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In Business This Week: Headliner
William Farley: Soured Grapes
William Farley will no longer be minding the knitting at Fruit of the Loom. On Aug. 30, the company announced both that its flamboyant executive was giving up his post as CEO and that earnings for the maker of T-shirts and underwear would fall "significantly below" Wall Street estimates for the rest of this year. Since Farley, briefly a Democratic Presidential wannabe, took control of the company through a leveraged buyout back in 1985, the undergarment company has been slowly unraveling. Lately, production and customer service snafus caused a 12% dip in first-half sales, while the stock has fallen from a peak of $48 per share in 1993 to less than $7 recently. "He ran a great business into the ground," says one investor who continues to hold the stock. Farley, who could not be reached for comment, will nowoccupy the newly formed "Office of the Chairman" with two other members of the board, says Dennis Bookshester, a director who will assume CEO duties until a permanent replacement can be found.By Andrew Osterland; Edited by Mark FrankelReturn to top
A Blockbuster Harvest for Apple
Just two years after it was left for dead, Apple Computer shares look poised to hit record heights. With the Aug. 31 announcement of its new, high-end G4 Mac computer, Apple's stock neared $68 per share, last hit in 1993. When combined with the continued strong sales of Apple's colorful iMac and pent-up demand for its new iBook portable, anaLysts expect a blow-out December quarter. Consumers have put in orders for 140,000 units of the iBook, which is scheduled to ship in mid-September. "All the arrows are heading in the right direction," says longtime interim CEO Steven Jobs. What's more, Apple's new Mac OS9 software, due out on Oct. 1, may bring an uptick in Net-related profits. The program contains a feature called Sherlock II that lets cyber-shoppers easily seek out the best deals on the Net. Apple is negotiating with E-merchants for hefty commissions, says an insider.Edited by Mark FrankelReturn to top
Can These Guys Beam Up Iridium?
On Sept. 1, Iridium, the beleaguered satellite phone company, announced it had hired New York turnaround firm Alvarez & Marsal. Iridium filed for Chapter 11 bankruptcy protection in August after failing to meet bond payments and revenue targets promised to bankers. Alvarez & Marsal will prepare a restructuring plan for the company. The firm's managing director, Joseph A. Bondi, will serve as Iridium's chief restructuring officer, while Managing Director David R. Gibson will act as the interim chief financial officer, replacing Leo Mondale, who resigned.Edited by Mark FrankelReturn to top
Intel Chips Away at Networking
Intel is wading deeper into computer networking. On Sept. 1, the semiconductor giant unveiled 13 chips meant to be used in communications gear such as Internet routers and data switches. Until now, the Santa Clara (Calif.) company has made chips mostly for PCs, but Intel is trying to duplicate its earlier success by using the same tactic in networking: hawking general-purpose chips to companies who design them into products. "We want to be the building-block supplier to the Internet economy," says CEO Craig Barrett. Analysts and rivals think Intel may find that a tough sell in the fragmented networking business.Edited by Mark FrankelReturn to top