Sarah Gilbert
Portland, Oregon - http://www.cafemama.com
Sarah Gilbert is a blogger by trade and a finance geek at heart. She cut her teeth on her first Excel spreadsheet full of financials at the tender age of 21, when she began her investment banking career in First Union's Loan Syndications group. She went on to get her MBA from Wharton, work at Merrill Lynch and fall in love with analyzing company strategy and endless rows of numbers. So she tried her hand at *setting* strategy, working for a number of exciting and under-discovered startups in various product management roles, all of which seemed to center around writing business plans and, yes, making spreadsheets. She got into blogging as a marketing strategy and loved it so, it took. She now blogs about finance while her three little boys are asleep in her beloved 1912 Portland home.
Sarah Gilbert
Portland, Oregon - http://www.cafemama.com
Sarah Gilbert is a blogger by trade and a finance geek at heart. She cut her teeth on her first Excel spreadsheet full of financials at the tender age of 21, when she began her investment banking career in First Union's Loan Syndications group. She went on to get her MBA from Wharton, work at Merrill Lynch and fall in love with analyzing company strategy and endless rows of numbers. So she tried her hand at *setting* strategy, working for a number of exciting and under-discovered startups in various product management roles, all of which seemed to center around writing business plans and, yes, making spreadsheets. She got into blogging as a marketing strategy and loved it so, it took. She now blogs about finance while her three little boys are asleep in her beloved 1912 Portland home.
Posted Jan 7th 2009 11:11AM by Sarah Gilbert
Filed under: Management, Politics, Headline news, Comic Relief
Here's one that I'll bet executive recruiters don't see every day: a résumé on a mausoleum. In Chicago's Oak Woods Cemetery, would-be Illinois senator Roland Burris has had his
many accomplishments engraved in stone, in the mausoleum he will (I assume) one day be buried. He has listed everything from his "trailblazing" stint as the first African-American exchange student from Southern Illinois University to Hamburg University in Germany in 1959, to his rather more impressively record-setting position as the first African-American Illinois attorney general.
Interestingly, he has left room for more African-American firsts, and though it's certain he will never be the first minority to serve as Illinois senator, it appears he is
fighting hard to be the third one.
Politicians, attorneys and executives aren't known for their creativity in the hunt for a new job, so Burris could be trailblazing in more ways than even he imagined here. Perhaps, in a market in which many big companies are dissolving, leaving executives flailing and jobless, it's time to re-think the staid past of executive job searches. Just off the top of my head, I could see a heavy hitter like Lehman's Dick Fuld (also
known for his hubris) having his résumé painted on the back of one of the many paintings in his art collection, and delivered to the office of his potential boss. That may flirt with the "bribe" line, but it's a jungle out there, right? And if any of the auto executives go jobless in the coming months, perhaps they might persuade the pilot of their private jets to fly around Detroit, writing their résumés in the sky with their jet trails.
It's a thought.
Posted Dec 30th 2008 6:45PM by Sarah Gilbert
Filed under: Consumer experience, Marketing and advertising, Yum Brands (YUM)
It's right there in the stock symbol: for
Yum! Brands (NYSE:
YUM), parent of Kentucky Fried Chicken, Taco Bell and Pizza Hut, is all about good taste. None of the food conglomerates' brands have ever been widely recognized for their healthfulness; in fact, it's safe to say that consumers passionate about healthy eating consider the entire suite of fast-service restaurants dens of iniquity.
Yum is
trying to change all that. No, not by making any of the restaurants' foods more healthy, but by targeting consumers who are looking to lose weight with its new
Keep It Balanced web site. The site shows laughing, gorgeous, healthy consumers holding chalupas and sodas, while exhorting weight-conscious readers to "Keep a record of what you eat and drink" and "Be Patient!" while ordering sauce on the side at Taco Bell and (seriously?) removing the skin and breading from your KFC fried chicken. Meanwhile shadowy figures dance around the corners of the site's frames in moves reminiscent of Tai Chi; a discipline that I would be willing to bet 90% of the company's consumers don't practice and, likely, consider ridiculous.
