Secrets to sucessful new hire placements

I'm not normally one for repeating jokes that arrive in my inbox. However, this was droll, and plays to my ambivalent feelings about the challenges in recruiting new hires.

Proper Job Placement

1. Put 400 bricks in a closed room.

2. Put your new hires in the room and close the door.

3. Leave them alone and come back after six hours.

4. Then analyze the situation:

· If they are counting the bricks, put them in the Accounting Department.

· If they are recounting them, put them in Auditing.

· If they have messed up the whole place with the bricks, put them in Engineering.

· If they are arranging the bricks in some strange order, put them in Planning.

· If they are throwing the bricks at each other, put them in Operations.

· If they are sleeping, put them in Security.

· If they have broken the bricks into pieces, put them in Information Technology.

· If they are sitting idle, put them in Human Resources.

· If they say they have tried different combinations and they are looking for more, yet not a brick has been moved, put them in Sales.

· If they have already left for the day, put them in Management.

· If they are staring out of the window, put them in Strategic Planning.

· If they are talking to each other, and not a single brick has been moved, congratulate them and put them in Top Management.

· Finally, if they have surrounded themselves with bricks in such a way that they can neither be seen nor heard from, put them in Government!

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Fair Trade Coffee Not Fair?

I like business. I like coffee. So it only makes sense to also like the business of coffee. That's why I was interested in a study that looked at how Fair Trade dovetails with mainstream coffee production.

Technology Liberation Front: Fair Trade: Does it Work

from the US-based Transfair, fair trade advocates conceded that fair trade producers provided lower grade coffee for sale through the fair trade system. Fair trade producers sell their best coffee on the free market when it commands a higher speciality price than fair trade. Producers then keep their lower-grade quality through the fair trade system where they receive a guaranteed price. They do this because there is an oversupply of fair trade coffee and an undersupply of buyers for fair trade coffee.

On the bright side, coffee producers get more money for low-grade beans than they would without Fair Trade agreements. Better yet, the premium at retail, where the low-grade Fair Trade beans sell at high-grade prices lets concerned consumers believe that because they're paying more, they're doing something good for the little guy.

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Ford Posts Q1 Profit: No Word On The Other Six Signs Of The Apocalypse

Yahoo!: - Ford Motor Co. produced a profit of 100 million dollars in the first quarter

Ford Motor Co. produced a profit of 100 million dollars in the first quarter in a surprise turnaround for the struggling auto giant that has been mired in deep losses.
...
Despite the surprise profit, Ford said it expected to show a loss for the full year 2008 "equal to or better" than its 2007 deficit, dragged down by continued problems in North American automotive operations.

Yes, yes, bully for them them. But one data point doesn't make for a trend. The way the business media has been handing out reacharounds today, you'd think Ford had pulled this rabbit out of their hat eight or more quarters in a row.

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Sony Number One In LCD TV Shipments

See, I'm not always hounding Sony about their failures. I give them their laurels too.

Marketnews: Sony Jumps to Number-One in LCD

In a quick turn of events, Sony jumped four spots to acquire the number one spot in LCD shipments worldwide during the fourth quarter of 2007. In Q3, Sony was fourth overall when it came to unit shipments, trailing behind Sharp, Vizio, and Samsung.
...
According to figures provided by DisplaySearch in its Global TV Shipment and Forecast Report, Sony’s share increased to 12.8 per cent from just under 10 per cent in the previous quarter, representing a whopping 83 per cent quarter-over-quarter growth. Sony led the pack in large-sized LCD TVS ranging in size from 40-54”.

All of this begs the issue that from a performance standpoint, plasma remains superior to LCD, but let's not let that rain on Sony's parade. In terms of LCD flat panels, they are very good at what they do.

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Matsushita rebrands self as Panasonic

Reuters: Japan's Matsushita to switch name to Panasonic

TOKYO, Jan 10 (Reuters) - Japanese consumer electronics maker Matsushita Electric Industrial Co Ltd (6752.T: Quote, Profile, Research) saidit will change its name to Panasonic Corp on Oct. 1, using its most famous brand
...
Besides changing the company name to Panasonic, the Osaka-based electronics maker plans to switch the brand name for appliances such as washing machines and refrigerators in the Japanese market to "Panasonic" from "National".
"So far, all the corporate activities by the Matsushita group and all the hard work by our employees have spread out under three names -- Matsushita, National and Panasonic," Matsushita President Fumio Ohtsubo told a news conference on Thursday.
"We now aim to link all our efforts straight into one brand, one company name, which is Panasonic."

