Toys ‘R’ Us scraps IPO plan
Toys “R” Us Inc, the toy retailer owned by Bain Capital LLC, withdrew its plan for an initial public offering after first filing with the US Securities and Exchange Commission almost three years ago. The 1,500-store toy chain, owned by the private-equity firm founded by Mitt Romney and partners KKR & Co and Vornado Realty Trust, cited “unfavorable market conditions and the company’s recently announced executive leadership transition.” Toys “R” Us, in a separate filing yesterday, reported that fourth-quarter revenue fell 2.6 percent to US$5.77 billion from the year-earlier period, while profit fell 30 percent to US$239 million. Profit fell 75 percent to US$38 million for the fiscal year ended Feb. 2, the company said.
UPS to forfeit US$40m
UPS on Friday agreed to forfeit US$40 million and implement a compliance program after a US Department of Justice probe found the company delivered drugs on behalf of illegal online pharmacies. The agreement followed an investigation that showed that UPS was shipping drugs on behalf of Internet pharmacies that were distributing controlled substances and prescription drugs that were not supported by a valid prescription. “We are pleased with the steps UPS has taken to stop the use of shipping services by illegal online pharmacies,” US Attorney Melinda Haag said in the statement. UPS officials weighed whether to target online pharmacies as a business in the mid-2000s and continued to accept their business even after they were flagged as problematic or illegal, according to an agreed statement of facts.
Consumer spending rises
Consumer spending rose last month and sentiment perked up this month, further signs of an acceleration in economic activity in the first quarter after a near stall late last year. The data on Friday also showed a rebound in income growth, putting the economy in a better shape to deal with tighter fiscal policy, particularly US$85 billion in across-the-board federal government spending cuts, known as the “sequester.” Consumer spending increased 0.7 percent last month after a 0.4 percent rise in January, the Commerce Department said. Though part of the increase in spending, which accounts for about 70 percent of economic activity, was because of higher fuel prices, consumers also bought long-lasting goods such as automobiles and spent more on services.
No rescue needed: official
The country will not be the next euro member to need a financial rescue as it can afford to wait for lower borrowing costs before issuing new debt, its top economic official said on Friday. The new center-left government was widely expected to raise money on financial markets, but has not done so because the country’s borrowing costs have soared because of the turmoil in Cyprus. Investors are betting that the country, another tiny member of the eurozone with a population of just 2 million, will also need a rescue to keep its banks and economy afloat. While the country’s banks are also in trouble, the sector is smaller than in Cyprus and it does not share the exposure to toxic Greek debt, and Slovenian Finance Minister Uros Cufer said his country did not need help.