Business

Albertsons/Rite Aid merger faces challenge ahead of key vote

A week from Friday, shareholders of Rite Aid Corp. will decide if the independent pharmacy retailer can merge with Boise-based Albertsons Companies.

If 50% say yes - the deal is likely to happen. If it can't reach that threshold, the next steps for the two companies are unclear.

  • Advisors say no: Two big shareholder advisory firms said a no vote was appropriate. Institutional Shareholder Services & Glass Lewis gave the tie-up a thumbs down. 
    • ISS report: “It does not appear that Rite Aid shareholders would receive a fair ownership interest in the combined company, a concern heightened by potential conflicts of interest during the negotiation process and apparently reflected in the company’s underperformance since announcement."
    • Glass Lewis: “We fail to see that the proposed combination represents a particularly attractive outcome for unaffiliated Rite Aid shareholders, each of whom has, in our view, been offered very little reason to conclude that management has secured full value under extant market conditions or that the Company would not benefit from continued implementation of its stand-alone operating strategy until a counterparty is prepared to deliver a clear and attractive value for control of Rite Aid,” 
    • A Rite Aid spokesperson disagreed, telling Reuters the deal “will significantly improve Rite Aid’s growth prospects, financial strength and ability to deliver compelling long-term value for shareholders."
  • Other shareholders against: Highfields Capital Management came out earlier this month and said it would vote its 4.4% stake against the deal. "The proposed transaction is in the best interests of Albertsons and Rite Aid management, but not Rite Aid shareholders," Highfields said.
  • It's about scale: The two companies have mounted a detailed campaign to gin up support for the deal - with an extensive website and letters to Rite Aid shareholders ahead of the vote. 
    • Albertsons COO Jim Donald on CNBC: "Scale is big here. Scale is what we can use as we continue to [serve] customers online and  brick and mortar."
  • Amazon looms: With the pending merger of Albertsons and Rite Aid on the table, Amazon announced it would acquire small prescription-by-mail company PillPack - one of a number of moves the web giant has taken in the drug space.
  • E-commerce perks up:  Albertsons said on a recent earnings call that sales from e-commerce more than doubled from the previous period - up 108%. The company has been working to drive initiatives - including home delivery, "Drive Up and Go," meal delivery service Plated and a partnership with Instacart.

Boise's Clearwater Analytics to expand, adds new CEO

Boise's booming Clearwater Analytics has announced a new chief executive officer, as filings show it will expand its Downtown Boise headquarters.

Sandeep Sahai is on a quick rise with the company. He joined the board of directors in September 2016 and was bumped up to executive chairman in March before taking the CEO role this week. His previous CEO experience includes Headstrong - a former company in the financial services space which is now part of Genpact

Sandeep Sahai. Courtesy Clearwater Analytics

Sandeep Sahai. Courtesy Clearwater Analytics

He replaces co-founder David Boren in the job, who will remain on the board of directors.

“Mr. Sahai has distinguished himself throughout his 30-year career as an executive with a proven track record of building and leading outstanding global teams,” said Eric Lee, Chairman of the Board of Directors for Clearwater said in a prepared statement. “Under his guidance, we are excited to see Clearwater continue to thrive and grow as an industry leader in product innovation and client success.”

The company plans to build out an additional 26,218 square foot space in its building on the Grove Plaza in Downtown Boise. The space had been unoccupied since Clearwater moved into the building in 2016 and had been designated for future growth. 

Once complete, the fifth floor will "support business on floors 6-9" in the building. New team rooms, conference rooms, offices and training rooms are part of the buildout.

Clearwater Analytics offers web-based investment accounting reporting software solutions. David Boren, Michael Boren and Doug Baltes founded the company in 2004. It now employs more than 650 people.

Header photo: Don Day/BoiseDev.com

Boise mall Build-a-Bear mobbed for big sale

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“Be careful, it’s a jungle out there,” the clerk at the JC Penney jewelry counter warned to passing customers.

The jungle was filled with bears - or at least kids wanting bears.

A line of more than a thousand kids, teen, parents and grandparents started at the Build-a-Bear Workshop in the Boise Towne Square and wrapped all the way down to Dillard’s, back around and toward Kohl’s.

The jungle-like crowd was there to purchase a bear for the age of the person getting the toy. Three-year-olds get the deal for $3, 10-year-olds for $10 and so on.  That doesn’t include accessories or upcharges - but the base toy is still a bargain.