The message: our food is so totally unhealthy, but you can make it healthy by picking off all the tasty bits. Then you'll be free to head to martial arts training with a clear conscience. Brilliant. Or, perhaps, absolutely unbrilliant and obviously meant only to pay lip service to criticism that the company's foods are contributing to our nation's decidedly unhealthy relationship with food, a half-hearted effort to associate its brands with the "diet season" of January. In my estimation, the site is a waste of marketing dollars and, as long as you're not an investor, laughable.
Posted Dec 23rd 2008 12:40PM by Sarah Gilbert
Filed under: Rants and raves, Indices, Personal finance, Recession
This post is part of our feature on Money Losers of 2008. See all 20.
If there could be a more cruel joke played on the downtrodden American middle class this year, I don't know what it could be. Battered by high gas prices and a punishing mortgage climate in which millions lost their homes, at the end of the year, many were laid off. Desperate in a period of high unemployment, millions are turning to their 401(k) plan for emergency funds. And that's where the true emergency is.
My 401(k) lost about 40% of its value in only a few terrible months this summer and fall. I didn't have much to lose; I'm only a drop in a trillion-dollar bucket, with losses in the NYSE alone at $8.6 trillion for the year. In January 2008, the NYSE opened at 9,647 points, a value of $19.7 trillion. By mid-December, the NYSE was hovering around 5,500 points, a value of $11.1 trillion, an enormous 43.7% decline.
Taking an early distribution from my 401(k) due to a period of depressed income (I'm now a freelance writer and not an "employee," a title so imbued with special status in our society), I had to laugh at the automatic calculator that the Fidelity Net Benefits system makes you undergo in order to request a distribution, showing me how much I would be losing from my retirement income. If only someone could have made me go through this little exercise when I was responsibly socking away cash in stock index funds -- "this is how much retirement money you can lose if you trust in the American economy!" -- perhaps I'd have saved the time to log into Fidelity and just stuck the money in savings instead. I had to laugh -- so I didn't cry.
Continue reading Money losers of 2008: The American investor, the joke's on you
Posted Dec 16th 2008 4:02PM by Sarah Gilbert
Filed under: Bad news, Consumer experience, Technology
Worried about the honesty and effectiveness of the toy-screening conducted by major toy manufacturers and retailers?
Zap 'em yourself with a Niton X-ray fluorescence analyzer, or XRF gun. That's what many consumer groups, including the Center for Environmental Health and HealthyToys.org, do in the continuing struggle to keep dangerous toys off retailer's shelves. The handheld guns go for $25,000 and emit mini x-rays which strike the toy; the "elements in that sample emit return rays with frequencies that indicate which elements are present and in what amounts."
Retailers and manufacturers are not pleased, contending that such guerilla testing is a poor manner of assessing a toy's safety. But the XRF gun is what the CPSC itself uses to test toys, which consumer groups point to as evidence that the technology is appropriate. (The CPSC goes on to send toys that read hot to a third-party laboratory for verification.) And anyway: this manner of testing actually uncovers toys which are toxic, much better than the CPSC's old strategy: go to stores, and look for the ones with bright colors (more likely to be tainted with lead). A comparison of the two strategies showed the XRF gun screening to have a far higher discovery rate, though of course many items that had high readings on the XRF gun were shown to be safe after further lab testing.
But who wants consumer advocacy groups out looking for bad toys? Certainly not the toy companies, who can only stand to be hurt by the increased scrutiny and "fear-mongering." In a column published earlier today I wrote about my
concern over the fate of small toymakers given the impending effective date of the CPSIA. I can't exactly shed big tears, then, for the bigger manufacturers and importers who might be hurt by the discovery of toxins (even if the alarm bells ring a bit too loudly and too soon). The two manners of dealing with the toxic toy issue -- attacking it in the streets with ray guns, or clamping a shackle of expensive testing around each toy before it hits the market -- both seem wrong-headed, one too reactive, the other too proactive. Isn't there a better middle ground?
Posted Dec 16th 2008 8:28AM by Sarah Gilbert
Filed under: Mattel, Inc (MAT), Hasbro Inc (HAS)
Today may have been ignominious for toymaker
Mattel (NYSE:
MAT) as its Fisher Price unit paid $12 million in a settlement to make up for its role in allowing toys containing lead to be delivered to retailers and consumers across the U.S. However, Mattel and its big competitors, like
Hasbro (NYSE:
HAS), may be enjoying the fruits of the scandals next year as new laws meant to protect consumers from the toxins in lead paint and the plastic toxin known as phthalates
effectively remove its small competition from the marketplace.
