BROWN-FORMAN is still “very committed” to its Finlandia vodka unit, despite struggling sales in major Russian and eastern European markets, according to Marshall Farrer, head of the distiller’s global travel retail business and a company director. Farrer’s remarks, at the annual TFWA World Exhibition & Conference now under way in Cannes, followed industry speculation earlier this year that Brown-Forman had placed Finlandia on the auction block (Spirits Business).
KINDRED said it completed its previously announced agreement to sell 12 long-term acute care hospitals in six states for $27.5 million to Curahealth, an affiliate of the private investment fund Nautic Partners. The hospitals have a total of 783 licensed beds in Arizona, Louisiana, Massachusetts, Oklahoma, Pennsylvania and Tennessee (press release). The Louisville-based hospital and nursing giant employs about 2,200 workers in the city, including at the Fourth and Broadway headquarters downtown. It has more than 100,000 workers nationwide.
YUM‘s 7,200-restaurant China Division said today it would issue 10 million common shares to Yum Brands shareholders as part of its planned spinoff next month. The offering could result in Yum China receiving proceeds of up to $54.05 million, implying a maximum offering price per share of $5.405, according to a regulatory filing. (bit.ly/2ctqkQy) The China division, which operates in more than 1,100 cities, is higher risk and potentially more rewarding, while Yum without the China division is likely to be more stable with greater cash flow (Reuters and SEC document).
PIZZA HUT has hired a Walmart technology executive to help develop digital ordering initiatives as its chief customer officer, a new position. The executive, Helen Vaid, will lead the international e-commerce, technology and operations business for the 16,000-location pizza chain. Vaid was Walmart’s vice president of digital store operations and experience. Before that, she was a general manager at Snapfish, a web-based photo-sharing and photo-printing company (press release).
KINDRED has paid a $3.1 million penalty to the federal government after failing to comply with a corporate integrity agreement it signed with regulators. The penalty came after the hospital and nursing home giant failed to correct improper billing practices in the fourth year of the five-year agreement. This penalty is the largest issued for corporate integrity violations to date, the Department of Health and Human Services Office of Inspector General said yesterday. The violations were discovered after several unannounced site visits were completed by the inspector general’s office. Under the agreement, Kindred had agreed to a number of corrective actions, including outside scrutiny of billing practices. In exchange for the agreement, the agency agreed not to exclude Kindred from participating in Medicare, Medicaid or other federal healthcare programs (Home Health Care News).
TACO BELL competitor Chipotle is launching a new marketing campaign today in a bid to convince people they can trust what’s in their burritos, nearly a year after two E. coli outbreaks sickened dozens of its customers in several states. In the campaign, the fast-Mexican chain says its now tracing ingredients back to the farm, blasting pathogens off chorizo with high-powered water jets, and requiring restaurant managers to receive food-safety certification (Wall Street Journal).
KFC: The newest in the TV commercials starring a resurrected Colonel Harland Sanders imagines him launching a professional football team, the chicken-fueled Kentucky Buckets, in a 30-second spot that starts airing today to promote $20 buckets. The chain posted the commercial to its YouTube page yesterday, where it’s already been viewed more than 153,000 times. Check it out:
The commercial stars “Saturday Night Live” cast member Rob Riggle, the latest actor to portray the KFC founder. Earlier ones were played by Darrell Hammond, Norm MacDonald, Jim Gaffigan and, most recently, perpetually tanned actor George Hamilton, as the “Extra Crispy” colonel. The campaign featuring resurrected KFC founders started in May 2015.
When the Yum unit unveiled the campaign last year, many customers were skeptical or disgusted that the chain would revive its founder — a real person — from the dead, according to Business Insider. But the controversial move has paid off for the chain; in July, Yum announced the fried chicken chain had its eighth consecutive quarter of same-store sales growth, after a period of slumping sales (Business Insider).
KINDRED‘s Gentiva Health Services unit successfully advocated for a Medicaid rule change that could extend care to 18,000 people in Mississippi. Eligible patients in the state will now be able to receive home and community-based services — “waiver services” — at the same time as hospice services. “The old program was unintentionally keeping patents away from hospice care,” Mullins told Home Health Care News. “Patients would be forced to choose between their waiver services, like Meals on Wheels, or hospice care” (Home Health Care News).
In business journalism, some of the most interesting news shows up in fine-print footnotes in documents companies file with government agencies. Hospital and nursing giant Kindred Healthcare is great example. Last spring in a statement to stockholders, it disclosed two special payments to top executives: $6 million to then-executive vice chairman Paul Diaz in connection with his leaving the CEO’s job, and $250,000 to Chief Financial Officer Steven Farber, to help him escape a high-profile dispute with a Glenview neighbor. But to uncover that, you had to follow three different footnotes on a table showing how much they got paid overall.
