Financial life in a big town

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They lacked a business plan, site review or financial feasibility study.

What Ron and Ruth Carter did have, however, was a wealth of kitsch accumulated at flea market and garage sales, along with an ideal locale to peddle the stuff.

Gifts and Decorations requires no introduction to anyone who has driven along North Kingshighway near Delmar Boulevard.

It’s tough to miss the queen-sized Notorious B.I.G. bedspread or the array of themed rugs and wall motifs adorning the storefront where Kingshighway meets Vernon Avenue. 

A sidewalk inventory sheltered only by an awning did not occur by happenstance.

“We pretty much have to put everything outside,” Ron Carter explains. “Nobody will know if we’re here if we sit inside eating jelly donuts. There’s not a lot of windows here.”

Statistics tracking the longevity of small businesses can be confusing.

A 2010 United Capital Funding study that drew on several sources, including data from the U.S. Census, Commerce Department and Small Business Administration is probably closest to the mark. It calculates that the small business survival rate is 49 percent for five years, 34 percent for ten years and only 26 percent for ten years or more.

How, then, to explain the staying power of Gifts and Decorations? This year, the Carters will commemorate a quarter century of selling DVDs, CDs, scarves, ponytail bungees, socks, dirty magazines, mass-produced art and  rugs, including one with the indelible image of the late reggae icon Bob Marley toking a joint.

Carter, 61, gives a simple answer: “It’s not just caring about what you sell. It’s how you treat people, too.”

Gifts and Decorations traces its roots to a spot a few blocks east and south, along Lindell Boulevard. There, Carter — then an elementary school arts teacher — sold handcrafted ashtrays, statuary and figurines molded from plaster of Paris in the early 1980s.

The figurine and ashtray market proved to be fairly successful.

But as the collection of knick-knacks picked up at the flea markets, and other sales approached critical mass, the Carters decided to broaden their inventory.

When the couple – married 35 years – set up shop on Kingshighway in November 1987, the stretch included a beauty shop, a barber shop, a repair shop, a Chop Suey joint and a bar. 

The Carters gradually took over the neighboring real estate as each of the businesses dropped away. Eventually, Gifts and Decorations occupied the entire building.

But only for the purpose of storage. For rare is the customer that makes it past the entrance of 1158 North Kingshighway.

Peddler such impulse buys on the sidewalk is “a lot easier than trying to get them through the door,” Carter says.

Outdoor merchandising captures the peripheral vision of the driving public payday loan no faxing. That’s key to attracting passerby shoppers like Helen King, who pulled curbside after spotting a framed Last Supper triptych, in which artist Wolfgang Otto cast people of color as Christ and his disciples.

“Ten dollars,” King said, loading the print into her car. “You can’t beat it.”

Rotating or rearranging the inventory on a daily basis is another marketing trick. Close observers of Carter’s downmarket bazaar will notice the Betty Boop bedspread, for example, rarely hangs in the same spot.

“That’s another secret,” said Carter. “Don’t put (stuff) in the same place everyday.”

Of course, there’s a downside to conducting business in the great out-of-doors.

Winter isn’t the problem.

“Snow is not so bad, it comes down slow and you can get the stuff inside,” said Carter.

It’s the other seasons, with the storms that tend to descend on St. Louis out of nowhere, that pose the biggest threat.

It takes the Carters about an hour each morning to wheel out the smaller inventory and clamp the rugs and bedspreads to the clothesline running the length of the building.

Carter has never put it to a stopwatch. But he assures it takes a lot less time to get the merchandise inside when high winds and thunderbolts erupt without warning.

Carter says business has dropped off since a city health inspector two years ago ordered Gifts and Decorations to halt the sale of frozen ice – which the Carters call “snow balls.”

“Everybody liked our snowballs, because we gave them a lot of juice,” he said. “And when people stopped for a snowball, there was no telling what else they’d buy.”

Carter is keenly aware that sidewalk transactions, even after 25 years, doesn’t fit the traditional business model.

