Category Archives: Business News

Good Vibrations from Reverb

Chicago-based Reverb.com is doing really great things.  Just recently the company (that sells instrument and music gear online) launched its e-commerce site for music collectors.  Specializing in vinyl it is anticipated that this move will bolster the firm’s success, when it goes live later this year.

And with an injection of $15 million in funding, Reverb is clearly making a name for itself in the tech industry.  Big names like Max Levchin (co-founder of PayPal) and Adam Bain (ex-COO at Twitter) are making investments in the firm which will be used for new employee hires as well as the expansion of the company, worldwide.

Not surprisingly therefore, the company also landed a place on Inc. Magazine’s annual Inc. 500 list.

Forbes Recognition for Illinois Largest Private Firms

A recent Forbes list of top largest private firms in America had some astonishing results for Chicago.  Illinois, it seems is home to 13 of the country’s best largest firms for 2017. Although that figure was 14 a year ago, it’s still a very impressive record.

Number 11 on the 33rd annual list of 225 companies hails from Chicago.  Reyes Holding – the firm that owns food service and beer distribution companies – is based in Rosemont and has an annual revenue of $26.5 billion. This was up a spot from last year’s Number 12 position.

The list features private firms that have an annual revenue of $2 billion+ and at least 100 staff members.  Hence there were 225 companies this year and 223 last.

Here are the top 10 Illinois companies on the list and their rank:

  1. Reyes Holdings (Rosemont)
  2. Medline Industries (Mundelein)
  3. OSI Group (Aurora)
  4. Flex-N-Gate (Mundelein)
  5. Dot Foods (Mt. Sterling)
  6. Eby-Brown (Naperville)
  7. Walsh Group (Chicago)
  8. Amsted Industries (Chicago)
  9. Follett (Westchester)
  10. Koch Foods (Park Ridge)

 

Chicago Assisting Female Entrepreneurs

The Women’s Business Development Center (WBDC) recent opened a branch in the south suburbs, offering assistance to women who want to become entrepreneurs in the region.

Already – for over 30 years – this non-profit (based in Chicago) has been giving women (free) advice, programs, and services in order to bolster the amount of enterprises owned by women. Earlier this year, a small business development center satellite office was opened at Governors State University in University Park, by the organization. This was most welcome given the budgetary cuts which resulted in the closure of the Illinois Small Business Development Center.

Now though — thanks to a grant from the Illinois Department of Commerce and Economic Opportunity and the U.S. Small Business Administration – the WBDC is opened for business!

 

Earnings and Stock Price Up for United Despite Violent Treatment of Passenger

An United Airlines Boeing 767-300 gets loaded at Chicago O’Hare (KORD/ORD) for the flight to Europe. Photo by Lasse Fuss

Although United Airlines has had a rough time this past month dodging bullets in response to last week’s violent treatment of a passenger, quarterly earnings were higher than expected.

United Continental Holdings Inc was forecast to earn 38 cents per share in the first quarter of 2017 by Wall Street analysts. Instead, the major airline company posted 41 cents per share. Revenue was up to $8.42 billion, a 2.7 percent increase from last year, and better than the predicted $8.38 billion.

“In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building,” stated Oscar Munoz, CEO.

United’s stock closed on Monday afternoon up 2 percent, to $70.77 from its close on Friday. The stock rose even higher in after-hours trading, reaching $71.55 per share, almost back to its previous price before the incident of April 9.

The incident involved cell-phone videos depicting a bloodied passenger being dragged off a United flight by policemen to make room for United personnel. Without venturing into whether United was within their legal rights to call law enforcement to force the man off the plane, the bad publicity was not good for the stock price.  Yet, it seems to have taken only a bit more than a week for the shares to bounce back, and the company’s revenues did even better than expected.

The company said that it is hoping for improved customer service in the future.

“It is obvious from recent experiences that we need to do a much better job serving our customers,” Munoz said. “The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility. This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the center of everything we do. We are dedicated to setting the standard for customer service among U.S. airlines, as we elevate the experience our customers have with us from booking to baggage claim.”

Mayor Emanuel Defies AG Sessions on Chicago’s Sanctuary Policy

Rahm Emanuel, former White House Chief of Staff (2009-2010), Mayor of Chicago since 2011

Attorney General Jeff Sessions hunkered down on his threat to halt funding to what are being called “sanctuary cities” in response to the city’s controversial policies regarding treatment of immigrants.

Defiantly, Mayor Rahm Emanuel responded by reiterating his promise to “continue to welcome” immigrants to Chicago, despite the Attorney General’s threats to block federal money for law enforcement.

“I’ve always seen Chicago as a welcoming city,” Emanuel said in an interview. “It welcomed my grandfather 100 years ago, we continue to welcome entrepreneurs, immigrants, and I would just say think of it this way: Half the new businesses in Chicago and the state of Illinois come from immigrants, nearly half,” he added. “Half the patents at the University of Illinois come from immigrants, and so we want to continue to welcome people, welcome their ideas, welcome their families to the city of Chicago, who want to build the American dream for their children and their grandchildren.”