Since Panasonic is one of my favorite companies, it seemed like a good idea to give them kudos for what overall is an excellent branding exercise.

Trivia Time: it was around 2001 or 2002 that Matsushita retired the "Technics" brand from home audio. At the time, Matsushita chose to pursue a low end, entry level and "Home Theatre in a Box", and did not want to besmirch the Technics name, which had been well respected for decades, opting instead to sell indifferent audio products under the Panasonic name. Technics still remains a force in commercial and studio audio products.

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Boutique coffee trade enriches buyers and growers

Peter Meehan wrote a fantastic article in the New York Times this week that encompasses three things that are dear to my heart: capitalism, coffee, and fair trade. Not necessarily in that order.

NYT: To Burundi and Beyond for Coffee’s Holy Grail

...Mr. Sorenson and a few like-minded coffee hunters around the country will go almost anywhere, do almost anything and pay almost any price in pursuit of the perfect cup of coffee. For people at Stumptown and friendly competitors like Intelligentsia Coffee Roasters and Tea Traders of Chicago and Counter Culture Coffee of Durham, N.C., long trips to remote farms for meetings without immediate payoffs are necessary steps in a much bigger goal: reinventing the coffee business.

If you love coffee, it's well worth reading the whole thing. And a big shout out to Mr. Meehan for bringing CoffeeGeek.com to my attention!

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Owner of Ottawa Senators pays fine to Ontario Securities Commission

But bear in mind that he has not admitted to any wrongdoing through his settlement.

Yahoo!: Ottawa Senators owner pays $1 million to settle with securities regulator
By Laura Bobak
TORONTO (CP) - An Ontario Securities Commission panel has formally reprimanded Ottawa Senators owner Eugene Melnyk, who will pay $1 million and be barred from being a director of the drug company that he founded for one year.
Melnyk, who founded Biovail Corp. (TSX:BVF) and helped it grow into one of Canada's biggest drug manufacturers, was accused last July of failing to file trading reports and other required disclosures in connection with offshore accounts in the Cayman Islands.

What's notable about this is neither the penalty, nor the lack of an admission of guilt. Both of those are par for the course. What's notable is that he was prosecuted for unreported offshore transactions. Offshore "tax haven" investments are often touted alongside High Yield Investment Programs (HYIPs in the parlance) by investment scammers looking to fleece unwary investors. It's a common pitch that banks and High Net Worth individuals conduct tax free offshore transactions all the time, and because of some clever loopholes in Canada's tax code, it's all perfectly legal.

Guess what, it's not.

Exhibit A is this High Net Worth individual who was prosecuted for doing just that. Of course, if some slippery joker starts pissing on your leg and telling you it's raining, and rationalizing why this won't happen to you if you give him your money, walk away.

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Eastman Kodak Continues To Dissapoint

CNBC: Eastman Kodak Loss Narrows Helped By On-Going Cost Cutting
The photographic equipment maker reported a loss of $151 million, or 53 cents a share, for the first quarter, up from a loss of $2.98 million, or $1.04 a share, in the same quarter a year ago. Revenue fell 7.5% to $2.12 billion from $2.29 billion in the year-ago period.

So far, Kodak has failed, by any metric you choose, to parlay their dominance in the film business and their branding into anything resembling success in the digital imaging realm.

Especially damning is this passage:

Looking ahead, the world's top maker of photographic film said it expects full-year revenue to be down between 4% and 7%, with digital revenue growth down between 3% and 5%.

This is the year 2007, and not only are they are still being referred to as "the world's top maker of photographic film" but their digital business is in reverse.

At this point, you have to wonder if it's too late to turn Kodak around. Since about 1980, business consultants and people who like sounding smart have made references to the demise of the Buggy Whip business at the start of the 20th century. One hundred years from now, will Kodak be the butt of cautionary tales about failing to evolve your business?

