Allens Canning business went on the auction block earlier this week with Sager Creek Acquisition Corp. winning the bid and agreeing to pay $124.781 million for the bankrupt business. Little is known about Sager Creek, a recently formed Delaware-based corporation, according to the court filing.

The president of Sager Creek, James Athanasoulas, is the managing director of Sankaty Advisors, a unit of Boston-based Bain Capital. Sankaty Advisors is a secondary lienholder listed among Allen’s creditors. The amount owed was not disclosed.

The $124.781 million price tag is subject to increase or decrease for the actual amount of “First Priority Obligations,” other pending claims and fee along with the $3 million break-up fee required by the court. The sale be must authorized and approved by the bankruptcy court in a hearing set for Tuesday, Feb. 11, in Fayetteville. A secondary bid was recorded by Atlanta-based McCall Farms in the amount of $124.606 million, according to the filing.

There were a number of assets excluded from this proposed deal such as the stadium suite at Arvest Ballpark in Springdale, an airplane hanger at the Siloam Springs Municipal Airport, frozen re-pack facility and processing plant in Montezuma, Ga., and five residential properties each located in Siloam Springs.

Other personal items also excluded from the deal included a desk in the CEO’s office once belonging to Earl Allen, various sports and personal memorabilia located in the corporate offices of Nick, Josh and Rick Allen, and various historic photographs of the family business displayed in the corporate headquarters.

The stalking horse bidder, New York-based Seneca Foods Corporation, walked away from the deal to acquire Allens a second time this past week as the fruit and vegetable company was outbid for the Siloam Springs-based canned food business.

Seneca entered a bid at $148 million after combing through Allen’s records. Early reports indicated the winning bidder, Sager Creek, offered the court $159.98 million for the assets up for grabs. Subsequents details in the court filing late Friday, (Feb. 7) indicated the purchase price to be $124.781 million by Sager Creek, with McCall Farms backup bid of $124.606 million.

This is the second failed attempt by Seneca to close a deal with Allens in three years. Seneca said in December that Allens canned food business would fit into the company’s long-term growth plans.

Allens and Seneca tried to merge their operations in June 2011, but walked away from the deal in September 2011 when the businesses could not agree on terms.

Given that Sager Creek principals are venture capitalists/private equity investors and not manufacturers like Seneca or Allens, it’s possible the business could be dismantled and sold off or infused with cash and sold for a higher price.

Candidates for statewide elective office descended on Fort Smith on Saturday (Feb. 8) talking unreasonable tax cut plans, Obamacare and the role of the lieutenant governor's office.

Prior to the Ronald Reagan Dinner, hosted by the Sebastian County Republican Women, former U.S. Rep. Asa Hutchinson, who is seeking the Republican nomination for governor, took aim at Democratic candidate Mike Ross' tax cut proposal presented to the public this week. The plan called for a phased-in tax cut for all tax brackets at a total cost estimated at $574.5 million.

In describing the differences, Hutchinson said the tax cut proposal from Ross is not a reasonable plan that could work within Arkansas’ budget.

"Our plan reduces the income tax rate for those in the middle income category in Arkansas and the revenue loss is about $100 million for our state. Mr. Ross released his plan and there's two things. One, there's no start date to it, so if you have a plan to reduce taxes, you really need a start date and he does not have that. It's just really a promise to the future. And secondly, his really would cost us $500 million plus, which is not a reasonable plan to begin with of recurring revenue to have that kind of loss to the state that would hurt education, that would hurt essential services that we have."

Even with the price tag of Ross' plan well over a half billion dollars, Hutchinson said his opponent's tax plan does nothing to lower tax rates or create jobs within the state of Arkansas.

"Our goal is to ultimately reduce the high individual tax rate in Arkansas from 7% down, and that's not his objective. His objective is simply to index the rates to keep them at the same high percentage rate that we have now. And so there's no job creation benefit, we're still not competitive to our surrounding states. So two different objectives. Two different costs. Mine has a start date, his does not."(A brief video interview with Hutchinson can be viewed at the end of this story.)

And while Hutchinson may have been a vocal skeptic of Ross' tax cut proposal, at least one Republican candidate for lieutenant governor said he was excited at the level of cuts Ross was proposing and said even if the state's top two constitutional officers continue to hold different political affiliations, the plan showed that Ross is willing to entertain Republican-friendly policies.

"As you know, recently candidate (Mike) Ross has suggested his own income tax reduction plan and I'm very, very excited that he's into that policy arena and I'm also excited about the level of income tax reduction he thinks we need in Arkansas," said Rep. Charlie Collins, R-Fayetteville.

Without going into specifics, Collins said he would want big changes made to the proposal, though he said the plan itself was on the right track.

"While I would dramatically restructure the plan overall, I think with a couple of those parameters — (primarily) reducing income taxes to the tune of $575 million a year — we've got a lot that we can work on together to get some great progress for Arkansas."

Collins sidestepped a question about the possibility of retiring U.S. Rep. Tim Griffin, a Little Rock Republican, exploring a race for the lieutenant governor's office, instead talking about what he hoped to accomplish in the largely ceremonial position.

"I think the relationships I've built in the (State) House and the (State) Senate, that I can help be a very effective liaison between the executive branch and our (possible) next Republican (governor) of Arkansas and both the House and the Senate."

He explained in detail, as well, why he was seeking the office versus running for a third term in the House from his Fayetteville district.

"I think with a statewide platform, I can help build and champion and get more support for this message of economic freedom (and) making our state more competitive with the states around us," explaining that moving from the House to the lieutenant governor's office would allow him to take a jobs creation message across the state instead of having a limited voice as one of 100 representatives.

U.S. Rep. Tom Cotton, R-Dardanelle, who has made eliminating Obamacare a central message in his race for U.S. Senate against incumbent Democrat U.S. Sen. Mark Pryor, addressed a CBO report released earlier this week that projects 2 million fewer full-time employees in the workforce by 2017 as proof that the new health care law is hurting Arkansas workers. But instead of focusing simply on jobs, Cotton said the report shows that the legislation is leaving millions without coverage even after the bill's passage in 2010.

"It confirms our worst fears that we had about Obamacare. For instance, it projects that there is going to be the equivalent of 2.5 million job losses over the next ten years because of the impacts of Obamacare in places like Fort Smith, or like my hometown of Dardanelle, or all across America. It also confirms the botched rollout of the law is going to significantly drive down the number of people who are enrolled, which is going to drive up the cost to the taxpayer in terms of paying higher premiums or the bailout of insurers. And finally, it says that in 10 years, we still going to have 30 million Americans uninsured. That's the exact number the President was using five years ago to sell Obamacare. So after all the trillions of dollars of new spending and new taxes and canceled plans and loss of access to doctors, we're still going to have over 30 million Americans uninsured."

Cotton took time to layout what he is proposing for changes to the law during the next few years, should he be elected to the Senate.

"In the short term, we have to focus on laws that stop the immediate harms of Obamacare. For instance, the legislation we passed in the House in November that would allow people to stay on their plans by grandfathering those plans into the future. Or to prevent people from having to pay the income tax penalty. They can't get insurance under Obamacare because they can't' afford it. So those are the kind of short term measures we can pass."

Once President Barack Obama leaves office in January 2017, Cotton said he and his colleagues in Congress would be able to implement long-term solutions.

"In the long-term, though, we do have to repeal it because it is a fundamentally flawed law, but we have to replace it with market-based reforms and empower patients and doctors that address the problems of the pre-Obamacare system  — the high cost of health insurance and the lack of access, especially for people with pre-existing conditions."

Cotton said the way to tackle such problems was with more choice for consumers, including the ability for buyers to purchase insurance outside of their home state. He also proposed encouraging the increased use of Health Savings Accounts (HSAs) and tackling the high level of medical malpractice lawsuits. He also proposed creating a high-risk pool so "people with pre-existing conditions can get coverage in their state and then transition that coverage to employer-based coverage or individual market-based coverage, all of which would encourage competition. That would increase access and quality and it drives down prices."

Plenty of eyes are watching the outcome of a formal complaint by the National Labor Relations Board against the nation's largest private employer, Wal-Mart Stores Inc. But, the retail juggernaut is standing its ground and challenging the validity of the compliant filed last month.

The retailer said it acted within its rights to discipline workers who failed to adhere to the company's attendance policy, according Wal-Mart' recent response filing reviewed by The City Wire.

The complaint alleged three violations of NLRB rules.
• During two national television news broadcasts and in statements to employees at Walmart stores in California and Texas, Walmart unlawfully threatened employees with reprisal if they engaged in strikes and protests.

• At stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington, Walmart unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests.

• At stores in California, Florida, Missouri and Texas, Walmart unlawfully threatened, surveilled, disciplined, and/or terminated employees in anticipation of or in response to employees’ other protected concerted activities.

Wal-Mart denied the allegations in the filing. In the response, Wal-Mart argued the "intermittent job actions" described in the original complaint was difficult to distinguish from absenteeism. The retailer said it warned employees two and three times for missing scheduled work days and employees were repeatedly told the company would enforce its attendance policies.

Wal-Mart claims the walkouts were orchestrated by advocacy groups, supported and publicized by the United Food & Commercial International Workers Union. The "strikes" taking place at Wal-Mart were not traditional in the sense that workers walk off the job, while their union delegates negotiate for higher wages, better working conditions or some other demand. In the Wal-Mart incidents the workers protest at designated stores or outside the home office for a short time period.

