Sears to cut retirees’ health care subsidy
About 14,000 Sears retirees will lose a monthly health insurance subsidy as the languishing department store titan looks for ways to shave costs.
Illinois-based Sears Holdings Corp. sent letters Friday to the 14,000 Sears, Roebuck & Co. retirees and dependent spouses who have been receiving the $37 monthly health care subsidy, informing them the subsidy will be eliminated in 2015.
Only employees who retired before 2000 were eligible to receive the subsidy, which was reduced in 2006 and is applied to the monthly cost of health care coverage through Sears-sponsored group benefit plans. Anyone who retired after 2000 had their subsidy eliminated in 2006.
The move will save Sears Holdings, which owns Sears and Kmart, about $6.2 million annually. The decision has been in the works for months and was not related to the company’s recent earnings release when Sears reported its ninth consecutive quarter of losses and 30th consecutive quarter of revenue declines, spokesman Chris Brathwaite said.
There will be no change to pensions or life insurance, he added.
Atlantic City losing casinos, not business
ATLANTIC CITY, N.J. » A Wall Street firm predicted Friday that much of the revenue generated by three Atlantic City casinos that are closing will remain in the city after they’re gone.
Fitch Ratings predicted in a report that the city’s casino revenues will decline to $2.5 billion in 2015 from last year’s $2.86 billion. It also said it does not see any more casinos closing in Atlantic City for at least the next two years.
The firm also predicted that a good chunk of the money being won by the Showboat, Revel and Trump Plaza will go to the surviving Atlantic City casinos. Showboat and Revel closed last weekend; Trump Plaza shuts down Sept. 16. After that, Atlantic City will have eight casinos after starting the year with 12.
Fitch predicted at least 50 percent of Revel’s revenue will go to the remaining casinos, judging by increases the Tropicana Casino and Resort and the Golden Nugget Atlantic City have seen since the Atlantic Club closed down in January.
Buffett may take stake in Burger King
Berkshire Hathaway Inc.’s $3 billion of financing for Burger King Worldwide Inc.’s planned takeover of Tim Hortons Inc. gives billionaire Warren Buffett the option to buy a 1.75 percent stake in the combined company.
Buffett’s company received the warrant to buy common shares and agreed to purchase 30,000 preferred shares as part of the deal, Miami-based Burger King said Thursday in a regulatory filing. The perpetual preferred securities pay a 9 percent coupon. Burger King didn’t specify how many common shares Berkshire has the right to purchase.
Buffett, Berkshire’s chairman and chief executive officer, has positioned his company as a source of financing for deals and patient capital during times of crisis. During 2008, he helped Mars Inc. and Dow Chemical Co. with takeovers and injected a total of $8 billion into General Electric Co. and Goldman Sachs Group Inc.
"Berkshire’s participation on this deal demonstrates its ability to use its strong balance sheet and massive cash generation to capture very attractive returns, even without the backdrop of a financial crisis," Meyer Shields, an analyst at Keefe, Bruyette & Woods, wrote of the Burger King-Tim Horton’s transaction in an Aug. 26 research note.
The latest investment helps Buffett, 84, deploy some of Omaha, Neb.-based Berkshire’s cash pile, which grew to a record $55.5 billion at the end of June.
Chinese competitors challenge Alibaba
BEIJING » China’s biggest property developer, Wanda Group, and Internet giants Baidu and Tencent unveiled a new e-commerce venture Friday in a challenge to industry leader Alibaba Group ahead of its U.S. stock offering.
The three companies said they will integrate online and offline selling, with e-commerce services in Wanda’s 107 shopping malls, as well as its hotels and resorts. They said they would invest $814 million to start.
The venture adds to competition for Alibaba, whose Taobao, Tmall and other platforms account for some 80 percent of Chinese online commerce.
The company is preparing for a U.S. initial public offering that analysts say might value it between $150 billion and $200 billion.
IN THE NEWS
Hershey takes wraps off new corporate logo
HERSHEY, Pa. >> The Hershey Co. is rolling out a new corporate logo that features a freshly stylized version of one of its most famous chocolate products. The candy maker on Friday announced the new design, which adds a new version of the Kisses chocolate at the end of the company’s name.
It’s part of what the company calls a “disciplined identity system” designed to provide more consistency.
Stock market closed
The U.S. stock market was closed Monday for Labor Day.
ON THE MOVE
Emma Spencer Living Properties have announced the promotion of Kelsea Garlich to general manager of Volcano Village Lodge. She started working at the lodge in 2009 as well as served as an intern at the Kilauea Military Camp in Hawaii Volcanoes National Park in the food and beverage department.
UBS Financial Services has announced that Gregg Matsuura has been promoted to first vice president-investments in recognition of outstanding achievement. He has 14 years of financial adviser experience and eight years of commercial real estate development and asset management experience.
Sea Life Park has appointed Valerie King general manager. She has 25 years of executive management experience in the hospitality and tour industry, including serving as director of marketing and business development for Kualoa Ranch, president of Navatek Cruises and vice president of marketing for Atlantis Adventures.