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Globe & Mail Prints Quite Possibly The Worst Career Advice Article EVER!

I'm embarrassed to have read this, and I'm embarrassed-by-proxy on behalf of anyone who thinks they learned something from it that will help their career:

Globe and Mail: A little S&M on the job can take you a long way
Ladies, say hello to the corporate dominatrix.
It doesn't require whips, chains or leather boots, but if you're harbouring fantasies about getting ahead in your career, it may be time to assume the position of corporate dominatrix, and engage in a little workplace S&M, argues Ms. Robyn, the author of a new book called The Corporate Dominatrix: Six Roles to Play to Get Your Way at Work.
Beneath the suits and civilities, workplaces really are dens of sadomasochism, where bosses and workers unwittingly act out three basic S&M roles: dominants, submissives and switchables, who move back and forth between the first two roles, Ms. Robyn says.
The result of these three groups of players interacting daily in the workplace is a constant surge of pleasure and pain, she says.

That's it, let's perpetuate the stereotype that for a woman to get ahead in the "man's world" of business, she has to be twice as tough and twice as mean to get respect.

Even better, let's go all the way, formalizing the "I need to be a bitch to get respect from my co-workers" mindset by visualizing yourself as a dominatrix.

Unfortunately, demanding respect never plays out. It doesn't work when men do it, and it backfires just as often when women try it. Respect is earned. You become respected due to the quality of your work and the professionalism of your personal interactions. Man or women, throwing your weight around the office turns you into the pointy-haired boss from Dilbert. But no, feel free to model your work persona after him! Just make sure to drop me an email and let me know how it works out.

Fuzzy-think gurus like Anthony Robbins counsel that the metaphors you create to describe your life set the tone for how you live. Since there's some truth to that, I would suggest that the consequences of setting yourself up as the office dominatrix in your head will involve you being regularly mocked and alienated by your co-workers, and possibly even marginalized in your career track.

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Circuit City Only Now Decides To Have a Good Business Plan

It admittedly took me a couple of days to tackle this just because I was absoultely flabbergasted when I read this.

TWICE: Circuit City Addressing TV Margin Declines

Read the whole thing, but I'll pick out (actually pick on would be more apt) the highlights for you.

Richmond, Va. — Circuit City has taken a series of actions to bolster TV profits amid the weak pricing environment.

Sounds good so far.

The measures, outlined this week to Wall Street analysts and touched on last week during an earnings conference call, include boosting attachment sales through new merchandising practices

Wait, Circuit City has been in business for how long, and they just now are starting to realize the importance of attachment sales (otherwise known as add-ons, or "accessorizing")?

According to a research note by Goldman Sachs retail analyst Matthew Fassler, Circuit City renegotiated deals with its vendors following the fourth-quarter free-fall in flat-panel pricing. The new agreements call for improved communication of planned price cuts and more reliable price protection.

Again, a major retail banner, #3 in the United States behind Wal-mart and Best Buy, didn't have a buying office competent enough to stay on top of managing the back-end price rebates from the manufacturers? Volume incentives, prompt payment discounts, and price-drop rebates are bread and butter for CE retailers. I'm stunned.

The No. 2 CE chain also reworked terms with its key extended service plan provider to enable faster renegotiation of warranty prices, and to provide contingency plans should TV price drops reaccelerate. Management indicated that Circuit City’s inability to adjust warranty pricing to match price point declines during the holiday selling season was a mitigating factor in last quarter’s earnings shortfall, Fassler said.

Again, most other retailers already have extended warranty plans that are keyed to price points, not product categories. This is a trend in the warranty business that dates back before 1999. Has Circuit City not done any competitive analysis of the warranty market?

Going forward, the company is expanding a new operating model designed to improve the building of a TV “basket” that includes such add-on sales as accessories, extended warranties and Firedog installation services. The pilot program was successfully tested in 50 stores in Texas and is being rolled out chain-wide, enabling Circuit City to offer its customers a “basket of goods” at a variety of price points come next holiday season, according to Bank of America analyst David Strasser.

Wow. They're going to try to sell cables, surge protectors, extended warranties and delivery & installation with every television purchased. But it's such an innovation that first they needed to demo it in some pilot stores to see if it would work. That's a retail strategy so cutting edge, I don't think anyone else has ever tried it before.