Experts said while workers typically do have the right to strike, it is unclear if the walkouts at Wal-Mart fit the criteria and are covered by the 1935 National Labor Relations Act. 

"Walmart does not believe Congress created intermittent strike leave to serve as a prop for union campaign messaging at the expense of customer service, operational efficiency and the co-workers who have to cover for employees," the company noted in the Jan. 27 response.

The retailer claimed the strikes are intended to disrupt staffing and customer service. Wal-Mart also argued that it never gets notice from Our Walmart about which employees will strike or which stores or departments will be affected. The retailer claims these tactics are not protected by law.

Some legal experts have said the NLRB is moving into uncharted territory exploring the intermittent-strike issue with this case.

Roby Brock, owner and editor-in-chief of Talk Business Arkansas, has ended his publishing arrangement with Vowell, Inc. and is moving the popular magazine back in house where it has previously been produced.

The Talk Business Arkansas magazine was first published as a quarterly in January 2008, but has expanded to six times a year. In 2012, the magazine began a publishing arrangement with Vowell, Inc. – publisher of Active Years (AY) magazine.

Brock and Vowell ended their business arrangement earlier this month.

Brock said he looks forward to again producing the Talk Business Arkansas publication through his company, River Rock Communications. Brock also said he will continue to work exclusively with the team of talented writers he has assembled across the state, including The City Wire that provides unique coverage of business in the Northwest Arkansas and Fort Smith areas.

“The good news is that we will not miss a beat as we bring the magazine back into the River Rock shop,” Brock said. “We will continue to produce the same first-class publication we always have since its beginning. Readers can continue to expect the same high-quality, insightful and fair business and political coverage we have built our reputation on for the past 15 years.”

Talk Business Arkansas will remain a six times a year magazine publication and the next issue will be out in March 2014.

“We’ve got a few growth strategies that we’ll be putting in place by the time our next issue is published,” Brock said. “I look forward to sharing those ideas with our readers and advertisers on that occasion.”

Readers wishing to subscribe to the publication for free or advertisers wishing to be in upcoming publications can email Brock for assistance at Roby@TalkBusiness.net.

ABOUT TALK BUSINESS
Talk Business Arkansas enters its 15th year in 2014. The popular statewide business and political newsmagazine can be seen on TV, heard on radio, viewed online and in local newspapers, and read through the magazine published six times a year.

Talk Business Arkansas, hosted by Roby Brock, interviews business and political decision-makers who are shaping the Arkansas news landscape. Talk Business Arkansas can be found through the following media channels:
• TV – KLRT Fox 16 Sunday nights at 10 pm

• Radio – KUAR 89.1 FM (central Arkansas) Monday nights at 6 pm; KUAF 91.3 FM (northwest Arkansas) weekdays at noon; KASU 91.9 FM (northeast Arkansas) Saturdays at noon.

• Magazine – Talk Business Arkansas is produced six times a year and is directly mailed to 12,000 influential business and political decision-makers.
Newspapers – Brock writes a weekly business column for Stephens Media newspapers and their affiliates across the state distributed by the Arkansas News Bureau.

• Web site – TalkBusiness.net or TalkBusinessArkansas.com

• Social media – Talk Business Arkansas news can also be received by email or by following Brock on Twitter or Facebook.

Three Arkansas-based retailers— Wal-Mart, Sam’s Club and Dillard’s — were sitting high on the 18th annual list of Brand Keys 2014 Consumer Loyalty Engagement Index (CLEI).

Retailers are finding that winning favor among fickle, demanding consumers is no easy feat, and maintaining that loyalty is even harder, according to Robert Passikoff, president of Brand Keys, a New York-based consumer marketing firm.

Passikoff told The City Wire that Bentonville-based Wal-Mart continues to dominate the discount category moving ahead of Target, following the massive data breach which occurred during the height of the holiday season. He said Target was resembling a wobbly table in the midst of a marketing shift from “cheap chic” to “always onsale.”

“When the data breach hit Target, it knocked one of the legs out from under the wobbly table. It’s likely going to take three quarters or so, for Target to repair the damage with its customers, who are shopping elsewhere in the meantime.” Passikoff said.

Despite the love/hate relationship with Wal-Mart, Passikoff said the retailer continues to engage loyalty from its customers who have come to depend on the low price guarantee.

“Coupons and discounts won’t save a retailer today and they certainly won’t differentiate it,” Passikoff said.

He adds that Wal-Mart has done a good job merchandising “believable brands” that consumers can see as “value” in their purchases.

In the crowded department store category, Passikoff said Macy’s garnered the highest loyalty ranking in the survey. But, the much smaller Little Rock-based Dillard’s also scored high marks, ranking just below Macy’s, according to the index results.

“In the department store category, brands are the buzz that resonate with consumers but it’s the value proposition of those brands that most encourages consumer loyalty,” he said.

Perhaps Macy’s does the best job helping its customers make an emotional connection to the brands it sells, but Passikoff also said Dillard’s scores high in emotional connections and perceived value among its customer base.

In the warehouse club category, Sam’s Club ranked ahead of Costco and B.J.s for brand loyalty engagement in 2014. Sam’s Club is known as a “house of brands,” and it’s the value associated with the top name brands that helps the Wal-Mart subsidiary maintain high levels of customer loyalty engagement, the expert said.

Costco ranked a close second to Sam’s Club in the 2014 loyalty index. But a real differentiator between the two competitors is that the Costco experience is mostly a brick and mortar trip. Sam’s Club continues to engage its members using online and mobile connections and in the past year has offered special coupons for instant savings on branded products. 

Passikoff said the entire retail sector will continue to face operating challenges as consumer demands escalate. He calls this phenomenon “zappofication” – a term Passikoff coined several years ago to describe escalating consumer expectations.

“It came from the online retailer Zappos. Most think they are a shoe company but they are really in the customer service business. Zappos figured out they could sell more shoes and make their customers very happy if they offered reduced shipping costs and free returns for unwanted merchandise. Now that has become the online industry standard,” Passikoff said.

He said there will always be someone bigger and willing to up the ante to win favor with consumers. In the 2014 index, Amazon.com ranked the highest among online retailers for customer loyalty and engagement, followed by Ebay.com, Overstock.com and Zappos.

The 2014 legislative fiscal session that begins Monday (Feb. 10) will be remembered for two words – Private Option – and three potential votes.

When Republican lawmakers, in concert with Democratic Gov. Mike Beebe, fashioned the novel health care plan for Arkansas, there was no doubt that it would stir controversy. The hard-fought votes to secure the funding’s passage was testament to that.

In short, the private option takes the Medicaid expansion money offered under the Affordable Care Act and allows Arkansas to steer that money into a private health insurance exchange, where four carriers have a variety of plans for citizens of all income levels.

The funding votes in the Joint Budget Committee and on the floor of the House and Senate were close in the regular session of 2013.

Get ready for a replay in 2014, but consider two major factors that have boosted momentum for opponents of the plan.

First, the botched roll-out of the federal health care law has given tremendous momentum to those who disagree with the program. Secondly, the timing of a new private option funding vote – which requires three-fourths of approval from both legislative chambers – will take place less than a month before filing period opens for political office in Arkansas.

With many Republicans fearing conservative challenges from their right flank in party primaries this Spring, the political repercussions of a new vote will be felt.

Some supportive lawmakers argue the vote will already be on their record so why change it; others contend they can defend a shift in their position. The private option, which has garnered national attention, only passed with two votes to spare in each chamber, so the margin for error is miniscule.

One State Senator, Missy Irvin, R-Mountain View, says her support has altered, and the Senate’s newest member, John Cooper, R-Jonesboro, is an ardent opponent of the private option.

Gov. Mike Beebe (D) and House Speaker Davy Carter, R-Cabot, sat down recently for interviews on the topics and you can view their comments at the bottom of this post.

TAX CUTS
Beebe has been touring the state in recent months making the case that as much as $140 million in tax cuts approved during the 2013 regular session were only possible through projected savings tied to the private option.

Lawmakers don’t view it that way. Several key lawmakers, including Revenue and Tax chairmen Sen. Jake Files, R-Fort Smith, and Rep. Charlie Collins, R-Fayetteville, have been outspoken that tax cuts can stay even if the private option funding renewal vote fails.

While the legislature will not likely vote on any tax reform measures in the 2014 fiscal session, they will be the topic of debate during the course of other budget decisions.

PRISONS & TEACHERS INSURANCE
Another financial quagmire that will be the focus of legislative attention is following up on the state’s teacher insurance crisis.

Arkansas lawmakers convened for a special session in October 2013 to address an expected $53 million shortfall in the teacher insurance fund. They plugged $43 million from the state’s $169 million surplus into the fund to help close the gap. The remaining difference is to be largely made up by a 10% premium increase for teachers and other public school employees utilizing the insurance plan.

Major long-term reforms included a restructuring of the oversight board that reviews the insurance plans’ benefits. Lawmakers will reshape the board to have more representation from teachers and members with a background in employee and insurance benefits. Expect updates and scrutiny to these reforms as legislators are keeping a watchful eye on the issue.

Also, state prison officials took the extraordinary step during budget hearings to request money above the Governor’s recommendation to ease overcrowding at county jails and to study the feasibility of building another prison for the state’s growing inmate population.

