Up Front
Edited by Sheridan Prasso
Talk Show
"...the economy will narrowly avoid recession and recover gradually next year." -- Congressional Budget Office report
THE BIG PICTURE
WILD BLUE YONDER
Time-Share the Skies?
More companies are finding time shares on private planes an alternative to corporate jets or forcing harried execs to cope with commercial travel. Fractional ownership--in which companies buy the right to use a fleet of planes at any time--is up 30% over last year, though it still accounts for only 0.6% of all business trips. For companies wanting the convenience and prestige of flying executives anywhere at all hours, the cost of fractional ownership--about $1 million to $5 million to buy in, plus $6,000 monthly and hourly fees--is far cheaper than forking over $42 million for a Gulfstream jet. Plus, it eliminates idle time and expense at the hangar.
After watching passengers defect from business class, commercial airlines are anxious to get in the game. UAL (UAL
) is launching private jets next April that will boast five-star service and more amenities than United can offer, including spacious cabins and, on some planes, conference tables and lounges. "For a much smaller universe of people, there are a number of needs commercial airlines simply cannot fulfill," says Stuart Oran, CEO of United BizJet Holdings. Air Canada, British Airways, and Virgin Atlantic are planning similar services. They will join already crowded skies. Berkshire Hathaway's Executive Jet is the industry leader, with 370 planes.
By Rod Kurtz
BUSH WHACKINGS
Think Twice about Havana Holidays
"See Cuba before Castro dies." Travel hipsters have been chanting that mantra, spurred on by reports that 75-year-old Fidel has fainted, is in ill health, or can no longer deliver five-hour-long speeches in the blazing sun.
But just as travel to Cuba is escalating, with tens of thousands of Americans going last year, the Bush Administration is cracking down. Many tourists are canceling trips, and organizations that offer legal excursions under the exempted category of cultural exchanges are getting tougher about whom they'll take. "It's very distressing," says Sandra Levinson, who runs study trips from her Center for Cuban Studies in New York. "We are self-censoring because it seems the Bush Administration is enforcing the rules much more strictly."
While travel itself is not illegal, U.S. laws prohibit American tourists from spending money there. But starting in May, the Treasury Dept. says it sent more than 400 letters to tourists telling them they'd been caught. The Clinton Administration sent 188 letters in 2000, with fines averaging $3,000. This year, fines are averaging $7,500. The travelers were spotted by U.S. Customs agents transiting in Toronto or the Bahamas or their passports had a Cuba stamp--sometimes from trips two or three years ago. The Center for Constitutional Rights, which defends travelers to Cuba, is getting 10 calls a week, triple last year's caseload, and can't take any more.
Meantime, word is filtering down to would-be Cuba-goers. "I don't think I should go now," says a banker who had planned an October trip. Just what the Bush Administration had in mind.
By Sheridan Prasso
AFTERLIVES
Newt Gingrich, Literary Critic
What do you do when you've already been Time's Man of the Year, provoked the wrath of Democrats, and left behind a controversial legacy in Congress? If you're Newt Gingrich, you become an amateur book reviewer. A prolific reader, the ex-environmental studies prof has been posting reviews on Amazon.com and become one of the site's Top 500 customer-ranked critics. "People were saying, `What have you been reading?"' says Gingrich.
So he decided to tell them. His reviews--nearly 50 on works ranging from crime novels to tomes on quantum physics and Palestinian-Israeli relations--are straightforward and plainly written. But Gingrich, who claims not to miss politics, can't help sneaking in a few asides. The novel Hot Springs "describes a world (the one in which Bill Clinton was raised) which reminds you that crime, gambling, and entertainment have a long intertwined history in America." And Innovation in the Interwar Period is "the one book Secretary of Defense Don Rumsfeld should read."
Ranked Amazon's 452nd-best reviewer, the former Speaker of the House ties with "Suzy Shams," a stay-at-home Mom, and "happydogpotatohead," whose bio says he hails from "Eastern Venus."