In some places, according to USA TODAY, the sale was shut down - but that wasn’t the case in Boise.  For a time, parents were not allowed to join the line, according to one parent who didn't want her name used, but they later opened the queue back up.

Some parents had been told they may wait in line but not be served due to a shortage of some supplies.

Folks at the front of the line had been waiting since 8 a.m. - and were still waiting as of noon.  One grandma said it was worth the wait. 

"I’m a grandma, so,” Bonnie Little said.  But, she probably wouldn’t do it again. “It’s great, it’s been fun… but no. If I knew this would be anything like this, I wouldn’t do it.”

Mom Erica Benson learned about the sale last week - before it caught wide notice in the media.

“I decided to do it before the news announced it, and told the four-year-old,” she said. “I instantly regretted it as soon as soon I saw it all over the news.  I should have just brought her yesterday!”

But Benson said it was an adventure.

“We are here with friends - and we made new friends,” she said - motioning to Little and her family.

“If it were on Black Friday, I’d be more apt (to do it again) because it other stores would probably have deals.”

An employee at a nearby store said the line when he arrived was so long it actually extended outside.  He said his business hadn’t seen a bump in sales.

“People come in, go straight to the line and leave,” Giovanni Georgia with Forever Flawless said. “It’s crazy.”

Idaho Press expands into Boise; is a newspaper ‘war’ underway?

 NEWS ANALYSIS

Just before I returned to Boise, Idaho after a year in the John S. Knight Journalism Fellowship at Stanford, something curious happened.

A newspaper war broke out.

An. Um... What now?

The ‘war,’ for now at least, benefits the consumers of local news in the Boise and Treasure Valley of Idaho.

The area has two major daily papers. The McClatchy-owned Idaho Statesmanand the Adams Publishing-owned Idaho Press-Tribune.

For decades, the Press Tribune stuck to the second-largest county in the metro, while the Statesman primarily covered the largest county — which includes the capital city of Boise.

But then something happened.

Adams Publishing purchased the IPT and the rest of the newspapers in the Pioneer chain.

Shortly after, a 2008 agreement between McClatchy and Pioneer to print both papers at the Press-Tribune plant in Nampa ended. The Statesman is now printed more than 100 miles away in Twin Falls. Thirty-thousand daily copies of the Statesman are now printed at the facility of the Times-News and shipped up the road to Boise for home delivery.

The switchover happened in March, and went little-noticed among the general public.

 

But less than two months later, the Idaho Press turned heads by hiring perhaps the state’s most-prominent journalist — Betsy Russell. Russell heads up the top journalism advocacy organization in the state, and writes a must-follow blog for political junkies and leaders.

Russell was quickly joined by reporters covering Boise City Hall, Ada County Government, Ada County crime & courts — as well as a new sports editor, photo editor and community engagement editor.

With the added staff in place it opened up home delivery to the larger Ada County area with a $10/month deal.

Then another series of surprising moves: shortening the name to Idaho Press (no more Tribune), putting up billboards, running TV ads, putting paper boxes in Downtown Boise, dropping free teaser copies of the paper on Boise-area doorsteps and revamping its website.

 

(Disclosure: Idaho Press has licensed a few stories from my micro-news site BoiseDev.com. In addition, I have publicly criticized the Idaho Statesman for its practice of using BoiseDev stories as a lead generation source and occasionally borrowing my exact phrasing. I also had discussions with the Statesman in 2017 about working together that ultimately led to an offer to write a free monthly column which I declined. Judge what comes next with that in mind).

The Idaho Press is clearly determined to eat into the market share of the Idaho Statesman. Which may leave people going: “Umm… you’re doubling down on print?”

McClatchy has publicly said it is working to fast pivot to digital, and has worked to up the number of stories it generates that are high pageview drivers.

(Company CEO Craig) Forman takes it as a marker of progress that only 25 percent of the company’s revenues now come from print advertising. Of course, that has lots to do with how far print has fallen over time and how fast those declines have been for the last year.

The Statesman is part of McClatchy’s California/Idaho region — along with papers like the Sacramento Bee. That paper has gone public with its request from the public to sign up for the news organization’s digital edition.

We could fully fund our newsrooms — from salaries and benefits to notepads and pens — if we had 60,000 people supporting us through digital subscriptions. Roughly 15,000 do so today, so we’d need to earn the support of about 45,000 more…

The Bee says it would have to quadruple its number of digital subs to make ends meet without print or ad revenue. If they have a similar plan for Boise, quadrupling the number of subscribers would be a big goal.

