Austin American-Statesman from Austin, Texas • B8

B8 AUSTIN AMERICAN-STATESMAN I SATURDAY, JUNE 28, 2014 RETAIL Michaels' return to public trading tepid Newscast continued from B7 p.m. news. In the most recent Nielsen "sweeps" period, KVUE had the No. 1 English-language newscast at 10 p.m., with an average of about 36,000 Central Texas households tuning in each weeknight in May. KXAN was next, with about 30,000 households, followed by KEYE, the newscast of choice in roughly 29,000 households.

The new KTBC newscast is one of several announced this week set to air on Fox-owned stations nationwide, including ones in Atlanta, Charlotte, N.C., Minneapolis, Phoenix and Washington, D.C. "Uninformed critics say big companies are cutting local news," Fox Television Stations CEO Jack Abernethy said in a written statement. "However, the opposite is true at Fox. We are expanding in a big way." In Austin, Fox 7 airs more local news than any other over-the-air broadcast station, including a morning show that runs 5V2 hours. Nasdaq CEO BobGreifeld (right center) joins Michaels Stores CEO Chuck Rubin (center) during the opening bell of the Nasdaq exchange in New York to celebrate the Michaels IPO of 27.8 million shares on Friday.

Michaels' share price went back and forth between small gains and declines, bebetomatthews associated press customers want to come to the brick and mortar stores to see how things come together," he said. He also noted the average price for an arts and crafts item is $3. "There's no easy showrooming in this industry," he added. The big opportunity is personalization and taking advantage of social media sites like Pinterest, he says. Michaels wants to focus not only on the crafts enthusiasts but novices as well.

Last year, more than 800,000 customers took classes at Michaels stores. The company, founded in 1973 with one small store in Dallas, said in a regulatory filing that North America could potentially grow to 1,500 Michaels stores. It currently operates 1,263 Michaels stores and 118 Aaron Brothers stores. Its original debut as a public company came in 2001 on the New York Stock Exchange. It's using the same ticker "MIK," but is trading on Nasdaq.

For its latest fiscal year, which ended on Feb. 1, sales rose nearly 4 percent to $4.6 billion. Net income rose to $243 million from $200 million. The arts and crafts chain plans to use the IPO's proceeds to pay down its debt. It had $3.7 billion of debt as of May 3.

Lackluster investor response reflects on arts, crafts industry. Associated Press NEW YORK Michaels had a tepid return to the stock market Friday, its shares going back and forth between small gains and declines. The Texas arts and crafts store operator's shares were up 19 cents to $17.22 in midday trading on the Nasdaq, after falling a little over 1 percent earlier. The lackluster response shows investors are wary of retailing and the fragmented $30 billion arts and crafts industry. The last IPO from a major retailer was The Container Store Group which made its debut late last year.

Its shares have fallen 19 percent and closed at $29.41 Thursday. The IPO comes amid a market rush. It's the third-busiest week for IPOs since 2000, according to IPO investment adviser Renaissance Capital. Michaels Cos. which also runs the Aaron Brothers chain, priced an initial public offering of 27.8 million shares at $17 each, at the low end of its predicted range.

The Irving-based com- WALL STREET Wal-Mart Stores for example, recently brought back its fabric offerings and online king Amazon.com. Michaels has been late to the online party, launching its e-commerce business only this year. In an interview with The Associated Press on Friday, Chuck Rubin, who was appointed CEO of Michaels in March 2013, dismissed the market's response. He said he's focusing on long-term opportunities, and that investors will be rewarded. "This is a marathon, not a sprint," he added.

While there's not a lot of data available on the arts and crafts market, he said Michaels' sales have been growing faster than the industry's annual rate of low-single-digit increases, and it's been taking market share away from other traditional chains, though he declined to give names. Rubin shrugged off competition from Amazon, saying e-commerce is not as much of a threat as it is to other industries. "When you sell pieces and parts, we know Mercedes, Infiniti to build in Mexico Stocks notch tiny gains Contact Gary Dinges at 512-912-5987. Twitter: gdinges Eurozone continued from B7 The debate comes as EU countries are under less pressure from financial markets because they have seen their government borrowing rates fall. Investors have regained confidence in the 18-country eurozone as its financial crisis eased.

But while markets have stabilized, economic growth is still weak and unemployment is stuck at record levels in many of the bloc's nations. Italian Prime Minister Renzi urged more leeway in the EU rules ahead of the two-day summit, where leaders are to determine the 28-nation bloc's strategic priorities for the coming five years. Italian news reports said Renzi and German Chancellor Angela Merkel, who opposes changing the rules, had a tense exchange at the leaders' dinner Thursday. A senior German government official, speaking on condition of anonymity, said the two leaders had a more positive bilateral meeting Friday morning. The official was briefing reporters on condition of anonymity because he was not allowed to discuss their closed-door talks publicly.

The EU rules limit countries' budget deficits to a maximum of 3 percent of gross domestic product, and total debt to 60 percent, forcing countries above these thresholds to consolidate their budgets. The overall market was essentially flat. the money raised in the IPO will be used to pay down debt. The company's stock rose 2 cents to $17.02, just two cents above its IPO price. DuPont dropped $2.26, or 3 percent, to $65.44.

