Sarah Gilbert
Portland, Oregon - http://www.cafemama.com
Sarah Gilbert is a blogger by trade and a finance geek at heart. She cut her teeth on her first Excel spreadsheet full of financials at the tender age of 21, when she began her investment banking career in First Union's Loan Syndications group. She went on to get her MBA from Wharton, work at Merrill Lynch and fall in love with analyzing company strategy and endless rows of numbers. So she tried her hand at *setting* strategy, working for a number of exciting and under-discovered startups in various product management roles, all of which seemed to center around writing business plans and, yes, making spreadsheets. She got into blogging as a marketing strategy and loved it so, it took. She now works for AOL and blogs all day (and some of the night) long, with her little boys yanking at her elbow, in her beloved 1912 Portland home.
Posted Jul 2nd 2008 2:06AM by Sarah Gilbert
Filed under: Consumer experience, Rants and raves, Competitive strategy, Starbucks (SBUX)

I hemmed and hawed when I saw
Jennifer Openshaw's piece on MarketWatch a few weeks ago; her opinion was that
Starbucks (NASDAQ:
SBUX)
would recover much of its lost value in these past several months of sluggish sales, rising milk costs and slipping coolness, no matter what the naysayers, say. Her argument: that Starbucks was great because of its atmosphere and general quality standards in coffee. While I certainly agree that Starbucks is still an attractive "third place" and would pick Pike Place brew every time over McDonald's or Dunkin Donuts coffee, I hesitated. Had management already made too many mis-steps? Had hubris got the best of the 'Bucks?
The latest news; that Starbucks management has
plans to close 600 stores in the U.S. this year; could be an indication of positive things in the company's stock price. It certainly had traders in after-hours activity eagerly snapping up shares, sending 72 cents, or 4.6%, to $16.34 around 2 a.m. I'm always leery, though, of a huge strategy reversal such as this. In my analysis of Starbucks' financial statements, the company spends about $300,000 to start a new store, and this is largely funded through cash. Management regularly offers old furniture and equipment to its high-ranking employees when upgrading or shutting down a store, so it's unlikely that much of the cost will be recouped.
Doug McIntyre noted further that Starbucks will continue to pay more millions in lease costs; the company is known for locking up prime real estate with serious long-term lease agreements. Sure, the loss won't affect the cash balance much, and the charge will be "one-time," so the financial picture will still look rosy in a year when the charge has dropped into "historical financial statements." Investors don't look back.
But by acknowledging that some $180 million in costs, not to mention the hundreds of millions probably spent to train and employ staff at these locations, was a big waste of money, Starbucks management is owning up to a future of slow growth.
Continue reading Starbucks: Will store closings lift company's fortunes?
Posted Jun 29th 2008 2:10PM by Sarah Gilbert
Filed under: Industry, Hunt(J.B.) Transport (JBHT), Entrepreneurs
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Johnnie Bryan Hunt, eponymous founder of J.B. Hunt (NASDAQ: JBHT), was, like so many Depression-era children, a jack-of-many-trades. He picked cotton, harvested grain, sold lumber, auctioned livestock, sold lawn sod, and drove a truck. He was a handy soul, inventing a rice hull press and designing a unique poultry truck.
It was the rice hulls that would be the start of J.B. Hunt. J.B. came up with the concept of using rice hulls for chicken bedding. He and a partner used the rice hull business as seed money to buy five trucks and seven trailers and in 1969 started J.B. Hunt Transport. Today the company operates 11,000 trucks and about 47,000 trailers and containers, though its founder died in 2006 -- in time to see his little transport business become the largest publicly-traded trucking company in the world.
It's fitting that J.B. Hunt, which made its start on the profit earned from chicken farmers, should be based in rural Arkansas -- the land of poultry. Lowell, Arkansas is a tiny town, made up of only about 5,000 residents, so J.B. Hunt is a big force. With 16,000 employees, the company could triple the town's size based on its payroll alone.
Be sure to check out more Big Company, Small Town posts.
