Tag: Big Employers

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Amazon rips new high; B-F’s shares said looking ‘pricey,’ could tank 10%; and Pizza Hut, KFC push ahead in Myanmar
Amazon Japan
Amazon launched its Prime video service in Japan last fall.

A news summary, focused on big employers; updated 4:12 p.m.

AMAZON shares notched a record $724.23 intraday high before closing moments ago at $722.79, up 1.5%; U.S. markets overall were weak (Google Finance). The online giant announced at least a dozen original video series for Amazon Japan, less than a year after entering the video market there (Deadline). More fresh Amazon news.

BROWN-FORMAN‘s stock is now looking pricey after a decade of 12.5% average annual returns that beat the Standard & Poor’s 500 index by five percentage points, according to financial weekly Barron’s. Class B shares closed at $98 on Friday and are now trading at 27 times forward earnings forecasts vs. a 10-year average of 21. The culprit: Revenue growth at the spirits and wine giant has slowed on currency swings, a problem that could soon fix itself. But by then, the company will face tough comparisons in a market that’s already crowded. Only one or two things must go wrong for shares to fall 10% or more (Barron’s). B shares were trading modestly lower 90 minutes into trading; the voting Class A shares were flat. About Brown-Forman.

PIZZA HUT and KFC are charging ahead with expansions in the former pariah nation of Myanmar after the U.S. Treasury’s easing of sanctions over human rights abuses. Pizza Hut opened one outlet last year; plans another three this year, and 20 over the next five years. KFC opened two locations  on top of five others — including one at Yangon International Airport that was blessed by monks during an opening ceremony April 6 (Global Meat News).

TACO BELL is planning three more urban-focused Cantinas, in Atlanta; Fayetteville, Ark., and Austin — areas with lots of coveted millennial college students attracted to the alcoholic beverages on menus; these newest locations follow another already in the works in Berkeley, Calif. (Eater Atlanta). Launched last year with locations in Chicago and San Francisco, Cantinas also rely heavily on technology: Every part of ordering is made easier through digital menu boards, TV monitors and Taco Bell’s mobile ordering and payment app pick up (press release). Also, 300 junior and senior high school students from 38 states who’ve won $1,000 scholarships from the Taco Bell and Get Schooled foundations will get their photos featured on a six-story digital billboard June 8 in the nation’s No. 1 tourist attraction: Times Square. This is the Graduate for Más Times Square Yearbook’s second year (Magnolia Reporter).

dd72ef_c0fd1a9b1cd54df5a2778d9922efc6eeIn other news, KMAC has postponed its reopening until July 1 because of construction delays. The $3 million renovation of the arts and crafts museum will streamline 20,000 square feet of exhibition space and 6,000 square feet of public area at its historic location at 715 West Main St. (press release). KMAC was to open June 4, with admission free for a year, underwritten by a gift from Dental Dental of Kentucky.

U.S. stocks zig-zagged, with major indices closely lower as traders looked for fresh clues on whether the Federal Reserve will hike interest rates in June (Google Finance). Shares in the 11-employer Boulevard Stock Portfolio tanked, too; Churchill Downs was the biggest loser, closing down 2% at $125.51.

And Louisville native Jennifer Lawrence’s newest entry in the “X-Men” franchise, “Apocalypse,” took the top box office spot with an estimated $80 million sales over the four-day holiday weekend. But that was a big decline from “X-Men: Days of Future Past,” which opened to $110.5 million on Memorial Day weekend in 2014 (WMDT). Watch the trailer:

Quote Unquote

Paige Dudek“Even my centerpiece in my apartment right now is a bowl of a variety of Taco Bell hot sauces. In fact, for my senior year of high school, I was Taco Bell hot sauce for Halloween.”

— UCLA psychology student Paige Dudek, who readily admits to being obsessed with Taco Bell, in a letter to Yum CEO Greg Creed asking to spend her 21st birthday at company headquarters. This month, she got her wish.

Photo: Paige Dudek, in a photo she included with her make-my-wish-come-true letter.

Latest Headlines

$1.7B deal to sell Middle East Hut-KFC franchiser collapses

A news summary, focused on on big employers; updated 1:31 p.m.

YUM: A proposed $1.7 billion deal to sell a majority stake in the Middle Eastern franchise rights-owner of Pizza Hut and KFC to a local group of businessmen has been scrapped. Kuwait Food Co. had been up for sale for years, but talks to sell failed amid a diminished appetite for large transactions in a region where low oil prices have dented investors’ confidence (Wall Street Journal).

GE logoGE picked Boston for its new headquarters, but not before the border state of Rhode Island made its case by comparing itself favorably on labor costs. The average R.I. tech worker makes $93,000 per year vs. $109,000 in Massachusetts, state officials said. Gov. Gina Raimondo told The Providence Journal that the state’s final offer to GE was more than $100 million and “competitive” with the Massachusetts package. Providence and New York City were among the finalists before GE chose Boston in January. (Boston Globe).

In other news, over the past four years, the Louisville police have logged more than 9,200 calls for service from six area Walmarts, 33% more than the next-highest location, seven area Kroger stores (WDRB).

Entrepreneurs

In Brown-Forman’s first family, an exceptional tale of beating the odds for 150 years

Boulevard focuses on news about some of Louisville’s biggest employers, nonprofits, and cultural institutions. This is one in an occasional series about them.

The spirits and wine company best known for its Jack Daniel’s, Old Forrester and Korbel brands is one of Louisville’s most storied companies. George Garvin Brown, a young pharmaceuticals salesman, started it in 1870 with $5,500* in saved and borrowed money.

Nearly 150 years later, his fifth-generation descendants sit on the board of directors, which George Garvin Brown IV chairs. And the company employs 4,000 people worldwide, with 1,000 in the Louisville area at the headquarters at 840 Dixie Highway and elsewhere.

Garvin Brown IV
Garvin Brown IV

The Browns control the company through their majority ownership of the voting Class A shares — a stake worth more than $10 billion, making them America’s 20th most-wealthy family, according to Forbes magazine. The Browns and the company are major supporters of Louisville cultural institutions, including the Speed Art Museum, Frazier Museum, and Actors Theatre.

The family’s hold on Brown-Forman is exceptionally rare in American business. More than 30% of all family-owned companies survive into the second generation, according to the Family Business Alliance. But the numbers dwindle rapidly after that: Just 12% make it to the third generation, and a slim 3% survive to the fourth and beyond. With the ascension of three new fifth-generation Browns to the board of directors Thursday, Brown-Forman is now firmly in fifth-generation hands.

To be sure, there are other resilient families. Just last month, Walmart announced a third generation member — Helen and Sam Walton’s grandson, Steuart Walton — was joining the board. The Mars family still owns their candy company, 105 years later. And the Sulzbergers are grooming a fourth generation to run The New York Times.

But other clans are struggling: The Redstones are now embroiled in a jaw-dropping battle over a $40 billion empire that includes Viacom and CBS. A family fight over the future of the Al Schneider real estate fortune has pit sisters against sisters. And we all know about the collapse of the Bingham family’s media holdings amid third-generation infighting in the 1980s.

In Thursday’s reshuffling of the board room, the Browns hope to avoid that fate.

Latest Headlines

KFC in U.K. fined $126K after failed health inspection; and Mid-City’s renovation delay was ‘a disaster to my tenants’

A news summary, focused on big employers; updated 8:42 a.m.

KFC: British authorities have fined the restaurant chain $126,000 after it pled guilty in Cwmbran Magistrates’ Court to three charges over hygiene issues at a Pontypool restaurant in Wales last year. An environmental health inspector found no hot water in the bathrooms or food preparation areas, meaning employees couldn’t properly wash their hands, and the premises and food equipment could not be cleaned. The problem stemmed from a boiler that had failed 10 days before the inspection. Janet Cox, head of health, safety and environment at KFC U.K. said the company accepted the findings, and noted that 97% of the 890 U.K. restaurants have a food hygiene score of four out of five or above (Wales Online).

Louisville Magazine June 2016In other news, Mid-City Mall’s $1 million renovation last year was slowed by the discovery of asbestos in the roof, delaying completion of the nearly 60-year-old Highlands institution past the critical Christmas shopping season. “It’s been a disaster to my tenants,” majority owner Sandy Metts told Louisville Magazine in the just-published June issue. Metts, whose family bought the Bardstown Road property in 1976, had to reduce rent, and plans for renovating the Baxter Street side are now on hold.

Metts had to please critics who weren’t happy with the design from the git-go. “This is lipstick on a very old pig,” Debra Richards Harlan told the Bardstown Road Overlay District during the planning stages last year, according to WDRB. This was the first renovation since the 1980s. The mall’s development started in 1959, and was built on the former site of the German Protestant Orphan’s Home; photo, below:

German Protestant Orphan's Home
The front entrance to the orphanage in 1927, in this photo from the University of Louisville Photographic Archives.

And finally, private-equity shop Blue Equity of Louisville bought 3 Kings Entertainment, a broadcasting talent agency in Washington representing more than 100 news anchors, reporters, sportscasters and other media personalities for an undisclosed amount. The deal comes as Blue Equity builds a new sports and entertainment platform (Sports Business Daily).

Entrepreneurs

Kindred is a home-grown Louisville company that almost wasn’t
Kindred headquarters
The hospital and nursing home giant’s headquarters at Fourth and Broadway.

Boulevard focuses on news about some of Louisville’s biggest employers, nonprofits, and cultural institutions. This is one in an occasional series about them.

Kindred Healthcare traces its history to the 1985 launch of a predecessor, Vencor, that ran long-term acute care hospitals. By 1999, Vencor had morphed into a much bigger enterprise, with 300 nursing homes and 60 hospitals — and too much debt. Then it got clobbered when the federal government cut Medicare payments at a time when they accounted for 30% of a typical nursing home’s revenue.

Unable to pay its bills, Vencor sought Chapter 11 bankruptcy court protection in September 1999 after suffering staggering losses: $600 million in the fourth quarter of 1998 and $64 million in the first half of 1999, according to The New York Times. Vencor warned shareholders that its very survival was at stake.

But less than two years later, April 2001, it emerged from court protection with a new name, Kindred, and a new business plan. It is now a stronger and bigger company that sums up its operations in a very long sentence:

“Kindred through its subsidiaries had approximately 102,000 employees providing healthcare services in 2,692 locations in 46 states, including 95 transitional care hospitals, 18 inpatient rehabilitation hospitals, 90 nursing centers, 19 sub-acute units, 604 Kindred at Home home health, hospice and non-medical home care sites of service, 100 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,766 non-affiliated sites of service.”

Considerable growth came last year when Kindred completed its $1.8 billion takeover of Gentiva Health Services, a big Atlanta-based provider of hospice services, at-home nursing care and physical therapy. That deal was announced in October 2014.

Kindred is one of only four Louisville companies in the Fortune 500 list of biggest businesses. In June 2016, it was ranked No. 372 — a big leap up from 491 in 2015. (The other three in Louisville are Humana, No. 52; Yum Brands, 218; and Brown-Forman, 702.)

Benjamin Breier
Breier

Kindred is still growing. It broke ground this year on an expansion of its headquarters at Fourth and Broadway, to house up to 500 new employees in the years ahead. The company is led by CEO Benjamin Breier.

Not to be missed: Kaleidoscope, an online gallery of writing, photography, and other artwork created by Kindred’s patients and residents.