Because in order to comply with the new
Consumer Product Safety Improvement Act (CPSIA), effective February 10, 2009, all toymakers must pay a testing fee of $4,000 per type of toy they make, as well as permanently labeling them with a batch number and date (requiring them to create new molds in many cases). While this $4,000 fee will be barely felt by huge toymakers such as Mattel and Hasbro, it will annhilate the growing handmade toy industry in the U.S. and, for many importers, end their relationships with U.S. consumers. German wood toy maker Selecta Spielzeug has already
announced its intention to pull its toys from the U.S. market, effective December 31. In a statement, the company said its retail prices would have to increase "by at least 50 percent, which would price these products out of the market." Small toymakers, such as the little company which sells wooden shields at a wholesale price of $7, would be out of business, as would nearly every other small American, Canadian and European toy company, according to the
Handmade Toy Alliance. What's more, it could decimate Etsy, a marketplace for handmade goods.
The potential results of this act are so frightening and amazingly efficient I am left to wonder if it was drafted by the big toy manufacturers themselves. "We'll pay $12 million," I can imagine executives telling each other, "and we'll appear mollified by the government. Chastened and ready to return to the hallowed work of making toys for good little girls and boys."
Continue reading Mama on the Street: Mattel vs. the little guy in toy toxins
Posted Dec 12th 2008 5:42PM by Sarah Gilbert
Filed under: Agriculture
The entire planet's mortgage crisis could have been so easily averted.
If only all of us were Amish.
While I dream of a world filled with people who honor the land and decry technology that is unnecessary (did you know? The Amish do use technology, but only if it's
necessary -- milking machines, yes; Hummers, no), I understand that you can't unring our media- and technology-addicted culture's bell. On the other hand, it's great to be the mortgage banker to the Amish.
Bill O'Brien, mortgage banker at the Hometowne Heritage Bank, has had one late payment this year in his $100 million portfolio. A few
days late. And he's never had a loss on an Amish loan.
The risk profile is great, sure, but the work is hard, he says; he puts 1,000 miles each week on his car servicing his clients. (Sort of ironic, I think, given the Amish don't drive.) Interestingly, the Amish mortgages can't be jammed into CDOs or other securitized packages; due to an obscure legal rule, mortgages for homes without electricity, or homes that aren't insured, can't be securitized.
What can other mortgage bankers learn from O'Brien? Instead of relying on credit histories and scores or proof of financial stability, he talks to the borrower's father, and usually his father-in-law, too. "It takes a team to make a farm go," he tells NPR. If only if all of our families could operate in that manner.
Posted Dec 10th 2008 6:35PM by Sarah Gilbert
Filed under: Bad news, Starbucks (SBUX), Employees, Brinker Intl (EAT), Recession
Among all the layoffs at tech companies and banks, layoffs at restaurants are barely a plink-plink-plink dropping in the unemployment bucket. Restaurant employees, after all, often work more than one job and variable hours, and turnover is extremely high. It's not one of those made-for-Hollywood scenes when restaurants lay off employees (with the conference room filled with HR consultants and stacks of separation agreements); the picture looks more like gradual reduction in hours until one day you're just not on the schedule. Or, one cocktail waitress at this location, a hostess at the other location, handing in their aprons and their time cards. Perhaps it's just that applicants for empty jobs never get a call back, no matter how awesome their experience.
The
Wall Street Journal today evaluates a report that
jobs at food service establishments have decreased for five months in a row, and says waiters and waitresses are earning less in tips. Once-darlings of Wall Street,
Brinker International (NYSE:
EAT)'s Chili's and
Starbucks (NASDAQ:
SBUX) have seen many outlets close. To blame: it's the economy, naturally, with patrons eating out less, downscaling to fast food for family nights out, ordering less expensive food, and reducing tips from 20%-plus to exactly 15%. Adding insult to injury is the half-of-minimum-wage pay that servers and bartenders are paid in many states: it's been $2.13 an hour since I graduated high school (I can still remember the ignomy when my $21 weekly paycheck from the little Lexington, Virginia pub where I worked in college bounced -- that's how you know your employer is struggling!).
