Seneca Foods is one step closer to purchasing the canning division of Allens Inc., as the $148 million stalking horse bid for the Siloam Springs company was approved by bankruptcy judge Ben Barry after taking the matter under advisement earlier this week.

The court approval of the Seneca bid officially sets the stage and the clock for any potential suitors who want to try and purchase Allens’ assets from the bankruptcy court.

As previously announced, Allens entered into an asset purchase agreement under which Seneca Foods Corporation intends to acquire substantially all of the Allens canning operations in a court-supervised process under Section 363 of the U.S. Bankruptcy Code.  

The asset purchase agreement sets the floor for an auction that is designed to achieve the highest or otherwise best offer for these assets. Allens also is seeking bidders for its frozen operations in Montezuma, Ga., and intends to sell the assets through the auction process.
 
On Jan. 7,  the court approved the proposed bidding procedures and bid protections for the sale process. The court also set deadlines for interested parties to submit qualified bids to acquire substantially all of the company’s assets and set dates for an auction and sale hearing related to the sale.
 
EMPLOYMENT CONCERNS
Allens said it continues to operate the business in the ordinary course, focusing on its core canned vegetable markets. Although Allens employees have received notification that their jobs may be terminated as a result of the sale process, the company expects that the majority of personnel will be offered continued employment by the winning bidder.

“The court’s approval of the bidding procedures and bid protections is another important milestone in the process that is intended to maximize the value of Allens,” said Jonathan Hickman, chief restructuring gfficer of Allens. “We are encouraged by the continued interest Allens has received for our canning operations and other assets and we are committed to an outcome that provides the most value for our creditors.”

Bankruptcy documents show that Allens employs 1,173. Of that, 766 are hourly, 162 are salaried and 319 are temporary workers hired through staffing agencies.
 
Under the approved bidding procedures, interested parties must submit qualified bids to acquire the assets of the company no later than 5 p.m. on Jan. 27. In the event qualified bids in addition to the stalking horse bid are received, Allens will hold an auction on Feb. 3. The Court has scheduled a final sale approval hearing for Feb. 10, with the closing anticipated to occur shortly thereafter.

Second lien holders filed an objection to the terms of the stalking horse bid with the court citing excessive break-up fees should Seneca lose out to another bidder. The court ordered a $4.5 million break-up fee unless it is one of the second-lien creditors who wins the successful bid, and in that case the break-up fee would be $3 million, according to the court records.

ALLENS' HISTORY
According to the company website, Allens is a family-owned vegetable processing company that began as Allen Canning Company in 1926 near Siloam Springs. The company expanded production during World War II, and during the 1970s added several new brands to its portfolio, including Popeye Brand Spinach.

Allens officials made several moves in 2012 to shore up business, including a March 2012 announcement that Allens was selling six frozen vegetable brands to the French company, Bonduelle Group.

The company also announced in early 2012 that the company would move operations and 150 jobs from Van Buren into an Allens canning operation in Siloam Springs. The company’s Van Buren warehouse operation was expected to remain open.

Consolidating the canning operations came more than 30 months after Van Buren operations were expanded. In June 2010 the company announced a more than $20 million expansion that included a $13.5 million investment in the company’s Van Buren operation. The $13.5 million investment in Van Buren expanded the company’s capacity to process sweet potatoes.

Fort Chaffee Redevelopment Authority Executive Director Ivy Owen has been appointed alternate Arkansas state director on the board of the Southern Economic Development Council, according to a press release.

Owen was chosen by a group of his peers within Arkansas, the release said, with his one-year appointment having become effective Jan. 1 and expiring on the first day of 2015.

The FCRA executive director, who has been a member of SEDC for almost five years, was praised by Hal Johnson, incoming chairman of the SEDC board.

"Ivy Owen is a consummate professional, his experience and leadership will not only help us meet our goals, but also continue our efforts in raising the bar for SEDC and our membership."

Owen said he was thankful for the appointment, adding that the honor from his peers in economic development was touching.

"I am honored to be appointed to the Board of the SEDC. This honor means more because it's by recommendation of my peers that this appointment happened," he said. "I will work diligently through the SEDC Board to promote economic development in Fort Smith and the region."

