Business today

Compiled from Times wires

© St. Petersburg Times, published January 4, 2001

CONSTRUCTION SPENDING DROPS: U.S. construction spending fell in November, the first drop in four months, the Commerce Department reported. Spending fell 0.6 percent to an adjusted annual rate of $815.6-billion, as a decline in work on highways and home improvements offset gains for new housing. The report did suggest underlying strength, as spending on single-family homes increased for the first time in eight months.

MICROSOFT SUIT FILED: As announced, seven current and former Microsoft Corp. employees filed a discrimination suit against the computer softwaremaker Wednesday, alleging racial bias. The suit, filed in U.S. District Court in Washington, D.C., asks for at least $5-billion -- by far the most sought for any class-action suit. Willie E. Gary, the plaintiffs' lead attorney, said the high figure -- which includes compensatory and punitive damages -- is commensurate with Microsoft's size.

COMPUTER SALES SLUMP: U.S. retail unit sales of desktop personal computers fell about 24 percent in December from a year earlier, researcher PC Data said. Retail PC revenue fell to $855-million in December as economic growth slowed and consumers chose not to buy new PCs to replace older ones. It was the fifth straight month in which sales declined from a year earlier, and the second month of double-digit declines. The average retail selling price for a PC in December was $846, 7 percent less than a year earlier.

LENDERS ASSIST DANKA: Debt-laden Danka Business Systems has received another lifeline from its lenders to help keep operations afloat. Danka's chief lender, a 30-plus bank consortium, has agreed to give the St. Petersburg company cash advances until March 28 to meet "ordinary operational needs." A Danka spokesman did not specify how much money Danka might borrow. The credit agreement is otherwise unchanged, expiring March 31, 2002. Separately, the company said it made a $25-million term loan payment in advance of the Jan. 2 due date. Danka, which distributes and services copiers, has hired investment banker Houlihan Lokey Howard & Zukin to explore its options, including restructuring its $752-million in debt, selling off assets, or putting the entire company on the auction block.

FUNERAL COMPANY SETTLES CHARGES: A funeral home and cemetery company agreed to pay $500,000 to settle allegations that it used deceptive sales practices and may have cheated Florida customers while it was in financial trouble. Prime Succession Partners, which owns Fred Hunter's Funeral Home in Fort Lauderdale, also agreed to reimburse some Florida customers under the agreement reached with the state's Attorney General's office. The funeral home was accused of selling expensive concrete burial vaults in advance to customers in preneed arrangements and then pressuring families to use a cheaper vault when the person died, pocketing the difference.

PENNEY NAMES NEW CFO: Four top executives of J.C. Penney Co. Inc., including its chief financial officer, retired over the weekend. Robert B. Cavanaugh, 49, was named executive vice president and chief financial officer to replace Donald A. McKay, who retired effective Sunday. Cavanaugh had been CFO of Penney's Largo-based Eckerd drugstore chain.

Also, Stephen F. Raish, 50, was named executive vice president and chief information officer, replacing David V. Evans, 56, who also retired Sunday. John E. Fesperman, 55, president and chief operating officer of Penney's direct marketing and credit operations, and Randy S. Ronning, 51, president of Internet and catalog sales, also retired.

TROPICAL WARNS OF SLOWER SALES: Tropical Sportswear Int'l Corp. said net sales will drop in its fiscal first quarter but said its earnings forecast remains on target. The Tampa clothing manufacturer expects sales of $95-million to $96-million for the quarter ended Dec. 30, compared with $102-million for the same period last year. Tropical said per-share earnings should be 40 cents to 44 cents before one-time items, up 9 percent to 12 percent from the previous year. The company blamed the drop in sales on order cancellations and a weak retail environment.

DELTA CUTS BACK FLIGHTS: Delta Air Lines said it will trim its flight schedule an average of 2.7 percent through the first quarter of 2001 as it struggles to manage continuing pilot shortages. About 4 percent of Delta's 2,700 daily flights will be cut in February and about 3.5 percent in March. This month, Delta will eliminate less than one-tenth of 1 percent of its flights, including a daily round-trip between Atlanta and both Newark, N.J., and Tampa; and between Jackson, Miss., and Shreveport, La. Delta and its 9,800 pilots have been negotiating a new contract since September 1999.

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