These aren't good times to work in the restaurant industry, or invest in anything but the bare-bones-est of eating establishments.
Continue reading Bad time to be a waitress, or a Brinker investor
Posted Dec 9th 2008 10:55AM by Sarah Gilbert
Filed under: Bad news, Consumer experience
I have thus far in my parenting career managed to avoid Chuck E. Cheese. As someone who wants to run screaming out of the local public pool (the noise! the smell of chlorine! the constant frantic need to
protect your babies from certain watery death!), Chuck E. Cheese with three little boys, well ... whoops, how did I lose that invitation?!? It turns out my instincts are shared by others, who are, perhaps, less willing to dispense with social graces and their children's begging and pleading.
As the
Wall Street Journal reports today: Chuck E. Cheese birthday parties have been known to get a little out of hand. So out of hand, in fact, that the restaurant has begun to give up liquor licenses in some restaurants, and post armed security guards in others. In Brookfield, Wis., the Chuck E. Cheese gets way more calls than the biker bar down the street, according to the town's police chief. Typical of the fare: adults have too much to drink and one parent decides someone else's child is hogging a machine, voicing their complaints in loud and unsavory language. Next, here comes mama bear (or, upon occasion, papa) to protect his, or her, babe. One fight involved
40 people slinging punches and insults.
Continue reading Chuck E. Cheese way worse than biker bars: Fist Fights 'R Us?
Posted Dec 9th 2008 6:44AM by Sarah Gilbert
Filed under: Deals, Law, Whole Foods Market (WFMI)
With the FTC, argues
Whole Foods Markets (NYSE:
WFMI), it's personal. Ever since the federal agency began its review over the company's merger with Wild Oats Markets about a year and a half ago, Whole Foods says, the deck has been stacked against the organic and natural foods store chain. What's more, the FTC has continued to pursue Whole Foods to undo its deal even though the merger closed in August 2007, after the FTC lost its first challenge to the merger in federal court. Just last week,
reports of an intrusive subpoena had many watchers crying foul over Whole Foods' behavior; this week, the FTC is getting its own harsh spotlight.
Whole Foods is
appealing to Congress, and yesterday filed a lawsuit to stop the FTC from continuing its challenge to the long-completed merger. The FTC is running a rigged game, says CEO John Mackey, and what's more -- "we would be better off today if we hadn't done this deal" with Wild Oats. With the depressed economy (and, grocery analysts like myself would argue, Whole Foods' inability to develop a cohesive mission that resonated with sustainability-conscious shoppers), Whole Foods sales have been bottoming out, and the debt the company accrued to complete the merger is now weighing heavy on the balance sheet.
Indeed, this battle over a minority of the grocery market -- a minority the FTC inexplicably argues is called "premium and natural grocery" and is unfairly dominated by Whole Foods -- has gone on long enough.
Continue reading Whole Foods fights back against FTC in rare corporate move
Posted Dec 3rd 2008 8:06PM by Sarah Gilbert
Filed under: Internet, Competitive strategy, Google (GOOG)
Today was a perfect storm for Twitter, the microblogging application led by Evan Williams (who created Pyra Labs and Blogger, selling it to
Google (NASDAQ:
GOOG) in 2003 as blogging went bigtime). The company was all over business technology media, making an appearance at the
Wall Street Journal with a rather ingenue "User's Guide to Twitter" and in the
New York Times with an explanation of why
Twitter turned down a merger with Facebook.
Katherine Boehret likes Twitter but takes it to task for many of the things Twitter clients like Twhirl do wonderfully; notify you of @ replies (when someone Tweets you directly using an @ sign before your name, i.e. @sarahgilbert), for instance, and complains of the tinyurl conversion issue which most Twitter old hands work around by using their own url shortening services (many of my friends built their own). She doesn't even approach the question that's on everyone's minds: How will Twitter make money?