According to the press release, the SEDC is a 950 member, non-profit organization composed of a broad cross-section of active and influential industrial economic developers from business and industry, utilities, transportation, financial and education institutions, chambers of commerce, and local, regional and state development agencies.

John Brown University report its online bachelor program has been named one of the top 100 programs in the nation by U.S. News and World Report.


The magazine released the “2014 Best Online Program” rankings on Wednesday, Jan. 8.  More than 1,000 online programs were considered for ranking, according to the report. John Brown University tied with two other universities at No. 77.

“From the very beginning of our online programs, our goal was to bring the quality of JBU’s traditional classroom experience to the digital realm,” said Dr. Ed Ericson, vice president for academic affairs. “This endorsement from U.S. News putting us in the top 10% of online programs nationally speaks to the quality education our online students receive.”

Several factors are incorporated into the U.S. News ranking, including student engagement, faculty credentials and training, peer reputation, student services and technology.

“We hear a lot of feedback from our online students about the rigor of our online classes, which they appreciate,” said Susan DeWoody, dean of degree completion and non-traditional programs. “More importantly, our students value the responsiveness of our faculty and the integration of faith into our classes, which is the same for online students as in our physical classrooms.”

JBU offers online bachelor’s degrees in business administration and liberal arts through its degree completion program. JBU offers five online graduate degree programs: MBA in Leadership and Ethics; MBA in International Business; MBA in Global Continuous Improvement; Master’s in Leadership and Ethics; and Master’s in Higher Education Leadership.

Clarity Pointe Fayetteville, an assisted living community dedicated to the care and treatment of Alzheimer’s in Northwest Arkansas, appoints Linda Vigil as director of community outreach. The facility is under construction with anticipated completion in the spring of 2015.

Clarity Pointe Fayetteville’s pre-opening efforts are being managed from temporary offices in the McKee Business Center. As a certified assisted living administrator with 25 years of experience in senior housing and healthcare marketing, Vigil has been instrumental in opening numerous assisted living and memory care communities across the country. 

Since moving to Northwest Arkansas seven years ago, Vigil has established key relationships with older adults, their families and healthcare providers. She has held marketing management positions at Culpepper Place Assisted Living and Walnut Grove Nursing & Rehab in Springdale, as well as Peachtree Assisted Living Communities. 

With a bachelor’s degree in marketing and master’s in gerontology, Vigil is an ambassador for the Springdale Chamber of Commerce; a board member of Health Care Marketing Alliance of Northwest Arkansas; a member of Case Managers Society of America; and a Community Advisory Committee member for the Schmieding Center for Senior Health and Education.

The Ozark Affiliate of Susan G. Komen announced Marilyn Bielema, mother of Arkansas Razorback Head Football Coach Bret Bielema, will join Shelley McMillon as an honorary co-chair for the 2014 Annual Komen Ozark Race for the Cure on April 26, 2014.

Bielema is a three-time breast cancer survivor and a passionate supporter of breast cancer research and awareness. 

“If my story can help one woman make the decision to get her mammogram, then everything I have been through is worth it,” said Bielema.  “I am so excited to come to Arkansas and celebrate the wonderful people who make this race great. As a mom and a survivor, there is no other place I want to be on April 26.”

Bielema is a retired day care operator and still lives Prophetstown, Ill., where she and Arnie, her husband of 53 years, raised their family.

 “As a fellow survivor, I have been inspired by Marilyn’s story, “said Kari Nikolish, president of the Komen Ozark Affiliate board of directors.  “She is a passionate advocate for women’s breast health and I admire her courage.  We are very fortunate to have such an enthusiastic champion come be part of the Komen Ozark team this year.”
 
This is the 16th year the race will be held in Northwest Arkansas and the sixth year racers will run the course at the Pinnacle Promenade in Rogers. Registration is open and teams are currently forming.
 

Families across the country and local region may not go for out for dinner, but research shows they will plunk down an average of almost $300 per weekend when they travel with their children’s youth sports teams.

Dev Pathik, CEO of Sports Facilities Advisory in Clearwater Fla., told The City Wire that spending on sports travel has steadily risen during the past few years and is largely fueled by youth sports. He said families collectively spend $192 million per day supporting their children’s sports activities. That ranges from gear, uniform fees, private lessons and travel to games often played each weekend during their appropriate seasons.

