These are stories Report on Business is following Tuesday, Feb. 25, 2014.
The Polar Vortex and you
There’s more than just mittens in hot demand during this winter’s deep freeze: Long johns.
Fortune reports today that the Polar Vortex – do you wish you’d never heard the term? – has brought with it a scramble for long underwear.
So much so that companies such as Hot Chillys and Terramar Sports are projecting 30-per-cent gains in revenue.
When I was a kid, we called them long johns. Now they come with fancy names, but whatever you call them, they’re selling like hot cakes and are being snapped up when they hit the shelves.
“It’s the middle of February, and my phone is still ringing off the hook with orders,” Hot Chillys sales chief Steve Lee told Fortune.
“We fell behind in orders around the first part of December and have been catching up ever since.”
It’s a fascinating business, as Fortune’s Caroline Fairchild tells it, because of the need to forecast the weather.
No hedging here, apparently.
After two consecutive mild winters, Ms. Fairchild writes, retailers didn’t put in for big orders.
And that left them scrambling when people began freezing their buns off.
Shares of BlackBerry Ltd. rallied today, up almost 8 per cent, as the smartphone maker strikes back after a long spell on the ropes.
“We have engineered a new strategy to stabilize the company and restore our customers’ confidence in BlackBerry,” John Chen, the company’s new chief executive officer, said as he unveiled new initiatives at the Mobile World Congress in Barcelona.
Mr. Chen, who has pledged to turn around the company that once ruled its industry, announced new products and services, from a cheaper Z3 BlackBerry that will cost under $200 (U.S.) to a new Q20 model that brings back its “classic” keyboard.
It’s also revamping its BlackBerry Enterprise Server and launching BBM for enterprise users.
The new Z3, the first result of its partnership with Foxconn, will initially launch in Indonesia in April. The Q20, in turn, which will feature the function keys and signature trackpad with a QWERTY keyboard, will go on sale later this year.
As The Globe and Mail’s Sean Silcoff reported earlier this week, the return of this “belt” of function keys is aimed at winning back customers.
Mr. Chen, who joined the company last year as Thorsten Heins departed, is fighting back against fierce competition from Apple Inc.’s iPhone, Samsung’s Galaxy and the various smartphones powered by Google Inc.’s Android system.
The latest industry report, released earlier this month by research firm IDC, showed BlackBerry’s operating systems slipping to hold just a 0.6-per-cent share of the market for new smartphones in the fourth quarter of last year.
Mr. Chen, by the way, also suggested in Barcelona that its already popular BBM chat app will become even more popular in the wake of Facebook Inc.’s huge deal for WhatsApp.
BBM, which original BlackBerry users loved, has been expanded to the iPhone and Android devices, and now to Microsoft Corp.’s Windows.
At the same time, as The Globe and Mail’s Omar El Akkad and Greg Keenan report, Ford Motor Co. is said to be looking at switching the operating system on its Windows-based Sync to one from BlackBerry’s QNX.
- Read Sean Silcoff’s exclusive report on John Chen’s simple plan to save BlackBerry
- BlackBerry to bring back function keys to win back former fans
- BlackBerry announces new phones, enterprise service as part of comeback strategy
- Omar El Akkad and Greg Keenan: Ford eyes switch to BlackBerry software for vehicles
- Molly’s back on BBM: Why BlackBerry’s ‘forbidden fruit’ is such a hit
BMO profit up
Bank of Montreal’s diversified operations and lower loan losses helped the bank earn $1.1-billion in the first quarter, The Globe and Mail's Tim Kiladze writes.
BMO’s profit amounted to $1.58 a share, up 5 per cent from the first quarter of 2013. After adjusting for one-time items, the quarterly profit came in just a tad higher, amounting to $1.61 a share. Analysts estimated adjusted earnings of $1.52 per share.
Individual profits across the different business lines fluctuated during the quarter, but the bank exhibited solid revenue growth. Adjusted revenue increased $310-million, or 8 per cent, aided in part by a sinking Canadian dollar.
Bitcoin shrouded in intrigue
Intrigue surrounds the virtual world of bitcoin today as one of the biggest exchanges virtually vanishes.
As Reuters reports, the Mt. Gox website is inoperable, the whereabouts of its founder aren’t known, and some people are saying they’ve lost money.
Six other exchanges put out a statement saying that whatever has happened with Mt. Gox “does not reflect the resilience or value of bitcoin and the digital currency industry.”
Questions have long surrounded bitcoin, its value and its uses.
“Many things have been used as money over the years and some good books written about the history of money,” said Kit Juckes, the chief of foreign exchange at Société Générale.
“Clam shells from Lake Victoria were undermined by the fact that they were less rare than people thought, European money in the middle ages was regularly undermined by 'clippers' lowering the silver content or by bankrupt kings deliberately devaluing,” he said in a research note today.
“Money as a store of value is based on the idea that you can trust that the supply is limited and that there will be demand. Banking is based on the idea that people trust you to look after their money. And this morning, the world needs a better idea than bitcoin, in my opinion.”
Tims to open shops
Tim Hortons Inc. will open 800 restaurants in North America and 220 in the Middle East as it targets compounded annual growth of 11 per cent to 13 per cent under its new five-year strategic plan, The Globe and Mail's Marina Strauss reports.
The iconic Canadian coffee chain, facing mounting pressure from U.S. global giants McDonald’s Corp. and Starbucks Corp, said it today will also look to enter other international markets for expansion opportunities.
The five-year strategy, outlined at an investor conference, focuses on defending and growing its leading position in Canada and viewing the United States as a “must-win battle.”
The company plans to introduce 500 restaurants in Canada and 300 in the United States. It currently has almost 3,600 in Canada and more than 850 south of the border.
Europe gains some steam
Inch by painful inch, the euro zone is slowing emerging from its troubles, largely driven by the powerhouse that is Germany.
The European Commission today released a new forecast that projects economic growth of 1.5 per cent in the European Union this year, and 1.2 per cent in the smaller euro zone, up marginally from earlier predictions.
Next year, growth is seen picking up to 2 per cent in the EU and 1.8 per cent in the monetary union, our European correspondent Eric Reguly reports.
Unemployment, however, remains stubbornly high, projected to fall to 10.4 per cent in the EU next year and inch down to 11.7 per cent in the euro zone.
And, of course, countries such as Greece and Spain will continue to suffer far more than their stronger counterparts.
“The worst of the crisis may now be behind us, but this is not an invitation to be complacent, as the recovery is still modest,” said Olli Rehn, Europe’s chief for economic and monetary affairs.
“To make the recovery stronger and create more jobs, we need to stay the course of economic reform."
Richer, and deeper in debt
Canadian families saw both higher net worth in recent years, as the value of their homes and pensions grew, and higher debt loads due to bigger mortgages and lines of credit, a national study shows.
All told, the median net worth of Canadian families climbed 44.5 per cent to $243,800 in 2012 from 2005 adjusted for inflation, according to Statistics Canada’s survey of financial security released today and reported by The Globe and Mail's Tavia Grant.
Net worth changes with people’s life cycle. Families where the highest-earning person was between 55 and 64 years old had almost three times the median net worth of all family units. Among provinces, net worth is highest in British Columbia, which likely reflects rising house prices.
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