But he points out that Gifts and Decorations is as vulnerable to the market and economic forces as the grocer across the street or the auto parts supplier on the next block.

Besides taking a hit in the recession, Gifts and Decorations is engaged in constant give and take with wholesalers over the cost of the Chinese goods that dominate the inventory. And the Carters grind their teeth over the bane of businesses of every shape and size – taxes.

Ron Carter may complain that “I don’t know if I’ll be in business that much longer if they keep raising my taxes.”

Still, the couple allows that a healthy supply of merchandise is stockpiled beyond those doors that his customers never enter.

And nearly 25 years after they first arrived at the corner of North Kingshighway and Vernon, they have no plans to clear the sidewalk anytime soon.

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Stock markets recovered around the world following an early stumble caused by election results in France and Greece that appeared to jeopardize Europe’s plans for fighting its debt crisis.

Greek voters over the weekend punished mainstream politicians who had backed cost-cutting plans demanded by the country’s international lenders, leaving the country without clear leadership. In France President Nicolas Sarkozy was thrown out in favor of Socialist Francois Hollande, who pledged “to finish with austerity.”

Investors on Monday worried that the shifting political landscape in Europe could undermine the region’s long battle to keep its shared currency intact and restore the faith of global investors. European markets slumped early on, but closed higher after worries about the political changes dissipated and investors focused on Hollande’s pledges to encourage economic growth.

Investors were also relieved after Spain announced a plan to present measures this week to support the country’s ailing banks. Prime Minister Mariano Rajoy said he would not rule out lending or injecting public money into the country’s financial system.

Stocks rose sharply in Spain, ending up 2.7 percent. France’s main index gained 1.7 percent. The euro also recovered ground it lost against the dollar.

In the U.S., the Dow Jones industrial average fell as much as 68 points in early trading, but recouped its losses and even gained 10 points by the afternoon. The Dow finished the day down 29.74 points, or 0.2 percent, at 13,008.53.

The Standard & Poor’s 500 also started the day lower but ended up 0.48 points at 1,369.58. The Nasdaq composite index rose 1.4 points to 2,957.76.

The election results in Europe showed that voters were rejecting the extreme belt-tightening required by international bailouts and favored by Germany’s leadership.

Investors are waiting hear the newly-elected leaders articulate their visions for how to deal with the euro zone’s debt crisis, which is why there is a muted reaction from stock markets, according Kim Caughey-Forrest, equity research analyst at investment firm Fox Pitt Capital Group.

“There is no reason to cry until you get hurt,” said Caughey-Forrest.

The verdict from European voters will likely force leaders there to go back to the table and come up with more acceptable solutions to the debt crisis that has plagued many nations. The deep cuts in government spending have already worsened the situation in many countries, leading them into deeper economic distress and increasing already high unemployment.

Many believe the austerity programs are necessary to keep bond investors from panicking about the possibility that more European nations will default or require bailouts Faxless payday loans.

However, a growing number of politicians, like France’s Hollande, say the cuts have been too much, too fast. They say the region’s economy can’t return to growth unless governments stop tightening the fiscal noose and start spending again to create demand. Some economists also now believe that the cuts have to be accompanied by some government economic stimulus to promote growth.

“We are going to hear a more balanced prescription coming out of the European leadership,” said Quincy Krosby, a market strategist at insurer Prudential Financial. “The elections were a strong message for pro-austerity leaders from the people.”

Initially, traders also bought up ultra-safe Treasurys overnight when stock markets in Europe were falling. That pushed the yield on the 10-year note as low as 1.83 percent early Monday morning, a level it hadn’t reached since early February. However, the yield rebounded to 1.88 percent in late trading, the same level it was at late Friday.

Earlier in Asia, Japan’s Nikkei index plunged 2.8 percent to its lowest finish in three months. In addition to Europe’s elections, it was also the first time for investors in Asia to react to a weak jobs report Friday in the U.S. Hong Kong’s benchmark Hang Seng index slid 2.6 percent.

