Star Tribune from Minneapolis, Minnesota · Page 39

Star Tribuno Friday February 81991 tlYCV. J 11 r i - 1 1D. Marketplace pulse Minnesota contracts for future construction Total In millions of dollars ,700. I I I I I I I I I I I I I I I I I I I I I I 600 -fr mj :2oo----- ; 100 - i o I I I I I I I I I I I M I I II l I I I J FMAMJ JASONOJ FMAMJ J ASOND ; I 1989 I 1990 Contracts for December Nonresidential . $122.8 Residential... . $97.7 Nonbuilding $28.3 Indudwiuchproi a highway, Drk DataMcGraw-Hill Information Systems Co. Star Tribune graphic NutraSwect hopes will be marketable Chicago, 111. NutraSweet Co. has no plans to follow up its fat-free frozen dessert with other foods containing Sim-plesse but hopes to sell the fat - substitute to others as an ingredient, a company executive said Thursday. .David Morley, president of NutraSweet's Simplesse Co. subsidiary, said the company always expected ingredient sales to be the largest part of the business. But some industry analysts said jkhe move was a strategy shift reflecting NutraSweet's reluctant re-,'alization that Simplesse has not 'performed as well as the company ihoped when it launched Simple 'Pleasures frozen dessert a year i ago. i "It was a case of a company perhaps overstating what something could do before proving it," said David Braff, president of David Braff & Co., a New York-based food-industry consulting firm. 1 viw- Consumer credit down in December Washington, D.C. Consumer credit fell at an annual rate of 2.3 percent in December, the steepest decline in nearly four years, the Federal Reserve uoara aid Thursdav. The rerjort sur- )rised analysts because December jsually is a busy shopping month. (Economist Sandra Shaber of the I cited consumer fears about the ) economy. "We have lost a million ijobs since June. Wage rates are way behind inflation. In many areas, the values of homes are declining. People are worried about the banking situation." The Fed said consumer installment debt fell a seasonally adjust Mavtaa cuts stock Des Moines. Iowa Maytag Corp. directors Thursday slashed by 44 percent the dividend on common stock and ended a policy of paying a bonus year-en0 dividend. The international appliance mak-fgr cited sluggish sales worldwide !!and its chairman said prospects n dim for improvement soon. It was the first dividend reduction since 1974, Maytag spokesman Jim Powell said. That also was a period of recession in which con- Senate approves Washinoton. D.C. The Senate approved President Bush's nomination Thursday of former Rep. Lynn Martin as secretary of labor by a vote of 94-0. Martin, 51, won praise from Sen. Edward Kennedy, D-Mass., chairman of the Labor and Human Resource Committee, which had unanimously recommended her approval. ""She is the first and only secretary of labor ever to be nominated Dy a president after having voted in Money market fund assets rise New York, N.Y. Assets of the nation's money market mutual funds rose $6.47 billion in the week ended Wednesday to $455.19 billion, the Investment Company Institute said Thursday. The seven-day average yield on the funds fell in the week ended Tuesday to 6.65 percent from 6.76 percent the week before, according .to Donoghue's Money Fund Re- its fat substitute as an ingredient Simplesse is a fat substitute made from egg whites and milk protein that mimics the texture of fat It was approved by the Food and Drug Administration (FDA) early last year for use in frozen desserts and is widely available only in Simple Pleasures products, although Eskimo Pie Co. is testing it in a frozen dessert sandwich. Morley said he expects FDA approval this year to use Simplesse as an ingredient in refrigerated desserts, salad dressings, mayonnaise and some dairy products. He said Simplesse Co. is working with food manufacturers to launch products containing Simplesse as soon as the FDA allows, but has no plans to market its own products in those categories. But food industry analysts said the company implied when it launched Simple Pleasures last February that it planned to develop and market a range of proprietary products. ed $1.45 billion, the first decline since a 0.2 percent dip in February 1989 and the sharpest decline since a S.2 percent drop in February 1987. For the year, credit growth slowed to 3.1 percent, down from 6 percent in 1989 and 8.5 percent in 1988. November's 4.5 percent growth was stronger than the 2.8 percent gain first reported, however. Only automobile loans increased in December. All other types of consumer debt, including credit card debt, declined in the month that included most Of Christmas shopping. dividend by 44 sumer confidence slid as world oil prices rose. "It's probably the right business decision," said Russell Leavitt, an analyst who follows Maytag for the New York investment firm Salomon Brothers Inc. He said the company would make better use of its cash by investing to upgrade operations to keep competitive in an industry struggling with slumping sales. labor secretary Coneress to override the presi dent's veto on a critical labor issue," Kennedy said. Martin voted to override Bush twice on the minimum wage and the Family and Medical Leave Act. Martin, a former English teacher, was elected to the House from Rockford, 111., in 1980. She was defeated in the 1990 Senate race by Democratic Sen. Paul Simon. Simon supported her nomination as labor secretary. port. The 30-day average yield fell to o.ou percem irom o.y. percent. The effective annual yield available on money market accounts fell to 5.72 percent as of Wednesday from 5.78 percent a week earlier, according to Bank Rate Monitor's survey of 100 banking institutions. The yield on Super NOW accounts fell to 4.99 percent from 5.01 percent Midway posts loss, suspends loan, aircraft lease payments Associated Press Chicago, 111. Midway Airlines Inc. reported a fourth-quarter loss of $86.1 million Thursday and said it was suspending all aircraft lease and loan payments. The airline said the fourth-quarter loss reflected a $55 million special chargtf'for the sale of the company's Philadelphia hub assets and the restructuring of its routes. Midway "plans to resume lease and loan payments at reduced levels be SpotlightSmall 1" ' At 1 ,1 x """" Staff Photo by David Brewster Pat Feely, president of Toy Soldiers Inc., which has been sold to a Japanese toy manufacturer. Major