Legislative support – particularly those tough on crime in the wake of last year’s parole shortcomings – will likely be there.

THE VACANCY
Finally, lawmakers and the Governor seem to be on the same page with avoiding a special election to fill the vacancy of Lt. Governor created by Mark Darr’s resignation.

Darr’s exit due to ethics violations presented a tricky challenge for the state’s constitution. The Lt. Governor’s post is the one office where the Governor can’t fill the vacancy by appointment, as Beebe did when Treasurer Martha Shoffner resigned.

Legislators will likely tweak language in the election code that allow the office to remain vacant since it is an election year and the office is up for grabs between a slate of candidates. The timing calendar for a special election would be tricky from a logistics perspective, and for voters it would add to confusion with the activity already expected on this year’s ballots.

Seven artists and their songs about Arkansas have been selected from more than 230 entries as part of the “Song of Arkansas” contest conducted by the Arkansas Department of Parks & Tourism. The public is being invited to pick a winner among the seven.

The entries were first filtered by a panel of judges. The judges included rock and roll pioneer Sonny Burgess, Broadway performer Lawrence Hamilton, award-winning director Jason Moore, Jimmy Buffett Coral Reefer Band member Mike Utley and The Wolf 105.1-FM morning show team Bob Robbins and Jennifer Trafford.

Voting began Monday (Feb. 10) and will continue through Feb. 24, with one vote per e-mail address. Plans are for the winner to be announced March 3, and the winning musician will perform at the 40th Annual Arkansas Governor’s Conference on Tourism in Rogers on March 10. The winner also receives a recording session and taping of a video of their winning entry along with $2,000.

Following is a brief bio of the finalists. Follow the link at the end of the bios to hear the songs.

• Barrett Baber with Kenny Lamb
“A.R.K.A.N.S.A.S. Get There From Here”
The son of a Baptist preacher, Barrett grew up with music in the church, growing into choral music and eventually heading to Ouachita Baptist University, where he learned songwriting and how to play the guitar. He left OBU to head to Nashville to apprentice as a songwriter then returned to Arkansas to complete his education. While at UCA, he met his wife. After working in advertising in Little Rock and Fayetteville, Barrett turned to a new pursuit, teaching debate and forensics to students at Fayetteville High School, two years ago.

• Chana Chaylor
“Come Home to Arkansas”
The spa director who works in Mount Ida today started out playing piano when she was just eight years old. By the age of twelve she was singing and playing piano in church. A lifelong Hot Springs native, Chana has performed in piano bars and entertainment venues both inside and outside the Spa City. The musical repertoire of the married mother of three includes everything from Billie Holiday to Whitney Houston to Patsy Cline. She’s working on her first original album.

• Blane Howard
“Arkansas Y’all”
Blane’s family moved to Hot Springs when he was two. He grew up singing and developed a deep love of songwriting. After high school he left for Nashville to get his degree in music from Belmont College. Today he’s a full time musician with one EP already released, “‘Bout Time.” He heard about the Song of Arkansas contest from his mom when he came home for the holidays.

• Jeremy Huddleston
“Here in Arkansas”
Jeremy lived his entire life in Russellville until heading to southern California last June to plant a new church with three other families. Before that, he was on staff at the Journey Church in Russellville for nine years and the drummer for local Christian act Nick and Sam. Jeremy and his two sons love hiking Petit Jean Mountain, Mount Nebo, Mount Magazine and all around the Arkansas River Valley. While the ocean views are pleasant in California, he misses the woods and trails of Arkansas.

• Matt Knoble
“Right Here in Arkansas”
Matt has always been around music – growing up in Haskell (near Benton) and playing trumpet in the band at Harmony Grove High School. After four years in the University of Arkansas Marching Razorback Band he and his wife relocated to the Bentonville area. Today, Matt teaches 5th grade Social Studies and plays guitar in the worship ministry at church.

• Candy Lee
“Here in Arkansas”
Candy graduated from Florida Girls State University and moved to Arkansas after friends in Fayetteville sent her photographs of the Ozarks. She fell in love with the beauty of The Natural State and relocated. The waitress and folk jazz artist has been involved with chorus throughout her life, and as an adult, she learned how to play the guitar. She loves riding her bike on paths throughout the Razorback Greenway and visiting Devil’s Den State Park. Her first album, "The Gate," was released in 2010; she’s currently recording her second.

• Pamela K. Ward
“Natural State of Mind”
Pamela’s family has had a farm in McRae for over a hundred years. Her grandfather was involved with the Sugarloaf Opry, and she first took the stage to sing at the age of two. She decided to take up the saxophone after seeing a performance at the Arkansas State Fair when she was seven. Growing up, she spent some weekends performing at the Ozark Folk Center and others on Beale Street in Memphis. During her career she’s tackled nearly every musical genre. Today, she lives and works in Nashville.

Link here to listen to the seven songs.

A variety of issues that specifically affect the elderly population in the state of Arkansas was the topic of discussion at Monday's (Feb. 10) League of Women Voters meeting in Fort Smith.

Panelists addressed how league members and residents could assist in a variety of different areas — food insecurity among the elderly, dealing with Alzheimer's disease and preparing legal documents for the elderly.

Ken Kupchick, director of marketing and development at the River Valley Regional Food Bank, said a common problem among individuals older than 75-years-old is not having enough food. Recent moves by the U.S. Congress, including the passage of a new Farm Bill that cuts the SNAP (Supplemental Nutrition Assistance Program) by about $800,000 every year for the next decade, have made food insecurity an even larger issue as many are struggling to make ends meet while also having food to eat.

"The bigger problem in Arkansas is actually getting seniors to enroll in SNAP in the first place," he said. "The participation rates in the state over all (is) at about 73-77% of those eligible. But when it comes to those seniors, that drops to under 50% and one of the things we need to do is get more seniors into the SNAP program, which only exacerbates the problem all the more (when budgets have been cut)."

According to Kupchick, a large reason seniors do not sign up for a program like SNAP even when they are in need is because of a supposed stigma associated with what their generation may consider to be "welfare." He said others may not enroll because they do not assume that they will get enough to make a dent in their monthly grocery budgets.

"Many of them think they'll only get about $16 a month, which is the minimum qualification," he said. "But if you reverse that and say, 'Hey, coupon clipper. How would you like $16 worth of free groceries at the grocery store?' every senior would grab them. We have to fix that problem more so than we have to worry about the take away. It's getting more enrollment."

Kupchick said programs to help seniors, such as SNAP, should be promoted to seniors not only to make sure they stay fed and healthy, but also to promote economic development in the community. He said while his group gave away $12.7 million worth of food in 2013, some economists he had spoken with place the economic impact of those food giveaways at $22 million due to seniors and other food recipients being able to pay their rent on time and being able to afford other items, as well.

ALZHEIMER’S ISSUES
Melissa Curry of the Arkansas Alzheimer's Association was also on hand to discuss ways caregivers can provide assistance to those battling the sixth leading cause of death in the United States.

It is an issue Curry said is vital for caregivers and patients, as an estimated 65% of caregivers die before patients "because it's so mentally, physically, emotionally, and spiritually draining. So that's why we're trying to help right now, the Alzheimer's Association, to give them that support."

She advised individuals to contact her organization for help finding resources to not only care for a loved one, but also to get emotional support for themselves. Among the help her group could provide is connecting caregivers with organizations that can provide financial assistance for medical care, such as the Veterans Administration for veterans and their widows, or signing patients up for Medicaid.

Curry also advised audience members to know what the warning signs of Alzheimer's are and to find ways to deal with the disease and the affected patient without stripping them of their dignity. Among the tips is writing a list of concerns to share with doctors or nurses at upcoming appointments instead of discussing the issues right in front of the patient, or having a doctor notify a patient that their condition makes them unsafe to drive a vehicle instead of the caregiver simply taking away the keys.

As seniors move from healthy and independent to needing assistance or simply closer to the end of their lives, attorney Todd Whatley of The Elder Law Practice said it was important to get legal documents in order such as power of attorney. He also answered questions from the audience on issues such as how funding long-term could happen, whether an individual has Alzheimer's or some other ailment.

"If the person is broke, the person with Alzheimer's is broke, and their income is below the limit…then Medicaid will provide some care during the day, whatever they decide she needs, they will then come in and provide that care."

He said should a long-term nursing facility be needed, families can rent out an individual's home and use the rent generated to pay for medical costs, even as Medicaid is funding the remaining amount.

Whatley also said families in need of legal assistance should call on a firm that specializes in senior care, such as The Elder Law Practice. If finances are an issue, he said, those families can get legal assistance from other groups, as well, including the Alzheimer's Association.

And while there are programs available to provide assistance, the key to seniors being able to tackle their golden years is preparation, Kupchick said, again specifically addressing food insecurity.

"If you're not entering into your retirement years with enough safe guards, you're definitely going to be amongst the food insecure. And what we find here is if you've lived your life in low-income situations, if you didn't graduate from high school, if you remained a renter most of your life, if you are one minority or another, if you live in the South, if you're living alone or if you raised a grandchild — all of these things impact your food insecurity as we age."

Punctuated by the high-energy rock riffs of Rush and massaged by the distinct baritone voice of advertising pitch man Mike Rowe, Wal-Mart Stores Inc. has in recent days placed a high-profile advertising commitment on the company’s pledge to return manufacturing jobs to the U.S. 

