Even DIY craft maven Martha Stewart knows when she needs help. On Wednesday, her limping Martha Stewart Living Omnimedia announced that it had hired Blackstone Advisory Partners to evaluate its options, including a possible sale of the company.
The news sent MSLO shares soaring nearly 30%—to all of $5 each. The value of Ms. Stewart’s famed franchise, nearly $2 billion back in early 2005, was a mere $250 million after the day’s trading.
It’s been a hard few years for the media and home decor franchise. Magazine ad dollars dried up; a merchandising deal with Kmart wasn’t renewed. In January, NBC dropped Ms. Stewart’s morning television show and its related spinoffs, relegating them to Hallmark Channel oblivion. The company’s CEO position has been vacant since 2008; Lisa Gersh, a founder of Oxygen Media, is slated to assume the post June 6.
The company’s announcement came just as 69-year-old Ms. Stewart, who has had the job title of chief editorial officer the past few years, is set to rejoin its board of directors, ending a five-year banishment due to her 2004 federal conviction for obstruction of justice.
TAX-SQUEEZED SUBURBANITES, REJOICE: Gov. Andrew Cuomo and state leaders agreed to impose a 2% limit on annual property tax increases statewide. The guv says property taxes soared 5.5% per year between 1999 and 2009, and the new cap aims to combat economic decline. Still, the state teachers union said limiting tax increases would devastate low-income schools outside of New York City. Legislators seem set to vote on the cap next month. …
HEDGE FUNDER DAVID EINHORN BET $200 MILLION ON THE METS, buying a minority stake in the financially strapped team. Whether that’s enough to buy a championship, or even downplay owner Fred Wilpon’s recent tongue-lashing, remains to be seen. …
THE HUFFINGTON POST IS NOT OFF THE HOOK, YET. A federal judge declined to throw out a lawsuit claiming the media company’s founders, Arianna Huffington and Kenneth Lerer, stole the idea for the online news site from a duo of Democratic political consultants—a charge AOL Huffington Post Media Group said is “pure fantasy.” …
THE FEDS ARRESTED GERARD DENAULT, the lead manager on the controversial CityTime project, and charged him with receiving $5.6 million in kickbacks from a technology subcontractor. Mr. Denault, who oversaw the rollout of the computerized timekeeping system for more than 100,000 municipal workers, could not be reached for comment. His employer, Virginia-based SAIC, has not been charged with wrongdoing. …
TWO MASSIVE, LONG-VACANT BROOKLYN PROPERTIES WERE FINALLY CLEARED for redevelopment. A judge rejected a community group’s lawsuit and green-lighted a $2 billion redo for the former Domino Sugar factory in Williamsburg. The city is now free to rezone the 11-acre site for a mixed-use residential project. And in Sunset Park, a 1.1 million-acre warehouse shut since 2000 gets its own shot at redemption: The city’s Economic Development Corp. tapped Salmar Properties to redevelop the charmingly named Federal Building #2 for light industrial use.
With fair weather forecast, the start of Fleet Week, and new attractions this year on the waterfront and Governors Island, the city is gearing up for an unusually crowded Memorial Day weekend.
Hotels are at around 88% capacity, according to Chris Heywood, a spokesman for NYC & Co., the city’s marketing and tourism organization.
“Last year was a record” for Memorial Day weekend lodging, he said, “and so far, we’re on track for another record year. Demand is very strong.”
Travelocity, a leading online travel agency, has seen bookings for Memorial Day weekend flights to the city soar in the past few years.
“New York City is the No. 4 destination for Memorial Day weekend, coming in behind Las Vegas, Orlando and South Florida,” said Genevieve Shaw Brown, senior editor at Travelocity. “It also happens to be the most expensive of those, in terms of hotel stays.”
New York was also the No. 4 destination for Memorial Day weekend in 2010 and 2009, Ms. Brown said.
The city is promoting revamped waterfront attractions at Coney Island, with its new Scream Zone, and expanded activities on Governors Island, where officials are hoping two new public sculpture exhibitions and free outdoor concerts will draw crowds.
A new smoking ban took effect this week, for the first time covering city beaches and parks. City Parks Department Commissioner Adrian Benepe said the city introduced the smoking ban partly as a result of public pressure, and partly because cigarette butts, which he said represent up to 70% of the pieces of garbage picked up on beaches, are “a particularly long-lasting and pernicious form of litter.”
Although 19 million visitors crowded New York’s shoreline parks last Memorial Day weekend—three times as many as in 2009—for the first time in years there are enough lifeguards, more than 1,300, to cover all of the city’s beaches and pools, according to Mr. Benepe. The lifeguard jobs pay $13.50 per hour with 48-hour work weeks through the season.
