In Business This Week: Headliner
Michael Sovern: A Top Gun for Sotheby's
He's more familiar with arbitration battles than auction bids, but that should make Michael Sovern the perfect man to head Sotheby's right now. The besieged New York auction house named Sovern, 68, as its new chairman following the Feb. 21 resignations of Chairman Alfred Taubman and high-profile Chief Executive Diana D. Brooks. Both quit three weeks after rival Christie's said it was cooperating in a Justice Dept. probe of collusion in the auction houses' commission rates, in return for conditional amnesty. Sovern, a former Columbia University president and law professor who is often consulted to resolve disputes, has had little to do with the lofty art world. But now he's charged with repairing Sotheby's reputation while appeasing shareholders, who had pummeled the stock to one-third its 52-week high of 47. Manhattan art dealer Richard Feigen suspects that Sovern is probably an interim CEO and argues that "D.D. Brooks is not going to be easy to replace." Maybe so, but Sotheby's board sees the experienced troubleshooter as a priceless addition to their collection.By Diane Brady; Edited by Anne NewmanReturn to top
Gateway: Going for Bricks and Mortar
When Gateway chairman Theodore Waitt decided three years ago to set up retail outlets, industry insiders scoffed. Why invest in bricks and mortar when the Internet was creating the most efficient sales channel possible?
Now, nobody's laughing. The company's 240 Country stores are driving big profits from e-commerce, Net access, training, and other sources. And on Feb. 23, the leading seller of PCs to consumers announced strategic partnerships with OfficeMax, Sun Microsystems, and eSoft that will expand its retail presence. Gateway will set up outlets in more than 1,000 OfficeMax stores over the next 14 months. The move could also boost nonhardware profits to as much as 40% of total income by yearend, up from 20% last year. By 2004, total revenues could reach $30 billion--three times the level in 1999, says the San Diego-based company. Happy investors bid up Gateway's shares 18% for the day.Edited by Anne NewmanReturn to top
Cleaning House at Unilever
In an effort to shore up its lagging stock and profits, AngloDutch consumer-products giant Unilever plans to close 100 plants and shed 25,000 employees--about 10% of its workforce. The company wants to focus on about 400 top brands such as Lipton tea and Calvin Klein fragrances and lose 1,800 marginal ones.
Unilever is also signaling that it's in the market for U.S. acquisitions--and would like its first nibble to be Ben & Jerry's Homemade to complement its ice cream empire. It also may bid for Gillette, the shaving products maker, and cereals giant Kellogg.
For the last year or two, Unilever has shied away from big acquisitions, preferring to return $8 billion from the sale of its specialty-chemicals division to shareholders. But now Chairman and CEO Niall Fitzgerald says the stocks of consumer-products companies are sufficiently beaten up that they're worth considering.Edited by Anne NewmanReturn to top
Mickey to the Rescue?
Walt Disney knows when to pull out the heavily artillery. With its vaunted $3 billion-a-year merchandising machine in a funk, the media giant is gearing up to reintroduce America to Mickey Mouse. It plans a flood of TV commercials, featuring the likes of basketball star Shaquille O'Neal, actor Kelsey Grammer, and game show host Regis Philbin, all wise-cracking their way through testimonials for The Mouse. Disney is introducing yet another line of Mickey clothing, will soon release a La Vida Mickey album, and just shipped a Mickey interactive car-racing game. The Mouse again will appear regularly on TV: Disney introduced Mickey Mouse shorts on its ABC Saturday morning shows and next year will give him his own House of Mouse show.Edited by Anne NewmanReturn to top