Jim Karrh, a marketing and public relations advisor with more than 20 years experience and owner of Little Rock-based Karrh & Associates, said Wal-Mart has certainly “reached a huge mass audience” with their manufacturing initiative through the new ads. (The three ads can be viewed at the end of this story.)

“They have pushed the chips to the center of the table,” Karrh said, using a gambling reference to suggest the company is now “all in” publicly with the effort.

On Monday (Feb. 10), Wal-Mart spokeswoman Katie Cody said there have been “more than 2,000 job commitments” as a result of the effort to buy products from U.S. manufacturing operations. More are expected. Cody said more than 40 different Wal-Mart departments are “actively working” with existing or potential suppliers to find opportunities to source products from U.S. manufacturing operations.

Some of those 2,000 commitments include 500 jobs related to the planned production of televisions in Winnsboro, S.C., and 250 jobs planned to begin in March 2014 at a shoe production plant in Hazelhurst, Ga.

INITIATIVE HISTORY
The 30-second television ads – which have found air time during broadcasts of the 2014 Winter Olympics – attempt to show the early results of the 2013 pledge by Wal-Mart to buy an additional $50 billion in American products over the next decade. Bentonville-based Wal-Mart estimates cumulatively over the next decade the investment will total $250 billion. The Boston Consulting Group predicts that this $250 billion investment will create one million jobs, including the jobs in manufacturing and related services.

Wal-Mart conducted a manufacturing summit in Orlando, Fla., in August 2013, with an estimated 500 suppliers attending and representatives from 38 state governments, including eight governors. Arkansas Gov. Mike Beebe was one of the eight attending. A 2014 summit is set for Aug. 14-15 in Denver, Colo.

The initiative has already proven beneficial to Wal-Mart’s home region. Redman & Associates in October announced a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years. Redman operates a sales office in Bentonville that employs 16 people. Moving the manufacturing to Northwest Arkansas is estimated to create 17 jobs the first year, and ramping up to 74 by the time the entire operation comes online in Rogers.

Walmart U.S. CEO Bill Simon announced Jan. 23, 2014, a $10 million innovation fund from the retailer and its foundation to spur new U.S. manufacturing commitments that lead to job creation. The fund will provide grants to innovators in the manufacturing sector and seeks to create new processes, ideas, and jobs that support America’s growing manufacturing footprint.

‘AT ONE TIME, I MADE THINGS’
The three television ads made public by Wal-Mart are busy with alternating scenes of factory work with hard hats, eye protection, sparks flying, empty bottles moving along an assembly line, forklifts moving pallets and impact wrenches buzzing. 

The “I Am a Factory” ad featuring the voice of Mike Rowe begins with the image of a closed manufacturing site, complete with a padlocked gate.

“At one time, I made things,” emerges the voice of Rowe. “I was mighty and then one day, the gears stopped turning.”

As as factory work begins, Rowe continues: “But I am still here, and I believe I will rise again. We will build things, and build families, and build dreams. It’s time to get back to what America does best.”

The ad then closes out with the Wal-Mart message: “Over the next ten years, we’re putting $250 billion to work to help create new manufacturing jobs in America.” And that’s followed by Rowe saying, “Because work is a beautiful thing.”

The “Lights On” ad carries the viewer 10 seconds into a dark space. The action begins when a worker turns on the lights. Doors open, coffee makers are prepped and pallets are stacked and prepped for loading.

“Actions are louder than words,” the ad notes.

‘WORKING MAN’
Although the Rush song “Working Man” makes the point for Wal-Mart in the title, the lyrics of the song have historically been considered an anthem for the working man who can’t seem to rise above their economic class no matter how hard they work.

The song lyrics, included in the Wal-Mart ad, note: “I got no time for living, yes, I’m working all the time. Seems to me I could live my life a lot better than I think I am. I guess that’s why they call me, they call me the working man.”

Some comments on Wal-Mart’s YouTube page note the issue between the song title and the lyrics.

“I think you missed the point of the song,” noted one comment.

That was followed by, “Agreed. It's almost as bad as when Reagan used Born in the USA for his 84 campaign before Springsteen told him to knock it off.”

Another comment mentioned Rush’s home.

“The irony of Rush being Canadian is killing me but otherwise this is a fantastic spot and a great tribute the all the Working Men and Women. Well done.”

‘GETTING BACK TO BASICS’
Cody, with Wal-Mart, said the imagery of the ad is the point of the message.

“The important thing is the energy of the music and highlighting the people working in the factory,” Cody explained.

No matter the irony or lyrical message, Karrh said it’s a smart move by Wal-Mart. He said his initial impression is that Wal-Mart is using the ads to also return to the company’s “foundational Americana” message. He said the ads could be seen as not only the promotion of returning jobs to America, but of Wal-Mart “getting back to basics and back to what is authentic to them as well.”

“I immediately thought, ‘OK good,’” Karrh said after his first viewing of the ad with Mike Rowe. “They’re bringing back a piece of the Wal-mart story that has always been true to them, but I think it got lost and minimized a bit over the years. ... I hope they stick with it.”

Cody declined to provide detail on the ad cost and air time purchased, but did say that broadcast time has been bought for all three ads.

The financial picture at Van Buren-based USA Truck appears to be improving, but the company still posted a net loss of $9.11 million in 2013. While an improvement compared to the net loss of $17.671 million in 2012, it marks the fifth consecutive year of losses for the trucking company.

According to the earnings report released early Tuesday (Feb. 11), the company would have posted a fourth quarter gain if not for a $5.97 million charge to boost the long-term claims liability reserve and a $1.5 million charge for expenses related to fighting the hostile takeover attempt by Phoenix-based Knight Transportation. That attempt came to an effective end on Feb 4. with a "standstill" agreement approved by both trucking companies.

Instead, the fourth quarter saw a loss of $4.636 million, more than the $3.24 million in the fourth quarter of 2012. The 45 cent per share loss missed the consensus estimate of a 1 cent per share loss. Revenue for the quarter was $141.416 million, up 4.93% compared to the same period in 2012.

For the full year, the company posted a loss of $9.11 million, better than the $17.671 in 2012. The company posted a 2011 loss of $10.77 million, a 2010 loss of $3.308 million, and a $7.177 million loss in 2009.

Revenue for the year was $555.005 million, up 8.3% compared to revenue in 2012.

'TURNING POINT'
"The fourth quarter capped a turning point year for USA Truck, with improvements in virtually every area of our business," President and CEO John Simone said in the earnings report. "Our results reflect the growing positive momentum of our strategic plan, which focuses on three critical areas – operational execution, profitable revenue growth and cost effectiveness.”

The one-time charge is a function of the company being self-insured. The decision to take the charge came “right at the wire” at the end of the quarter and was a tough call.

“it was disappointing that we had to take the charge, but it was the right thing to do,” Simone said in an interview with The City Wire, adding that it will help level costs going forward.

The report noted several areas in which company officials reported improvements. Those include:
• Reduction of debt by $12 million;
• The first quarter of positive operating income since the second quarter of 2011;
• Operating income growth of 74.4% for the year in the Strategic Capacity Solutions segment; and
• Increased length of haul and increase in rates during the quarter.

"We are very pleased with our fourth-quarter performance, especially since we are still in the early stages of implementing our turnaround plan and see many opportunities for continued improvement,” Simone noted in the report. “Given the substantial headway we have made over the past year and the momentum we carry into 2014, we believe our goal of returning USA Truck to profitability is achievable for the full year 2014." 

BACK IN THE BLACK
Returning to profitability in 2014 will require continued improvement in the company’s operating ratio, which remained relatively high at the end of the year. The year end operating ratio was 105.4, meaning that the company lost $1.054 for each dollar in revenue. However, that operating ratio was an improvement over the 110 operating ratio at the end of 2012. The operating ratio for the fourth quarter was 109.1.

During an interview with The City Wire, Simone said he is confident the OR will keep moving in the right direction and the company will be “fully profitable” in 2014.

“We have 17 areas that will provide significant cost savings to our business, and some of the largest areas are improving our safety and claims ... and we’re going to be doing that by” changing the hiring process and placing “more rigor around our training programs,” Simone explained.

Another key in improving OR is in controlling costs related to driver retention, Simone said. He said the trucking environment now favors good drivers who have the ability to work for the company that treats them the best. USA Truck operates with a little more than 2,000 company drivers and around 100 owner-operators.

“Good drivers are like free agents today. Good drivers can go anywhere and get a job,” he said.

Retaining good drivers will require the company to ensure driver time is “better utilized” so that drivers are spending as much time on the road and not waiting for new loads, maintenance and other down-time factors, Simone said. Driver utilization was improved, with the company recording a 3.6% gain in miles per seated truck during the quarter.

“We’re here to serve the driver so we can take care of our customers,” Simone said, adding that the company is not perfect in how it works with drivers but is pushing for continued improvement.

The other part of the USA Truck plan to reach profitability is in gaining marketshare and doing more business with existing customers. Simone said USA Truck secured $36 million in net new revenue during the quarter, with the full year seeing $152 million in net new revenue posted. On top of that, the company added three Fortune 500 companies to its top 10 customer list in terms of revenue. Also, 96% of the top 100 customers by revenue purchased more than just one service from USA Truck, up from 67% compared to a year ago.