Claire Cain Miller
does approach the question, but doesn't have much of an answer. Her analysis of why Twitter turned down Facebook is brief -- it wasn't the right time, Twitter has "too much to do" yet -- and needs to learn how to make money. The one hazy concept we all agree on is that Twitter might charge businesses to talk to customers with its service; providing proactive alerts to companies when Twitterers complain about their service, giving them the opportunity to respond (and perhaps charging for consulting on how to best make use of the interaction) might be worth a lot. A few businesses now are very good at that; when I complained about my Comcast internet connectivity on Twitter, for instance, I quickly was pinged by a Comcast technician offering to help.
One particularly brilliant user of Twitter for business purposes is Rael Dornfest (who is a friend of mine, so I suppose I'm biased);
Continue reading A Twitter business plan: On the near horizon?
Posted Dec 2nd 2008 9:01PM by Sarah Gilbert
Filed under: Management, Law, Competitive strategy, Whole Foods Market (WFMI)
In the continuing FTC battle with
Whole Foods (NYSE:
WFMI) over the company's merger with Wild Oats Markets (a merger, I might add, that's already complete; all of the stores in my region have been converted to Whole Foods markets for many months), there is a local casualty. This local casualty has not been forced out of business by the strength of the Whole Foods conglomerate, with, now, stores in every quadrant of the city -- no, it's thriving, popular with both customers and the quirky-and-excellent local purveyors of vegetables, cheeses, chickens. But New Seasons Market is
facing unwelcome bullying from the organics food giant.
Yesterday in the New Seasons blog, popular CEO Brian Rohter points to the objectionable subpoena he's received from Whole Foods' attorneys, claiming that his company's secrets are party to the FTC/Whole Foods dispute. (A response from Whole Foods indicates that this request went out to 96 companies, stores and vendors, although those aren't detailed.) The subpoena demands a wide variety of documents, including all documents relating to competition with Whole Foods or Wild Oats; financial information, by store; market studies and strategic plans; and all plans for future stores, expansion and renovation. Rohter's attorneys have objected but tell him he could very well lose and be ordered to hand over the documents (at considerable cost to a small local grocery chain).
Rohter argues that, though Whole Foods insists only the attorneys and consultants will see the information "That's like trusting the fox to guard the henhouse – and we don't have any faith it's going to work like that. ... some of the people at Whole Foods have a history of less than stellar behavior when it comes to competing fairly." In a
follow-up to a Whole Foods response at Portland Food and Drink, Rohter says, "And those "consultants"...? Once they've looked through our information they're not going to "unlearn" it. The very nature of their job means they carry things they've learned from one job to another. Will they ever work for Whole Foods again?"
Continue reading Whole Foods playing dirty pool against local competitor
Posted Dec 2nd 2008 7:33AM by Sarah Gilbert
Filed under: Employees, United Parcel'B' (UPS)
Here in the Portland metropolitan area,
28 bike delivery employees will be hired -- by
United Parcel Service (NYSE:
UPS). It may seem counterintuitive, but here in Portland, Oregon, where we
crazy passionate types embrace bicycling so warmly that monthly group bike rides for kids continue even through the winter, the concept of hauling up to 200 pounds in a trailer with a mountain bike sounds like the perfect holiday vacation. UPS bike drivers will be given special training to
really practice pulling 200 pounds and learn, for instance, "safe following distance in rain" (I think if you're following anyone too closely with 200 pounds in your bike trailer, you should be training for the 2012 Olympics, not delivering Amazon.com packages for UPS.)
UPS can only deliver 25-50 packages per day by bicycle, compared to up to 150 by truck, but Portland area spokesman Jeff Grant says UPS will save $38,000 in vehicle operation and upkeep costs for every three delivery bicycles used.
After all, UPS started using bicycles to deliver packages 100 years ago in Seattle, and started a pilot program in
Atlanta and Seattle last year. Bicycle delivery is ideal for the holiday season as it allows the company to expand its service without having to expand its fleet of expensive delivery vehicles; bikes are about $600 each, and judging by the reaction to popular biking blogs, the company will have no trouble filling the available jobs with bikers eager to prove their mettle. It's not only sensible economics, but fantastic PR for a company that struggles with a rather stodgy image. Expanding the bike delivery program for all the company's busy seasons would be a fiscally responsible plan that could also pay big dividends in customer good will.