Posted Jun 26th 2008 5:10PM by Sarah Gilbert
Filed under: Industry, Employees, Tyson Foods'A' (TSN), Entrepreneurs
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Like most big companies located in small towns, Tyson Foods (NYSE: TSN) has a delightfully quirky origin. John Tyson, owner of a battered truck and 500 chickens, opportunist, and debtor in the Depression-era 1930s struck an idea that probably seemed like folly to his neighbors: he'd deliver chickens to Chicago and Kansas City, where they'd get more money.
I'm sure for every story like Tyson's, there were 100 that didn't turn out so auspiciously. But in this tale, the hero comes back to his little Arkansas hometown with a profit and pays off his debts. He keeps on raising and selling birds in points north, eventually devising a plan to keep more of the profits by "vertically integrating" (I'll bet dollars-to-doughnuts he didn't call it that) and incubating his own chicks instead of buying them from a hatchery, as well as milling his own feed instead of buying it from a feed store.
This wasn't the end of Tyson's forethought. He bought a broiler farm in Springdale, Arkansas (beginning the company's history in that town) and started to cross-breed birds designed for meat production, instead of using heritage (or "pedigree") breeds.
Continue reading Big company, small town: Tyson Foods, Springdale, Arkansas
Posted Jun 24th 2008 4:44PM by Sarah Gilbert
Filed under: Deals, Amazon.com (AMZN)
Talk to anyone about what little technology company has a chance at being the Next Big Thing in social media, and chances are you'll hear the name "Twitter." Everyone's twittering about Twitter, even my mom knows all about it. News of the
platform's $15 million funding round has been making the rumor rounds for over a month,
Today the rumors were confirmed with news of the funding
on the Twitter blog, and a new nugget: Jeffrey Bezos of
Amazon.com (NASDAQ:
AMZN) is one of the funders, through his personal investment company, Bezos Expeditions. The company didn't confirm the size of the round (or so much of a whisper of the company's valuation), but said they would spend the money on the always-aching infrastructure and reliability.
As my
favorite media analysis guy Marshall Kirkpatrick says, "As founders are concerned, Bezos could be called Mr. Scalability - making this an awesome partnership to tackle Twitter's biggest obstacle." It may not prove great things for Twitter's one-day IPO; Bezos certainly hasn't proven to be a brilliant generator of shareholder value -- but for today, it's proof that the great idea has a lot of legs.
Posted Jun 12th 2008 5:12PM by Sarah Gilbert
Filed under: Bad news, Products and services, Consumer experience
This post is part of a series on some of the most memorable companies that have disappeared.
How is this for a post-op? "The fashions were too forward," said apparel industry analyst Kurt Barnard. Merry-Go-Round was a huge clothing chain targeted at teens and young adults, one in which (I couldn't make this up folks) my best friend in high school worked, gaining her great respect amongst the shopping-obsessed teens we were.
In the late 1980s and early 1990s, Merry-Go-Round was the darling of Wall Street and the suburbs where Jessica sold $70 rayon shirts for minimum wage plus commission. Its 536 stores comprised Merry-Go-Round, Dejaiz, Cignal, and Chess King, the latter an acquisition made a few years before its demise. One blogger called the apparel "faux upscale" and wrote of the chain's merchandise, "the cheesiest, sleaziest, ugliest and most eye-searing '80s clothes you could possibly find. Velcro closures? Check. Mesh designs? Check. Excessive use of leather? Check. Odd-colored thick v-neck sweater vests? Check."
Sadly, the mid-nineties teen did not want to wear v-neck sweater vests, mesh, or paisley rayon blouses. According to the New York Times, the 1990s teen wanted ripped jeans from Wal-Mart. The company had expanded too fast, too furious, changing merchandising strategies so frequently that its edgy consumers couldn't keep up. The business was so overtly trendy it tipped over the edge. Merry-Go-Round filed for Chapter 11 bankruptcy protection in 1994, but couldn't stay afloat and liquidated all its assets in 1996 when its chief backer, Fidelity Management, pulled its support.
