were picked because they were thought to boast clean air or because they were in industrial areas.
When the study began, Mira Loma residents complained to researchers about the smell of dairy cows, herds of which clustered on vast pastures and cow yards. But in 1987, Riverside county supervisors revamped the general plan for Mira Loma, clearing the way for massive warehouse development.
“In the course of a few years, the dairies disappeared,” and what had been “open pasture became streets and warehouses, lined with trucks,” Avol said. “Mira Loma turned out to be a very interesting place to study.”
The trucks made the already bad air worse, bringing in diesel particulates, very small particles that can enter the lungs and travel to tissues throughout the body. They are associated with asthma, heart disease, neurological problems, and cancer.
In Mira Loma, children were found to be growing up with stunted lungs compared with children living in places with better air. Their lungs were growing at a rate that was 1 to 1.5% slower, Avol said, so that “after their teen years, they were about 10 to 12% lower in lung function than children who had grown up in cleaner places.”
He added: “We have no information at this point that supports the idea that they ever catch up.”
Studies from other Inland Empire communities are also dire. In a neighborhood near the BNSF rail yard in the city of San Bernardino, Loma Linda University researchers found that adults have more respiratory problems, and children alarmingly high rates of asthma, even when compared with other polluted communities.
There are more than forty thousand Chinese restaurants across the country—nearly three times the number of McDonald’s outlets. There is one in Pinedale, Wyoming (population 2,043), and one in Old Forge, New York (population 756); Belle Vernon, Pennsylvania (population 1,085), has three. Most are family operations, staffed by immigrants who pass through for a few months at a time, living in houses and apartments that have been converted into makeshift dormitories. The restaurants, connected by Chinese-run bus companies to New York, Chicago, and San Francisco, make up an underground network—supported by employment agencies, immigrant hostels, and expensive asylum lawyers—that reaches back to villages and cities in China, which are being abandoned for an ideal of American life that is not quite real.
Rain, who asked that I use his adopted English name to protect his identity, is reedy and slight, with a wide face and sloping cheekbones. He is observant, in no hurry to speak, but he is more cagey than timid. Like his boss, and like everyone else who works at the restaurant, he is primarily concerned with saving as much money as possible. He needs to pay the snakehead that got him to the U.S. and send money to his family in China. He harbors the vague suspicion that everyone around him is angling for more money, less work, or some other benefit at his expense. So, instead of conversation, Rain occupies himself with the math of a transient cook: the time it takes to clean the shrimp, the days before he can visit his girlfriend in New York, and the balance of his debts. At night, he lies on a cot in his boss’s otherwise empty living room, mulling the slow processing of his green card. During the day, if he’s feeling bold, he walks across the strip-mall parking lot to order lunch at Subway, pointing at the menu when he doesn’t know the English word for something.
“I understand why he acts like this,” Rain told me, about his boss. “He’s been working in that restaurant for almost twenty years. He goes back and forth between the restaurant and the dorm where we live. Back and forth, back and forth, every day for years.” The boss’s wife and kids are in China. “You do this kind of work for that long, and you start to lose perspective.” Rain pinched his fingers together. “Your world is this small.”
It can get kind of better
Six mornings a week, the boss picks up Rain and the other workers from their dorm and takes them to the restaurant. Their preparations have a catechistic order: first the rice cooker, then dishes for the buffet, then those for the lunch rush. Twice a week, a Chinese-run company brings supplies, and everyone gathers to butcher meat, hacking it into small pieces for quick cooking. They put on rubber gloves and pour salt and cornstarch over the meat, mix it by hand, then seal it and put it into the freezer. Chinese kitchens in the U.S. have none of the badinage that makes for good reality TV. In Rain’s kitchen, the only person who talks is the boss, complaining. When a buffet tray gets low, a waiter calls through an intercom, set at a startling volume: “We need more pineapple chicken up front!”
When Rain arrived in the U.S., he assumed that he had a fair proficiency with Chinese food. His father had prided himself on his culinary skill, and his mother was a capable cook, too. She taught him when to add spice to a dish, when to temper it with Chinese celery. Rain worked briefly as a fry cook in his village, and found that he had absorbed some of his parents’ knowledge. “Even if I’ve never cooked a dish before, I can think about it and draw from my experience,” he said. Having grown up on his father’s subtly flavored fish soups, he was surprised by American Chinese food. Americans seemed to eat like kids: they love starches and sweet things, and are frightened of meat and fish with bones in it. “Americans eat all that fried stuff,” he told me. “It’s not healthy.” Real Chinese food is more refined: “You have to spend a lot of time studying and really understanding it.”