Link here for a PDF report from USA Truck of its fourth quarter and full-year earnings.

USA Truck shares (NASDAQ: USAK) closed Monday at $14.82. The market responded Tuesday to the report by dropping the price on the thinly-traded stock to $14.07 in mid-day trading. During the past 52 weeks the share price has ranged from a $16.38 high to a $4.37 low.

The economy, particularly in Northwest Arkansas, has seen steady growth in the past two years. But on a national level the number of Americans who consider themselves middle class wage earners continues to shrink, according to a recent report from Pew Research Center.

Economists warn that without middle-class engagement, a full economic recovery is unlikely.

Since 2011, the number of Americans who identify themselves as the middle class has dropped from 52% to 44%. Pew researchers said this is a fundamental shift in how American’s view their income levels.

According to the Census Bureau, the median household income in the U.S. decreased by 8% since the recession began in 2007. Median incomes fell from $55,627 in 2007 to $51,017 in 2012. The median income in 2012 was at the same level it was in 1995, a setback of 17 years, the report notes.

Income losses have been greater for households in the middle of the income distribution than for households at the top. For households in the third quintile of the income distribution, average income fell by 8% from 2007 to 2012. Meanwhile, for households in the highest quintile, average income fell by only 2%. The net result is growing inequality in the income distribution, the research notes.

A separate study Pew conducted in 2012 also found a reduction in the middle of the income distribution. The study used Census Bureau data to classify adults into lower, middle or upper income tiers depending on the income of their household relative to the overall median. The researchers found that the share of adults in the middle income tiers has fallen in each of the last five decades, from 61% in 1971 to 51% in 2011.

Economists have been reporting for years that the lack of job growth in the middle-skill, mid-income levels jobs is creating a gap in earning potential for the middle class. The New York Federal Reserve found that middle class jobs increased 46% between 1980 and 2009. At the same time, low-skill jobs rose 110%, while high-skill jobs increased 100%. The shift has been referred to “jobs polarization” and it continues today with the majority of new jobs announced being low-skill, lower income positions.

Wall Street analysts continue to advise investors to aim high or low but avoid the middle income demographic as it steadily erodes. John Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers, recently told The New York Times that retailers and restaurants are either chasing richer customers, or focusing on rock-bottom prices to attract budget-conscience shoppers.

“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” Maxwell said. “You don’t want to be stuck in the middle.”

Restaurants such as Olive Garden and Red Lobster that cater to the middle income consumers have had their woes, while fine-dining chains like Capital Grille and Ruth’s Chris Steak House continue to expand. The local Ruth’s Chris Steak House in Rogers confirmed with The City Wire that it’s in the midst of expanding its patio section to add additional tables and seating to the restaurant.

“We know much of the economic recovery of the past few years is largely attributed to upper-income demographics. But this wealthy class can only consume so much,” said Kathy Deck, director for the Center for Economic Research at the University of Arkansas.

She said this shift away from the middle class is a challenge to continued economic growth and the longer term consequences could result in diminished innovation. Locally, Deck said roughly 26.3% of households earn less than $25,000 and just 26.8% of households earn more than $75,000. That leaves the vast majority in the middle, where incomes have largely stagnated.

“A shrinking middle class is not what people think of when picturing a vibrant economy. Without the middle engaged future recovery will be hindered in the national economy,” Deck said

She also said that while Northwest Arkansas is seeing much broader-based job growth than the nation as a whole, there are still more applicants than there are jobs, particularly in the lower-skill service industry.

“As long as there is a surplus of applicants, there is little chance wages will increase among these service/hospitality jobs. From December 2012 to December 2013, Northwest Arkansas jobs grew at 4.1% clip. This compared to 1.6% nationally,” Deck noted.

While the Northwest Arkansas economy is growing at faster pace than the nation, Deck said it is not immune to effects of the shift income distribution and growth.

A recent report from economists Steven Fazzari of Washington University and Barry Cynamon, of the Federal Reserve Bank of St. Louis, indicated that the top 5% of earners were responsible for 38% of domestic consumption in 2012. The researchers found this was a 10% jump from 1995.

Fazzari reports since the recession ended in 2009, inflation-adjusted spending by this top echelon has risen 17%, compared with just 1% among the bottom 95% of wage earners.

The effects of this phenomenon are now rippling through one sector after another in the American economy. While spending among the most affluent consumers has managed to propel the economy forward, the sharpening divide is worrying, Fazzari notes.

“It’s going to be hard to maintain strong economic growth with such a large proportion of the population falling behind,” he said. “We might be able to muddle along — but can we really recover?”

It took federal Bankruptcy Judge Ben Barry more than an hour Tuesday morning (Feb. 11) to weed through a long list of objections regarding the sale of Allens Canning to private equity firm Sager Creek.

Part of the process required Judge Barry to transfer more than a dozen claims related to the Perishable Agricultural Commodities Act (PACA) to U.S. District Judge Richard Taylor in Arkansas’ Easter District. The claims involve licensing and lease contracts related to commodities managed by Allens. The federal PACA oversees certain contracts related to agriculture commodities.

Once the commodity contracts were moved, Barry quickly approved Sager Creek’s $124.781 million purchase price for Siloam’s Springs-based Allens Canning.

“It’s a good deal, it’s good for the debtors and the creditors,” Barry said as he ordered the approval.

There was one holdout, which was set aside for a future hearing date on Feb. 24, as lawyers for Allens and Sager Creek were told by Barry to work out the terms with Infor Global Solutions, the accounting software company that licensed their product to Allens. The software company is claiming the license is non-transferrable. Council for Allens said its software the company uses daily to run its business and the new owners will need it as well. 

Infor told the court it didn’t object to the sale, but something would have to be done to support the transfer to Sager Creek – likely a fee paid. Barry asked the parties to work out a deal ahead of the Feb. 24 hearing. Barry also commended Allen’s counsel for resolving more than 40 objections filed to the sale ahead of Tuesday’s hearing.

An adversarial case still has to be heard the court, but it does not impact the closing of the sale to Sager Creek. SSS of Crawford County claims that 80 acres included in the sale, does not belong to the debtors. Barry said, “Rather than throw a monkey wrench into the deal, hindering closing, the case can be heard on Mar. 21., understanding the deal is going to close with the SSS claim still hanging.”

Both parties agreed to argue the case of Mar. 21.

Stanley Bond, an attorney for several creditors with PACA claims, asked the lawyers with Sager Creek to guarantee and specify for the court how it planned to pay the outstanding claims. Barry indulged that request.

Mark Weinstein, senior managing Director for FTI Consulting, told the court that an evergreen fund would be established by Sager Creek for the sole purpose of satisfying 100% of the PACA claims filed with court which are subject to the resolution process.

The transcript from the Feb. 7 auction was filed with the court. The document indicated that the opening bid by Seneca Food was $148 million. The bidding was a complicated issued as the three parties taking part in the auction each tailored their offers according to perceived value, subject to breakup fees, working capital or other debt obligations.

Sager Creek had the highest bid at roughly $160 million, but the purchase price was substantially lower at $124.781 million, which included money it was owed by Allens, breakup fees and working capital.

McCall Farms was deemed the backup bid with a purchase price of $119.2 million. Seneca Foods came in third offering a purchase price $117 million. There were just three bidders taking part in the auction, according to the transcript.

Little is known at this point about Sager Creek, a recently formed Delaware-based corporation, according to the court filing.

The president of Sager Creek, James Athanasoulas, is the managing director of Sankaty Advisors, a unit of Boston-based Bain Capital. Sankaty Advisors is a secondary lienholder listed among Allen’s creditors. The amount owed was not disclosed and is now a moot point given its purchase of Allens was approved.

The deal is expected to close by Feb. 28.

The Fort Smith Board of Directors for the first time Tuesday (Feb. 11) heard from an attorney who believes the city may have the authority to level fines against Whirlpool Corp. for its admitted pollution of groundwater in and around the area of the company's former manufacturing facility in south Fort Smith.

The attorney, Melissa Sims of Sims Law Office in Princeton, Ill., reached out to City Administrator Ray Gosack after reading about the contamination issue on the Internet. In a letter to Gosack, Sims explained what her firm could provide the city should she be retained for legal representation.

"As we discussed, I partner with several top tier law firms in the country and together we represent municipalities in utilizing the city's ordinance violations to fine polluters for contamination on a contingency fee basis," she wrote, adding that she began her practice following her work as village attorney in DePue, Ill., where she used the village's nuisance ordinance to level fines against both Exxon Mobil and CBS Viacom for environmental contamination.

"The Seventh Circuit Court of Appeals ruled that no federal preemption applied and we grappled with state law preemption on the issue of abatement (injunction) action. Ultimately, the Village of DePue settled with the defendants for $975,000."

She said her firm, which only charges clients one-third of any judgment against defendants, have the resources to go after large corporations like Whirlpool, while other small local firms may not have the manpower or finances to wage a tough battle.

"I have other cases filed – and yet to be filed – in Illinois and other states working with large firms on a contingency fees basis to assist cities such as Fort Smith seek restitution for contamination from old factories which have reaped enormous benefit from spreading hazardous materials."

Sims, who participated in a conference call with the Board during Tuesday's study session, said in the case of Fort Smith, it could be possible to fine Whirlpool for not only polluting the land where the company sits, but also other properties where a toxic plume of trichloroethylene (TCE) has migrated in groundwater during the 30 years since the company's admitted spill of the cancer-causing chemical.

