In Business This Week: Headliner
James Kilts: On Razor's Edge
After Gillette's board asked Michael C. Hawley to resign last October, director Warren Buffett commented that the board was "looking for a .360 or .370 hitter" to be the next chief executive. It may have found one. James M. Kilts, 52, who steps up to the plate on Feb. 12, has an impressive career under his belt, including a turnaround of Nabisco Group.
Kilts confronts monumental challenges at Gillette. Growth is anemic. And while it remains the king of razor blades, its Duracell batteries, Oral-B toothbrushes, and Gillette toiletries lost U.S. market share last year. But Kilts wasn't fazed by similar problems when he became CEO of Nabisco three years ago.
The first outsider to run Gillette in 70 years, Kilts inherits a company dominated by engineers. His first move will likely involve instilling more marketing pizzazz. He's likely to beef up advertising and improve relations with retailers.
Reenergizing Gillette won't be easy. Those who know him say Kilts is the man to do the job. The question is how soon.By William Symonds; Edited by Monica RomanReturn to top
Mack Makes an Exit at Morgan Stanley
Morgan Stanley Dean Witter President and Chief Operating Officer John Mack will leave the firm on Mar. 21, making Chairman Philip J. Purcell the undisputed chief of one of Wall Street's top investment banks. Mack will be succeeded by Chief Financial Officer Robert Scott. Mack's resignation is widely perceived as the culmination of a bitter battle between himself and Purcell for control of the firm. News of Mack's departure depressed the Morgan Stanley stock price by 3% on Jan. 24, the day of the announcement. Mack, known to some as "Mack the Knife," has been key to Morgan Stanley's ability to bring in large investment banking deals. "It is definitely a short-term negative," says Amy Butte, a securities analyst at Bear Stearns."Edited by Monica RomanReturn to top
Lowering the Lights at Loews
Loews Cineplex Entertainment, one of the largest U.S. theater chains, is considering filing for bankruptcy protection. The New York company will also close or sell 112 theaters that house 23% of its movie screens. Loews Cineplex CEO Lawrence Ruisi blamed the company's woes on dwindling attendance at its older theaters and poorly performing movies. Closing the theaters will force the company, which has $1 billion in debt, to take a $122 million charge in its fiscal third quarter. Loews says it is pursuing a restructuring to help avoid the fate of chains such as United Artists, Edwards, Carmike, and General Cinema--all forced to file for bankruptcy.Edited by Monica RomanReturn to top
All Smiles Again at Warnaco
No one gets between Linda Wachner and her Calvins, not even Calvin himself. On Jan. 22, Wachner's Warnaco Group, which manufactures the famous Calvin Klein jeans line, settled its differences with the designer--avoiding a nasty courtroom battle. At issue in the suit filed by Klein was the quality of Warnaco's products and their distribution to a growing number of discount outlets. Klein was seeking to terminate the license. For deeply indebted Warnaco, which gets about one-fourth of its revenues from the Calvin Klein line, the settlement was good news. Its stock climbed 60%, to $4 a share, on the day of the deal.Edited by Monica RomanReturn to top