In Sacramento, McClatchy plans to increase subscribers by doing quick hits of coverage on topics to see what sticks. If it doesn’t work, they move on.

Implicit in the McClatchy strategy: Print is dead. We’re on to the next.

But what happens if 25% of your revenue comes from print advertising (and, presumably, an additional amount from print subscriptions and single-copy sales)… and someone comes along looking to steal your market share?

McClatchy’s model is currently built on the premise their outlet is the only print-heritage newsroom in a market. In Boise, that suddenly isn’t true.

The Idaho Press is working a very aggressive plan, is spending money to win market share. If it depletes the revenue base for the Statesman, it’s fair to worry that another round of cuts could come — in a newspaper that has trimmed its staff so many times that it now has fewer journalists than my former employer KTVB (it once wasn’t even close).

It doesn’t take many folks who decide to switch from Idaho Statesman print to Idaho Press to quickly drive down the Statesman’s circulation and print advertising base.

And, as noted in my disclosure above, the Statesman seems to be focused on scraping a lot of content from other places to do quick “read, confirm, write” type stories. It layers these on with perhaps one major investigative or in-depth piece per day. The Idaho Press, on the other hand, appears to be taking a more traditional approach with the “soup to nuts” product of days past.

The Idaho Press will also have a significantly later print deadline since they print the paper in their own building here in the metro area, instead of shipping it in from down the road. During Boise State football season, it stands to reason the Idaho Press will be the only printed paper with game coverage from the night before.

The Statesman still has some talented local journalists doing great coverage. With the addition of Idaho Press resources, residents in the area are better served — but that only is true if both outlets can survive without cuts.

For it to be a war, two parties have to engage. Will the Idaho Statesman be able to fight off the threat? Or could Boise become a one newspaper town — with the upstart from Nampa winning the day?

Don Day is a 2018 Stanford John S. Knight Fellow. He has twenty years experience in media — leading teams, producing award-winning journalism and innovating in the digital journalism space. He currently is the publisher of BoiseDev.com.

SYKES call center cuts 640 Boise workers, asks police to be present

The SYKES Boise call center on Chinden Tuesday evening. Photo: Don Day/BoiseDev

The SYKES Boise call center on Chinden Tuesday evening. Photo: Don Day/BoiseDev

 UPDATES with confirmed number of layoffs. 

Large Boise call center SYKES has laid off an unspecified number of employees, a spokesperson confirmed to BoiseDev.

The layoffs occurred right before the Independence Day holiday. 

Regional Communications and PR Director Dana Wiederman says SYKES had some "client changes with their specific business needs" that prompted the layoffs. She could not confirm the number of employees let go, but a filing with the Idaho Department of Labor said approximately 640 people are without jobs. 

"SYKES will remain open with business on other accounts and are doing everything we can to help employees impacted by this decision," Wiederman said. "Those affected were provided 60 days’ pay and benefits to provide them time to adjust and seek other employment. We are actively looking to bring new business to our center in Boise and continue to provide new career opportunities for residents of the Boise metro area."

SYKES in Boise handles customer service contracts with several companies, including Google's Nest, Expedia and Capital One. Employees with knowledge of the situation say workers assigned to the Capital One account were impacted by the layoff.  Wiederman would not confirm which contracts were involved.

Boise Police had a presence at the call center on Chinden Blvd. during the layoff process.

"Officers were on scene in perimeter positions," Boise Police spokesperson Haley Williams said. "Officers... were there as a precaution."

Williams said police involvement in a layoff was not a routine practice, but SYKES officials called and asked for the presence ahead of time.

Some employees who remained at the company this week were given literature on how to deal with an active shooter.  Wiederman confirmed the practice, but said the information went out to all employees at SYKES Worldwide.

"(We are) alerting all employees. With the Department of Homeland Security, we are always making sure they have the best information here in the office, in public or at the mall."

An unrelated call center formerly housed in the same building, operated by Maximus, saw a lay off of more than 1500 people in 2015. According to WARN Act filings with the Idaho Department of Labor, this is the largest layoff in the State of Idaho since the Maximus cuts in 2015.

Unemployment in the Boise metro area hit 2.4% in May - the second lowest rate recorded since 1990, according to the Bureau of Labor Statistics.

 “With such low unemployment rates in Boise and the broader valley, we’re confident that there’s plenty of opportunity for those impacted to find new work,” City of Boise spokesperson Mike Journee said