The local ordinance that could be used is the city's ban on littering, which imposes an initial $500 fine and subsequent $250 fines for everyday the litter is not cleaned up.

Sims said her initial research on Arkansas' statute of limitations laws indicates that municipalities, such as Fort Smith, may not have a stated timeline of how far back in time a city could go when it comes to imposing a fine, though a lot of it depends upon how far back it can be proven that the violator, in this case Whirlpool, committed the violation. By the company's own admission, TCE contamination occurred in the early 1980s, a time when the company stopped using the degreasing agent at its Fort Smith manufacturing facility.

In discussing the possibility that the city could retain counsel to pursue fines against Whirlpool, City Director Keith Lau raised the issue of whether pursuing legal action against the company would hurt the city's attempts to attract other businesses.

"We want to protect the citizens, I understand that. We want to protect and enforce our nuisance laws, I understand that. But we've also all talked about being business friendly in the city of Fort Smith and promoting industry. What kind of message does this send — and it's just something to think about — what message are we sending if there's an industry out there that inadvertently contaminates the groundwater, brings it to us, goes to the ADEQ, goes through their steps of remediation and then at the very end, we sue them — not sue them, fine them — for contamination? So there's a balancing act here and I'm not sure I'm comfortable with this."

City Director Philip Merry challenged Lau's statement, recalling how long it has taken Whirlpool to address the contamination that has spread from its facility to the neighborhood north of the factory.

"I can't imagine that there's a company out there that would think that 30 years is (a) fair timeframe to rectify a problem. And I can't imagine there's one out there that would find our litter laws so strong that they don't want to come (and) have to comply. I'm asking that we definitely allow this professional to dig in for free to see laws have been broken and recommend back to us what laws have been broken and what she thinks would be a fair thing to request and then we make the decision at that time. I think to not make an informed decision, as in to allow her to dig in and recommend for free, would be remiss on our part."

Merry made a motion to place the consideration of retaining Sims on the Feb. 18 Board agenda for a vote, with City Director Pam Weber seconding the motion.

Should Sims determine the city could impose fines on the city, she said it could up a month after being retained by the city before any court actions against the Benton Harbor, Mich.-based company are filed.

If fines are imposed and Whirlpool is found in violation or settles with the city, Gosack said Arkansas was clear that the money would have to be used for "governmental purposes," which he said could include infrastructure improvements or economic development initiatives, such as enlisting outside help to market the Whirlpool site to interested buyers. He said any money collected could not, by state law, be distributed to residents living above the plume, many of whom are engaged in a class action lawsuit against the company.

Following the meeting, resident Debbie Keith, who has been a vocal advocate for citizens in the contaminated area, voiced support for possible fines against the company and expressed disappointment at Lau's statement about the message imposing fines would send to businesses wanting to locate in Fort Smith.

"I think the city of Fort Smith should set a precedent and say this is not going to be acceptable. If you want to come here and do business (as) a blue collar industry, then you need to be responsible," she said. "It's absolutely ridiculous at this point in the game that we would even consider what Whirlpool thinks by any means. And yeah, they should be punished. If we have to slap their hands and tell them no, this is not acceptable…ADEQ should have done it. That's their job. ADEQ's not done their job, so we're being forced to do something."

The new Arkansas Music Pavilion under construction in Rogers will be named the Walmart AMP, following a $2.5 million gift from the retailer on Tuesday (Feb. 11). The Walton Arts Center announced the gift which includes additional capital support and services over the next decade to ensure the venture’s success.

“Northwest Arkansas is quickly becoming known for its arts, culture, and high quality of life,” Doug McMillon, president and CEO of Wal-Mart Stores Inc., said in a statement. “By creating a permanent home for the Walmart AMP in our community, we are making this region an even better place to live and work. Walmart is proud to support this state-of-the-art facility, which will be just down the road from the first Walmart store, and to help bring additional economic opportunity to the surrounding area.”

The venue will be the largest permanent outdoor amphitheater in the state and is slated for completion in June. The new amphitheater will have improved technical capabilities, improved access, an increased seating capacity of 7,000, (3,000 covered and 4,000 lawn seats), greater lines of sight, air-conditioned restrooms, and the largest stage house in the state.

The new facility is under construction in the Pinnacle Hills area of Rogers.

“With the generous support of Walmart, the new venue will position Northwest Arkansas as a key stop on concert tours in the mid-south. The outdoor amphitheater will provide a fun and comfortable concert-going experience, attract bigger artists, and serve a broader audience to create more economic activity around the region,” said Peter Lane, president and CEO of Walton Arts Center.

The Walton Arts Center purchased the AMP in February 2011 as part of an expansion strategy to meet the growing demand for more arts and entertainment in the region. Previous owners were Suzie Stephens and Brian Crowne. The AMP, now in its eighth year, has been located at the Northwest Arkansas Mall in Fayetteville and the Washington County Fairgrounds.

Walmart joins the Lifetime Founders, Johnelle Hunt who donated the land and $3 million interest-free loan as well as the Willard and Pat Walker Charitable Foundation who donated $2.5 million — these gifts include naming rights for the Hunt Pavilion and Walker Plaza, respectively.

The new facility is set to open in the Summer of 2014, and country music singer Jake Owen is scheduled for a Sept. 11 concert.

Consumers spend $725 billion annually on consumer packaged goods (CPG) and the battle for market share is a fierce one between national brands and private label marketers. The stakes are high for even the slightest pick up in marketshare as it can provide a significant boost to the bottom line.

A report by consumer marketing firm IRI examined growth opportunities for retailers and suppliers looking to capitalize on emerging retail segments like convenience stores, dollar stores, drug stores and warehouse clubs.

During the past year, private label share has increased across half of the largest CPG categories, with drug, convenience and dollar channels showing signs of increased private label momentum. Researchers see ample growth opportunities for suppliers and retailers in the private label arena.

National and private label manufacturers are broadening their product portfolios. These changes are having an impact on private label’s key strength — the price point — and reinforcing the need for retailer/supplier collaboration on private label strategies, the report notes.

PRIVATE LABEL GAINS
Private label efforts to drive growth have met with success across some important product categories since 2010:
• Cups and plates, 56% of share, up 4.8% 
• Food and trash bags, 54% of share, up 3.6% 
• Bottled water, 38% of share, up 6.6%
• Fresh bread and rolls, 36% of share, up 2.7%
• Toilet tissue, 23% of share, up 4.2%

These categories are generally viewed as “staples,” historically a private label strong suit, since consumers tend to see little differentiation between private label and national brand options in these categories. Combined, share victories across just these five categories brought more than $2.6 billion to private label marketers’ top line revenue during the past year, according to IRI.

Private label purchases comprised about 14.6% of consumers CGP spending last year. That’s been a fairly steady rate since 2010, according to the report. Researchers said at the macro-economic level private label sales look flat, but taking a closer look there is mounting evidence to support the belief that an evolutionary change is underway.

SUPPLIER ACTIONS
ConAgra, a manufacturer of national brands, recently completed the acquisition of private label manufacturer, Ralcorp. Together the company is working toward growing national brands and private label brand segments of its business through new product innovation and broader promotional programs that benefits from streamlined distribution.

Jason Long, CEO of Shift Marketing Group, said when it comes to attacking private label brands, he is watching Procter & Gamble.

“P&G have introduced lower tier brands Bounty Basic and Charmin Basic and have just launched a basic version of Tide called Tide Simply Clean & Fresh which is about 35% cheaper than regular Tide,” Long said.

In formulating a cheaper alternative that still carries the sacred brand name, Long said P&G runs the risk of diluting its brand equity and cannibalizing existing sales.

“But, they also will grab sales that had previously been ceded to private label. It's a risky move, but it's a strategy they need to explore in my opinion,” Long added.

P&G’s Tide is the Lexus in the laundry detergent category. It has been used as a loss leader at Target for years and was recently added to the shelf at Aldi, an almost an exclusive private label grocer.

As further proof of the laundry-detergent competition, Texas-based grocery giant H.E.B. recently introduced Bravo Plus laundry detergent, a private label option that was touted as a lower-priced solution that contains the same number of cleaning enzymes as Tide.

The two products were merchandised side-by-side, with signage that called on shoppers to “Take the Bravo Plus Challenge,” with a reassurance that dissatisfied customers would receive a full refund.

DRUG/CONVENIENCE MOMENTUM
The IRI study indicated private label performance within the drug store segment has been consistent year-over-year. Unit share grew 1% to 17.6%, while dollar share climbed to 16.9%.

The convenience store segment has the smallest percentage of private label share at just 2.4% of the market at the end of 2013, according to the IRI report. That said, researchers agree the convenience store segment is ready to be opened up by manufacturers and retailers to introduce new products that respond to consumer demand.

IRI said a prime example of what can happen in the convenience store segment can be seen at Ahold’s Stop and Shop stores. The retailer began offering a broad selection of  tiered private label products under the brands Stop & Shop (basic), Nature’s Promise (organic line), Simply Enjoy (snack foods) and Guaranteed Value, a less expensive tier. Private label now accounts for 40% of the products sold at Ahold’s Stop & Shop stores, IRI noted.