The music stopped for Merry-Go-Round, and all the mesh-covered horsies fell off. None of the children, it seems, cried.
Let us know in the comments what you miss about Merry-Go-Round. And be sure to check out other Companies That Have Vanished.
Posted Jun 12th 2008 2:14PM by Sarah Gilbert
Filed under: Deals, Rumors, Google (GOOG), Yahoo! (YHOO)

A joint announcement by
Yahoo! (NASDAQ:
YHOO) and
Google Inc. (NYSE:
GOOG) scheduled for 1:30 p.m. PDT today, after market close, has rumor-mongers wondering whether the two will be announcing a big deal. Yahoo! has been on the block for so long that even the slightest breeze of news has everyone guessing; this morning,
Doug McIntyre wrote that short interest was increasing as pessimists pooh-poohed Carl Icahn's plans.
Michael Arrington at TechCrunch says his sources are insisting it's only a search partnership, a deal that would probably have far less impact on the fate of Yahoo! -- it may signal more things to come, but let's recall that a "global advertising partnership" deal between Google and Time Warner, Inc. (NYSE:
TWX)'s AOL
in December 2005, in which Google purchased 5% of the internet company, never (yet) materialized into the acquisition many expected.
No major news outlet has the story yet, and there is no announcement on Yahoo!'s investor relations page. After falling 80 cents today, the stock was rebounding quickly on the rumors, at $25.97 at 2:10 p.m.
Update 6:21 p.m.: Microsoft has pulled its $33 per share offer for Yahoo!, and
Yahoo! has announced a search advertising partnership with Google. Yahoo!'s stock ended the day down $3.34, or 12.77%, at $22.81.
Posted Jun 12th 2008 10:10AM by Sarah Gilbert
Filed under: Management, Competitive strategy
This post is part of a series on some of the most memorable companies that have disappeared.
Paine Webber was never the biggest brokerage on Wall Street; the title of top dog was held throughout the years by its rivals, Merrill Lynch, Morgan Stanley, E.F. Hutton, Kidder Peabody, Bear Stearns, Salomon Brothers. But it was part of the solid middle, the proud family firms that began to boom in the early decades of the 20th century, many before the Great Depression, and survived for nearly 100 years.
Paine Webber was founded in 1880 by William Alfred Paine and Wallace G. Webber. The firm expanded slowly in the latter part of the 19th century and by 1930 had expanded to 30 branch offices in 25 cities through the Northeast and Midwest United States. When Paine died in September 1929, his son Stephen had become a partner in the firm, maintaining the family connection. Unfortunately, Stephen got the firm mixed up in a securities fraud case involving Canadian investment trusts in the late 1930s, ending up with his securities license revoked and his firm's proud family name in the dirt.
The firm eventually recovered from the ignomy, and in 1963 moved its headquarter offices to New York City. Throughout the next few decades, it expanded through acquisitions in the Northeast and Southeast U.S. Unfortunately, Paine Webber was a follower of market trends, and in the late 1970s when it became vogue for brokerages and investment banks to combine forces, it bought Blyth Eastman Dillon. The merger turned out to be disastrous, as the company was not prepared for the immediately following bull retail market. Their systems could not support the thousands upon thousands of trades, and the company almost broke under the pressure.
Continue reading Companies that vanished: Paine Webber, proud family heritage
Posted May 30th 2008 5:10PM by Sarah Gilbert
Filed under: Bad news

We've all mourned the
plight of the honey bee in America, and Europe has been hit hard, too. Everything from fungi to
cell phones to stress has been blamed for the startling losses -- from 30% to 80% of many commercial beekeepers' hives have been wiped out.
After a lot of urgent research conducted in the past few years, some tests on dead bees have shown that 99% of the ones examined had a high level of clothianidin in their system -- the chemical sold under the name "Poncho" by Bayer AG in Germany. It's used as a pesticide for sweet corn and rapeseeds.
