Monthly Archives: July 2014

Former Toys R Us CFO Louis Lipschitz Dies at 69

Louis Lipschitz

Louis Lipschitz

Louis Lipschitz, the man who played a key role in keeping the finances of the giant toy company Toys ‘R’ Us strong, passed away at the age of 69 after a brief illness.

As the chief financial officer of Toys ‘R’ Us, Lipschitz led his company from 300 stores and annual sales of less than $2 million during the 1980s to a powerful institution consisting of over 1600 outlets and $11 billion in 2004, the year of his retirement. When Lipschitz left there was more than $2 billion in cash available. Just one year later a leveraged buyout brought the company to private status the result of which was to add over $5 billion in debt to the company’s balance sheets.

During his 18 years as the CFO Lipschitz led the company’s quarterly conference calls with analysts. He was viewed as a warm and friendly man who was nevertheless a tough money manager.

“I recall Lou as a man who could surprise people on Wall Street with his warmth and humor,” said Sean McGowan, managing director, equity research at Needham & Co. in New York, and a leading toy industry analyst. “At first, it might appear that he was a classic ‘bean counter’, and in fact he had a sharp financial mind, but if you got to talk to him outside of that role, he was a gentle, warm, funny guy,” he said.

Japan Reverses Fifty Year Defense Sharing Ban

In a move which represents the first defense technology transfer since they relaxed their military export rules last April, Japan has given the go ahead for the export to the US of a locally manufactured part for a missile defense system. Japan also will pursue a joint research project with Britain on technology for air-to-air missiles on fighter aircraft.

The new easing in military export rules nullifies the self-imposed Japanese ban on arms exports as a consequence of their anti-war constitution. It is a sign of Prime Minister Shinzo Abe’s interest in creating a more assertive defense position for Japan.

The decision gives a green light to Mitsubishi Heavy Industries, Japan’s major defense contractor, to export seeker gyro, which is a component of Patriot Defense Capability-2 surface-to-air missile defense system, to Raytheon Company. The gyro gives the missile the ability to identify, track and chase its targets.

Japan’s government also gave its seal of approval to participate in research with Britain on the Japanese seeker technology.

“It would not only strengthen national security and defense cooperation between Japan and Britain, but also could contribute to raise the capability of (Japan’s) Self-Defense Forces in the future,” said a joint statement issued by the foreign, defense and industry ministries.

US Business Travel Grows in 2014

According to The Global Business Travel Association, business travel that originated in the US grew by 3 percent in 2014 over the previous year. Company’s spent $71.2 billion in the first quarter of 2014, an increase of 7.6 percent over the same period during the previous year.

Analysts believe that US business travel spending will rise by 6.8 percent by the end of 2014, to a total of $292.3 billion.

Together with Visa the GBTA published their GBTA BTI™ Outlook – United States 2014 Q2. The report describes the relationship of business travel to overall US economic expansion. Some of the most important findings of the report are:

•    The total number of domestic person business trips in 2013 was revised upward to 468.8 million from the previously reported 448.7 million, resulting in a 4.7 percent year-to-year gain. Spending remained consistent with the previous forecast at $241 billion, indicating a lower-than-estimated spend per trip.
•    Group business travel outperformed individual business travel in 2013, growing 8.6 percent, an indicator that the business travel industry is recovering from the Great Recession and increasing discretionary spending.
•    While individual business travel volume is expected to grow 2.3 percent in 2014, spending is expected to increase 5.6 percent, driven by higher prices and additional spend-per-trip.

The report also described other factors that could affect business travel in the near future such as the price of fuel, cost of travel and international outbound business travel.

TSA to Require Powering On of Electronic Devices

Airport Security to Reach New Highs

Airport Security to Reach New Highs

In response to an upsurge in the threat of attack and an increased fear that terrorists are working on a bomb which can be brought onto an airplane undetected, the Transportation Security Administration will soon be issuing orders that will require some overseas airports to require passengers boarding US bound flights to power up their electronic devices. Devices that do not power-up properly will not be allowed on board and the owners of those devices may have to be further screened.

‘‘As the traveling public knows, all electronic devices are screened by security officers,’’ the TSA said in the Sunday release announcing the new policy.

US intelligence is wary that al-Qaida have been hard at work to produce an explosive device which can by-pass today’s security measures. However, there is no indication that such a bomb has indeed been developed.

Jeh Johnson, secretary of Homeland Security said recently that the TSA will be utilizing additional security measures at some international airports that have direct flights to the US. Although the TSA has no jurisdiction abroad, they can still demand certain screening criteria for flights which travel directly to the US.

In an interview on the NBC news show “Meet the Press” Johnson would not say whether the new procedures would also be required at domestic airports at some future date.

‘‘We continue to evaluate things,’’ he said. ‘‘The screening we have right domestically from one domestic airport to another is pretty robust, as the American traveling public knows. In this instance we felt that it was important to crank it up some at the last point of departure airports and we’ll continually evaluate the situation.’’