Within the convenience store sector, private label share growth is strongest across edible products. This is supported by numerous launches, including 7-Eleven’s national  launch of 7-Select snacks and CST’s (new owner of Valero) rapid expansion of its Fresh Choices brand.

CONSUMER DEMAND
Analysts said consumers remain locked in conservative purchase behaviors that were initially adopted earlier in the economic downturn. Private label plays a key role in helping consumers save money. 

IRI reports on average, private label solutions offer consumers savings of 22% versus national brand solutions. The price gap, however, has been on the decline for several years. Today, only 5% of private label categories provide savings of more than 50% to consumers.

The study also notes that one-third of consumers are actively seeking out private label solutions to save money, and 10% of grocery list makers are listing specific private label products to buy before even entering the retail environment — roughly the same prevalence that existed at the depths of the recent recession.

A strong target for suppliers and retailers are light private label buyers. These buyers, defined as the bottom one-third of private label spenders, currently spend an average of a little over $200 annually on private label products, IRI noted in the report.

RETAILER UPSIDE
Long said on the retailer side of private label, the best example that comes to mind is Costco’s revered Kirkland brand. 

“The brand has come to stand for consistent quality across multiple product categories and has established trust with the consumer,” he said.

The wholesale club sector is demonstrating the strongest private label share growth, according to the IRI study. The growth is occurring among heavy and light purchasers of private label products and boosted wholesale club private-label sales nearly $1.4 billion in 2013, as compared to 2010.

Long said many private label brands are still a “shot-in-the-dark” from a quality and consistency standpoint, but one other retailer that has hit pay dirt with private label is Home Depot.

“I like what Home Depot has done with its HDX private label brand. Home Depot maintains that it's a branded house, and that the HDX brand is only for ‘fill-in’ opportunities, but from a supplier vantage we're seeing more and more emphasis being placed on the HDX brand in certain categories. It will be interesting to see where Home Depot ultimately takes the HDX brand,” Long said.

A Tuesday (Feb. 11) Board of Visitors meeting at the University of Arkansas at Fort Smith provided an update to three new degree programs at the university, as well as two new certificate programs and an update on the state's coordination of educational efforts across all grade levels.

The new degree programs launched at UAFS this year are bachelor's degrees in international business, finance and general studies.

According to Dr. Georgia Hale, interim associate provost for academic affairs and dean of the College of Applied Science and Technology, each degree program meets a need on the university's growing Fort Smith campus.

The new international business degree was designed to meet the needs of today's global economy, she said, fulfilling student and workforce demands.

"Students want to work in industries that have a global perspective and this will give them an opportunity to look at, go beyond American business (and) into international business," she said. "And also as they progress, it gives them more job opportunities because they will have an international perspective from the courses they've taken here."

UAFS's new finance degree was brought about after university officials noticed a rise in the number of business majors who were maxing out the number of finance courses students were taking as part of their degree programs.

"We did surveys and a lot of our students said if we had a finance major, they would certainly go into that area of study," she said, adding: "On the national level, the demands growing for students who have a background in finance."

By adding the major, the College of Business is now among the other 69% of accredited business schools that offer a finance major. While the finance major is a useful standalone degree, Hale said there is an expectation that many accounting majors may choose to double major now that the degree has been offered.

The third new degree offering is a bachelor's in general studies, which allows students with 45 hours in another major to apply those credits toward a general degree. According to Hale, the degree is targeted to students who either decided to change majors or were not accepted into some competitive academic programs, thereby allowing them to complete a degree with the hours already earned toward a specific major.

UAFS has also added two new certificate programs this year — a certificate in professional sales and another in robotics. The need for additional robotics education was a result of the university's notice that various companies across the state, including 21 in the Fort Smith region, are utilizing robotics of some sort in the course of doing business and yet there is not a single trained technician in the state, according to Hale.

In launching the new certificate program, UAFS Chancellor Dr. Paul Beran said he was able to secure $300,000 from Gov. Mike Beebe to help launch the program, as well as receiving a donation of equipment from Baldor.

With the equipment in place, Beran said the next step is getting faculty trained and ready to lead the state in robotics education.

"With this contract also comes a significant amount of training for our faculty, so they are truly proficient and have a high skill set themselves so their ability to teach it matches and exceeds what people need to know when they go out in the industry."

He said the program was not "on a whim," but was created after much research. He added that the closest known robotics program at a university was in Indiana, confirming the need for such programs in Arkansas.

The three new bachelor's degrees and two new certificate programs come nearly a month after UAFS announced it was in the early stages of preparing a new master's degree in healthcare administration, the university's first master's-level program.

In other business, Dr. Mark Arant, dean of the College of Science, Technology, Engineering and Mathematics and the interim dean of the College of Education, presented the annual report of the Arkansas Commission for Coordination of Educational Efforts.

A meeting of the Barling Board of Directors Tuesday (Feb. 11) billed as an economic development study session quickly spiraled into something else entirely.

"Maybe this being called an economic growth study session was probably the wrong terminology. Maybe it was a Barling beautification study session," said City Administrator Mike Tanner after the meeting.

The reason for the distinction is because the study session, which was meant to get input from city directors on how to spur economic development in the city, instead focused almost entirely on landscaping, sidewalks and signs along Fort Street, a continuation of Fort Smith's Rogers Avenue that runs through the heart of Barling.

While the meeting may have deviated from its original purpose, it had a few moments of discussion of economic development when City Director Bruce Farrar addressed the need for the city to have what he said was the equivalent of a business plan.

"We need to develop a one year plan, a five year plan, a 10 year plan and a 20 year plan, like a business does. This is what we're going to accomplish this year, this year we're going to finish this project," he said. "I've been on this Board 13 years and we have never had a plan or a project. We always fly by the seat of our pants. I think it's time we change."

Farrar said property values have declined in the city, adding that his personal research has shown homes sold in Barling sell at 10%-15% less value than comparable homes in neighboring communities such as Fort Smith and Greenwood. The long-time Board member added that it takes three to four times longer to sell a home in the city, with the community only having two homes sold with values above $140,000 in the last three years. According to Farrar, the culprit is Fort Street, which he called an eye sore.

It was at this point that talk shifted from economic development to beautification, with Board members focusing more on the aesthetics of the street than attracting business and industry.

Farrar himself proposed a stricter set of rules governing construction of buildings in the city, along with stricter ordinances governing the installation of signs and upkeep of property. It was something Mayor Jerry Barling immediately attacked while taking a shot to his city's western neighbor.

"You don't want to be as restrictive as Fort Smith is, because I'm telling you they killed development in Fort Smith," he said. "When you have to spend $4,000 to set your garbage can at a particular area of the property, business isn't going to like that."

The Board came to an agreement to be voted on at a later meeting that it would attempt  to move forward with developing a plan to improve the city's appearance ahead of the opening of two big projects in the city in the coming years — the opening of a section of Interstate 49, which will end at Fort Street and Arkansas Highway 59, and a planned outdoor shopping mall in development at the same intersection, with an opening scheduled sometime in 2015 at the earliest.

Tanner said both projects could give the city the momentum it needs to see growth, now that it is no longer bound by Fort Chaffee to the south and east, essentially solving the dilemma of how to spur economic development that was the original topic of discussion at Tuesday's meeting.

"With this mall coming in, the economic growth should basically take care of itself. Just hopefully with the economic growth and the beautification — taking care of the signage and the sidewalks — that will lead to other retailers wanting to move to Barling," he said after the meeting.

As part of planning for that future growth, Tanner said an ordinance placing a vote on a one cent sales tax before the voters in November could give the city much needed funding to improve roads across the city as Tanner and other city leaders plan for the increase in traffic expected with the I-49 and outdoor mall opening.

The sales tax would be the second one to be voted on in a year, after Barling voters last year approved a one cent sales tax to fund improvements to the fire department. Because of an error in certifying the election, Tanner said collection of that tax will not begin until April 1, tacking on an overall sales tax of 8.75% on all purchases made in the city. If the latest sales tax is approved, it would bump the rate to 9.75%.

A vote by the Board on placing the item on the November ballot is expected as early as the March 11 meeting.

Hospitality tax collections in Fort Smith and Van Buren were down in 2013 compared to 2012, ending two consecutive years of gains for both cities. The tourism chiefs in both cities say 2014 will continue to be challenging for the regional tourism industry.

Collections in Van Buren during 2013 totaled $423,221.83, remarkably close to the $423,222.91 during 2012. December collections were $32,071, down 1.2% from the $32,451 in December 2012. The city collects a 1% tax on lodging and a 1% prepared food tax.

Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, said wintry weather in December likely resulted in the monthly decline. She said the January tally will also see a weather effect.

“January numbers are already reflecting (a) slow down caused by the bad weather. Lodging numbers for December were strong, but restaurants struggled with the icy, snowy weather and a weak economy. Preliminary numbers are showing this same trend for January 2014,” Koeth said.

Koeth said she expects 2014 tourism activity to be similar to 2013.

“Lodging ended the year above last year, but restaurants were down and are staying down. Due to the economy, specifically the smaller paychecks, we continue to see a change in the dining out patterns of consumers. I don't see that changing in the near future,” she said.

During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

FORT SMITH
Collections in Fort Smith during 2013 totaled $731, 057, down 2% compared to the same period in 2012. The gap in collections improved through the year with first quarter collections were down more than 6% compared to the 2012 quarter. For the fourth quarter, collections were up 0.62% compared to the 2012 quarter.