In Maryland, most of the patrons seem to come for the buffet and eat as much as they can. Still, Rain loves watching people in the dining room. “I like seeing a clean plate,” he said. “I like it when people take the first bite of my food and they start nodding their head.” He spends hours trying to create a perfectly round Chinese omelette. “There’s a lot of kung fu in making egg foo young,” he told me. “If you have time, you’ll make it really perfect. You’ll make it bigger, better-looking, rounder. They’ll think, I spent so little money and I got such good food, and on top of that it’s good-looking. And then maybe they’ll come back.”
Rain viewed the job in Maryland as an opportunity to expand his repertoire. “In a takeout restaurant, people order the same dishes over and over,” he said. At a bigger restaurant, he could learn new dishes. And his salary—twenty-eight hundred dollars a month—was good, but not good enough to arouse concern. “If you come across a job paying three thousand, you think there must be something wrong with that restaurant,” he told me.
Rain lives with five co-workers in a red brick town house that his boss owns, part of a woodsy development near the restaurant. The house is tidy; there are three floors covered with white carpeting, and each worker has been supplied with an identical cot, a desk, a chair, and a lamp. “Some bosses don’t take care of the houses,” Rain said. “If they’re renting the house, especially, they don’t care. The rooms will actually smell.” Every restaurant worker has a story of sleeping in a dank basement or being packed in a room with five other people. Many complain of living in a house that has no washing machine, and being forced to spend their day off scrubbing their grease-spattered T-shirts in a sink.
So this is why he stays
For many restaurant workers, the decision to come to the U.S. is irrevocable. But, as the disappointments of immigrant life accrue, it can be hard not to imagine that things might be better elsewhere. Chinese-Americans, despite a good public image, suffer higher rates of poverty than the general public. Mental-health problems are an increasing concern in New York’s immigrant communities. In parts of China where the growing economy has given people more options, the allure of working in the U.S. has faded. This February, in a hostel in Queens, I met a woman who had just returned from a difficult day of job hunting. “I thought America would be heaven, and all it is is cold!” she complained. She returned to Beijing after four months. In Fuzhou, a taxi-driver told me that he was glad his attempts to emigrate had failed. “My father says that having a son in the United States is like having no son at all,” he said.
Rain tried not to dwell on returning to Maryland, where he was due in a few days. Everyone else who had worked at the restaurant when he started had been driven off by the boss’s temper. “And it’s so far away,” Rain said. If he could find a job somewhere closer, he could see Annie every weekend. As his family’s only son, Rain feels increasing pressure to send money home to his mother. But, he reasoned, everyone who comes to the U.S. should be prepared for hardship. “Everything we do, we do for the next generation,” he said, and added, “No matter what, it beats sitting around in the village.”
Interesting article on what happens when your corporate culture goes bad.
Meanwhile, in arguably one of the worst decisions ever made by a major corporate CEO, Zander struck a deal with his Silicon Valley friend Steve Jobs, the CEO of Apple. Together their companies created a Motorola iTunes phone, the first phone connected to Apple’s music store. “We can’t think of a more natural partnership than this one with Apple,” Zander said at the time. Named the Rokr, the phone launched in the fall of 2005. Jobs, who introduced it, called it “an iPod Shuffle right on your phone.”
Zander says he believed that by working with Apple, Motorola could become cool again. But much as it had taught the Chinese to compete with it years before, Motorola was teaching one of the most creative, competitive, and consumer-savvy companies of all time how to make a phone.
Two years later, when Jobs introduced the first iPhone, Zander’s Motorola was still pushing Razrs, pumping up sales by taking new variations further and further downmarket. The result: ever-lower profit margins. One analyst calculated that the company made, on average, only about $5 per device.
Partly because of the huge layoffs of recent years, Motorola’s innovation machine was stalling. The company had long numbered among the top 10 American firms registering U.S. patents, notes analyst Joan Lappin; by 2006 it dropped to No. 34.
Zander insists that he saw the smartphone onslaught coming but that Motorola “didn’t have the DNA or the people” to understand the software involved. He also blames a less-than-speedy Motorola supplier that, he says, caused the company to miss nearly a year in the product cycle. “We should have just broken the contract” with the supplier, he says now. “The one regret I have is that I should have taken myself out of the CEO job and run the [phone] division [myself].”
Another mistake: Zander never engaged in China the way the Galvins had, leaving the details to his division heads and country managers. When China upped its networks to 3G, his managers pushed what they had—older 2G phones—at steep discounts in order to preserve market share, unbeknownst to the CEO. The collapse of the China business in 2007 left Zander dumbstruck. That year the South Korean company Samsung topped Motorola in phone sales for the first time, and it never looked back.
It’s bad news for content providers because AOL makes no money from them at all. Instead they make all of their money from old AOL dial-up subscribers who haven’t looked at their credit card statement in a very long time.