According to Bayer, the chemical typically sticks to the seed and doesn't get into the air, but an "extremely rare" "application error" resulted in its release. Germany didn't take any chances though -- honeybees are vital to the health of many crops and the country has
banned the entire category of pesticides.
But that doesn't end the bad news for Bayer, whose imidacloprid has been blamed in South Dakota and France for widepread colony collapse disorder. The chemical was used for oilseed rape and sunflowers. In South Dakota, farmers are suing, whereas the French government has banned the chemical (but just for sunflower seeds). The company maintains its products are safe, as long as they're applied correctly. I must admit, I'm skeptical. How many times will we accept the "user error" argument before we start scaling back the use of harmful chemicals? If they're killing bees, what might they do to humans who eat the foods from them? Bayer could face some major reduction in its €2.5 billion pesticide (aka "Crop Protection") market if more countries follow suit (and if more Americans like me begin to demand that our farmers stop using bee killers on their crops).
Posted May 28th 2008 3:38PM by Sarah Gilbert
Filed under: Marketing and advertising, Scandals, Politics

The world of conservative punditry is in a tizzy after
Michelle Malkin wondered if Dunkin' Donuts spokescheerleader Rachael Ray wasn't wearing a keffiyeh in a recent television ad. Just to be safe, Dunkin' Donuts pulled the ad.
I won't launch into any
ad hominem attacks of Michelle Malkin, much as I'd like to right now. But I will offer up a few facts:
- The keffiyeh is an ancient traditional headdress worn by men, and is most connected to the Bedouins. While the keffiyeh was worn by both Yasser Arafat and Che Guevara, it was also worn by bohemian American girls in the 1980s.
- Critics of the keffiyeh's symbolism point to its connection with Palestinians and Fatah. However, Palestinians themselves wear the headdresses no matter what their party affiliation or political leanings.
- Arabs are not all terrorists. In fact, most Arabs are not terrorists. Connecting an ancient traditional garment worn by millions across dozens of countries to a tiny (no matter how awful) faction of criminals seems racist.
- Rachael Ray is not wearing a keffiyeh in this picture. She is wearing a paisley scarf with a fringe, selected by her stylist. Honestly, I don't think it looks great on her, but what do I know.
For Dunkin' Donuts to pull an ad based on the rantings of an ultra-conservative columnist? Far more worthy of boycott than being accused of having a spokeswoman who might wear a paisley scarf while drinking a Cool Latte. One
liberal pundit says she's sticking with
Starbucks (NASDAQ:
SBUX until the ad comes back. What do
you think?
Posted May 26th 2008 3:56PM by Sarah Gilbert
Filed under: Scandals

Who
am I? I'm wondering after having been utterly unable to log in to my very-long-time LinkedIn account using my own email addresses (all of which feature the words "sarah" and "gilbert" prominently). While it's true I keep no extraordinarily private data in my account profile (the fields for "social security number" and "mother's maiden name" aren't yet a feature of the social networking site
that's been valued at $1 billion), still, when I discovered that a complete stranger was accessing my account using her own very different email address (her first name is "Kristin" and we have a few friends in common, but absolutely nothing else), I was rattled. This is both bizarre and troubling.
She found my email address through one of our common friends, and sweetly sent me her password, so I could actually be
me for a bit. I approved a couple of pending connection requests. I sent an urgent, full-of-exclamation-points email to LinkedIn. [
As of mid-afternoon on May 27th, I've still heard nothing from LinkedIn, and a scan of recent Twitter messages showed scattered problems.] I asked my friends if they'd heard of anything like this, and found
one similar problem (as far as I can tell, it was unresolved). I'm so fortunate that it was a friendly connection and not someone bent on masquerading as me (which could have ranged in dangerousness from the mild -- wildly recommending people I don't care for, maybe -- to the seriously fraudulent). What if
Bill Gates had his identity gifted to someone else? Salacious, no?
However mild or serious the result of this security breach, it's not something to be taken lightly; and a bug like this could turn off professional users who trust LinkedIn with their resume; it's certainly not befitting a billion-dollar company built on the concept of identity. News Corp., are you
still interested?