Posted Nov 25th 2008 1:55PM by Sarah Gilbert
Filed under: SEC filings, Forecasts, Bad news, Starbucks (SBUX)
The new m.o. at
Starbucks Corp. (NASDAQ:
SBUX) seems to be: give 'em their dour forecasts, then celebrate if the future is not, after all, entirely decaffeinated. After all, the company's stock is already at a low not seen since November 2001; all of the respectable gains of the past seven years have been wiped away. Starbucks stores may be cheerily decked out in holiday colors and decorations, but its management is nothing but sad, downcast, despondent, glum.
In the company's annual report filed yesterday after market close, management provided a Santa-sized list of all the reasons its sales have been down and its expenses up, as well as providing a dim outlook for a future ravaged by poor discretionary spending, stiff competition from low-priced coffee at its fast-food rivals, nasty landlords who won't go gently into the goodnight of store closings, and to top it all off, financially anxious consumers. To blame for 2008: foreclosures, high food prices, and less generous credit card limits.
At the end of this annual report, you have to wonder if coffee is the right business to be in. After all, the beverage isn't known for being a tonic for the depressed (when have you ever heard of a wronged hero drowning his sorrows in coffee?). Maybe Starbucks should look to add a line of moonshine to its offerings; offer it in Venti and "Jug" sizes and send free gift cards to the investors, who are the only people in America who deserve to be as solemn as Starbucks' annual report.
Posted Nov 24th 2008 3:09PM by Sarah Gilbert
Filed under: Commodities, Oil
Just a few weeks ago we were wondering whether
falling gas prices meant that Americans would be driving more. The data says: no. (Although the data is, admittedly, nearly two months delayed.) Both gasoline consumption and vehicles miles travelled have fallen every month over the past several months; the miles travelled figure is
down 11 months in a row and 4.4% in September.
In the
Wall Street Journal, Joseph B. White points out how the cycle is so far following that of the late 1970s and early 80s; gas gets expensive, Americans embrace high-mileage vehicles, less driving, and start thinking about alternative energy sources; demand falls and prices go back down; and then Americans return to their old ways. And complicating this situation is that gas tax revenue goes down when gas consumption goes down; so infrastructure funds dry up. Paradoxically, transportation officials are stuck in the not-so-virtuous cycle: if they encourage behavior that's good for the planet, they'll reduce their income and roads will suffer.
White asks, will we be headed straight back to "trance" state? Will automakers, having embraced development of electric-powered vehicles and other green options, give up in the face of the reality that it's just as cheap to drive a guzzler? Will Americans remember how much they loved their Sunday afternoon drives in the Excursion? Either way, the fallout is complicated.
I really believe that Americans will stay in the shock state. Many of my friends have made significant investment in the low-car lifestyle, buying family bikes and developing new routines around energy conservation. This time, it's not really about the money; I started my car-free lifestyle before prices started rising and the consensus seems to be that we're doing it for the health of the planet and our own health; those values are not to be unpacked for short-term gain. I believe in (some of) the American people. Now our government will have the hard choice of whether to raise gas taxes or find another way to fund the infrastructure shortfall.
Posted Nov 23rd 2008 8:00PM by Sarah Gilbert
Filed under: Employees, Presidential elections, Agriculture, Financial Crisis
Barack Obama is tasking his new economic team with figuring out how to create 2.5 million new jobs in his first two years in office. As
Peter Cohan commented, much of this new work will likely involve construction: building (and rebuilding) roads, bridges, schools, and wind farms, among other infrastructure-focused initiatives.
I was struck with how this news coincided with news that
prices were dropping in American commodity crops -- wheat, corn and soybeans. As I was mulling this over I was chatting with a friend who's on the board of my city's farmer's market. The vendors reported that what they desperately needed was help: workers who understood their products to help sell them in the many local markets, and most of all, more farmers to grow produce and make dairy products and preserves, more farmers to raise and cure meats. And I thought of Michael Pollan, and his
call for the President-Elect to encourage millions more Americans to become farmers.
Why not combine these great ideas?
Continue reading Millions of jobs? How about a million new farmers?
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