In Business This Week: HEADLINER: WHITNEY HOUSTON
EXHALE BLOWS `EM AWAY
Call it a Christmas miracle. No one was more surprised than execs at Twentieth Century Fox when its Waiting to Exhale opened on Dec. 22 and immediately became the unexpected hit of the holidays. Fox had targeted its marketing for the film, starring singer Whitney Houston and three other black actresses, heavily at black women. Exhale opened primarily in large cities; the studio hardly even opened the movie in the 'burbs until after Christmas.
Hollywood isn't sure why, but despite its segmented marketing and limited distribution, Exhale is knocking 'em dead. The film, based on a novel by Terry McMillan, was made on a budget of $15 million, about half the Hollywood average. In its opening weekend, the movie had a huge $14.3 million box office, beating out six other new films, including Warner Bros.' Grumpier Old Men and Universal Pictures' Sudden Death. Being one of the few women-oriented films helped. Whatever other reasons for Exhale's success, Hollywood won't ignore the lesson: Look for a wave of black-female buddy movies --glitzier, big-budget ones.EDITED BY THANE PETERSON By Ronald GroverReturn to top
A TRUNKFUL OF PINK SLIPS AT BUDGET
WITH THE RENTAL CAR BUSIness wrapping up one of its worst years ever, Budget Rent a Car's new chairman, Jack Frazee, had a Grinch-like holiday message for 500 salaried employees: Your services are no longer needed. Frazee hopes to save $20 million annually by cutting 20% of the salaried workforce. The cuts are part of a massive shakeup at Budget, the No.3 rental agency with estimated 1995 U.S. revenues of $1.5 billion. Frazee also showed the door to his CFO and two senior vice-presidents and closed 40 unprofitable offices. Handing out pink slips over the holidays was "not fun," Frazee says. "But I try to remind the people who are left that the company is a lot more stable as a result of the actions we've taken."EDITED BY THANE PETERSONReturn to top
PIER 1'S $20 MILLION QUESTION
PIER 1 IMPORTS ALSO HAD A lump of coal in its Christmas stocking: The retailer disclosed on Dec. 26 that it would post a pretax loss of $20 million because of "inappropriate trading activities" by a financial consultant--Capital Insight of Beverly Hills, according to the consultant's lawyer--hired to manage excess cash and short-term investments. Pier 1, otherwise enjoying strong sales gains, says the loss won't materially affect liquidity or operations, but a board committee is investigating. Pier 1 CEO Clark Johnson didn't return phone calls.EDITED BY THANE PETERSONReturn to top
IS CYRIX LOOKING AT A DEFAULT?
CHIPMAKER CYRIX IS SPUTtering. On Dec. 22, the company warned that it may lose $8 million or more in the fourth quarter. A price collapse forced Cyrix to write down its inventory of chips compatible with Intel's 486. Cyrix said the loss could force a default on $88 million in loans used to purchase production equipment to build its newest chip, which is designed to rival Intel's new Pentium Pro. The company hopes to get a waiver from creditor IBM, which manufactures Cyrix' newest chip.EDITED BY THANE PETERSONReturn to top