Posted May 22nd 2008 3:25PM by Sarah Gilbert
Filed under: Law, Marketing and advertising, Employees

With her homey look and her heavy New York accent, Wendy Kaufman entertained beverage fans everywhere with her TV appearances as the "Snapple Lady." Her silly responses to fan letters on advertisements gave her a cult following of sorts, and she was so authentic; she started out working in Snapple's marketing department and in 1993 was picked to appear in a campaign that ran heavily through 1995.
After having worked for a few corporate bosses as Snapple was bought and sold, finally ending up in Cadbury-Schweppes'
newly-spun-off Dr. Pepper Snapple Group Inc. (NYSE:
DPS), Kaufman was presented with a new "so one-sided" contract that she
declined to sign in March. While a company spokesperson insists that the contract was lovely, Kaufman says it was "worth nothing" and will be headed off into the sunset to do voiceover work for Motorola.
She's definitely not "over" yet though. Thanks to an appearance on VH1's
Celebrity Fit Club in 2004, she was back in the spotlight, and soon was planning to launch her own
plus-size clothing line, WendyWear. Is Wendy Kaufman still somebody without her job as the Snapple Lady? She seems confident enough.
Posted May 7th 2008 11:00AM by Sarah Gilbert
Filed under: Wal-Mart (WMT), Target Corp. (TGT), Battle of the Brands
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
In the suburban landscape littered with big-box retailers, it is no secret which are the favorites of the Friday morning housewives, the Saturday afternoon family shoppers. These are the stores so formidable that families can often be spotted pushing two carts to haul their weekly stock of everything from boxed wine and board books to T-shirts and toilet paper. And Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) are the very exemplification of our Battle of the Brands showdown: for most of you, it's either one or the other, never both. In the world of bargain retail megastores, loyalties run deep.
And naturally, both Wal-Mart and Target are forever trying to move in on each others' turf. While Target has always been known for its partnerships with cutting-edge fashion icons (regular shoppers often call it "Tar-jay," with a French accent, though the corporation is firmly rooted in the American Midwest), Wal-Mart has been known for tripping over its own fashion foot. Wal-Mart has emphasized its ability to deliver every single last thing to its customers (from banking to bebop to "green" coffee).
This year has marked a few nuances to the two companies' strategies. Target has been wooing upper-middle-income shoppers who are now looking for better values, with a rumored experiment with high-end cosmetics, a refinement of its furniture offerings, and a focus on labeling foods so consumers will feel more secure purchasing its fresh groceries.
Continue reading Battle of the Brands: Wal-Mart vs. Target
Posted May 6th 2008 5:11PM by Sarah Gilbert
Filed under: Battle of the Brands
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
For every time in your adult life, there is a lifestyle store to go along with it. IKEA is your freshman year in college, your first job, the apartment, you share with three strangers you met on Craigslist. Crate & Barrel is growing up: housewarming gifts, engagement parties, wedding registries, dinner parties. At IKEA, you can very well imagine arguing over who does dishes; with Crate & Barrel, you suspect a maid should be doing them (or at the very least, a whisper-quiet stainless steel dishwasher).
The two stores, too, are redolent of the cultures that incubated them. IKEA is Scandinavian, cool and spare and with the timeless efficiency and modernity of the Swedes. Crate and Barrel, on the other hand, was started in Chicago by a couple who had just returned from a European honeymoon; it reflects the penchant of well-to-do Americans to catch up every imported fad and embrace it as their own. So while Crate & Barrel's style hops from Japan to Tuscany to Providence and never seems to settle on a single influence, IKEA's is constant, playful, deliberate.
Like any lover of food, good company, and pretty glassware of moderate means, I have gone through both the IKEA and Crate & Barrel phases, and come through the end of them and settled back again on IKEA. I appreciate its constancy and wide selection, and especially its focus on children (as it turns out, the love-and-marriage set often ends up having little ones who quickly break the dozen old-fashioned glasses, the heavy water pitcher, the handsome oversized plates); I like that I can still find some of the same forks I purchased 10 years ago when I was in my first-job stage. The way I think about it, Crate & Barrel is the wedding, but IKEA is the marriage -- the lifestyle store that you can live with when the honeymoon is a distant memory.