“Many think they must invest this in their children from a young age if they are going to have the skills necessary to make a high school team, or perhaps secure a college scholarship,” Pathik said.

SFA research released in December 2013 found that net positive spend from 2012 to 2013 increased 22.6% in team sports at school, 16.7% in team sports outside of school and 15.9% in lessons and sports camps.

CAPTURING THE IMPACT
Youth sports and sports-related travel is creating an approximate economic impact of $7 billion per year, according to Pathik. Cities across the country have taken notice in recent years and competition for hosting tournaments for travel ball has become intense, he added.

“It’s not enough to just build a complex and think the masses will come,” Pathik told The City Wire.

He said municipalities can take advantage of the resilience of sports travel but these efforts need to be properly evaluated and planned. There are certain criteria that make a city attractive or unsuitable to events owners and decision makers.

His firm has worked with cities such as Gatlinburg, Tenn., to study the impact that large sports complexes can have on their communities. SFA also is engaged in the lead development and will provide ongoing management of facilities.

He said the $20 million Rocky Top Sports World in Gatlinburg is set to open this summer and features seven outdoor fields, including a track and stadium suited for championship play. There is also an 86,000 square-foot indoor facility that features six basketball courts and 12 volleyball courts.

Nestled in the Smoky Mountains, Pathik said Gatlinburg already gets its share of visitors and soon there will also be a major sports draw to that community.

Kalene Griffith, CEO of the Bentonville Convention and Visitors Bureau, said all of the major cities in Northwest Arkansas actively work to recruit youth and amateur sporting events to the region because they have long benefited from the economic impact of the extra visitors related to sports travel.

Studies show that 27% of all trips made in the U.S. relate to attending a sporting event of some kind, from professional and college games to youth and amateur sporting events.

“A few years ago, we held an AAU basketball tournament, ‘Real Deal on the Hill,’ and over a four-day period the economic impact was $1.2 million for the local region” as 200 teams took part, playing games in all of the four major cities, Griffith said.

That tournament is now played in Little Rock, she said.

In February, Griffith said the city will host the Bentonville Classic, a NCAA preseason softball tournament for 29 teams from up to 8 states.

“This tournament has grown from 12 teams just three years ago. Each team brings in between 18 and 20 people,” Griffith said. “This is one way the city works to keep the local hotels full in months when convention travel is typically low. It is also a great draw for our local residents who enjoy watching college softball.”

Pathik said research shows girls’ sporting events tend to have a slightly larger payback than similar events from boys sports.

“Girls bring more parents and grandparents to their games and they like to shop more I guess,” he said.

FACILITIES ON TAP
Springdale and Rogers also each recognize the value associated with constructing new sports complexes, not only for local use, but also to spur tourism within their cities throughout the year.

In August 2012, Springdale residents approved a $71 million bond issue that included $17 million for a proposed multi-use park that would be a combination of recreation space like Murphy Park and sports facilities like Tyson Park. Mayor Doug Sprouse said Tyson park was built in the 1980s and the city has just added three softball fields since that time.

“Our city has experienced tremendous growth since the late 80s and we just don’t have nearly enough recreation space for our own residents. Not to mention we are missing out of added sales tax revenue from the hospitality side of this issue because sports teams are going elsewhere to host tournaments,” Spouse said.

Roger Davis, general manager for the Holiday Inn and Convention Center in Springdale, said the city and chamber have increased efforts to recruit more sports teams to host tournaments in Springdale. Davis also serves as a member of the local advertising and promotion commission.

“We have a great deal of interest from soccer associations to hold tournaments in Springdale, but there simply aren’t enough fields. The same is true with softball and baseball. Meanwhile our neighbors in Rogers are building new fields and Bentonville has done a terrific job tapping this market,” Davis said.

He said when the city has hosted large sports events like Pitch for the Cure, hotels are full with players and families from outside the area, who eat, buy gas and stay over for two days or more. Griffith said the entire region helps accommodate Pitch for the Cure because 200 teams participate and bring thousands of dollars to the region over the three-day period.