Japanese firm buys Minnetonka's Toy Soldiers Editor's note: This is last of three articles chronicling the life of Toy Soldiers Inc., a young Minnesota toy company. By Dan Wascoe Jr. StafTWriter Toy Soldiers Inc. waved the white flag Thursday. The two-year-old toy company, based in Minnetonka, merged with Bandai Co., a Japanese power INSIDE Chrysler Corp. said it earned a modest profit of $31 million in the fourth quarter. Page 30. A senior executive said Ford Motor Co. will intensify cost-cutting in response to the recession, but won't cut capital spending. Page 30. L. William Seidman, chairman of the Federal Deposit Insurance Corp., said the fund backing bank deposits may have to borrow $1 5 billion. Page 3D. buff efiioo ginning in May 1991," the company said in a news release. The move surprised Wall Street. The airline's stock closed at $3 per share on the New York Stock Exchange, down $1.25. The company did not disclose the amount of the suspended payments, but Paul Karos, airline analyst for First Boston Corp., said he thought they were about $70 million a year. Midway said it has started talking Midway continued, on page 2D business &Jj m 1 1 : 4 ) , It tfHy , house that is one of the world's largest toymakers. The merger changes the dream of Toy Soldiers' founders, a collection of toy industry and retail veterans who sought to build an innovative Minnesota-based company that could spot opportunities and pounce on them quickly. Based in Tokyo, Bandai has about $900 million in annual sales and was a minority shareholder in Toy SEC filing by Tonka Corp. projecting a first-quarter loss By Dan Wascoe Jr. StaffWriter Tonka Corp., which already has projected significant losses for the fourth quarter and for all of 1990, is projecting a loss for the first quarter of 1 99 1 ranging from $15.5 million to $27.5 million. Last year, the toy company reported a $10.3 million loss on revenues of $135.9 million. i The estimates were made in a Tonka filing with the Securities and Ex for airlift NWA hit with Standard & Poor's-':' revision, losses at partner KLM ; By David Phelps StaffWriter A pair of announcements stressing the financial turbulence engulfing the airline industry struck Northwest Airlines Thursday. Reflecting concerns about cash flow at the Eagan-based carrier, Standard & Poor's Corp. said yesterday that it had placed some notes and bonds of the carrier and parent NWA Inc. on its creditwatch surveillance list "with negative implications." - ; - n f II Soldiers, said Pat Feely, Toy Soldiers' president. His own company has annual revenues of about $7 million, he said. At one time he hoped for $15 million. Yesterday's news came a week after Hasbro Inc. announced its plan to buy Tonka Corp., another Minnesota-based toy company. Feely would not disclose terms of Toy Soldiers continued on page 2D change Commission in connection with last week's agreement to be acquired by Hasbro Inc. Tonka spokeswoman B.J. French emphasized that the estimates are "not a reliable predictor of future events." The filing also disclosed that starting in December, Tonka's financial advisers sought "indications of interest" from more than 25 companies considered as candidates to acquire Tonka. They eventually determined that a purchase price of $7 per share And one of the airline's key financial partners, KLM Royal Dutch 'Airlines, announced that it expects, to. lose $396 million in the current fiscal year ending in March. It earned $207 million in the last fiscal year ended March 31, 1990. The Dutch flag carrier said it will cut 2,000 jobs in the wake of a big third-quarter loss, which it blamed on. increases in fuel and materials costs and losses on investments. KLM's losses on investments, including its NWA continued on page 2D ' ; Sluggish retail sales stumble in January By Sally Apgar StaffWriter The normally not-so-hot retail month of January was chilled even more as consumers worried about recession and watched televised play-by-plays of the Persian Gulf war. Across the nation, major retailers Thursday reported slumping sales for January, which only dragged out the disappointment from Christmas. . Although not considered pivotal by retailers, the January figures are telling indicators of low consumer confidence in the overall economy. ZJl "Sales hit an air pocket and dropped the first week of the war," said Jeffrey Edelman, an analyst for Barclays de Zoete Wedd. "Sales then bounced back some but remained sluggish for the rest of the month." Edelman and other analysts predicted that a war colliding with a full-speed recession will hold retail sales to a sluggish crawl for at least the next six months. ', Retailers, too, were cautious. Kenneth Macke, chairman and chief executive of JDayton Hudson Corp., said, "We remain very conservative in our planning for 1991 in view of the many uncertainties in this economic environment." He also noted that first-quarter results would be hit hard, in part by costs associated with the acquisition of Marshall Field's. Overall, Dayton Hudson, which operates 708 stores, continued to outperform many other national retailers, with same-store sales rising 12 percent for the five weeks ending Feb. 2. Same-store sales are revenues from stores open at least one year and; are widely considered a more accurate measure of a retailer's performance than overall sales. New stores can often have unusually strong sales that skew results. Wall Street has also shown some confidence in Dayton Hudson's performance, boosting its stock price higher than $68 recently from about $59 during the third week of January. The stock closed yesterday at $68.50, down 12.5 cents. Analysts said yesterday that many of the sales increases seen across the industry were the result of clearance sales. But spokeswoman Ann Barke-lew said Dayton Hudson's sales were not attributable to clearance sales. Dayton's adjusted retail sales for the five-week period increased 11.8 percent, to $988 million from $884 million a year ago. Retail sales continued onpage 2D the amount offered by Hasbro ' "was not likely to be obtainable in the near term" from the other companies. A recent lawsuit filed by two Tonka shareholders contends that Tonka's directors did not try hard enough to solicit other offers. Tonka says in the filing that Hasbro executives contacted Tonka Chair-Tonka continued on page 2D " .