Vote in our poll for IKEA or Crate & Barrel as your preferred brand, and let us know in the comments why you love it.
Posted May 5th 2008 7:00PM by Sarah Gilbert
Filed under: News Corp'B' (NWS), Battle of the Brands
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
While I won't claim the title of Most Hip Person on the planet, I do have a fair bit of "new media" credibility. And I think it should be instructive that I've finally embraced (or at least given a friendly pat on the back to) Facebook, whereas News Corp.'s (NYSE: NWS) MySpace continues to horrify. Where Facebook pokes, MySpace cackles wickedly; where Facebook exposes me to unwelcome questions from first grade classmates, MySpace exposes your children to unwelcome advances from questionable adults. Facebook is silly; MySpace is spooky.
The two social networking sites sprung up at about the same time, but focused on vastly different niches. Facebook was originally meant to monopolize electronically on the popularity of the "Freshman Facebook," a publication put together by most colleges displaying the faces of the new students and immediately hoarded by upperclassman hoping to find their one true love (at least for tonight). Why not bring the desirability of fresh faces to a much wider audience? At first the network was limited to college students, but soon the barely legal founder was pitching his product at a bigger market. And then my boss asked me to join and the rest is writing on my wall.
MySpace, on the other hand, was initially marketed to indie bands (although it wasn't meant to be a niche, its developers were active in the LA music scene and thought that would be a great way to attract other users) as a way to spread the musical love and relieve struggling artists of the need to sink money into building a website. The concept was a virtuous circle -- musicians attract fans, fans attract musicians, and so on forever.
Now musicians are still on MySpace, and college students are still on Facebook, but while Facebook seems to have (if not transcended at least) risen above its origins to attract "networks" and "groups" whose affinity ranges from a common employer to a favorite politician or social cause; MySpace has sputtered, devolving ever more into awful allegations and truths. Pedophiles are reported to find victims through their MySpace pages, and the site is notorious for cyberbullying (scary!). On the other hand, there is a big kerfuffle over Scrabble on Facebook (silly!).
I reluctantly set up an account on FaceBook several months ago, and now it's moderately interesting as a way to reconnect with friends from 1st grade, and occasionally peek in on the lives of my college and business school classmates. It occasionally bugs me with its "pokes" and "candy corn" (what the heck?) but it's not riddled with often obscene and sometimes frightening content, as is MySpace; the space that's not mine, at all.
Vote in our poll for MySpace or Facebook as your preferred brand, and let us know in the comments why you love it.
Posted Apr 30th 2008 11:00AM by Sarah Gilbert
Filed under: Consumer experience, Competitive strategy, Marketing and advertising, Krispy Kreme Doughnuts (KKD), Battle of the Brands
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Oh, how the sugary have fallen. Ten years ago, even five, you and I both know how this would have come out. In the standoff between longtime national fried-dough pusher Dunkin' Donuts and upstart sweet freak Krispy Kreme Doughnuts (NYSE: KKD), Krispy reigned supreme. The chain was rolling out new franchises as fast as dough circles could parade around its restaurants on shiny metal racks, and each time it did local police stations did overtime directing traffic.
Somehow, the mighty fell after the considerable sugar high, largely connected to poorly-managed finances, badly-handled expansion, and a sudden national fear of carbohydrates. All the while, Dunkin' Donut managers everywhere continued to plod along, making the doughnuts, and quietly stirring a blue-collar breakfast revolution. One day America woke up and realized, hey, Dunkin' Donuts' coffee is good! Someone named it "Better than Starbucks" and it soon became clear that the product guys had realized something: we make a lotta money off of coffee. Actually, more than half of the company's revenue.
Continue reading Battle of the Brands: Dunkin' Donuts vs. Krispy Kreme
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