Unstructured Finance

The waiters, the iPhone, the scalper and the Maltese

That’s a handy way to describe the zone around the Apple Store on Fifth Avenue in New York City. As you can see from the photos, folks were getting pretty ragged by Friday afternoon.

iphone crowd shot.jpg

the Apple sign

Then there was Imran Khan, the entrepreneur who tried to sell his seat in line. He said his best offer was $4,500 when we talked to him earlier on Friday. He was holding out for the big money, last we checked.

iphone imran khan and sarah.jpg

Jennifer Mendlowitz, meanwhile, brought her Maltese, Emma, and the Princess Diana biography by Tina Brown. Emma turns four next week!

Jennifer (r), Emma (l)

Online eyeliner

lipstick.jpgOnline sales of beauty products makes up four percent of sales in the more than $42 billion business  — and are growing fast, according to a consumer research report.
One in ten women said they hit the Web for their skin care, makeup and perfume needs, according to a report titled “Emerging Channels: Beauty Care Products Over the Internet” by retail research firm NPD Group. More than 15,00 women were survey.
Forty three percent of them said they shopped more online in 2006 than in 2005.
Why? Because it sure beats standing in lines at stores.
More than 74 percent of these women, aged between 18 and 64, said it saved time while about 70 percent thought “its easier/quicker to shop online.”
That said, only their trusted brands enjoy good online sales, said NPD senior beauty analyst Karen Grant.
“We find that women are less accepting of buying new brands over the Internet, but they are spending their money on brands they know and trust,” Grant said.
That could spell good news for beauty companies like Estee Lauder  and Elizabeth Arden, which have said they felt a continuing pinch in U.S. sales following the Macy’s/May Department stores mergers.
In the past quarter, Estee said positive internet sales were partly responsible for offsetting weak U.S. sales.
Fifteen percent of women in the $75,000 and over range shopped beauty online, compared to 10 percent in the $35,000 to $44,000 category and 7 percent in households that make less than $35,000.
And “baby boomer” women — those aged between 45 and 64 — shop the most online, followed by those who are in the 18 to 34 age range, according to the survey.

 – Written by Aarthi Sivaraman

Audio – Might Chinese wearing Gucci sunglasses buy Toll Brothers houses?

sunglasses.jpgToll Brothers Chief Executive Robert Toll is seeing a link between Chinese people wearing Gucci sunglasses and a business opportunity. And that’s one reason he is about to send a team to scout out possible homebuilding joint ventures in China’s first and second-tier cities, Toll said at the Reuters Global Real Estate summit.

China’s a solid prospect for Toll because its expanding and aspiring middle class has already encountered the company, which bills itself as “America’s luxury homebuilder,” on the Internet, he said.

Click here to hear Toll on why he sees brand-happy Chinese as Toll Brothers buyers.

Real Estate M&A Going From Hot to Not

RealEstate07.jpgThe Reuters Real Estate Summit held in New York this week had a clear message for property dealmakers: If you’re waiting for the M&A cycle to kick into high gear, it could be a while. In fact, it’s more likely the cycle is headed for a dry spell, they said.

Indeed, with commerical property investors spooked by CMBS concerns and homebuilders seeing another year of slumping markets, the M&A outlook at the summit this week wasn’t too hot

But there may be deals elsewhere in the industry. Companies specializing in real estate advisory and other real estate related services — like Chicago-based Jones Lang LaSalle – could peak the interest of big investment companies looking for a purchase. Executives at the summit spoke about the possibility of large commercial banks or asset managers beefing up real estate capabilities by buying a real estate advisory or real estate services firms.

Financial deals boost record M&A

First-half mergers & acquisitions hit another record breaking through the $1 trillion mark, thanks largely to deals for financial companies, according to preliminary numbers from Dealogic.

Takeovers of U.S.-based banks and other financial institutions rose to $157.48 billion during the first half, up from $90.59 billion a year earlier, to take the lead spot from telecommunications companies. Buyouts of First Data and Sallie Mae topped the sector rankings. To see a table of Dealogic’s breakdown of first half M&A activity click here.

Telecommunications dropped almost by half during the same period, falling from its spot as the most active sector during the first half of 2006 to the sixth-most active sector by volume so far this year with $80.72 billion worth of deals. Alltell’s sale helped keep the sector from falling off the charts altogether.                                                                                                    

iPhone launch: a tale of two stores

Here’s a tip — if you only want one iPhone, and don’t care to wrestle with a giant blue-nosed mole (on the far right), head to an AT&T store.

So far it appears that Apple stores are developing into local meccas of the Apple faithful, the media savvy and those with lots of time on their hands. On the other hand, AT&T stores, where the phone will also begin sales at 6 P.M. locally, are well, home to the lonely.

Apple's iPhone Launch

At around 7 a.m. this morning in midtown Manhattan, here (above) is the Apple store, with a line 200 deep, not including at least 6 TV news trucks, an army of reporters and one, um, giant… animal…thing:

A bear-y interesting corporate culture

Bbear.jpguild-A-Bear Workshop Inc. has hired Lehman Brothers to help evaluate strategic options.

