July 23, 2014 at 2:10 p.m.
Wal-Mart abandons banking venture (03/17/07)
Business roundup
Wal-Mart Stores Inc. is dropping its bid to establish a bank after months of heated debate over whether the world's largest retailer should be allowed to gain the added financial power of a federally insured bank, The Associated Press reported Friday.
Wal-Mart announced Friday that it was withdrawing its application for a bank charter.
The Federal Deposit Insurance Corp. was considering Wal-Mart's application to establish an industrial loan corporation, which is a limited-purpose bank for processing credit card and other payments.
The news came a day after details came to light of leases that Wal-Mart recently signed with banks that operate branches in hundreds of its stores, reserving the company's right to offer an array of future financial services in its stores. According to the lease terms, Wal-Mart can offer future services including mortgages, consumer loans, home equity loans, investment and insurance products and any other type of service or product that the company might develop.
The chairman of the FDIC, Sheila Bair, said the Bentonville, Ark.-based company's move to withdraw its application for a bank charter was "a wise choice."
"This decision will remove the controversy surrounding their intentions," Bair said in a statement.
Wal-Mart does not need to have the sort of bank in question "to play an important role in expanding access to financial services by partnering with banks and others," Bair said. "We look forward to working with Wal-Mart in meeting the need for low-cost financial services across all populations."
Wal-Mart's application to establish an industrial loan corporation based in Utah had prompted a firestorm of opposition from banks, unions, lawmakers, and consumer and community organizations.
Last April, groups representing those interests argued against granting the retailer's request at two public hearings, the first ever held by the FDIC on such an application.
"Unlike dozens of prior ... applications, Wal-Mart's has been surrounded by manufactured controversy since it was submitted nearly two years ago," said Jane Thompson, president of Wal-Mart Financial Services. "At no stage did we intend to use the (industrial loan corporation) to establish branch banking operations as critics have suggested - we simply sought to reduce credit and debit card transaction costs.
Dollar General sold
Dollar General Corp. has been sold to Kohlberg Kravis Roberts & Co's for $6.9 billion deal.
KKR's offer for the Goodlettsville, Tenn., company provides $22 in cash a share and assumption of $380 million in debt. The per-share price is a 31 percent premium from the stock's closing price on March 9 and an 82 percent markup from its 52-week closing low of $12.11 on Aug. 30. Both sides expect the deal to be completed in the third quarter.
Last year Dollar General's same-store sales gains faltered, and it saw increases in store-manager turnover, inventory costs and so-called shrinkage, which is theft or other merchandise loss. The company launched a turn-around effort in November, calling for the closure of 400 stores, a paring of its expansion plans and a reduction of inventory costs.
As Dollar General struggled, Family Dollar Stores Inc., the second-largest U.S. dollar-store chain, with more than 6,300 locations, narrowed the gap between the two retailers. Family Dollar, of Matthews, N.C., installed freezers and refrigeration units in its stores and poured $25 million into shoring up its network of urban stores.
Family Dollar's same-store sales gains have outpaced Dollar General's in 14 of the past 26 months.
Dollar General and Family Dollar stores each have a location in Portland.
Leads the state
Mercer County's unemployment rate of 4 percent for January was the lowest county rate in Ohio, according to figures released by the Ohio Department of Job and Family Services.
Mercer County has been in the lower three counties in unemployment for about the last year and a half, according to a report in the Celina Daily Standard newspaper.
Ohio's overall unemployment rate was 5.3 percent in January, down from 5.6 in December, according to figures.
Meets Wednesday
The American Society for Quality, East Central Indiana, Section 904, will meet Wednesday at 6 p.m. at Sirloin Stockade restaurant in Muncie.
Mollie Brown with the Lily Technological Center will speak about automated inspection technology.
The restaurant is located near McGalliard and Morrison roads. Pay the cashier when entering the restaurant.
The ASQ Section 904 includes Jay, Randolph, Blackford, Grant, Madison, Delaware, Henry and Wayne counties.[[In-content Ad]]
Wal-Mart announced Friday that it was withdrawing its application for a bank charter.
The Federal Deposit Insurance Corp. was considering Wal-Mart's application to establish an industrial loan corporation, which is a limited-purpose bank for processing credit card and other payments.
The news came a day after details came to light of leases that Wal-Mart recently signed with banks that operate branches in hundreds of its stores, reserving the company's right to offer an array of future financial services in its stores. According to the lease terms, Wal-Mart can offer future services including mortgages, consumer loans, home equity loans, investment and insurance products and any other type of service or product that the company might develop.
The chairman of the FDIC, Sheila Bair, said the Bentonville, Ark.-based company's move to withdraw its application for a bank charter was "a wise choice."
"This decision will remove the controversy surrounding their intentions," Bair said in a statement.
Wal-Mart does not need to have the sort of bank in question "to play an important role in expanding access to financial services by partnering with banks and others," Bair said. "We look forward to working with Wal-Mart in meeting the need for low-cost financial services across all populations."
Wal-Mart's application to establish an industrial loan corporation based in Utah had prompted a firestorm of opposition from banks, unions, lawmakers, and consumer and community organizations.
Last April, groups representing those interests argued against granting the retailer's request at two public hearings, the first ever held by the FDIC on such an application.
"Unlike dozens of prior ... applications, Wal-Mart's has been surrounded by manufactured controversy since it was submitted nearly two years ago," said Jane Thompson, president of Wal-Mart Financial Services. "At no stage did we intend to use the (industrial loan corporation) to establish branch banking operations as critics have suggested - we simply sought to reduce credit and debit card transaction costs.
Dollar General sold
Dollar General Corp. has been sold to Kohlberg Kravis Roberts & Co's for $6.9 billion deal.
KKR's offer for the Goodlettsville, Tenn., company provides $22 in cash a share and assumption of $380 million in debt. The per-share price is a 31 percent premium from the stock's closing price on March 9 and an 82 percent markup from its 52-week closing low of $12.11 on Aug. 30. Both sides expect the deal to be completed in the third quarter.
Last year Dollar General's same-store sales gains faltered, and it saw increases in store-manager turnover, inventory costs and so-called shrinkage, which is theft or other merchandise loss. The company launched a turn-around effort in November, calling for the closure of 400 stores, a paring of its expansion plans and a reduction of inventory costs.
As Dollar General struggled, Family Dollar Stores Inc., the second-largest U.S. dollar-store chain, with more than 6,300 locations, narrowed the gap between the two retailers. Family Dollar, of Matthews, N.C., installed freezers and refrigeration units in its stores and poured $25 million into shoring up its network of urban stores.
Family Dollar's same-store sales gains have outpaced Dollar General's in 14 of the past 26 months.
Dollar General and Family Dollar stores each have a location in Portland.
Leads the state
Mercer County's unemployment rate of 4 percent for January was the lowest county rate in Ohio, according to figures released by the Ohio Department of Job and Family Services.
Mercer County has been in the lower three counties in unemployment for about the last year and a half, according to a report in the Celina Daily Standard newspaper.
Ohio's overall unemployment rate was 5.3 percent in January, down from 5.6 in December, according to figures.
Meets Wednesday
The American Society for Quality, East Central Indiana, Section 904, will meet Wednesday at 6 p.m. at Sirloin Stockade restaurant in Muncie.
Mollie Brown with the Lily Technological Center will speak about automated inspection technology.
The restaurant is located near McGalliard and Morrison roads. Pay the cashier when entering the restaurant.
The ASQ Section 904 includes Jay, Randolph, Blackford, Grant, Madison, Delaware, Henry and Wayne counties.[[In-content Ad]]
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