Category Archives: Business News

Alphabet Buys YNoFace for $4.5 Trillion. Not!

Business News

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

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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

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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.

Illinois Grand Appliance Moving HQ to Wisconsin

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The Racine County Economic Development Corporation announced last week that Grand Appliance and TV is planning to move its corporate headquarters from Zion, Illinois, just north of Waukegan, to Sturtevant, Wisconsin.

The move will cost an estimated $8 million including the building of a new corporate headquarters. The move will bring about 142 jobs to Sturtevant over the next three years, including 120 jobs that the company will be moving from Illinois, and an additional 20 new jobs.

Company President Mark Reckling said, “Southeast Wisconsin provides an ideal location that supports Grand Appliance and TV’s growth plans.”

The company has 20 stores with 300 employees throughout Illinois, Iowa and Wisconsin. There are five outlets in the Chicago area.

On March 7 the village of Sturtevant will decide if it should contribute $450,000 to Grand Appliance and TV to help fund the project. The money would come through a tax incremental financing district.

The new headquarters will be constructed at the Renaissance Business Park east of Interstate 94. It will be 137,000 square-feet, the majority dedicated to warehousing. The new facility will also include and consolidate two distribution centers Grand Appliance runs already in Sturtevant, as well as the corporate headquarters.

Sears Firing 130 from Corporate Headquarters in Hoffman Estates

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Sears Tower in Chicago Skyline. Photo Courtesy of John G. Suhayda

In a major restructuring bid which will cost the company upwards of $1 billion, Sears Holdings Corp will be laying off 130 employees from their executive offices in Hoffman Estates, Illinois. The company announced that the layoffs are due to a slowing of their traditional retail business.

The details of the firings were elaborated in an email sent by the Sears CEO, Eddie Lampert to the employees at headquarters, on Thursday.

Lampert stated in the memo that the layoffs are part of their cost-cutting plan which are

“necessary to create a more nimble operating structure capable of driving the company’s strategic transformation forward.”

Lampert has already announced earlier this month that Sears will be closing 150 stores over the next two months. Lowering overhead, especially at the corporate level, is also part of the plan.

Sears posted a 16 percent loss in revenue during the fourth quarter of 2016, about $6.1 billion. The hopeful holiday season proved flat for Sears, so cost-cutting seems the best choice to staying in business.

Two major trends have taken their toll on the iconic retail department store chain, which also owns Kmart stores: more on-line sales, and slower mall traffic. Over the past eight years the company has most likely lost about $9 billion as their traditional business model has come under increasing pressure.

Cosmetics Retailer Lush Moving to Mag Mile

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Photo of Lush display by Olivier Bruchez

Although the move for Lush is only two blocks south to North Michigan Avenue, the new venue will be worlds away. The move is part of an overall facelift for all their branches to bigger, better, and more user-friendly spaces.

The new store just opened last week, and offers 2,200 square-feet of floor space where customers will be encouraged to touch and feel the merchandise. The experiential sales floor model will be coming to all Lush’s 250 North American stores over the next 3 years.
Brandi Halls, director of brand communications at Lush, explained that the past ten years saw a quick expansion of the number of Lush shops, leaving many too small for the company to give its customers the kind of experience they would like.

The new shops are more than doubling in floor space from the previous design, with plenty of room for rainbow colored bath bombs piled in displays, grocery store style; areas for cosmetic consultations; and even sinks for demonstrations of products.

“With a lot of our more innovative products, people aren’t always sure how to use them, so demos let customers get their hands in the water and feel it on their skin,” Halls said.

Not all the current locations will be abandoned. Any store already reaching 1,500 square feet will remain, but the interior design will be re-done so that it matches the ideal interior. The template for the new look is the company’s London flagship store, which has 10,000 square-feet of space. So far, the company has relocated or redesigned about 30 stores, including the one on Michigan Avenue.

Disney Teams with Luxe Bloom to Promote ‘Beauty and the Beast’ with Long-Lasting Roses

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Luxe Bloom Roses: Photo courtesy of
Kurman Communications, Inc.

Chicago’s Luxe Bloom, seller of unique preserved roses, is joining Disney as a marketing partner for their upcoming live-action re-make of “Beauty and the Beast.”

Disney reached out to Luxe Bloom through their global marketing department. Jan Coleman noted that:

“The roses will be adored by fans young and old and be a very stunning enhancement to the film’s marketing campaign.”

The film will star Emma Watson as Belle and Dan Stevens as the Beast, and is scheduled to premiere on March 17. In the iconic Disney cartoon a rose is the symbol of the Beast’s chances of finding his previous human form again through the power of love.

The partnership will make Luxe Bloom part of Disney’s social media-focused promotion of the film. They will also participate in the staging of the Hollywood premier, helping to create a magical atmosphere so vital to a Disney movie launch. The premier will feature a Rose Wall created by Luxe Bloom, which will act as the backdrop where prominent celebrities will be photographed.

The deal with Disney will also allow Luxe Bloom to sell “Beauty and the Beast” rose arrangements on their website and on Amazon. They will offer a $55 single red rose in a glass cloche all the was up to a crimson rose box of 16 roses for $399.