Tourist attractions, businesses and cultural institutions are also launching into high gear.
A spokeswoman for New York Water Taxi and the downtown Circle Line said the company had expanded its popular hop-on, hop-off tours from weekends only to seven days all season amid growing demand, and have also seen especially high interest from resident New Yorkers in the company’s newest tour, “Bike the Brooklyn Bridge/Water Taxi Back.”
And a costume exhibition of Alexander McQueen designs has drawn lines since 10:30 a.m. Friday at the Metropolitan Museum of Art, according to museum spokeswoman Elyse Topalian.
Big business in New York is bouncing back from the Great Recession—big time, according to the latest Crain’s ranking of the region’s top publicly held companies.
The total stock-market value of the 250 biggest public companies in the New York metro area, for instance, climbed 11% last year, to $2.44 trillion, compared with a total market capitalization of $2.19 trillion for the top 250 in 2009.
To put that $2.44 trillion figure into perspective: The total market cap for New York’s 250 biggest public companies exceeds the gross domestic of the United Kingdom (around $2.25 trillion last year, according to International Monetary Fund estimates) and comes in just under the GDP of France ($2.58 trillion).
Total revenue for the Crain’s 250 also rose 11% last year, to $1.75 trillion (that would be around the GDP figure for Canada), while overall profits soared 75% to $158.9 billion (somewhere between Peru and Romania).
Revenue winners last year included health care and consumer goods companies, such as Pfizer and PepsiCo, with gains of 35% and 33.8%, respectively.
But the finance sector was the biggest winner, with companies in the financial field accounting for 47% of all the revenue reported by the Top 250 companies, mostly due to stronger markets and more acquisitions than in recent years.
Bank of New York Mellon, mainly a custodian of corporate assets, saw revenues shoot up more than 75%, to around $14.5 billion after its 2010 acquisitions of PNC Financial Services Group and BHF Assets. And at BlackRock, the world’s largest money manager, revenues soared 83.2%, to more than $8.6 billion, in a year that saw BlackRock’s merger with Barclay’s Global Investors finalized.
Crain’s New York Business senior Web news producer Elisabeth Cordova seems to regret few things about leaving El Dorado.
She would, however, have liked to take advantage of the “El Dorado Promise” – a college scholarship fund for residents set up by Murphy Oil, the major employer of the small city in the far southeast of Arkansas, where she grew up in a trailer park. Her father was a beat cop and the DARE officer of the town, her mother worked long hours at the hospital admitting room, and she had a half-brother and two younger sisters to boot, so she could have used a little financial help. But the program didn’t start until 1997, a year after she had graduated from tiny Parker’s Chapel High School (graduating class: 46 students).
Cordova got to college anyway, five hours away in Fayetteville. “I went as far north in the state as I could without leaving,” she says.
At first, she says, she had no clue what she wanted to do. Luckily, the University of Arkansas’s Fayetteville campus happened to have a great journalism program, and by the time senior year rolled around Cordova, who had done mostly creative writing up until college, knew that it was for her. She immediately sent in her first internship application to the offices of Southern Living in Birmingham, Alabama.
“I just assumed I’d be working in magazines, right? Because that’s what you do,” she laughs.
Southern Living rejected her application. Cordova hadn’t known that the internship was for another trade publication owned by the magazine’s publisher, and it specialized in a topic that at the time, she knew little about: cooking.
Bummed, she relied on the advice of her advisor Patsy Watkins – the first in a series of important figures who would help shape her future – and took a job with Northwest Arkansas Business Journal, a small publication with a newsroom stuffed full of former sports writers. This turned out to be fortuitous.
“Sports reporters make good business writers,” says Cordova, “because they can turn boring statistics into a human story.”
The clubhouse atmosphere must have made an impression as well, because she stayed until the editors gave her a small business column of her own. After two years she’d made Associate Editor. But then, a long-term relationship crumbled and she knew the time had come to say goodbye to the Gem State.
“I got my heart broken in Arkansas,” she says ruefully. “I had to leave. I just could not stand to see my old life driving around in my old truck.”
Rootless for the first time in her life and not caring much where she settled, Cordova consulted the AABP list and picked 10 different cities throughout the U.S. with well-regarded independent business journals. Then she blasted a volley of applications to all four corners of the country – “even Hawaii,” she says. She got a response from City Business in New Orleans and moved immediately.
But covering business in New Orleans proved slightly more challenging than in northern Arkansas.
“I was in way over my head in New Orleans,” Cordova recalls. “I almost left and went back to Fayetteville.”
Her old job still awaited. All she’d need to do was say the word and she’d be hailed as a returning hero (partly, she says, because she had done the work of three people at the NABJ, commandeering graphics, editing and reporting).