The company cut its profit forecast late Thursday as a result of weaker sales of corn seeds. Nike gained 82 cents, or 1 percent, to $77.68 after reporting earnings late Thursday that beat Wall Street's expectations. Stronger worldwide sales offset marketing costs for the World Cup soccer tournament. Nike provided the outfits for 10 national teams, including Team USA, for the World Cup in Brazil. Bond prices were little changed.

The yield on the 10-year Treasury note held steady at 2.53 percent. The price of oil fell 10 cents to settle at $105.74 a barrel. ByJackEwing The NewYorkTimes FRANKFURT Daimler and Renault-Nissan significantly expanded their au-tomaking alliance Friday, saying they would jointly build a production facility in Mexico to produce a new generation of compact Mercedes and Infini-ti cars. The companies said they would invest 1 billion euros, or about $1.4 billion, in a plant in Aguas-calientes, Mexico, about 300 miles north of Mexico City, where Nissan already has a major production operation. While the vehicles produced at the 50-50 joint venture will carry different brand names and look different from one another, they will share many components, the companies' chief executives said in a news conference Friday.

The companies will also share some of the costs of developing the new vehicles. But they said they were not worried about cannibalizing each other's sales. There is virtually no overlap between buyers of Mercedes cars from Daim- ler and Infiniti cars from Renault-Nissan, said Carlos Ghosn, the chief executive of the Renault-Nissan Alliance. "We are not addressing the same customer base," he said. Dieter Zetsche, the chairman of Daimler, added, "If there was a risk, our sales organizations on both sides would raise their hands, and none of that has happened." Mercedes has been cooperating for four years with Renault-Nissan, itself a longstanding French-Japanese alliance.

Among other things, they produce four-cylinder engines together at a factory in De-cherd, Tennessee. They also shared the cost of developing major components for the next generation of their flagship small cars, the Renault Twingo and Daimler Smart, which are scheduled to go on sale this year. The partnership is part of a trend for car companies and, in some cases, competitors to share the enormous costs of developing and producing new models while maintaining separate brand identities. pany raised $472 million from the offering. Private equity firms Bain Capital LLC and The Blackstone Group LP bought Michaels in a $6 billion leveraged buyout in 2006.

Michaels' IPO was delayed two years after its then-CEO John Menzer resigned after a stroke. Michaels, which was in a sweet spot during the Great Recession when homemade goods gained new currency as people tried to save money, has faced increasingly tough competition. That's coming from discounters "The risk in the summer typically isn't financial, it's political," he said. "This summer it's geopolitical: Iraq and Ukraine." The Standard Poor's 500 index edged up 3.74 points, or 0.2 percent, to close at 1,960.96. The most widely used benchmark for stock funds lost 1.91 points for the week, a loss of 0.1 percent.

The Dow Jones industrial average rose 5.71 points, less than 0.1 percent, to close at 16,851.84, while the Nasdaq composite rose 18.88 points, or 0.4 percent, to 4,397.93. Many investors have been waiting for the market to take a break from its long climb. The 500 has gained 5.8 percent in three months and reached its latest all-time high on June 20, one week ago. In Friday trading, Mi-cheals Cos. made a minor gain in its return to the stock market.

Bain Capital and the Blackstone Group, two private equity firms, bought the operator of arts and crafts stores in 2006 and returned it to investors in a $472 million initial public offering. Much of Though the University of MichiganThomson Reuters index posted a more modest gain than the Conference Board's measure, it showed recent solid job growth has boosted consumers' view of their own finances. Four in 10 respondents in the June survey said their financial situation had improved over the last year, up from 35 percent the previous month and the best reading since 2007. More optimism about the housing market helped buoy consumer views of their financial situation. For the first time in eight years, the percentage of homeowners in the survey who said home-selling conditions were favorable reached 50 percent.

Overall, the University of MichiganThomson Reuters index of consumer views of current economic conditions rose to 96.6 in June, from 94.5 the previous month. Additional material from the Los Angles Times, Associated Press and Bloomberg News. But after a day of listless trading, they end the week lower. Associated Press NEW YORK Summertime settled into Wall Street on Friday as major stock indexes drifted slightly higher going into the weekend. The listless day of trading left the stock market with a tiny loss for the week, its second this month.

A handful of corporate results drove trading in some big names. Warnings of weaker earnings pushed DuPont down, while stronger results pushed Nike up. But the overall market was essentially flat. "The fact is, it's the summer, and there isn't much happening," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. That could change quickly.

Turmoil in the Middle East could easily rattle U.S. markets, especially if the fighting in Iraq drives oil prices too high, Ablin said. Rising tensions between Ukraine and Russia also remain a concern. Confidence continued from B7 formance since the recession. But economists attributed the dismal performance largely to extreme weather in much of the nation.

Recent data have indicated a strong rebound in the second quarter. "Consumer sentiment has been steady so far this year," said Ryan Wang, an economist at HSBC Securities USA Inc. in New York. "It suggests a degree of stability in the outlook for consumer spending. Households are still cautious.

But the improvement in the labor market has been a positive force." The Conference Board, the other leading tracker of consumer sentiment, said this week that its confidence index for June jumped to its highest level since January 2008. The readings are important because consumers account for about 70 percent of all economic activity. 9 mm Shoppers look at washers and dryers at a Costco in Piano earlier this month. Consumers who feel confident about their personal finances and the economy can be more prone to consider big-ticket purchases, lm otero associated press.