Luxe Bloom roses are unique in their lasting power. They are specially treated to maintain their beauty for at least two months without water or refrigeration. The roses come from Ecuador, and the company uses an “ancient all-natural method” to keep the roses looking fresh for many weeks.

Other companies have become believers in the magic of Luxe Bloom roses: Langham Hotels in Chicago and New York buy their wares; and Saks Fifth Avenue and the Red Door salons are also clients. Former Fortune 500 executive Shelley Rosen founded Luxe Bloom in 2013.

Non-Browning GMO Apples to Hit the Stores in the Midwest

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In what the food industry is hoping will be the breakthrough product for genetically modified organisms, (GMOs), a non-browning apple is about to be introduced in Midwestern grocery stores, perhaps as early as February 1st.

This high-tech apple will be sold under the brand Arctic Apple. The first introduction will be a test run to see how well the public accepts the controversial apple, which will be sold pre-sliced. The industry is hoping that the convenience of pre-sliced apples that do not turn brown will overwhelm the suspicion consumers have of GMOs.

Both critics and supporters of GMOs say that this product could be a “tipping point” in the country’s hot debate over the merits and dangers of genetic engineering, especially as it relates to food. Until now supporters of genetically engineered food have argued that the technology protects crops, bringing down prices, reducing the use of pesticides, and bestowing other benefits. The Arctic Apple is one of the first GMOs marketed directly to consumers strictly for its convenience factor.

“What companies are desperate for is some really popular GMO product to hit the market,” said McKay Jenkins, the author of a forthcoming history of the debate. “Any successful product could lift the cloud over GMOs.”

Despite the fact that there is a consensus among scientists that GMOs are basically safe, over the course of about 30 years environmental and consumer groups have been able to limit the use of GMOs to commodity crops like soybeans and corn.

The question the Arctic Apple will put to the public is whether the convenience of having pre-sliced apples that do not turn brown outweighs the bad rap GMOs have in the eyes of consumers.

“I don’t know what their chances are – it’s a very polarized debate,” said Michael White, an assistant professor of genetics at the Washington University School of Medicine in St. Louis. “But I think this is huge. What the Arctic Apple is doing, trying to push GMOs on their own merits, could lead to a more positive discussion.”

 

Craftsman Sold to Black & Decker for Almost $1 Billion

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A screwdriver-handled bottle opener, made by Western Forge for the Craftsman brand. Photo credit to J.C. Fields.

A complex deal has been struck between Sears and Stanley Black & Decker, for the purchase of Sears’ iconic Craftsman brand of tools.

Illinois-based Sears has agree to see the 89-year-old brand to Stanley Black & Decker for $525 million in cash and an additional $250 million by the end of the third year after the sale. In addition, there will be payments for up to 15 years as a variable percentage of sales. The approximate total value of the deal is $900 million, according to Sears.

The deal will allow the Connecticut-based Stanley Black & Decker the right to produce and sell Craftsman-branded tools in non-Sears stores in the US and internationally. Sears will also be able to sell Craftsman in its own stores through a perpetual license issued by Stanley Black & Decker. Stanley Black & Decker will receive royalties from Sears after a 15-year grace period.

“We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online,” said Stanley Black & Decker CEO James Loree. “To accommodate the future growth of Craftsman, we intend to expand our manufacturing footprint in the U.S. This will add jobs in the U.S., where we have increased our manufacturing headcount by 40 percent in the past three years.”

The deal stipulates that Sears will receive annual payments from new sales from Stanley Black & Decker Craftsman during a 15-year period. Between now and 2020 Sears will get 2.5 percent of sales; from 2020 until 2023 3.0 percent; and for the remaining time, 3.5 percent.

Lurie Children’s Planning Expansion

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An exterior image of Ann & Robert H. Lurie Children’s Hospital of Chicago. Photo courtesy of Ala1188.

The Ann & Robert H. Lurie Children’s Hospital of Chicago has plans to expand the highly in-demand hospital’s capacity with a $51 million infusion of funding. The Streeterville building, in the midst of the Mag Mile, is seriously overcrowded, and can use the extra beds under consideration.

The plan proposes to add 44 beds to the already 92 that serve the intensive-care unit. The hospital would also like to add four more beds to the neonatal intensive-care division to 60 NICU beds that are there now. The total number of beds in this specialty hospital, which treats the area’s most ill children, would rise to 336.

The application Lurie filed last month with state regulators said that the hospital, which partners with many community hospitals, has been fielding an increase in children referred by health care providers is northeast Illinois to the point where they have been forced to refuse transfers.

The hospital wants to add beds at a moment in history when other hospitals are downsizing their pediatric departments, if not eliminating them altogether. Because the Affordable Care Act puts more of an emphasis on prevention, many hospital beds are empty, while there has been a growth in the number of outpatient clinics and same-day surgery facilities.

Lurie hospital says that demand for its services has climbed because of its partnerships with over a dozen community hospitals. If the patients can be kept in those local community hospitals, they are. But if they need more sophisticated or intense care, they are then sent to the downtown hospital.

In 2014 Lurie switched 20 medical-surgical beds, the most common type of hospital bed, to ICU beds. In 2016 Lurie had to turn away 112 requests for patient transports because of lack of beds.

The additional beds will be added by renovating existing hospital space, with completion of the projected expected to be by January 31, 2019.