The Mayor was reacting to Sessions’ announcement that he would order the Department of Justice to make the receiving of federal grants conditional on compliance with immigration law. This statement reinforces the executive order on sanctuary cities that newly elected President Donald Trump signed back in January.

Caterpillar Closing its Chicago Plant

Photo courtesy of Shaun Greiner

Peoria, Illinois-based Caterpillar Inc, announced last week that it is planning to close its Aurora, Illinois plant by the end of 2018. The closure will result in the loss of about 800 jobs. The plant makes large-wheel loaders and compactors for construction and other industrial uses.

The facility will retain about 400 of its total 1200 workers, including those in product support and engineers.

Nearly three months ago the company first revealed that it was considering the closure of the plant, which is in a suburb of Chicago, and moving the jobs to different locations in Little Rock, Arkansas and Decatur, Illinois.

The 800 out of work employees will be allowed to apply for positions in other facilities owned by Caterpillar.

Alphabet Buys YNoFace for $4.5 Trillion. Not!

An artist with a unique sense of humor, fertile imagination, and or an ironic way of looking at the world, claimed he became the richest man in the world when Google’s parent company, Alphabet, bought his art business in exchange for stock.

Antonio Lee, owner of YNoFace Holdings, is a 32-year-old painter who works in acrylics, filed a report with the Securities and Exchange Commission falsely claiming that Alphabet gave him 4.5 billion Class A shares in its company as payment for YNoFace Holdings. That number of shares is about a factor of ten larger than the actual number of outstanding shares, and would be worth an estimated $3.6 trillion, making Lee richer than Bill Gates, Warren Buffet, and Jeff Bezos, all together!

The false filing seems to have done little damage other than to Lee’s credibility, although it has gotten him so free publicity. There is no evidence that anyone believed his filing claim, that he profited in any way, or fooled any investor.

The former barber and retail agent, who paints his subjects without faces, told the Chicago Tribune that he always wanted to be rich, “so I could have more free time with my family.” He is a divorced father of three.

The filing did make its way into the SEC’s Edgar database, which takes online submissions of regulatory filings. Every year as many as 800,000 forms are filed with the SEC, or an astounding 3,000 every working day. The government does not check the filings, and frequently doesn’t even remove the ones found to be false.

“The SEC can’t stop them,” Lawrence West, a former SEC associate enforcement director. “They can only punish the filer afterward and remove the filing from the system. So, caveat lector — let the reader beware.”

The government can choose to charge false filers with a civil-fraud lawsuit, or even a federal criminal prosecution can ensue.

This was not the first-time Lee filed a false form with the SEC. On October 19 Lee said that the Bank of America bought a share in YNoFace Holdings for the company’s stock worth $88 billion. Apparently, he was still not rich enough.

The Art Institute of Chicago Wins Interactive Award at SXSW

And the winner was: The Art Institute of Chicago for its digital tool called JourneyMaker in the Visual Media Experience division.

The tool allows families to create their own personalized tour of the Art Institute museum ahead of time, to make their “in-person” visit more rewarding.

The yearly Interactive Innovation Awards entered its 20th year at this year’s SXSW conference, and gave out a total of 13 awards. The awards cover a wide range of categories, including wearable tech, VR & AR, smart cities and new economy.

Visual media experience, the category for which the Chicago Art Institute was recognized, awards projects that “create content and deliver it in a way that moves beyond passive viewership by providing a more immersive and engaging entertainment experience.”

JourneyMaker was launched last year. Users create a personalized tour of the museum choosing one of eight storylines, like Superheroes or Time Travelers. They then select the works found in the museum that they would like to visit that fit within their chosen theme. When you are done, you can even print a hard copy of the guide you just created, and come well-prepared for some great museum fun.

The main goal of the tool is to make what otherwise could be a daunting, confusing experience at the museum into an organized, enjoyable journey which the whole family planned together in advance.

Second City’s Second Airport Preparing to Take Off

Midway Airport-Chicago. Photo by Vmzp85.

On Chicago’s southwest side there is a lesser known airport known as Midway International Airport, that is about to play a game called catch-up. Last month the city finalized a plan to inject a $248 million boost over several years, into the devilment of this city-owned airport.

The plan includes modernization which will expand the airport plus grow the retail options, security and parking areas. Millions of people travel through this airport each year, and delaying its much needed facelift is no longer an option.

Chairman of the aviation committee of the Chicago City Council, alderman Mike Zalewski explained the council’s decision: “To be a competitive option, Midway needs to provide the best products, services and resources to its traveling public.”

The improvements are urgent, as many of the country’s older, larger airports find themselves in fierce competition with a growing number of newer, regional hubs with modern facilities designed to create a much-improved consumer experience, helping to boost revenue.

Midway is looking to improve its own financial situation with this huge investment from the city. It is one of only two US airports which posted a loss for operations in 2015, the other one the Bangor International Airport in Maine. The reported loss is in contrast to Midway’s place as one of 25 airports in the country with over 10 million airplane emplacements the same year as it reported a loss. Because the airport has no way to bring in the much-needed non-aeronautical revenue through the purchase of food, goods and services by consumers passing through the terminal, Midway is under huge financial pressure.