Each week, Report on Business editors choose five stories that shouldn't be missed. Here are the 'must reads' for the week of June 14, 2010.
To understand Humphrey Kadaner's reinvention of music retailing, consider the latest twist on an old product: headphones. In December, as he strolled through HMV stores in Hong Kong and Singapore, the president of HMV Canada was struck by the skyrocketing sales of headphones - and not just any headphones. Fur-lined ones. Lime green ones. Headphones, he realized, have become a fashion statement, and the accessories served to lure teens and twenty-somethings into those HMV stores as they looked for ways to personalize their portable music players. Now Mr. Kadaner is betting on headphones as a way to draw young people back to his chain after they abandoned it to the digital world. In a bid to broaden his offerings beyond music, he's counting on transforming HMV into an entertainment retail hub. His efforts, including a rewards program that launches on Monday and an expansion into digital music later this month, are aimed at heading off double-digit annual sales declines in the traditional music industry.
A three-way mix-up involving investors, their financial firms and the federal government has left 70,000 people with potential tax bills for over-contributing to their Tax-Free Savings Accounts. Glitches are inevitable when a new savings program such as the TFSA is introduced, but this one involving over-contributions is a beaut. Because of a misunderstanding about the TFSA rules, people have received notices from Canada Revenue Agency informing them they may have to pay penalties, in some cases of several hundred dollars, on excess contributions to their plan.
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Investor Education: TFSAs |
Frank Yeung wanted out of Goldman Sachs when he realized that traders a few years older than he were kept captive by what he calls "golden handcuffs." And when he looked at their boring lunches, he knew he'd found his escape route. "The guys six or seven years ahead of me had big houses and big holidays and their kids went to private schools, and they were completely trapped," says Mr. Yeung, 25, who spent two years as an equities trader at Goldman Sachs in London after graduating with a master's degree in math and physics from Oxford University. "None of them were happy. I knew it wasn't for me." When Mr. Yeung finally saw an exit hatch, it was shaped like a burrito. On a business trip to New York, he noticed that the Mexican wrap was a hugely popular lunch food - cheap, filling and portable. Yet no one was selling them to the business crowd in London, where the sandwich holds a lunchtime hegemony.
For a man who has engaged in high-profile battles with institutional investors for much of his corporate life, Frank Stronach seems blasé about their opposition to a deal that is worth $863-million to him. "You've got very sophisticated institutions," Mr. Stronach said Thursday in his first public comment since some large Magna International shareholders began venting their displeasure over the proposed buyout of his controlling stake in the company. "They've got their own money on the line and they can decide. It's as simple as that."
It must have seemed like a good idea at the time: Bring thousands of the world's leaders and high-level bureaucrats to Toronto for a couple of days, wine and dine them between high-level discussions about geopolitics, and send them home with fond memories of a satisfying convention and a winning tourist destination. But if the predictions of some marketers are correct, Toronto's G20 summit next weekend will not be just a lost opportunity to market the city, but might significantly hurt its brand.