AOL beat Wall Street’s Q2 revenue and profit numbers. And, like the last few quarters, the company says that its content business — sites like Huffington Post and TechCrunch — was profitable, if you’re willing to accept a fuzzy definition of profit.
But as always, the most amazing thing about AOL’s business is the thing that drives AOL’s business: Millions of people, who started paying the company a monthly fee for Internet access more than a decade ago, who continue to pay the company a monthly fee for Internet access, even though they likely aren’t getting Internet access from AOL anymore.
AOL doesn’t break out precise earnings numbers for this business, but it gives you enough hints to understand that it’s enormously profitable. As it should be!
Tim Armstrong’s company says its subscription business generated $143 million in “Adjusted OIBDA” – its proxy for operating income — last quarter. That’s more than the $121 million in Adjusted OIBDA that the entire company generated.
Here’s how it makes that money: Getting a shrinking number of subscribers — 2.34 million this quarter, down from 3.62 million at the beginning of 2011 — to pay an increasing amount — the average AOL subscriber now pays $20.86 per month, up from around $18 a few years ago.
“You came, you shopped, you dressed nice – you went to the mall. That’s what people did,” says Lawless, a pseudonymous photographer who grew up in a suburb of nearby Cleveland. “It was very consumer-driven and kind of had an ugly side, but there was something beautiful about it. There was something there.”
Gazing down at the motionless escalators, dead plants and empty benches below, he adds: “It’s still beautiful, though. It’s almost like ancient ruins.”
Dying shopping malls are speckled across the United States, often in middle-class suburbs wrestling with socioeconomic shifts. Some, like Rolling Acres, have already succumbed. Estimates on the share that might close or be repurposed in coming decades range from 15 to 50%. Americans are returning downtown; online shopping is taking a 6% bite out of brick-and-mortar sales; and to many iPhone-clutching, city-dwelling and frequently jobless young people, the culture that spawned satire like Mallrats seems increasingly dated, even cartoonish.
According to longtime retail consultant Howard Davidowitz, numerous midmarket malls, many of them born during the country’s suburban explosion after the second world war, could very well share Rolling Acres’ fate. “They’re going, going, gone,” Davidowitz says. “They’re trying to change; they’re trying to get different kinds of anchors, discount stores … [But] what’s going on is the customers don’t have the fucking money. That’s it. This isn’t rocket science.”
Of course it didn’t help that they were built with no urban planning principles in mind.
For mid-century Americans, these gleaming marketplaces provided an almost utopian alternative to the urban commercial district, an artificial downtown with less crime and fewer vermin. As Joan Didion wrote in 1979, malls became “cities in which no one lives but everyone consumes”. Peppered throughout disconnected suburbs, they were a place to see and be seen, something shoppers have craved since the days of the Greek agora. And they quickly matured into a self-contained ecosystem, with their own species – mall rats, mall cops, mall walkers – and an annual feeding frenzy known as Black Friday.
“Local governments had never dealt with this sort of development and were basically bamboozled [by developers],” Underhill says of the mall planning process. “In contrast to Europe, where shopping malls are much more a product of public-private negotiation and funding, here in the US most were built under what I call ‘cowboy conditions’.”
Shopping centres in Europe might contain grocery stores or childcare centres, while those in Japan are often built around mass transit. But the suburban American variety is hard to get to and sells “apparel and gifts and damn little else”, Underhill says.
Same thing in the largely empty Confederation Mall. The mall emptied out after rents skyrocketed in Saskatoon. What used to be disposable income is now needed for rent. In that way, malls are a reflection of the economic health of the surrounding communities.
Although some countries and cities have managed to profit from well-run major sports events such as the FIFA World Cup and the Olympics, they’re far from the norm, a prominent professor of economics says.
Victor Matheson, a professor of economics at the College of the Holy Cross in Newton, Mass., says prospective hosts need to think twice about whether the massive outlays of cash are worth it in the long run.
“The economic benefit is typically zero,” Matheson says in an interview set to air on CBC’s Lang & O’Leary Exchange on Tuesday. And even when there is a modest gain, “it’s not enough to justify the price tag,” he says.
I think we know who to blame
Because the IOC and FIFA make their money from selling TV and merchandising rights, they have no incentive to keep costs from ballooning, Matheson says.
“On paper, the IOC and FIFA don’t care whether it costs $51 billion to host the Olympics in Sochi or $14 billion to host the World Cup in Brazil, because ‘I’m not paying those costs,'” Matheson says.
Construction has not begun on a massive trade and exhibition centre South of Saskatoon.
“I think with a project of this magnitude, there are small delays that are along the way and I think they just want to make sure they got all their bases covered,” said Rural Municipality of Dundurn Reeve Fred Wilson on Monday.
The first phase of the Dundurn International Exhibition Centre is expected to start this spring, but repeated requests for an update from Brightenview Development International Inc. have gone unanswered.