The chain is also implementing new store operating procedures (SOP) which will eliminate many redundant tasks and allow sales associates to focus exclusively on selling during store hours, Strasser related in a research note.

It's probably good that they won't expect the salespeople to mop and dust, since now they're being paid less.

The picture being painted here is of a retailer that appears to have thought that they could just hammer out Run Of Print ads every week, and make sales without any coherent thought about key sales support and back-end strategies. Busting out attachment and warranty sales as a revolutionary new way to build margin is especially galling, since they should have been doing it all along. Announcing these initiatives, and pretending they're a good idea just highlight how weak and undirected CC's senior management team has been for, oh, the past twenty years. It's as if they've been doing business in a giant bubble, never once even setting foot in a Best Buy or a successful regional independant.

Honestly, Circuit City needs a new senior management team. Now.

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Speaking of the Alberta housing boom and labor shortage

One of my little hobbies is doing a little buy/sell/trade business on Audiogon, which is like eBay, but a more exclusive site, and focused entirely on HiFi. In addition to my own gear, I also broker deals for people who want to unload their equipment, but are too lazy to set up their own Audiogon account.

Last week I sold some cables to a guy who lives in Thunder Bay, Ontario. On the phone, we were having a chat and the subject of labor costs amongst the trades came up. His sister lives in Calgary, and his other brother-in-law lives in Thunder Bay, and runs a drywall company. Well, sister needed some drywalling done, and after shopping around for quotes determined that it would be cheaper to fly brother-in-law and his entire crew in from Thunder Bay, put them up in a hotel, and pay their standard rate than it would cost to hire a company in Calgary.

In addition to saving money, she got better quality work done. Brother-in-law walked on to a few other jobsites while he was in town, and pronounced the quality of work he saw as "Total shit."

The fact is, right now builders and general contractors are so busy, that they have to take what they can get. And some sub-contractors are so concerned with getting paid and moving on to the next job that the quality of work goes out the window. You pay too much, and get too little.

Moral of the story: don't build a house until the next recession.

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The Power of Brand

An article in The Economist that was reported by Vinography.com concerns a study conducted on wine lovers.

Not only have these folks figured out that THE most important thing in determining the value of a wine at auction is its label (i.e. the name, brand, reputation, region and vintage) but they've done one better. They've actually proven that when people tasted the wine before they bid on it, no matter what the label said, they paid less for it! Let me repeat that for full effect. The power of the label is so strong we actually pay more for wines that we know only by reputation, rather than having tasted the wine to know whether it's any good.
Apparently they did this study on a bunch of Champagne auctions where they had some people taste wines blind, some people taste the wines and see the label after, some people tasted the wines while looking at the label, and some didn't taste at all. Those who didn't taste at all paid the highest prices, those who tasted while seeing the label paid the next highest, and those who tasted blind paid the least for the wine.

This, like all good studies, confirms what we already knew, or at least suspected. It also ties in nicely to a fluffy piece done by CBS before Christmas last month:




My question is, does our ability to percieve Brand count as one of our senses?

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Any Organizational Psychology Nerds here?

If like me, you are obsessed fascinated by OrgPsych, Information Arbitrage has their first two articles posted about the conflict between different corporate cultures on Wall Street.

As an info junkie, I love hearing and reading about other people's industries and businesses, and look for the lessons and takeaways that I can apply to what I do in my field.

Fabulous reads, both of them:

The Wall Street Series Part I: Deutsche vs. Citi - A Study in Wall Street Cultures


The Wall Street Series Part II: Investment Banking vs. Sales & Trading - Can't We Be Friends?

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The Keyboard is Mightier than the Sword

Funny story, and I'm still not sure what it means.

Yesterday, I was on the phone with the territory rep for a supplier of ours. Purely conversationally, I asked him, "Hey, is [redacted] still the head of [redacted] in Canada?"

"Yep" he replied, then with panic in his voice "Wait, you're not going to blog about him are you?"

This totally caught me off guard. "No, I said."

Then as I got my balance back, asked "Why, what have you got?"

"Nuthin."

"Come on, you can't just drop that and leave me hanging!"

"Nope. I'm not saying anything. "

The conversation eventually drifted back to business, but I'm still baffled by his panic at the thought of me writing about his boss. I know the guy, and have met him on several occassions, and really don't have anything negative to say about him, nor have I ever heard a glimmering of anything.

Some people don't understand what Oscar Wilde said, which appears to now be The Paris Hilton Principle: The only thing worse than being talked about is not being talked about.

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DealBreaker unveils their Deal Lingo Lexicon

DealBreaker: Deal Lingo Lexicon

In case you ever get caught napping in a meeting, and the Senior Vice President of Sophistry and Circumlocution asks you to suggest some lateral action items to leverage your core resources towards stemming the negative growth, here's a one-stop-shop for catch-phrases and jargon to make you sound like corner-office material, if you're not already there.

Some of my favorites:

"chasing our tail"--looking at deals but getting none of them closed
"looking under a lot of rocks"--looking for deals in strange places
"keeping your powder dry"---saving capital to deploy via better opportunities
"running parallel" a disguised way of saying we are whoring it out to everyone and let the lowest/highest bidder win
"carry it across the goal line"--close a deal
"stick a fork in that puppy"--kill the deal

And whoever wrote this one, which is way too long to quote, and way too perfect to abridge, needs to be made partner at his firm immediately. If he's already a partner, he needs a bigger bonus.

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US Air and Delta getting into bed together

Bloomberg: US Airways Proposes $8 Billion Delta Air Takeover

Nov. 15 (Bloomberg) -- US Airways Group Inc. made an $8 billion offer for bankrupt Delta Air Lines Inc. in a transaction that would create the world's largest airline. US Airways disclosed its bid today after Delta Chief Executive Officer Gerald Grinstein last month declined to enter into talks. Delta's creditors would get $4 billion in cash and $4 billion in stock in US Airways, formed 14 months ago by exiting bankruptcy in a merger with America West Holdings Corp. A merger would vault the combined company past AMR Corp.'s American Airlines as the world's biggest carrier, uniting the third-largest U.S. carrier, Delta, with seventh-biggest US Airways. The tie-up would take advantage of airlines' recovery from more than $40 billion in losses from 2001 through 2005. ``This would be a very sensible move, but fiendishly complicated,'' said Richard Aboulafia, vice president of Teal Group, a Fairfax, Virginia-based consultant. ``Complicated by issues of seniority, culture, fleet, route networks -- and that's just scratching the surface.''

Since I'm pressed for time, I'm just going to restate what I commented on Dealbreaker.com earlier:

So the plan is for USAir and Delta to merge so that two years from now they can plunge into bankruptcy together?

The airline business, in general, is a big black hole for public and private capital. Aside from farmers, nobody beats airline executives for pissing and moaning about a thousand factors beyond their control that inhibit their ability to make money. Inevitably, they wallow up to the government trough with their hands out.

I guarantee that if today some whiz kids invented safe, reliable teleporters just like on "Star Trek" and revolutionized the world with inexpensive, instananeous transit of passengers and cargo, the very next day the airlines would be lobbying the U.S. Congress for tax breaks, and a big fat bailout package to stay afloat in the face of this new threat to their status quo.

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Who here is leaving money on the table?

NYT Dealbook: The Spending Habits of Hedgies

A new survey of hedge fund professionals, who are a generally secretive group, suggests they are juicing not just the art market, but those for other goods as well. For his book Fortune’s Fortress: A Primer on Wealth Preservation for Hedge Fund Professionals, Russ Alan Prince of the consulting firm Prince & Associates, working in conjunction with trade publisher MARHedge, polled the buying habits of 294 managers with a median net worth of $61.7 million.

Given the reputation of many hedge-fund professionals as big technology fans, it may be suprising that electronics were so low on the hedgie shopping list. In fact, facials seem to have outranked plasma TV’s, as average spending on “traditional spa services” was higher than the “electronics” category.

The survey’s findings for their 2005 personal average spending:
Fine art: $3.99 million
Yacht charters: $429,700
Jewelry: $376,400
Hotels & resorts: $304,900
Watches: $271,300
Fashion and accessories: $204,200
Traditional spa services: $124,000
Electronics: $99,300
Entertaining friends: $76,700
Wine & spirits for the home: $48,900

If I had to make an educated guess why a sample of affluent, technologically savy, testosterone fuelled men spent less than $100K each in "electronics" in a year, I would lay the blame at the feet of our own industry's failure to promote value, performance, and quality, choosing instead to go for the easy sale, and the cheap, commoditized, disposable product.

Really, you can spend $271,300 on a single wrist watch. In comparison, the $99,300 number can easily encapsulate a large quantity of individual low-ticket items: a Motorola RAZR, and iPod, a laptop, a Plasma TV, etc. Sure, the potential is there for more high roller luxury electronics in that figure, but it seems less likely.

Ask yourself, what kind of car does a man with a $61.7 million net worth drive? Is it nice? If he spends $48K a year on booze, do you think he's buying a thousand flats of Molson Canadian and two thousand forties of Medallion Rye, or does he drink the good stuff?

Now that we've determined in Socratic fashion that we have a consumer who values quality, why would you show him a $499 surround-sound-in-a-box or a $1000 42-inch plasma that was made in China by some brand you've never heard of?

Dealers are the first to start moaning about low margins, eroding price points, and competitive pressure, but all these woes are self inflicted. By trumpeting low, low prices in advertising, consumers are programmed to believe that's all that matters, even the ones who, if shown a more upscale, higher quality option, would choose it. Honestly, if your store's staff present the same big-screen tv and sound system to the kid with his first job as well as the guy in the two thousand dollar suit, then there's your problem. If you treat every customer the same, and present the same options every time, then you're throwing money out the window.

Believe me, there are firms out there that get it. Dealers who take the time to get to know their consumers, and who work to turn customers into clients. Those dealers know how to determine if they really do have an easy XM Radio sale on their hands, or if they have a greater opportunity in front of them.

If you need a reminder that opportunity is always there waiting for you, go read Russell Conwell's classic Acres of Diamonds, one of the greatest motivational lectures of all time.

Now go take care of business!

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This week's column on CE Pro

CE Pro: Four Steps to Successful Performance Management

A big hearty thank you to editor Jason Unger who did a fantastic job of clarifying my voice on a topic that I tend to go off about.

I would also like to publically thank old mentors and luminaries from the past, without whom I would have had to reinvent the wheel, and who can all take a public bow for contributing to my success and development:

John Reeves of The Running Room
Howard Toering, once of Forzani Group, but I have no idea where the hell he is now.
Rev. Brian J Munro, formerly of Sony of Canada
Ufuk Yavasser of Sony of Canada
Dave Barton, formerly of Sony of Canada, now with Amex*
Dave Reid, formerly of HBC, now a big wheel at Saan Stores*
Dave Grobman, formerly of A&B Sound, now at Future Shop*

All of the above are Leaders of Men, and I wish them every success in their future endeavors.


*these are the Daves I know

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Odd times in US homebuilding

Dealbreaker analyzing NYT article

Continued weakness in the housing market prompted
homebuilders to dramatically slash prices so as to reduce their inventory. In
addition, they had to experiment with incentive programs as well, when lower
prices weren't enough. In fact, builders aren't crazy about lowering prices,
because it makes homeowners think they'll go lower, so incentives like "free
upgrades" (!?) are becoming more common. It's beginning to sound like the US
auto industry. Soon they'll be offering cash back, interest-free mortgages, and
employee pricing. And once they go down that road, they won't be able to get out
of it; even when things are strong, homebuyers will demand some modest cash back
for their troubles.

Great points from Dealbreaker's Joe Weisenthal about the risks homebuilders run when they try to "incent" home buyers with factors aside from location, construction quality and completing the project on schedule.

So, when the housing market is going soft, and every builder on the street of dreams is offering upgraded appliances and fixtures free of charge, what does a builder do who wants his marketing to stand out?