But that didn’t happen. Instead, the second of her big helpers came through – her City Business managing editor, Keith Brannon, who convinced her to stay and tough it out. “He helped me become a better business writer,” she says of Brannon.
So Cordova rallied. She went on to a two-year stint at City Business, eventually helping the journal establish its first Web department. And again, fate intervened. She had a falling-out with a “terrible” editor, “the worst boss I have ever worked for”, she says.
This time she had a plan.
Cordova had friends who had moved to New York, including a former colleague, Keith Pandolfi, and somehow they were making it. And she was well aware of the reputation of Crain’s New York Business: at the New Orleans and Fayetteville journals, she says, the journal “had always been held up as a standard” for clear, in-depth reporting and graphic presentation.
“I wrote [then Crain’s editor] Greg David an absolutely glowing letter,” she says.
David contacted her shortly and told her to give him a call when she got into town. Elated, Cordova moved – and ended up selling soap in Herald Square for three months. The journal had no openings. She could have gone into public relations, as many struggling writers did. But then she thought better of it.
“I know a lot of good journalists who’ve gone into P.R.,” she says. “And you just can’t come back from it. Once someone has paid you to write what they want you to say, it’s hard to look credible as a journalist anymore.”
“They do pay better, though,” she laughs.
Finally, luck was on her side, and she landed a six-week freelance gig filling in for a health care reporter on a leave of absence. When the reporter unexpectedly returned a week early, she says, “it was a bit awkward.”
“All of my stuff was at her desk. I was kind of like, ‘Hi, I’ve been filling in for you!” she laughs. But she was determined not to leave just yet. “I just sort of moved everything to a different desk nearby,” she says, and waited to hear from David. And when the journal’s fashion reporter left unexpectedly, she was there to take over.
She stayed on the fashion desk for the next three and a half years. The beat culminated in one of the best scoops of her reporting career, when she anticipated in a story that fashion icon Liz Claiborne would be completely reorganizing her empire. And it was during this time, in 2005, that she met her husband, John Cordova, with whom she now has a one-year-old daughter, Olivia. The two are expecting their second child in October.
She and her husband never would never have met, she says, if her friend Keith Pandolfi had been a bit less hung-over. She, Pandolfi and two other New Orleans friends were scheduled to meet for a brunch at Prune in the Lower East Side. Pandolfi cancelled, and one spot at their table unexpectedly opened up. “John was there by himself,” she says, and the place was packed.
“I just thought, ‘that guy’s never going to get to eat,” she remembers. So she invited him to dine with she and her friends.
Her altruism paid off. It turned out they were a perfect match. John was a line cook at Le Bernardin, the famous fish spot, and an aspiring chef. Cordova loved to try new restaurants and occasionally cooked for her friends. A year and a half later, they were married and living in Brooklyn, where they are on their fourth apartment. The two recently returned to Prune for the fifth anniversary of their meeting.
Spending the last four years helping create and edit news, video and graphics for the Web – she was just promoted to senior news editor last January – Cordova has learned a few things about what makes good business news.
“I was really intimidated by business journalism at first. I knew nothing about business,” she says.
But she’ll always remember a lesson she learned as a rookie reporter covering small, local companies, years ago, in Fayetteville, Arkansas.
“The best business reporters,” she says, “get at the people behind the numbers.”
The federal government netted its biggest hedge fund fish yet when a jury found Raj Rajaratnam guilty of all 14 counts of conspiracy and securities fraud. Jurors deliberated the insider-trading case for weeks, after listening to damning testimony from Wall Street bigs such as Goldman Sachs Group Inc. Chief Lloyd Blankfein and former McKinsey & Co. director Anil Kumar. In the end, the government’s unusual wiretaps likely sealed Mr. Rajaratnam’s fate, as jurors repeatedly listened to more than 40 tapes of the defendant milking various industry players for inside information.
The Sri Lanka-born hedge fund executive faces as much as 25 years in prison; sentencing is set for July 29. Mr. Rajaratnam, 53, plans to appeal the verdict and will wear an electronic monitor during his house arrest in the interim.
At the peak of his career, the Galleon Group founder managed more than $7 billion and was revered on Wall Street. In his defense, his lawyers tried to convince jurors that Mr. Rajaratnam was simply well-researched and only moved on information that was publicly available. Prosecutors, however, painted the hedge funder as the very definition of an inside trader.
