Calif. Raises Minimum Wage to $8
Sacramento, Calif., Gov. Arnold Schwarzenegger and Democratic leaders have agreed to lift the minimum wage in California from $6.75 an hour to $8. The hike, the first since early 2004, will effect the more than 1 million Californians who earn minimum wage and will allow them to receive a nearly 20% pay increase over the next year and a half.
Workers will get a 75? increase Jan. 1 and an additional 50? on Jan. 1, 2008.
The jump to $7.50 on New Year’s Day will make California’s minimum wage the nation’s fourth-highest, following Washington, Oregon and Connecticut. The federal minimum wage is $5.15 an hour.
Aether to Buy The Athlete’s Foot
New York City, Aether Holdings announced Monday that it has entered into a definitive agreement to acquire The Athlete’s Foot brand along with the global retail franchise operation. Aether also said it intends to start doing business as NexCen Brands Inc.
Robert Corliss, president and CEO of The Athlete’s Foot, will continue with Aether after the closing as president and CEO of Aether’s retail franchise division, NexCen Franchise Brands Inc.
Aether has also agreed to enter into employment arrangements with certain key executives of The Athlete’s Foot, including Corliss. The company did not disclose names of other executives.
“This franchise system will provide us not only with a historical and growing revenue stream, but also a flexible distribution channel for additional consumer brands that we plan to acquire in the future,” said Robert D’Loren, Aether’s president and CEO. “This is an exciting first step for Aether toward building a large and diverse portfolio of consumer brands and franchise-related assets.”
Aether will pay $51.5 million at closing through a combination of cash and the issuance of Aether common stock. The transaction is expected to close before the end of 2006.
Gap 2Q Profit Plunges
New York City, The prospects for a quick turnaround at Gap Inc. diminished Thursday after the retailer reported more than a 50% drop in second-quarter profit and cut its earnings forecast for the year.
Gap Inc. reported its net income for the quarter ended July 29 dropped to $128 million from $272 million for the same period last year. Sales were flat at $3.72 billion, while comp-store sales fell 5%, compared with a prior-year decrease of 3%. Gap cited sluggish sales and “aggressive” discounting.
“The second quarter was more challenging than we expected,” Paul Pressler, CEO and president, Gap Inc., said in an address to investors during a conference call Thursday. “While we are encouraged by improved performance at Banana Republic, business was tough at Gap and Old Navy as we cleared through summer product. But across all businesses, I believe we are making progress.” Comp-store sales at Gap stores fell 6% in the second quarter, while comp-stores sales at Old Navy slumped 5% and comp-store sales at Banana Republic slipped 1%.