The city collects a 3% tax on lodging.

The 2013 tally in Fort Smith was boosted by a healthy jump in December. December collections were $52,204, up 15.7% compared to December 2012. Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said “a wide range of factors” caused area hotels to be more full than normal.

Candlewood Suites reported a 40% increase in collections thanks to several construction crews staying in the extended-stay hotel. Hampton Inn saw December revenue jump 29% thanks to utility crews using the hotel as a base while they worked winter weather related power outages.

The Holiday Inn in downtown Fort Smith hosted a robotic competition that helped boost the hotel’s revenue 26% in December. In 2012, the competition was split between days in November and December, Legris explained. Also, the La Quinta Inn was up 46% in December because all its rooms were open. In December 2012, areas of the hotel were closed for renovations.

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The 2011 collections were up 4.3% compared to 2010.

Legris said he is projecting a 4% increase in collections during 2014, but admitted that reaching the target “will be a little bit of a challenge.”

TOURISM EMPLOYMENT, ARKANSAS COLLECTIONS

Employment in the region’s tourism industry was 9,000 during December, down from 9,100 in November and above the 8,700 in December 2012. The sector reached an employment high of 9,800 in August 2008.

Average monthly employment in the Fort Smith metro tourism sector ended a two year decline in 2012. During 2007, 2008 and 2009, the average monthly employment was 9,300. That fell to 8,700 during 2010, 8,500 during 2011, but rose to 9,000 during 2012. The sector reached an employment high of 9,800 in November 2008.

Arkansas’ tourism sector (leisure & hospitality) employed 103,400 during December, down from a revised 103,700 during November, and above the 102,900 during December 2012. At a revised 103,700, the November employment tied a record for the sector that was first reached in January 2013.

Arkansas’ 2% tourism tax receipts totaled $11.967 million for the first 11 reporting months of 2013, up 2.95% compared to the $11.624 million during the same period of 2012.

Arkansas’ 2% tourism tax receipts totaled $12.405 million during 2012, up 3.16% compared to the $12.025 million during 2011. The gains marked the third consecutive year of improving tourism tax revenue.

The Regional Intermodal Transportation Authority (RITA) voted Wednesday (Feb. 12) to contract with Washington, D.C.-based The Normandy Group to host a meeting during the summer in hopes of bringing together key players in government and industry in hopes of eventually securing funding for the construction of a $23 million inland port along the Arkansas River.

According to Mat Pitsch, intermodal project manager for the Western Arkansas Planning and Development District (WAPDD), said the organization approached RITA about hosting the meeting 

"We've been approached by an entity who saw (our ongoing plans for a new inland port) in the public eye, a former staffer for Sen. Boozman who works for a group that what they do is bring all parties to the table, whether it's elected officials, whether it's the shipping lines, whether it's the railroad companies, the big shippers, (agriculture) businesses, the retailers that use big shipping. They, for a fee, would host a major meeting, try to coordinate all those people to be there are the right time and our board is considering that at today's meeting."

Former Boozman Chief of Staff Matt Sagely is the individual who reached out, according to Pitsch, with himself and Fort Chaffee Redevelopment Authority Executive Director Ivy Owen meeting with Sagely during a visit to Washington in January.

RITA, which is funded jointly by various local governments including the cities of Fort Smith and Van Buren, will split the cost of the $20,100 contract with the FRCA.

Owen said bringing government and business leaders together using The Normandy Group was "an investment," which is why the FCRA board approved its half of the expenses shortly after Owen's trip concluded.

"We think it is so important that this happen, and I was so impressed with this meeting we had in D.C. and the wherewithal that these people have and the ... what they can do to bring these people to the table. It is worth our investment to get them here. It's vitally important that we get these people here to talk to us."

Pitsch told The City Wire that the proposed inland port, what he referred to as a harbor, would be located nearly Lock and Dam 13 in Barling, on land that used to be part of the U.S. Army installation at Fort Chaffee. The location, he said, provided easy access to the river as well as railroads and Interstate 49 when it is completed, though a timeline for completion of the interstate is still largely unknown at this time.

The U.S. Army Corps of Engineers is completing a study on the port and whether it would be a feasible venture. There is a possibility that RITA could obtain Corps funding of up to $7 million for the project, though the meeting planned for this summer by The Normandy Group would look to make the project a public-private partnership should the right opportunity between a private group and RITA present itself.

As for how the proposed port is different than the other ports along the Arkansas River today, Pitsch said this port would have capacity to handle large containers normally unloaded at ports along the West Coast.

"Probably the easiest way to analyze it, and of course those people are at our meeting today, is in the trucking industry you have short haul, less than truckload (LTL). Well, in the shipping industry, what we're heading towards is a containerized and not necessarily defined as containerized, but something so large in its bulk that you wouldn't just ship a partial load. And I think that's where we're headed. We've had customers in this region step forward and said, 'That's what we want.'"

Ports already in existence on the river, he said, are not structured to handle the capacity.

While some may question the need for the port, RITA Chairman Robert Null said the completion of the expansion of the Panama Canal next year will open this part of the country to a whole new customer with coastal cities, including Newport News, Va., already preparing for the onslaught of container traffic to reach their shores.

It's that region, Null said, that The Normandy Group has helped before, showing that the company can follow through on bringing the big players to Fort Smith for a meeting in June. Asked whether he had confidence in the company's ability to replicate the success in the Fort Smith region, Null expressed no doubts.

"You asked the question, 'Can this group pull it off?' We've looked at it. They've got a history of it. We think they can pull it off."

A recent report by the Guttmacher Institute reported that abortion rates in the United States had hit its lowest levels since 1973, and that the rate also declined in Arkansas by dropping from 13.6 abortions per every 1,000 women in 1991 to 7.6 abortions for every 1,000 in 2011.

Even though conservatives may want to point to an increase in restrictions for abortions in some states across the South and Midwest for the decline, the report said data would not back the assertion.

"While the study did not specifically investigate reasons for the decline, the authors note that the study period (2008–2011) predates the major surge in state-level abortion restrictions that started during the 2011 legislative session, and that many provisions did not go into effect until late 2011 or even later. The study also found that the total number of abortion providers declined by only 4% between 2008 and 2011, and the number of clinics (which provide the large majority of abortion services) declined by just 1%."

The report also noted that abortion is “a common experience.”

“At current rates, about one in three American women will have had an abortion by the time she reaches age 45. Moreover, a broad cross section of U.S. women have abortions. 58% of women having abortions are in their 20s; 61% have one or more children; 85% are unmarried; 69% are economically disadvantaged; and 73% report a religious affiliation,” noted the report.

The Guttmacher Institute advocates for “reproductive health and rights,” and supports access to abortion.

ABORTION REDUCTION DEBATE
Rose Mimms, executive director of Arkansas Right to Life — a pro-life group based in Little Rock — said she believed groups like her's were responsible for the drop.

"I think the pro-life movement as a whole should get some of the credit. We have been focusing on education over the last 40 years about the development of the unborn child during the first eight weeks (of gestation). Most abortions are done in the first trimester and many women are told it's just a clump of cells and that's just not true."

Director of Marketing and Communications Susan Allen of Planned Parenthood of the Heartland, which has offices in Fayetteville and Little Rock, did not credit the drop to the pro-life movement, but instead credited the accessibility of birth control for the drop.

"We believe the decline in abortion is largely due to improved access to contraception, and more effective methods of contraception — both of which reduce the rate of unintended pregnancy,” Allen said.

Allen pointed to the increase in the use of long-acting reversible contraception (LARC) as being more effective than other birth control methods, which she said is likely a contributing factor in the abortion rate decline.

"LARCs are some of the most effective forms of birth control," she said.

ABORTION RESTRICTION ISSUES
While the study stated restrictions have not been a contributing factor in the drop in abortions, it did note that Arkansas has several restrictions on abortions. Among them, according to Guttmacher.org, are:
• A woman must receive state-directed counseling that includes information designed to discourage her from having an abortion and then wait until the next day before the procedure is provided;
• Health plans that will be offered in the state’s health exchange that will be established under the federal health care reform law can only cover abortion when the woman's life is endangered, rape or incest, unless an optional rider is purchased at an additional cost;
• The parent of a minor must consent before an abortion is provided; and
• Public funding is available for abortion only in cases of life endangerment, rape or incest.

Mimms said a restriction that pro-life groups have pushed for in other states and which is simply optional in Arkansas is requiring women seeking abortions to see an ultrasound of the fetus.

"It's not required in all states, but in Arkansas we give them the option to see (an ultrasound). I've heard that the people that are outside the abortion center here in Little Rock, they ask the women to ask (their abortion provider) to see their ultrasounds. They've then come out holding the ultrasound (image) and have changed their mind. That is a great resource to be able to see the truth."

It's a point that Allen disputed, adding that an increasing number of abortions are taking place by medication instead of physical procedures, thereby eliminating any chance of individual women seeing an ultrasound of the fetus.

"Abortion restrictions do nothing to reduce abortion, they only make a woman's access to it more difficult," she said. "This new Guttmacher report underscores the need for a woman to have information and access to her full range of options, in consultation with a medical provider and without political interference. Similar to national trends, we have seen increase in the rate of medication abortion, which currently accounts for nearly 60% of the abortions Planned Parenthood of the Heartland provides. Medical abortion is a safe and effective method early in the pregnancy."