Among U.S. stocks that made big moves:

_ Disney rose 2 percent after its movie “The Avengers” pulled in $80.5 million in its domestic debut Friday, the second-best haul ever on opening day. The movie was made by Disney’s Marvel Studios unit and is based on Marvel Comics heroes.

_ Cognizant Technology Solutions plunged 19 percent after the information technology services provider lowered its forecast for the full year on low demand, echoing the bleak outlook from other rivals due to uncertainty in the global economy.

_ Meat products maker Tyson Foods rose over 3 percent after reporting an increase in its second-quarter profit on higher beef and chicken prices.

_ Frontier Communications fell 7 percent after the regional telecommunications provider said it was losing residential and business customers. The company had bought rural landlines from Verizon Communications two years ago, which led to several quarters of growth last year.

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The Czech government

The Netherlands, the fifth-largest economy in the euro region, no longer belongs to the core of the common currency and may face rising borrowing costs, Citigroup Inc. said.

Orders to U.S. factories rose in December, supported by a rebound in business investment in capital goods such as heavy machinery.

The results cap off another strong year for U.S. manufacturing. Combined with strong figures released Thursday on job growth in January, they signal the economic recovery is gathering strength.

Factory orders rose 1.1 percent following a 2.2 percent gain in November, the Commerce Department reported Friday. For the year, total orders were up 12.1 percent following a gain of 12.9 percent in 2010. Orders had plunged 22.1 percent in the 2009, the year the deep recession ended.

For December, orders for so-called core capital goods, which are viewed as a good measure of business investment plans, rose 3.1 percent to an all-time high. That gain was driven in part by a rush by businesses to take advantage of expiring tax breaks.

The advances in 2011 pushed orders for the year up to $5.36 trillion, still slightly below the peak of $5.44 trillion set in 2008.

For December, orders for durable goods, items expected to last at least three years, rose 3 percent, a figure that was unchanged from a preliminary report last week. Orders for nondurable goods slipped 0.4 percent, reflecting declines in petroleum products.

The orders category that signals business investment plans, non-defense capital goods excluding aircraft, climbed to an all-time high of $68.9 billion in December.

While some of that surge likely reflected a rush to make orders before investment tax breaks expired at the end of last year, many economists believe the boom in spending on new equipment will continue even with the tax breaks gone because there is a large amount of pent-up demand on the part of businesses to modernize their operations.

Companies are hiring more, factories are making more goods and more people are buying cars. Those positive signs for the economy have to be balanced against the threat that Europe’s prolonged debt crisis is acting as a drag on global growth. That would hurt sales of U.S. exports.

In December, orders for commercial aircraft were up 18.9 percent, orders for autos increased 1.7 percent and demand for heavy machinery rose 6.7 percent, reflecting strong demand for oil field equipment and construction machinery.

Manufacturing has been a bright spot in the recovery, although there was a slowdown in the middle of last year as factories dealt with supply shortages caused by the Japanese natural disasters that occurred in March.

The Institute of Supply Management reported this week that its gauge of manufacturing activity expanded in January at the fastest pace in seven months. The index rose to 54.1, up from 53.1 in December. Readings above 50 indicate expansion and the index has been in expansion territory for 30 straight months.

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European Union Economic and Monetary Affairs Commissioner Olli Rehn said authorities are

Just as the jobs recovery seemed to be picking up, the number of Americans filing for first-time unemployment claims rose more than expected last week.

The Labor Department reported Thursday that 399,000 people filed for initial jobless benefits, up 24,000 from the week before. That’s awfully close to the 400,000 level economists often say is too high to bring the unemployment rate down substantially.

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Obama battles job crisis

Before Obama even took office, America had lost 4.4 million jobs. Track his progress since then.

But it’s too early to start worrying just yet. The encouraging news brought by last week jobs report is not off the table, economists say guaranteed fast personal loans.

"This can be a wonky period for claims," Jennifer Lee, senior economist with BMO Capital Markets said in a note. "So let’s give this a few weeks to see how it plays out."

