Hain Celestial Eliminating 500 SKU's

Hain Celestial, maker of Terra Chips, Celestial Seasonings, Garden of Eatin' and other natural and organic foods, announced the final implementation of its Stock Keeping Unit rationalization program. The company is elminating 500 SKU's that are competitively disadvantaged, as a result of small production runs, and low volume of sales. The company expects to save $2 million, with savings comiing from reduced spoilage, warehouse and procurement costs, consollidation of copackers and other efficiencies. The eliminated SKU's have annual sales revenue of $15 million; their sales volume is expected to be replaced by introduction of new items by Hain Celestial over the next 12 to 18 months.

Suit Alleges Uncompetitive Credit Card Transaction Fees

Five small businesses seek to represent all business owners as a class, in a suit alleging that banks are charging exorbitantly high fees to merchants for MasterCard or Visa Card purchase transactions. Filed in Connecticut Federal Court on 6/22, the suit looks to put an end to the banks anti-competitive behavior, as the plaintiffs seek damages in the tens of billions of dollars. Paul Cohen, a Visa USA vice president, said the company plans to defend the fees as a business practice that has been both commercially successful and deemed legal in federal court, Business Week online reports.

Angels Investing in Groups

Some entrepreneurs are benefitting from a trend for angel investors to band together and make collective investments, the New York Times reported on June 23, 2005. Individual investors tend to put in $25,000 to $100,000, while a group can invest up to $1 million, according to James Geshwiler, chairman of the Angel Capital Association. Group investing provides angels with a community of business experts to evaluate deals and spread the risk. "We're seeing the return of a sadder but wiser angel", said John May, managing partner of the New Vantage Group..

Six Cash Flow Boosters

Here are six cash flow boosters, as provided by consultant Norm Grill, and published in the June 20th Westchester County Business Journal: 1) Establish payment terms from the start, with your proposal, estimate or contract; 2) Analyze customer payment patterns, and revise terms and payment methods so they are more favorable for you; 3) Closely monitor accounts receivable aging; 4) Negotiate favorable payment terms (e.g., discounts for prompt payment); 5) Use email for invoicing and software to manage cash flow; 6) Consider hiring a skilled finance professional

Krispy Kreme Stumbles Recounted

Krispy Kreme managed to stumble into most of the pitfalls in the franchise model, according to the cover story of the June, 2005 issue of CFO Magazine. It focused on growing revenues and profits at the parent-company level, while its franchises struggled. Raw materials and equipment were sold to franchisors at exceptionally high profit margins. The brand lost its mystique, as Krispy Kreme dougnuts went on sale for the first time at grocery stores, gas stations, and kiosks. In 2004, the SEC launched a formal investigation into the company's buybacks of several franchises, while franchisors alleged "channel stuffing." Krispy Kreme stock has dropped from it $50 mid-2003 high to $6 in early May of 2005.

Maryland Professor Documents Dot-Com Ventures

The Chronicle of Higher Education reported that David Kirsch, a University of Maryland Professor, has created an electronic archive, documenting the rise and fall of Internet-related ventures over the period 1996 through 2002. The archive, which was started thanks to grants from the Alfred P. Sloan foundation and the Library of Congress, so far lists basic information for 2,400 dot-com companies, with about half of these entries fleshed out with business plans. The archive also offers "Top Ten Lessons from the Dot-Com Meltdown."

SBA Reconsidering Definition of Small Business

The Small Business Administration has holding hearings, starting in St. Louis and Seattle, as it considers changing the definnition of small business, the Seattle Times reported. Under current rules, the definition of a small business ranges by industry, but is generally defined as having 500 or fewer employees. Last summer, the SBA withdrew a proposal that would have defined the limit of "small" at 100 employees. Hearings are to continue in New York, Chicago, Los Angeles and other cities through the month of June.

Consumer Confidence Rebounded in May

The Consumer Confidence Index, which had declined to a two-year low in April, bounced back in May, increasing to 102.2 (1985=100), up from 97.5. The Present Situation Index increased to 116.7 from 113.8. The Expectations Index, measuring consumers' opinion about business conditions six months out, improved to 92.5 from 86.7, breaking a four-month decline.