A Census official said a “processing issue” was one of many possible causes for a population undercount in the city—not that Tony Farthing, the bureau’s regional director, would confirm said undercount. He spoke at a City Council hearing in response to a Brooklyn councilman’s incredulity over Census-reported apartment vacancies in Bay Ridge. The city, which has yet to officially challenge the 2010 census count, hopes to reclaim 80,000 residents it says were missing from the rolls and thereby boost federal funding by $2.4 billion over the next 10 years.
Not only did Goldman get the heads-up that the Commodity Futures Trading Commission might soon charge it with civil fraud relating to its clearing services for a broker-dealer, it also admitted to receiving more subpoenas concerning its ill-fated mortgage product Abacus 2007-AC1. That piece of work has already attracted global scrutiny.
Uncle Sam wants to unload a thin slice of its 92% stake in American International Group Inc., offering 200 million shares in a sale that commenced last week. The government’s breakeven point is $28.72. Just 1.6 billion shares to go.
Daniel Brodsky was named chairman of the Metropolitan Museum of Art’s board. The developer admits he’s no expert when it comes to art, yet he was a driving force behind Lincoln Center’s recent renovations, and he’s a trustee of not only the Met but also the New York City Ballet and New York University. In his spare time, he manages 6,200 apartments in 68 Manhattan buildings.
Many Battery Park City residents are breathing sighs of relief after their managing agency agreed to cap the neighborhood’s total ground-lease rents at $525 million over the next 30 years. The agreement prevents projected hikes that could have cost the community $279 million more than that. A product of the 1980s, ground leases require tenants to pay a rental fee on the underlying city-owned land, in addition to apartment fees.
A version of this article appeared in the May 16, 2011 print issue of Crain’s New York Business.
Asian-American firms are making it big in the Big Apple, accounting for 10 of the Top 25 minority-owned companies in the New York area, according to a new Crain’s list.
There were nine Hispanic and Latino-owned companies and six African-American firms on the Crain’s list, which ranked the region’s 25 largest minority businesses by their 2010 revenues. The No .1 company was Goya Foods Inc., of Secaucus, N.J., with an estimated 1.7 billion in revenues last year.
The top Asian-American firm on the list was information technology company ASI System Integration, which reported $175 million in revenues for 2010, placing No. 5 overall.
Six of the 10 Asian-American-owned companies on the list operate in either apparel or construction and construction supplies, industries that have struggled during the recent recession. Indeed, seven of the 10 Asian-American firms on the list lost revenue from the year earlier.
By Design, a Manhattan-based apparel wholesale company, was founded in 1994 by Korean-American Chief Executive Jay Lee. Though still successful enough to make No. 10 on the list, the company’s revenue last year dropped to $77.1 million from $87.1 million in 2009. By Design’s director of human resources, Richard Eagan, said the continuing lull in the economy, paired with some retailers’ desire to save money by sourcing their own apparel overseas, made things tough last year.
The company is banking on innovation to help blunt the impact of falling revenue, acquiring a partner last summer in Los Angeles-based jeans-maker-to-the-stars David Kahn. Their high-end denims should appear in New York boutiques soon, Mr. Eagan said, noting that the move is “totally new” for a company that sells mainly knits and sweaters for young women.
One apparel wholesaler appears to have emerged unscathed: Lafayette 148 New York. The women’s apparel company ranked No. 8 on this year’s list with $100 million in revenues in 2010, up from $95 million in 2009.
Chief Executive Shun Yen Sui said Lafayette 148’s success in rough times resulted from a refusal to compromise the brand and the product. Favorable manufacturing locations also helped: “Certainly,” Mr. Sui said, “our vertical operations, with our own production facility in Shantou, China, give us a competitive advantage.”
Despite individual success stories, John Wang, president of the Manhattan-based Asian American Business Development Center, said apparel manufacturing has been falling for years. “Much of the manufacturing has moved to Asia, Vietnam,” he said. “And Americans are not spending as freely as before.”
Construction services also continued to slow in 2010: Though all three of the Asian-American construction and construction supplies firms on the Crain’s list moved up in the rankings, their total revenue dropped anywhere from 7% to 22%. (Overall construction spending in New York City plunged 12% in 2010 alone, and it’s off more than 20% from peaks seen in 2007 and 2008.)
Mr. Wang said whatever the sector, local Asian-American businesses will need to continue expanding into unfamiliar territory—even international markets—to stay competitive. He mentioned Latin America and Africa as potential markets for expansion, a trend growing for decades in Chinese business. But he also pointed to a growth market much closer to home.
Previously isolated minority groups are starting to put aside language and cultural barriers and are “developing each other” as potential customers, he said.
“On the smaller scale, people have been teaming up from the neighboring minority communities,” said Mr. Wang. But he said Asian American-owned companies “could be marketing much more heavily to Hispanic, African-American and gay and lesbian markets.”