By Heather Timmons
THE LIST
War of the Mints
First Altoids shot to fame as the "curiously strong" mints. Now, rivals are fighting back:
WARP
Cost per mint: 4 cents
Energy mints with ginseng, gingko, and guarana (a caffeine substitute)
ALTOIDS
Cost per mint: 8 cents
New tins are heart-shaped, decorated with art, and mini-sized
TRIDENT ADVANTAGE
Cost per mint: 8 cents
With Recaldent, a milk derivative that strengthens teeth
LISTERINE POCKET PAKS
Cost per mint: 9 cents
LSD-like tongue tabs; will debut in October
TYPICAL MAIL
A Big Break for Your Postman
Here's one boon from bad times: less junk mail. Thanks to hefty postage hikes and the economic downturn, many companies are planning to cut back on catalogs and other direct mail this fall. Bob Wientzen, CEO of the Direct Marketing Assn., says that after years of rapid growth, most of his 4,700 members will curb "prospecting" for new customers before the holidays. Such prospects now get up to 40% of the 16 billion catalogs mailed each year in the U.S. But they're less likely to respond than proven customers. So catalogers are now "mailing smarter," says Weintzen.
Many biggies won't talk about it, but those that confirm either cutting back or marketing more conservatively include Lillian Vernon (LVC
), Spiegel (SPGLA
) (which owns Eddie Bauer), and Coldwater Creek (CWTR
), which is cutting circulation 15%. "We will do more to target those customers prone to buying," says a spokesman for Coldwater, which is shifting its focus to online sales. Bedding-maker The Company Store has cut expansion plans 10%. Spiegel will keep circulation flat after years of growth.
Consumers may welcome less mail, but Wientzen maintains it's not junk: "The reality is that 86% of all mail that comes into the home is opened and looked at."
By Diane Brady and Julia Cosgrove
SLAVE TO FASHION
Cat on a Hot Thin Model
Supermodels Tyra Banks and Laetitia Costa love it. Christina Aguilera, Mariah Carey, and the gals from Sex and the City are avid collectors. The newest couture line? No--rather, purses, bags, and T-shirts adorned with Hello Kitty. All the rage for decades in Japan and once merely the domain of little girls in the U.S., the round-faced cat is suddenly cheap chic in the fashion world.
Because the kitschy kitty is hot with fashionistas, parent company Sanrio has seen North American sales triple, to $300 million, in the past few years. Trend analysts say Sanrio creates buzz by word of mouth, limited advertising, and new products every six weeks. "It's like an insiders' club," says Tom Julian of ad agency Fallon Worldwide. Pink quilted bags ($11.50), for example, quickly sold out in June after Sanrio made only 4,800 of them.
The Hello Kitty boutique in New York's Times Square is now a celeb-sighting scene. In recent weeks, "we've had a couple Victoria's Secret models, plus Miss Dominican Republic," says nonplussed manager Rita Maskey. The Christina Aguileras of the world wanting to avoid the crowds can keep avant-garde on sanrio.com.
By Julia Cosgrove
FOOD STUFF
Vitamin-Enriched Profits
Orange juice enhanced with calcium was just the beginning. Sales of foods with added vitamins and minerals, a $17.4 billion segment, are growing 7% a year. That's twice as fast as other food categories, say researchers Nutrition Business International. Such foods can fetch a 10% to 15% premium but cost just pennies more to make. A block of Nasoya tofu, for example, runs $1.79; with added vitamin A and E it costs $1.99. "Companies are in it big time," says Varro Tyler, a professor at Purdue University's pharmacy school.
With money to be made, there's incentive to experiment. Goldin Pickle quickly sold out of vitamin-enhanced pickle juice in May after reports that the Philadelphia Eagles drank pickle juice to prevent dehydration. While vinegar doesn't do much, nutritionist Susan Mitchell says the juice replaces lost salt. Belgian distributor Del Diche has a hit with Dynameat, a sausage with additives (guarana and ginseng) more commonly found in energy bars. Clearly, energy foods are taking off--in ever stranger directions.
By Olga Kharif and Kimberly Weisul
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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