Unstructured Finance

Borders looks to beef up reader loyalty


(Oops, we got a first name wrong-ed)

U.S. bookseller Borders has created a new vice president of customer loyalty position in an apparent effort to ramp up for its upcoming e-bookstore as it seeks to catch up to rivals Amazon.com and Barnes & Noble Inc in the race to win the e-books market.

David Dan Angus, who previously worked at various retailers such Guitar Center and American Eagle Outfitters, got the job and will have his work cut out for him.

Analysts say that Amazon and bricks-and-mortar bookstore Barnes & Noble have a major head start because the masses of data they have on their shoppers allows them to customize offers to an individual shopper’s taste, which in turn drives return traffic to their web sites.

By late June, Borders is set to begin selling e-books on its own site through a partnership with Canadian tech firm Kobo. Borders said it has 35 million members in its loyalty program and CEO Ron Marshall told Reuters earlier this month Borders’ loyalty program will give it the data needed to make personalized suggestions to readers, though he said Borders hadn’t taken full advantage of the data trove.

While Angus’ responsibilities are not new, apparently the title is. Customer loyalty used to be part of the portfolio of  vice president of acquisition and retention marketing.

Bad year for telecom counters


Telecom stocks had a bad year with top counters such as Bharti Airtel and Reliance Communication slipping 8 and 23 percent respectively in 2009.

The overall market however gained as much as 80 percent during the year.

The Sensex ended 81 percent higher at 17465 and gained more than 7,000 points, its biggest yearly gain since 1991.

A price war among telecom operators discouraged investors as there were concerns about future profitability of such companies.

Check Out Line: The Swiss drinks fight

Check out the battle brewing between iced tea and hot cocoa.

ConAgra Foods filed a suit against Dean Foods over the common look of their “Swiss” drink packaging.  ConAgra asserts that Dean’s Swiss Premium iced teas infringe its trademark for Swiss Miss hot cocoa products, Reuters’ Jonathan Stempel reports.

The beverages taste different, but they do seem to have some similar looks when it comes to their labels.  Perhaps that confuses some shoppers into thinking that the Swiss Premium sugar-sweetened teas come from the same company as those packets of hot cocoa mix.

Take a look for yourself.  Do these look like they come from the same manufacturer?

GMAC plays its too-big-to-fail card… again

The Treasury, as major shareholder of such credit boom casualties as Citigroup and General Motors, showed with its $3.8 billion infusion into GMAC that it can still be counted on to safeguard the financial system from systemic collapse. The auto-loan company, which had dutifully spread its wings into mortgages in the housing boom, wound up becoming a bank to qualify for TARP bailout funds a year ago – the day after Christmas 2008, to be precise. How could Treasury say no?

Now taxpayers are plonking another $3.8 billion into GMAC to help cover mortgage losses. That gives us another majority shareholding in a company that could not have survived to pay its bills, workers and its executives without aid. No, it’s not much in terms of the government’s balance sheet. But it should rankle in Congress when lawmakers come back from holiday.

Not far behind the brouhaha over universal health care lays the still smoldering debate over “too big to fail”. Is it naïve to note that the timing of GMAC’s new lifeline came when legislators were safely tucked away at home? Arguing that AIG was too big to fail, with its myriad confusing and distracting derivative contracts, and that GM was too big to fail, with its strategic position just behind the aorta of the American manufacturing heartland, or even that Citigroup, with its corner office (sans fireplace) in the U.S. superbanking community can somehow be extended to GMAC might seem farfetched to fiscal hawks.

The afternoon deal

MARKETS/Why do today what you can put off until tomorrow? This message was repeated throughout the day with GM extending its deadline for Saab bids, Britain’s Takeover Panel granting Cadbury three more days to publish 2009 results and Japan Airlines stock continuing a long slide with growing expectations the company is heading for bankruptcy.

For the big picture Bloomberg pours cold water on M&A hopes in 2010, reporting a rebound may be years away.

Looking back, and forward, here is a small sampling of the week’s end-of-year lists:

Small-cap stocks trade firm in a lacklustre market

INDIA-BUDGETThe BSE Small-Cap Index gained over 1 percent on Wednesday even as the overall market ended weak, with the Sensex slipping 58 points.

Topping the index was Nitin Fire, which jumped 20 percent in trade. Eight stocks in the index gained over 10 percent.

The small-cap stocks have rewarded investors well in 2009, with the index gaining 125 percent so far. This is higher than the return of mid-cap index which has gained 107 percent during the period.

Saab rolls into 2010

Saab workers are probably reminding themselves it is always darkest just before the dawn, which takes a lot longer to arrive in the Scandinavian winter than anywhere else. With the lights set to start going out at Saab plants, word surfaced that parent General Motors’ Dec. 31 deadline for bids was being extended into early January.

GM had given itself to the end of this month to consider bids for loss-making Saab while continuing a process to wind down the company, which has drawn interest from Dutch luxury carmaker Spyker and others. Spyker Cars Chief Executive Victor Muller said in a text message GM had extended the deadline for a final offer from Spyker Cars until Jan. 7, and added he believed there are multiple bidders for Saab.

As we’ve noted previously in DealZone, having emerged from bankruptcy means GM doesn’t have to manage deadlines for asset sales with creditors breathing down its neck. Sure, they have to keep an eye on Congress, which holds a majority stake of the company. But with healthcare, the financial overhaul and terrorism to worry about, GM could well keep extending the deadline for a few months. Plus, its worth keeping in mind what kind of exposure GM is running here, and what a week or two really means for GM to keep the lights on at Saab.

Check Out Line: Customers happier with online shopping

Online shopping Check out the retailers that kept their shoppers happy this season.

According to ForeSee’s annual report on holiday shoppers, customers were more satisfied with online shopping this year.

No brownie points for guessing Amazon.com occupied the top spot on the  e-retail satisfaction index. The online giant scored 87, up 4 percent from last year, according to the firm that measures online customer satisfaction.

Websites for Macy’s, SonyStyle, Gap, Home Shopping Network and Overstock.com also kept their shoppers happy, and registered increases of 10 percent or more in customer satisfaction year over year.

The afternoon deal

JORDAN/Clarity is in short supply today when it comes to IPOs.  Two companies filed for inital public offerings worth $100 million and $300 million on Monday, underscoring an impression of  investors growing more comfortable with companies they may have deemed too risky in 2009.

Following the upbeat tone is aluminum giant UC RUSAL securing some heavy-weight  investors –a member of the Rothschild family as well as one of southeast Asia’s richest men– in an IPO now bumped up in value to possibly $27 billion.

But wait, not all is rosy. A top China train maker, CNR, limped in its market debut after its $2 billion IPO in Shanghai. Valued at 49 times its 2008 earnings, investors tolerance was tested and the stock closed up a weaker-than-expected 2.34 percent.

Reliance Power jumps


Shares in power and utility firm Reliance Power jumped nearly 5 percent on Tuesday after the company said it expected to start generating more than 3,000 megawatts of power by 2012.

Shares in the company rose over 6 percent in intra-day trade and finally closed 4.9 percent higher at 154 rupees with volumes of 2.8 million shares.

Reliance Power, part of the Anil Dhirubhai Ambani Group, is developing 16 power projects with a combined installed generation capacity of more than 33,000 MW.