This leads me to another footnote, of sorts — one that appeared on a story today at Insider Louisville, the online news site launched in 2010, and to a document I’ve run across at the Securities and Exchange Commission. Together, they open a window on who’s investing in Louisville’s news media at a time when the once-dominant Courier-Journal has been losing influence amid steep staff cutbacks, shifting the balance of power in Kentucky’s biggest city. They underscore the importance of news outlets everywhere telling readers who’s behind the scenes, and about any conflicts of interest owners may pose for their publication. (I’ve got disclosures of my own.)
This morning, at the bottom of a long story about the Humana Foundation, Insider Louisville editors added this disclosure: “One of the five directors of the Humana Foundation is David A. Jones Jr., an investor of Insider Louisville.”
To be sure, close readers of Insider Louisville have known Jones was an investor for several years. In August 2014, owner Tom Cottingham told readers he’d brought in three new minority investors he knew from a prior venture: Jones; Doug Cobb, the former Greater Louisville Inc. CEO, and Jon Pyles, now the site’s vice president of marketing. The story — which carried only a “staff” byline — didn’t say how much they’d invested, nor the exact size of their stake. Cottingham said he remained the majority holder.
Now, though, an SEC document filed in April offers more clues about the publication’s investors, whom we learned this summer include a prominent heiress to the glittering Brown-Forman whiskey fortune. I can’t find any mention of the regulatory filing on Insider Louisville’s website, nor in any other media outlet in Louisville. My readers may well correct me after I publish this post; in any case, this is certainly the first time I’m writing about it.
The April 12 document shows that Insider Louisville LLC raised $975,000 from 12 investors in a $1.5 million stock offering that drew the first investment March 31. It didn’t identify the investors by name, however, and it didn’t say how big their stakes were. The first $450,000 was to pay down an undisclosed amount of debt, according to the document; anything left over would go to any of its directors: Jones, Cottingham, and a third named Jamie Wilson. (Who’s Wilson? I haven’t figured that out; maybe one of my readers knows.)
PAPA JOHN’S: The owner of three Papa John’s restaurants in New York City has agreed to pay $500,000 in back wages to more than 200 workers under a deal with state Attorney General Eric Schneiderman and the U.S. Labor Department; it’s the eighth case brought against Papa John’s franchisees by the state’s top law enforcer in the past two years. In addition to paying $500,000, franchisee Sultan Ali Lakhani must add procedures to handle employee complaints, post a statement of employees’ rights, and designate a compliance officer to submit quarterly reports to Schneiderman’s office (New York Daily News).
KINDRED is closing another hospital in Houston, the second such closing the Louisville-based hospital and nursing giant has announced there this month as it consolidates operations in the city. The Kindred Holcombe facility near Texas Medical Center will shutter in October and all 204 jobs will be eliminated; local news accounts did not say how many beds the hospital has. With the earlier planned closing of 37-bed Kindred Hospital Baytown, the company will still operate nine hospitals in the Houston area (Houston Chronicle).
FORD announced plans today to begin mass production of fully autonomous vehicles in 2021 for ride-hailing or ride-sharing services such as Uber or Lyft. The cars will be built with no steering wheel, gas or brake pedals. To advance its plan, the automaker, a major employer in Louisville, said it’s investing in or collaborating with four start-ups; doubling its Silicon Valley team, and more than doubling its Palo Alto campus in the valley. “The next decade will be defined by automation of the automobile, and we see autonomous vehicles as having as significant an impact on society as Ford’s moving assembly line did 100 years ago,” said CEO Mark Fields (video, above, and press release). In Louisville, Ford employs nearly 10,000 workers at truck and vehicle assembly factories. More about Ford’s local operations.
KINDRED is shuttering a 37-bed hospital outside Houston in Baytown, Texas, and has notified the state Workforce Commission that it’s eliminating all 33 jobs there during a two-week period starting Oct. 3. The notification letter called the closure a “strategic decision.” Kindred still will have nine long-term care hospitals in the Houston area, including Kindred Hospital Bay Area (Houston Chronicle).
TEXAS ROADHOUSE: Good luck finding the love of your life with this Craigslist Missed Connections advertisement in the Phoenix area. Yesterday (apparently) at 3:30 p.m., a man visited one of the four East Valley Texas Roadhouses for a birthday dinner. (At 3:30 p.m.? Was this an early-bird special?) “I walked in,” he writes, and saw a waitress, “the most amazing woman. She had long curly black hair, eyes that were to die for. The most beautiful face I have ever seen. . . . As I was leaving, I said, ‘I’m getting too old.’ I wish I had said something else. I hope you see this.” Problem is, he didn’t say which of the four restaurants he visited (CraigsList).
KFC: August is usually one of the slowest news periods of the year because so many people are on vacation — not making news. This brings us to the following three stories about Yum’s enormous fried chicken chain: