SUPPLY CHAIN

Starbucks opens Evolution Fresh manufacturing facility in California

BY Dan Berthiaume

Seattle – Starbucks is opening a new Evolution Fresh juicery in Rancho Cucamonga, Calif., that the retailer says will quadruple its production of cold-pressed, never-heated juice. The $70 million, 264,000-sq.-ft. facility features advanced technology such as High Pressure Processing (HPP) machines.

The facility, which is capable of sourcing, peeling, squeezing and pressing raw fruits and vegetables, will produce four times more than the original juicer. It will employ 190 employees, which includes retaining nearly 100% of its original workers from the old juicery, as well as creating 65 new positions. It will be Starbucks sixth manufacturing site in the U.S., adding to the company’s existing network of five roasting plants in Kent, Wash.; York, Pa.; Sandy Run, S.C.; Carson Valley, Nev.; and Augusta, Ga.

“The opening of this juicery marks a significant milestone in Evolution Fresh’s history and commitment to making high-quality, never-heated, nutritious juice available to consumers across the country,” said Chris Bruzzo, GM, Evolution Fresh. “We believe cold pressed is the future of juice and we are leading the charge in changing the way people think about juice. Today marks a significant milestone in our mission to provide accessible nutrition and a new way for people to experience fruits and vegetables and natural foods in their everyday diet.”

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FINANCE

Hay Group: Retailers optimistic for 2013 holiday sales and hiring

BY Marianne Wilson

Philadelphia — More than three-fourths (79%) of retailers expect an increase in sales this holiday season – the highest percentage seen since the financial downturn. That’s according to global management consultancy Hay Group’s seventh annual retail holiday survey, whose results were more optimistic that several other holiday forecasts.

Retailers’ confidence in the 2013 holiday season is also reflected in retailers’ plans for hiring. Twenty-five percent of retailers expect to hire more seasonal workers than they did in 2012 and another 61% are planning to hire at about the same level, according to the Hay Group report.

“Retailers are planning for a very merry holiday season in 2013,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice. “Even so, there is a sense of only cautious optimism in the air, particularly in sectors like apparel and general merchandising that have experienced stagnant sales in recent months. Coming off of a sluggish back-to-school shopping season, retail organizations are keeping a keen eye on the economy and consumer confidence as they head into the 2013 holiday season.”

A vast majority (87%) of retailers cited general economic conditions as the factor that they are most concerned about negatively impacting sales this holiday season. Still, retailers’ long-term plans reflect continued confidence in the health of the sector, with 30% of retailers reporting that they expect to hire at least one-fourth (25%) of their seasonal hires as full-time staff after the holiday season.

Other highlights from the September 2013 Hay Group survey:

Omnichannel strategy remains under construction. Only 14% of retailers reported having an omnichannel strategy in place; the majority (64%) said their omnichannel strategy is “still in progress.”

“Customers are increasingly demanding a seamless shopping experience across the web, in store catalogues and at brick-and-mortar locations,” said Maryam Morse, National Practice Leader for Hay Group’s Retail practice. “Retailers that have an omnichannel strategy in place this holiday season will have a distinct competitive advantage to those that are still working very hard to catch up.”

Affordable Care Act poised to have little impact on holiday hiring. The majority (78%) of retailers reported that the Affordable Care Act will have no effect on hiring this holiday season.

Retailers plan to invest more in employees. As unemployment levels creep downward, companies are expecting to pay more to attract and retain talent this holiday season. In fact, 22% of retailers reported planning to increase wages for seasonal talent, with 17% expecting to raise hourly pay $0.05-$0.15 over 2012 levels and another 5 percent planning to raise hourly pay $0.16-$0.30 when compared to last year’s hire rates.

Incentives and benefits are also expected to go up. Discounts remain the most popular reward, with 87% of retailers giving employees reduced prices on store merchandise, compared to 71% last year.

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FINANCE

Men’s Wearhouse rejects Jos. A. Bank offer, adopts rights plan

BY Dan Berthiaume

Fremont, Calif. – The Men’s Wearhouse has rejected the unsolicited proposal by Jos. A. Bank to acquire the company for $48 per share, or about $2.3 billion.

Men’s Wearhouse said in a press release that the offer significantly undervalues the company, is inadequate and not in the best interests of the company or its shareholders.

“After careful review and deliberation, our board of directors has determined that Jos. A. Bank’s proposal significantly undervalues Men’s Wearhouse and fails to reflect the company’s growth strategy and upside potential," said Bill Sechrest, lead director of the board. "We believe Jos. A. Bank’s unsolicited proposal is opportunistic, subject to unacceptable risks and contingencies, and would deprive our shareholders of the value inherent in Men’s Wearhouse for inadequate consideration."

The rejection sets the stage for a potential battle between two of the nation’s largest menswear retailers. Men’s Wearhouse has 1,137 stores, while Jos.A. Bank operates some 624 stores.

Men’s Wearhouse has also adopted a limited duration shareholder rights plan and declared a dividend of one right on each share of the company’s common stock. The rights generally will become exercisable and allow holders to acquire the company’s common stock at a discounted price if a person or group acquires beneficial ownership of 10% or more of Men’s Wearhouse common stock (15% in the case of a passive institutional investor) in a transaction not approved by the board of directors.

The rights plan expires on September 30, 2014 unless earlier redeemed, exchanged or terminated by the company. Men’s Wearhouse said the plan is not designed to prevent another buyout offer its board considers favorable.

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