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"Be annoyed. Be angry. God knows I am. But it's time to move on." -- Walt Disney CEO Michael Eisner, to shareholders irate over the lush exit package of Michael OvitzEDITED BY LARRY LIGHTReturn to top
AIN'T THAT A KICK IN LEVI'S PANTS
IT'S IRONIC LEVI STRAUSS HAS been on a financial tear. Levi just booked 10 straight years of record sales. And the company, known for its do-gooder image, last year announced an unusually generous incentive plan that could give each employee a bonus of up to one year's pay in 2001 if Levi hits financial targets. So employees got a jolt Feb. 18 when the world's largest apparel company said it must slash 20% of its 5,000 U.S. salaried jobs to cut escalating expenses by $80 million.
More bad news might be on the way. A source close to the San Francisco-based company says that plant closings could be in Levi's future. Layoffs of hourly workers may result. Levi says only that no decision has been made on those issues. Internal memos obtained by BUSINESS WEEK detail what the company's problems are.
The memos point to increased competition from designer and private-label brands sold at J.C. Penney and Sears. These memos also blame Levi for taking on too many costly initiatives, such as the revamping of customer service. Demand has also flattened for jeans. In an unusually frank statement for Corporate America, one memo says: "We lost our focus in the U.S. business and didn't prioritize well."By Linda Himelstein EDITED BY LARRY LIGHTReturn to top
SMUGGLED CIGARS ARE EXPLODING
SMUGGLED STOGIES ARE increasingly the souvenir of choice for American tourists abroad. With the boom in cigar smoking, Cuban cigars--banned in the U.S. since 1962--are sold more and more to visiting Americans in Canada, Mexico, and the Caribbean. The La Casa del Habano shop in Antigua, for instance, says Americans generally account for 80% of sales, buying roughly 12,000 Cuban cigars a week. At some cigar outlets in Toronto, obliging clerks cleverly package Havanas for Americans to fool Customs agents.
Such ruses, though, don't always work. The number of seizures by U.S. Customs is up dramatically: 1,372 involving 96,216 cigars valued at $1.14 million last year, vs. just 221 incidents in 1994 with 24,360 cigars worth $142,000. Usually, the goods are destroyed. Smugglers carrying large amounts that agents suspect are for resale could face up to 10 years in prison and $100,000 in fines. While Fidel Castro has quit smoking himself, his economically ailing island exported 70 million cigars in 1996, which Cuban officials say is half the demand.By Gail DeGeorge EDITED BY LARRY LIGHTReturn to top
FOR ALI, ROUND 3 IN THE CHICKEN BIZ
MUHAMMAD ALI IS AIMING TO go into the chicken business again, this time in the Muslim world, where the exboxer is a beloved figure. The former world heavyweight champ, who converted to Islam in the 1960s, is stricken with Parkinson's Disease. But he has remained active in business ventures, licensing his name for cologne and clothing.
Ali wouldn't own the restaurants. The deal under negotiation would involve Egypt's Behairy family licensing his name for a fee. Ali's lawyer says that the two sides are still far apart. For their part, the Behairys are confident a deal will be struck. The family wants to open the first chicken joint, costing $1 million, in Cairo. From there, they hope to expand throughout the Mideast. The atmosphere will have a feel similar to Planet Hollywood, except with no liquor or pork served.
Ali's restaurant career isn't as stellar as his ring record. Back in 1975, his attempt to start a chicken-and-burger chain fizzled for lack of funds. A second venture, a restaurant, called Muhammad Ali Rotisserie Chicken (he got a fee for his name), recently closed in Silver Spring, Md., after two years.By Sarah Gauch and Lisa Sanders EDITED BY LARRY LIGHTReturn to top