NO LOVE AT SEA RAY BOATS

825 EMPLOYEES LAID OFF AS SEA RAY ABANDONS SHIP

Knoxville, Tennessee-based Sea Ray has announced that it is closing two of its facilities. The Sykes Creek facility on Merritt Island, Florida, originally opened in 1972, will be closed permanently resulting in the layoff of 380 Sea Ray employees. Another 440 employees will be laid off at Sea Ray’s Palm Coast facility IN Flagler, Florida.

A portion of the Sykes Creek facility will remain open until contracted orders are fulfilled and to support warranty and other customer service operations.
Sea Ray, the manufacturer of luxury boats was acquired by Mettawa, Illinois-based Brunswick in `1986 for $350 million and has been restructured over the years. Brunswick claims that while production will be halted and facilities closes, the company will retain, refocus, revitalize, and reinvent the brand to include sport boats and cruisers. 

A Brunswick spokesperson indicated that the company tried to sell the Sea Ray business, but could not find a buyer willing to pay a premium for the iconic brand and that the general miasma and weak sales in the luxury boat category led to lower, and unacceptable, valuations.  Brunswick does not plan to leave the marine sector and will continue to offer Mercury and Mariner outboard engines, and Bayliner, Boston Whaler and Meridian boats. 

Are you wondering, Am I Next? 
 

NO LOVE AT KAH-NEE-TA RESORT AND SPA (OREGON)

The Kah-Nee-Ta Resort and Spa in Central Oregon has announced the closure of their popular facility after 50 years due to financial difficulties and will lay off its entire staff of 146 employees.  

It appears that an investment firm, known as AV Northwest, partnered with the tribe but was unable to secure additional financing for the resort. The facility is owned and operated by the Confederated Tribes of Warm Springs. The tribal council will continue to search for additional funding that would allow the facility to remain open on a self-sustaining basis. The facility hosts lodges, a hotel, a full-service RV center, swimming facilities, and a golf course.

The resort complex suffered from a loss in traffic and revenue since 2012 following the tribe’s relocation of the Indian Head Casino from the Kah-Nee-Ta property to a location on Highway 26 to capture more interstate customers. 

It appears that the Native American tribe acquired the resort along with the surrounding property from a non-native doctor in 1961 with funds said to originate with a settlement with the U.S. Army Corps of Engineers over the loss of their traditional fishing grounds by the construction of the Dalles Dam on the Columbia River.  

There appears to be something wrong here. Possibly a failure in leadership, marketing, or financial controls. The facility appears to be presentable and a great location for company retreats. 

Are you wondering, Am I Next?  

AM I NEXT? NO LOVE AT STARBUCKS (UPDATED)

November 15, 2018 — 350 HQ STAFFERS GONE — ACTIVIST INVESTOR HAS NOSE UNDER THE TENT.

Continuing with the reorganization plan previous announced, the company will be laying off 350 employees, mostly at their Seattle headquarters, and mostly in areas like marketing, creative, product, technology and store development.

According to CEO Kevin Johnson, “Every single decision was made after very careful consideration and reviewed with leaders across the company. And while incredibly difficult, they came as a result of work that has been eliminated, de-prioritized or shifting ways of working within the company.”

Look for more changes driven by activist/investor William Ackman of Pershing Square Capital Management who has taken an interest in the company.

Original post…

It should come as no surprise that Starbucks has continued to restructure its store in the face of slower business, increasing competition, bad publicity, higher rents, wage minimums, and market saturation.

The latest realignment comes with the announcement that Starbucks is planning to close at least 150 stores and layoff hundreds of employees. Even noting that growth is slowing, the company will be catering to Wall Street by increasing share buy-backs and shareholder dividends. 

Starbucks Announces Strategic Priorities and Operational Initiatives to Accelerate Growth and Create Long-Term Shareholder Value

Starbucks is optimizing its U.S. store portfolio at a more rapid pace in FY19, including shifting new company-operated store growth to underpenetrated markets, slowing licensed store growth, and increasing the closure of underperforming company-operated stores in its most densely penetrated markets to approximately 150 in FY19 from a historical average of up to 50 annually. In FY19, this will result in a slightly lower growth rate in net new company-operated stores. 

• Adds 5 million new digitally registered customers with Digital Flywheel since April 2018; Active Starbucks Rewards members up 13 percent year-over-year to 15 million

• Three newer major digital initiatives will contribute approximately 1-2% attributable comps in FY19

• Raises target for cash returned to shareholders to $25 billion through FY20, including a 20 percent increase in the company’s regularly scheduled quarterly dividend

• Sharpens focus on optimizing store footprint, anticipates lower net new store growth in the U.S. for FY19 - further concentrating growth in underpenetrated markets

• Decisive steps being taken by leadership to address an anticipated 1 percent growth in Q3 FY18 global comparable store sales

• Announces plans to drive G&A efficiency [cost-cutting]

It can happen to anyone, anytime, anywhere ... are you wondering, Am I Next?