The initial claims numbers are adjusted for seasonal trends, but economists still had expected a slight tick up last week due to temporary holiday jobs ending.

Many caution not to read too much into one week of data. They look instead to the four-week moving average, which smoothes out volatility. It also ticked up last week, but overall, has remained near the lowest levels since 2008 for about a month.

"We continue to view the labor market as gradually gaining momentum, so anticipate that claims will resume a modest downward trend in the coming months," Troy Davig, senior U.S. economist at Barclays Capital said in a research note.

Meanwhile, just over 3.6 million Americans filed continuing claims in the week ending December 31. That marked an increase of 19,000 from the week before.

The Labor Department’s monthly report released Friday showed employers added 200,000 jobs and the unemployment rate fell to 8.5% in December. (Check the unemployment rate in your state). 

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American bought more cars and trucks last year, spurred by easier credit, an improved economy and a desire to replace the aging vehicles that got them through the Great Recession.

Sales rose sharply for Detroit’s three carmakers and for Japan’s Nissan in 2011, aided by a surge in November and December. Analysts expect that momentum to continue into 2012.

Low interest rates, looser credit standards and pent-up demand are driving demand. The average age of a car on U.S. roads is the oldest ever, closing in on 11 years. Americans want to trade in those older vehicles now that a tentative recovery has begun and they’re feeling a little more secure about jobs and finances.

Buyers also were drawn out by an array of high-quality small cars with nice, roomy interiors and more features than in the past. That made it easier to downsize from bigger cars amid high gas prices. Pickups also sold well as business began to replace the trucks they need to haul equipment.

Those trends were good for the industry, which needs sales to keep growing after a scary drop in 2009. Healthy sales are also good for the economy, which benefits from jobs created by carmakers and spending by buyers.

After final figures are tallied late Wednesday, U.S. auto sales should rise to around 12.7 million for 2011. That’s a 10 percent jump from 2010 and 22 percent from 2009, when the U.S. auto industry and the financial system were in peril. Sales are almost certain to rise again in 2012, perhaps as high as 13.8 million, marking the third straight year of growth.

“Over the course of the fourth quarter of 2011, clear signs emerged that U.S. consumers are more confident and that other underpinnings of our economy are either stable or slowly improving,” said Don Johnson, GM’s U.S. sales chief.

Chrysler led the 2011 sales gains with a 26 percent increase, followed by Nissan at 15 percent, GM at 13 percent and Ford at 11 percent, the companies reported Wednesday.

For December, Chrysler sales surged 37 percent from a year earlier on strong demand for the Jeep Wrangler and the Chrysler 200 sedan. GM was up 5 percent for the month, aided by the Chevrolet Cruze compact and pickup sales. Ford sales rose 10 percent, led by the new Explorer SUV. Nissan sales rose nearly 8 percent for December.

Chrysler Group LLC’s strong showing for December capped a remarkable turnaround under its new Italian ownership. And it’s expected to jump ahead of Honda as the No. 4 U.S. automaker in 2011.

Chrysler and GM nearly ran out of cash in 2009 and needed government help and a trip through bankruptcy protection to survive.

Chrysler, now majority owned by Fiat SpA, sold 1.37 million vehicles last year, about 284,000 more than in 2010. It has introduced 16 new or revamped models in the past two years, vehicles that have fueled its recovery.

Sergio Marchionne, CEO of Chrysler and Fiat SpA, is predicting a net profit for 2011 of $600 million.

“Over the past 12 months, we successfully changed the conversation from Chrysler’s survival to products and service that consumers expect and want from a great American automaker,” Marchionne said in an e-mail to employees.

Nissan sold just over one million cars and trucks last year, its best calendar year ever. The company said it sold 944,000 Nissans and more than 98,000 of its Infiniti luxury cars and SUVs. Previously, 2007 had been the company’s best year.

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Covidien plc will spin off its Hazelwood-based drug business, turning it into an independent company that may restore the historic corporate name of Mallinckrodt.