Maxine Clark, chief executive bear, said the company will continue to implement its strategy of expansion, but also said Build-A-Bear had an obligation to shareholders to consider a broad range of potential strategic alternatives.

That’s right. Chief Executive Bear. That is Clark’s official title in company press releases and on the company’s web site. (Actually, Founder, Chairman and Chief Executive Bear to be precise.) The company also has a Chief Workshop Bear, Chief Information Bear, Chief Financial Bear, Chief Marketing Bear and Chief Operating Bear.
While those titles may work as part of the internal culture for a retailer centered around teddy bears, they might convey a different message on Wall Street, said Laura Hartman, professor of business ethics at DePaul University’s College of Commerce.

Titans mull private equity boom


   Has the private equity boom peaked? That was the hot topic at a Wall Street Journal conference on Wednesday, which hosted financial industry titans such as Henry Paulson, Lloyd Blankfein and Carl Icahn.
    According to billionaire financier Icahn (left), the answer is yes, as shareholders are balking at selling companies too cheap.
    “They’ve had a walk in the park for years, but now shareholders are waking up to the fact that we’re not going to sell it to you so cheap,” Icahn said. “And interest rates could start creeping up.”
    Blankfein, who runs Goldman Sachs, the top advisor to buyout firms, had a different opinion. He thinks the leveraged buyout trend is not “going out of style.” 
    Wobbles are being seen in financing of some leveraged buyouts. Ahold’s U.S. Foodservce postponed the financial backing of $7.1 billion LBO due to weak market conditions, sources told Reuters Loan Pricing Corp on Tuesday.     
    Meanwhile, the shares of Blackstone are off their IPO high amid tax concerns and worries the private equity boom may be off its peak. It finished its first day at $35.06 but closed on Thursday at $29.69.
    Other comments on private equity made at the conference::  
    Glenn Hutchins, co-founder and managing director of Silver Lake, said he didn’t foresee a blowup of the private equity industry although he expects the industry will see some unsuccessful deals. He added that he would not be worried until he saw underlying economic problems. 
    NYSE Euronext Chief Executive John Thain, when asked if he was concerned whether the private equity boom was becoming too heated, said the wider issue was the availability of capital that is allowing buyout firms to take companies private.
    “I don’t think it’s a question of the private equity boom. There is a tremendous amount of liquidity available so there’s a lot of leverage that’s available at very low cost. So I think the place to be concerned is — what takes some of the steam out of the availability of liquidity? That’s much more the issue than the private equity … Liquidity is fueling private equity — but it’s really the excessive amount of leverage at very low cost.”
    Richard Breeden, CEO, Breeden Capital Management and former chairman of the U.S. Securities and Exchange Commission: “What I do hope is that our market continues to be strong for private equity to generate value and also for larger shareholders in public companies to continue to create value. All markets and everyone benefits when new value is created.”

   Stephen Lerner, assistant to the president of the Service Employees International Union, or SEIU, which represents 1.8 million workers:  ”What we’re saying is what is happening in private equity is critical to the future of America and we need to have a conversation about how we make sure that workers and other people aren’t left behind by the buyout boom.”

(Additional reporting by Anupreeta Das)

Scouring the sale circulars

Just because they shop at a store known for its convenient locations rather than low prices doesn’t mean cash-strapped consumers aren’t looking for a bargain.
Rite Aid said on Thursday that its customers sought out more general merchandise that was on sale in the latest quarter compared with a year earlier. The company did not change its promotions, customers just bought more items that were on sale.
That tidbit from Chairman, President and Chief Executive Mary Sammons during Rite Aid’s fiscal first-quarter conference call sparked interest. The first analyst to ask a question on the company’s conference call asked for more detail on the issue.

“They are just buying more economically and I think it’s undoubtedly related to their economic condition and the cost of fuel, etcetera,” Sammons said.
She also said that Rite Aid saw customers buying more products at promotional prices throughout last year.
Rite Aid’s sales of general merchandise at stores open at least a year rose just 1.6 percent in the fiscal first quarter after rising 2.1 percent a year earlier and just 1.2 percent in the company’s fiscal fourth quarter.
Larger rival Walgreen’s same-store sales of general merchandise rose 5.6 percent in its quarter ended May 31, and such sales rose 6.6 percent in the latest full quarter over at CVS, which ended on March 31.


Like a bat out of hell — Bear exec’s cultural musings

Mr. LoafWhile hedge funds were collapsing around him, Rich Marin, head of the asset management unit at Bear Stearns Cos. stole a few moments to see a movie and blog about it, the New York Times reported on Thursday.

Two Bear Stearns-managed hedge funds lost big money in April, and in June, Bear bailed one of them out and decided to let the other fail. Over the weekend of June 17, while Bear Stearns executives were scrambling to save the funds, Marin took a few hours off to watch the new Kevin Costner thriller “Mr. Brooks,” the New York Times reported, and later wrote about it in his blog, Whim of Iron.

You’ll have to take the Times’ word for it–the blog is “gone, gone, gone” from the public Web and can now only be seen by people who receive a special invitation by Marin. But his blogging profile is still public. Like most blogger profiles, it includes a Q&A section, which opens with this gem: