Archive for March, 2009

Department store chain Gottschalks to liquidate (Reuters)

Monday, March 30th, 2009 | Finance News

NEW YORK (Reuters) –
U.S. regional department store chain Gottschalks will be liquidated after it failed to attract a buyer willing to operate the company as a going concern, the head of the company's creditors' committee said on Tuesday.

A joint venture of liquidators including SB Capital Group LLC, Tiger Capital Group LLC, Great American Group LLC and Hudson Capital Partners LLC won the auction for the assets of Gottschalks, according to Larry Gottlieb, chair of the bankruptcy and restructuring practice at law firm Cooley Godward Kronish LLP.

The results of the auction are subject to bankruptcy court approval. Going-out-of business sales at the chain are expected to begin on or around April 3, Gottlieb said.

Fresno, California-based Gottschalks filed for bankruptcy protection in January after a failed deal with investor Everbright Development Overseas Ltd to invest up to $30 million in exchange for a stake in the company.

As of March 3, the company had operated 58 department stores and three specialty apparel stores in six western states, including California and Washington.

The liquidator group has agreed to guarantee 98 percent of the cost of the company's inventory, Gottlieb said. The funds can eventually be used to repay the chain's creditors.

The liquidators had originally offered to pay 85 percent of the cost of inventory in their original "stalking horse" bid, but increased their bid during the auction, Gottlieb said.

A "stalking horse" makes the lead bid at a bankruptcy auction and creates a floor for the bidding, in exchange for certain protections that often include break-up fees.

The winning bid represented an increase worth about $14 million from the original bid, Gottlieb said.

The case is In re: Gottschalks Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-10157.

(Writing by Emily Chasan; Editing by Lincoln Feast)

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GM, Bristol-Myers, AK Steel are big movers (AP)

Monday, March 30th, 2009 | Finance News

NEW YORK – Stocks that moved substantially or traded heavily Monday on the New York Stock Exchange and Nasdaq Stock Market:

NYSE

General Motors Corp., down 92 cents at $2.70.

President Obama said GM and Chryslers restructuring plans were too little too late, and he set deadlines for cutting off aid.

Bristol-Myers Squibb Co., up 36 cents at $21.02.

A potential blockbuster diabetes drug appears free from heart-related side effects that plagued similar treatments.

AK Steel Holding Corp., down 93 cents at $7.04.

Steel producers slid on fresh evidence that prices for several types of the commodity have fallen and may continue to fall.

Lincoln National Corp., down $3.96 at $6.41.

The insurer late last week withdrew an application for government funding guarantees. Credit Suisse also downgraded shares.

NCR Corp., down $1.63 at $7.99.

A Baird analyst downgraded the ATM maker to "neutral" from "outperform," as banks are expected to spend less on the machines.

Manitowoc Co., down $1.54 at $3.07.

The maker of cranes said it no longer expects to meet previous guidance for full-year earnings and sales due to poor demand.

Bank of America Corp., down $1.31 at $6.03. Bank stocks retreated amid fresh concerns that financial firms will need more capital to weather the ongoing credit crisis.

NASDAQ

Layne Christensen Co., down $2.85 at $16.58.

The drilling and construction company said it fell to a quarterly loss as mineral exploration revenue dropped by nearly half.

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Intel rolls out Xeon in crowded servers arena (Reuters)

Monday, March 30th, 2009 | Finance News

SANTA CLARA, California (Reuters) –
Intel has unveiled its newest and most powerful family of microprocessors, the Xeon, announcing more than 70 customers for a more energy-efficient chip targeted at an increasingly crowded server market.

The world's largest chipmaker officially announced its Xeon chip for servers and workstations on Monday, based on its "Nehalem" design, technology that had been incorporated in Apple's Mac Pro since January.

Analysts said the new processors may help it cement its position just as Cisco readies a push into the market and a potential reorganization looms with sources and media saying IBM may buy server-maker Sun Microsystems.

"The server business is very competitive," said Douglas Davis, vice president of the digital enterprise group and general manager for Intel's embedded and communications group.

Xeon "will drive a set of requirements for the data center infrastructure."

Manufacturers and analysts say one of the next battles in the chip industry revolves around the amount of energy required to run data centers. A chip that performs better without drawing more power or producing more heat could be key.

Intel is designing a range of Nehalem-based microprocessors targeting servers, workstations, regular desktops and mobile devices, with the Xeon squarely intended for servers.

Dell and Lenovo had announced servers using the chips last week. On Monday, Hewlett-Packard rolled out its new line of Proliant servers using the Xeon processor 5500 series, which Intel said can automatically adjust power consumption in real time.

Other users and supporters of the Xeon family will include software developers Oracle, Microsoft, and SAP, Intel said.

Shares in Intel slid 4.5 percent on Monday as the broader market weakened, and were steady in after-hours trade.

"It is a pretty substantial shift, competition-wise and technology-wise," David Kanter, an analyst with Real World Technologies, said prior to Intel's official release.

Server shipments slid 12 percent in 2008's fourth quarter, their sharpest decline since the dotcom bubble burst seven years ago, and are unlikely to rebound significantly until late 2009 or early 2010, according to research house IDC.

The Nehalem competes with arch-rival Advanced Micro Device's Opteron, first released in 2003.

Nehalem design employs circuitry 45 nanometers wide, 30 percent smaller than previous chips using a 65-nanometer process. This means it can operate more quickly on the same amount of power.

Nehalem "will be very attractive to data centers," Kanter said. "Having the memory controller in the microprocessor is a huge benefit for servers."

Kanter said that Intel's on-chip memory controller could double the efficiency of its previous chips.

Intel's Nehalem and AMD's Opteron both have a memory controller on the chip, four cores, and can handle multiple instructions at once, but Kanter did not think AMD's Opteron could compete in the longer run.

As an example, Kanter said Intel has developed a way of sending two instructions to each core rather than just one and it can turn off cores when they are not needed.

"AMD in the 90s was the value alternative to Intel," he said. They sort of dropped the ball on product leadership and Intel's retaking the lead. AMD's going to be in the value position again."

(Reporting by Clare Baldwin; Editing by Edwin Chan, Gary Hill)

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