Some are turning to Celebrity Endorsements: Yahoo! News

You don't need to pay the nearly $9 million asking price for
Martha Stewart's "Turkey Hill" property in Westport, Conn., to live like the
lifestyle doyenne.
Instead, simply head to Cary, N.C. There you'll find a
community built by KB Home called Twin Lakes. Each of the 1,500- to
4,100-square-foot residences features exteriors, flooring, fixtures and cabinets
chosen by Stewart; the model homes are decorated with Martha Stewart Living
products. (The first phase has sold out, and there will be 650 in all, ranging
from the low 200,000s to the mid-400,000s.) There is already a burgeoning
Stewart-affiliated community in Fairburn, Ga., and two more are set to open
early next year, in Katy, Texas, and Perris, Calif.

Wait, isn't this the same Martha Stewart whose "Martha Stewart Living" line of home products were discontinued in Kmart in the US and Zellers up here because they didn't sell?

No, wait, it gets even more surreal:

Stewart's not alone in the celebrity real estate game.
In fact, several less-commercial stars--including tennis great Andre Agassi,
basketballer Shaquille O'Neal and hotel heiress Nicky Hilton--have become
involved in real estate developments in the past year, underscoring a trend that
continues even in the softening housing market: celebrity-branded real
estate.
What's in it for the star? In Stewart's case, a
licensing fee. Others receive entrée into the real estate market, a design
payment or, as investors, equity in the property. The home buyer gets to
associate his or her lifestyle with the celebrity's image. And for the
developer, there's ever-alluring buzz.

Okay, fine. But is it paying off? Not always:

But having a celebrity name attached to a project does not
guarantee success. In the last year, two high-profile Las Vegas
developments--Las Ramblas, a casino and hotel backed very publicly by George
Clooney and Brad Pitt, and Ivana Las Vegas, a luxury skyscraper affiliated with
Ivana Trump--failed when construction costs became too high. And last month,
developers of Manhattan's 485 Fifth Ave., which featured apartments with
interiors conceived by fashion designer Peter Som, reacted to sluggish sales by
returning deposits to buyers while they lull over converting the building into a
hotel.
"Attaching a name to a property is definitely not enough at the high
end of the market," says Kelly Mack, president of Corcoran Sunshine Marketing
Group, a Manhattan-based firm that markets luxury residential properties.
"Buyers are very sophisticated, and they have sophisticated taste. And although
it might be nice to have panache attached, you have to have service."

If you're looking for signs that the US housing market has jumped the shark, celebrity endorsements has to be an awfully ominous portent.

Bright marketing idea, or last-ditch grasp to keep the party rolling? What do you think?

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à la recherche du temps perdu

This week, I was giving some advice to a friend. She and her partner have been trying to collect from a reseller who has been delinquent on his account for over a year. The issue had been on the backburner for them because it was a small invoice, and they’ve been too busy with their real customers to follow up. This week, they finally received payment, along with a condescending note claiming that half of the goods suffered shipping damage, and that the reseller undertook it upon himself to pay for advertising to support sales of her product. The bottom line was that the reseller insinuated that she owed him money. No damaged report with the shipping company, no photos of damaged boxes, no evidence, and most importantly no explanation of why he dodged their phone calls and emails for a full year.

Regardless, all of this is beside the point, except as the lead in to a funny story an acquaintance of mine once told me. He used to work as a national account rep for Admiral appliances way back when, and one day he paid a surprise visit to the head office/distribution center of a well-known Canadian home furnishings retailer. He walked in via the loading dock entrance around the back, and since he was wearing a suit and tie, the workers assumed he was a head office guy, and ignored him as he poked around their operation.

Well, at the same time that he was nosing around, a truck loaded with Admiral washers and dryers came in and the workers started receiving them. My friend noticed that the foreman was marking two out of every three cartons with a giant “X” in black magic marker, and then scribbling notes on a clipboard. So he sidles over and says “Receiving washers, eh?”
“Yeah.” Says the foreman.
“So, what’s with the X’s you’re marking on those units?” He asked.
“I’m reporting them as dented in shipping, with hidden damage.” Responded the foreman, “I give this report to the buyer, and then Admiral will send him a rebate to compensate us.”
“I see.”
“Yeah, it’s free money. Pretty smart, really.”

Needless to say, Admiral’s relationship with that retail chain ended later that day.

If any of you have fond remembrances of shady dealings or sly business partners, send them to me to publish here. I promise to omit names to protect the guilty.

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