Covidien, based in Dublin, makes medical devices and medical supplies in addition to drugs. The proposed spinoff also will have its legal headquarters in Ireland, largely for tax reasons, company executives said in a conference call.

But the spinoff’s U.S. operation will be based in Hazelwood, and its new CEO will work from here. Spokesman Steve Littlejohn said the company has not made a final decision on its name, “but chances are good that it will be Mallinckrodt.”

Covidien’s pharmaceutical business has $2 billion in sales, with two-thirds of that coming in the U.S. market. It turned an operating profit of $318 million this fiscal year.

The drug business is a large provider of acetaminophen, the ingredient in Tylenol, and the largest U.S. supplier of opioids; both are pain medicines. Other lines include contrast products used with medical imagery and nuclear medicine products.

The pharmaceutical operation currently employs about 2,500 people in metro St. Louis. A company spokesman said the move should have no immediate impact on jobs here. Some jobs might be added as the firm sets up its own administrative operation.

Analysts had speculated that Covidien might get rid of the drug operation. Although profitable, it is less lucrative than the rest of Covidien and demands a higher investment in research and development. The drug operation earns a 16 cent operating profit for every dollar of sales, compared with 28 cents for the rest of the company.

The drug operation has a “lumpy” revenue history, notes analyst Aaron Vaughn of Edward Jones in Des Peres. The division is largely a generic drugmaker, and that sector suffered through a price war in past years, he noted.

“We thought they would be getting the business right-sized so that they could spin it off and let it grow on its own,” he said.

Covidien Chief Executive Jose Almeida said the pharmaceutical drug division’s performance had improved in recent years.

“We’re confident the business can now stand on its own,” he said in a conference call Thursday morning.

He said the company had been thinking about shedding the business for several years, citing “major differences” between drugs and Covidien’s other medical products. The operations have different business models, sales channels, customers and capital requirements, and demand different talents, he said.

Separating the operations would allow both to focus on their own strategies, Almeida said payday loans no teletrack. Shareholders also might get more value over the long term, he said.

The drug business “definitely needs some investment,” said analyst Jeff Jonas of Gabelli & Co. in an interview with Bloomberg News. “They need to find new products, invest in the pipeline. That’s a multiyear process.”

Research and development consumes 7 percent of revenue in the drug division, compared with 4 percent in the rest of Covidien.

The spinoff would be in the form of a stock distribution, tax-free to U.S. shareholders, the company said. That tax-free aspect made the option of a spinoff superior to the alternative of selling the unit, company officials said.

The spinoff could take 18 months to complete and would need approval of regulators.

Bloomberg News, citing unidentified sources, reported last summer that Covidien had tried to sell the unit, but talks broke down.

Almeida said he has picked a CEO for the new company, although he didn’t name the person. The person is a ’strong leader” with “broad pharmaceutical experience,” Almeida said, and will join the spinoff from another company.

The drug operation is now headed by Matt Harbaugh, the drug division’s chief financial officer serving as interim president. Based in Hazelwood, he has led the unit since the previous president left last year.

Besides its Hazelwood headquarters, the drug unit has a research operation in Webster Groves, a nuclear medicine facility in Maryland Heights and a plant just north of downtown St. Louis.

That plant sits on what was the Mallinckrodt family farm. G. Mallinckrodt & Co. was founded there in 1867 and grew up as a chemical and drug firm. It refined uranium for the Manhattan Project, which created the atomic bomb during World War II.

Avon Products acquired Mallinckrodt in 1982. Avon sold the company to International Minerals and Chemical Corp. in 1986, which later changed its own name to Mallinckrodt.

In 2000, Tyco bought the company. After Tyco went bankrupt amid scandals, its health care operations were spun off as Covidien in 2007.

Without the drug business, Covidien would have $9.6 billion in sales. Covidien’s remaining business makes trays, hypodermic needles, retractors, pumps for patient feeding and pain management, and other medical devices.

Covidien stock rose $1.39 to $43.55 on Thursday.

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