Last fall, crews were doing pre-construction work like filling sloughs and clearing brush on the piece of land that was purchased from the rural municipality.
In November, Lorne Nystrom, public affairs with Brightenview, said the project was advancing as planned.
“Different builders are being interviewed over the fall and early winter, that will all be in place in time for starting construction sometime in the spring,” he said back on Nov. 1, 2013.
The first phase of the project is expected to take 18 to 24 months to build at an estimated cost of $120 million. The building will be 300,000 sq. ft., and hold 350 showrooms for businesses from China.
Help me out here. Saskatoon has a nice looking airport but it is no where near busy enough to be a hub which means we don’t get a lot of flights from major cities where retailers are headquartered. This is supposed to be a business to business enterprise centre but why build one in a location that would require a layover in Toronto, Calgary, or Edmonton and then an additional drive. These places are traditionally built near airport hubs and are normally located in China where retailers and companies can liaison with the factories easily. In fact infrastructure means so much to these deals that Chinese cities are going deep into debt to facilitate them getting built.
I know land is cheap around Dundurn but this deal makes no sense. This feels like so many of those Devine era ideas that never happened for one reason or another.
The stunning collapse of Heenan Blaikie LLP, once one of Canada’s largest and most prestigious law firms, stemmed from a “loss of trust” in management over international business activities including dubious forays into Africa, where former partner Jacques Bouchard and former prime minister Jean Chrétien lobbied governments on behalf of clients, former Heenan partners and associates say.
Founded in Montreal in 1973, Heenan grew from 18 lawyers to more than 500, in offices across Canada and in Paris, where it established a beachhead in 2009. It was considered a rock-solid full-service firm — and a favourite of the Canadian establishment — until a crisis of confidence caused its foundations to crack. Lawyers began leaving, first in a trickle, then in droves, and the whole enterprise came crashing down this month.
Increasing financial pressures and friction between partners in Montreal and Toronto were key factors behind Heenan’s failure, the biggest ever for a law firm in Canada. “Montreal didn’t understand Toronto; Toronto felt the Montreal office was way overpaid and overpraised,” said one former partner.
But many also agree that Heenan’s excursions into Africa caused so much tension and tumult that partners began shaking their heads and taking their leave. “People like me said to themselves, ‘I want to work at a firm that values the practice of law in Canada, not international dictators,’” another former Heenan partner told the National Post. “It’s not what I signed up for.” He quit the firm last year.
There came “a point where confidence and faith started to disappear,” said Jean-Francois Mercadier, managing partner of the firm’s former group in Paris, Heenan Blaikie AARPI. “Partners started to lose any kind of faith in the management of the firm. There was a loss of trust in the partnership, and I think the origin is in the Jacques Bouchard story.”
While the story is about Wal-Mart, the interesting point is that failure comes very, very quickly in retail.
Wal-Mart recently reported that it will be laying off 2,300 workers at its Sam’s Club subsidiary, reportedly to cut the fat of middle management. Layoffs in and of themselves aren’t uncommon at any large company — competitor Target (NYSE: TGT ) also recently said it would lay off nearly 500 employees and keep hundreds more positions vacant — but such personnel reductions also aren’t something a growing company does very often.
What’s worth keeping an eye on is whether the Sam’s Club layoffs are a symptom of much larger problems at Wal-Mart. The company has been a giant of retail for decades, but there are signs that its reign is coming to an end.
Retail is a tough business to be in.
It doesn’t take long for a retailer to go from the top of the world to bankrupt. Kmart lost just $22 million in the second quarter of 2001, but was bankrupt by Jan. 22, 2002. In the four months leading up to bankruptcy, same-store sales fell 1.8%, 4.4%, 2.6%, and 1%, respectively, from a year earlier. You don’t need a big decline in sales to suck up all of your profits in retail.
Circuit City reported a 4.2% rise in same-store sales as late as December 2006, even raising its fiscal-year guidance to growth of 7%-8% in U.S. stores. But by December 2007, same-store sales were down 11% for the month and the company would be out of business by November 2008. From optimism to bust in less than two years.
The reason that retailers are sensitive to declines in sales is that there is a lot of overhead that goes into selling in brick-and-mortar stores. Wal-Mart spent $89.2 billion on overhead over the past year, and based on current margins and overhead spending, it would only take a 13.6% decline in sales to eat up all of Wal-Mart’s profits.
Amazon is Wal-Mart’s biggest competitor
What makes Amazon a bigger threat today is the company’s sheer size. It’s now bigger than Target, and every percentage point of growth takes growth away from Wal-Mart. In fact, Wal-Mart’s budget-conscious consumers are probably more likely to shop on Amazon than Target’s consumers.