Day: July 30, 2016

Documents reveal the enormous cost of spinning off Yum’s China Division

KFC Shanghai
A KFC in Shanghai, where Yums’s China Division is based.

Last fall, Yum announced plans to turn the huge China Division into a standalone company, a mammoth undertaking the Louisville fast-food giant plans to complete by Oct. 31 — despite recent reports of stalled talks with two big investors.

Expenses for investment banking, legal, and other spin-related services are enormous, according to Securities and Exchange Commission documents. Yum disclosed initial expenses of $9 million in the annual report last February. They’ve mushroomed ever since, according to the most recent quarterly report:

$10 million

spent in the second quarter alone

$28 million

since the spinoff was announced in October

$58 million

projected total cost by Oct. 31

What’s at stake?
Greg Creed
Creed

Much of Yum’s future. Based in Shanghai, the China Division has 7,200 restaurants, mostly company-owned KFCs and Pizza Huts. Last year, they accounted for 61% of Yum’s $11.1 billion in revenue and 39% of $1.9 billion in profits. Overall, Yum has 43,000 restaurants. (About Yum.)

Yum CEO Greg Creed and the board of directors agreed in October to separate the China business under pressure from activist investors, including Corvex Management Founder Keith Meister, who gained a seat on the board as part of the deal. They think the sum of the parts is greater than the whole.

Yum’s risky China bet

The company has regularly warned investors about Continue reading “Documents reveal the enormous cost of spinning off Yum’s China Division”

Taco Bell’s new Cheetos burrito looks like ‘Donald Trump exploded’; Jack’s Chris Fletcher recalls distillery as a ‘magical place’; and why Goldman downgraded Ford shares

A news summary focused on 10 big employers; updated 1:29 p.m.

proxy
The new $1 sandwich will be tested in Cincinnati next month.

More than two weeks before Taco Bell even starts testing a new Cheetos-stuffed burrito in Cincinnati, social media is having a field day — and handing the Yum division a public relations bonanza. Attorney Marcy Wagman Rauer told Huffington Post the $1 sandwich looks like “Donald Trump exploded.” And everyone was retweeting San Diego musician Danny Ellis’ marijuana-inspired conclusion that it looks  “like a stoner’s dream date with death.” The chain had tested the “Cheetos Crunchwrap Slider” earlier this year in Canada, but this is the first time the snack’s being used on its menu in the U.S. (Huffington Post).

Cheetos and Trump
A hairy comparison?

In the Ohio test market, the Cincinnati Enquirer’s Ben Goldschmidt says to forget the November elections. “Sure,” he wrote yesterday, “we’re in a swing county in a swing state in a bonkers election year, but . . . we will decide for the nation if the cheesy powder of Cheetos successfully meshed with molten queso, or if it’s just an uninspiring, soggy lump in a burrito.” Much more news coverage.

Sadly, Taco Bell ranks only fourth of 10 places for potheads with the munchies, according to Stoner Days. The line-up:

  1. In-N-Out
  2. Del Taco
  3. Jack in the Box
  4. Taco Bell
  5. McDonald’s
  6. Burger King
  7. Arby’s
  8. Starbucks
  9. Chipotle
  10. Subway

Road warriors take note: Google says there are 10 Taco Bells in Cincinnati.

Taco Bells Cincy map

To be sure, it wasn’t all good news yesterday for the Yum division. In California, Taco Bell is investigating reports employees taunted a Bakersfield police officer Thursday night by making “oink, oink” sounds and laughing at the cop in the drive-thru. “Taco Bell does not tolerate discrimination in any way,” the company told 23 ABC. “We are deeply appreciative of the men and women who have taken the oath to serve and protect our communities” (23 ABC).

The chain is still smarting from an incident two weeks ago in Alabama, where a cashier refused to serve two sheriff’s deputies; the chain apologized and fired the employee, but not before it was slammed across the Internet.

Chris Fletcher
Fletcher

BROWN-FORMAN: Jack Daniel’s assistant master distiller Chris Fletcher remembers long weekends walking through Continue reading “Taco Bell’s new Cheetos burrito looks like ‘Donald Trump exploded’; Jack’s Chris Fletcher recalls distillery as a ‘magical place’; and why Goldman downgraded Ford shares”