Sprouse said he has become a believer that parks are part of the quality of life piece that Springdale must promote like it’s neighbors to the north and south if it’s going to continue to grow a certain segment of its population.

“The city has bought 70 acres on the southeast side of town for a large park that will have new baseball fields, soccer fields, a football field, tennis courts and a splash pad. We hope to equip these baseball fields with all-weather infields,” Sprouse said.

He said the fields should be finished by spring 2015. Meanwhile three of the softball fields at Tyson Park will be converted to baseball fields once the softball fields in the new park are completed.

Another 120 acres have been purchased by the city of Springdale for a large sports complex on the west side of town, with completion in the next couple of years.

FACILITY PAYBACK
The city of Rogers earmarked $26.8 million of a 2011 bond issue for new ball fields and an $12.9 million aquatic park that opened last May.

The new softball/baseball park opened this past year with six fields and by 2015 the city will have added five new soccer fields and a football field at Veterans Park on the east side of the Rogers, said Frank Adase, sports marketing manager for the Rogers Convention and Visitors Bureau.

Adase works full-time at recruiting sports tournaments to the city and said the new fields which opened in 2013 made a huge impact in the number of tournaments and visiting teams. The city parks division confirmed they hosted 26 tournaments during 2013, a 225% increase from eight tournaments held in Rogers in 2012. There have been 17 tournaments scheduled so far for 2014, according to Jody Sands, spokeswoman with the parks department.

Adase said the competition for large youth sporting tournaments is fierce and top notch facilities are an absolute necessity.

“Between March 1 and July 1 there are 19 weekends, we have tournaments booked on the new fields for 15 of those and our city recreation league will be using them during the weeknights,” Adase said.

He said as lacrosse is growing in popularity the city now hosts two large tournaments in April for that sport.

TEAM SPORTS GROWTH
A report released in November by SFA found there were 12.224 million teams of youth sports for ages 10 to 14 across the U.S. in 2008. Over the next three years the number of team sports for the same age groups increased by roughly 2%.

In total, there are some 50 million youth participating in team sports across the country.

Participation in team sports for children between the ages of 6 and 12, compared to 2009:
• Gymnastics 52%, up 4%
• Soccer 45%, down 3%
• Baseball 37%, up from 32%

Between the ages of 13 and 17, participation in team sports compared to 2009:
• Track and field 48%, up from 44%
• Football 40%, up from 34%
• Lacrosse 34%, up from 33%
• Court volleyball 31%, up from 29%
• Cheerleading 30%, down from 35%

Tyson Foods sent a letter to its hog suppliers dated Jan. 8. that reflects a new set of animal welfare guidelines involving sow farm operations, including a shift away from sow gestation crates.

The Springdale-based meat giant had stood firm in recent years on the use of gestation crates of female hogs. These narrow metal enclosures hold the female pigs during their pregnancy, until they are moved to a farrowing crate a few days before birth, where they can lie down and nurse the piglets.

But Tyson reversed that stance this week on the heels of an earlier announcement by competitor Smithfield Foods who offered its suppliers cash incentives to abandon the use of gestation crates – a move it made with its own hog-raising operations in 2007.

In the Tyson letter to its hog suppliers, the company outlined five desired improvements in its animal welfare program that it expects suppliers to adopt. As part of FarmCheck, the company's ongoing animal well-being program, Tyson said it is increasing audits of sow farms.

"The third-party audits we began in 2012 are important in our efforts to help ensure responsible on-farm treatment of animals and we believe more audits will further validate good sow farm management practices," the company said in the letter, signed by Shane Miller, senior vice president, pork division, and Dr. Dean Danilson, vice president of the company’s animal well being program.


The new guidelines include:
• Tyson asking its contract farmers to install video monitoring systems by the end of 2014 and urging them to use video monitoring of their operation to increase oversight and biosecurity risks.

• Tyson urging its pork suppliers to improve "quality and quantity of space" standards in the design of any new or redesigned gestation barns beginning in 2014. "Whether it involves gestation stalls, pens or some other type of housing, we believe future sow housing should allow sows of all sizes to stand, turn around, lie down and stretch their legs," Tyson said.

• Tyson recommending that suppliers discontinue use of manual blunt-force trauma to euthanize sick and injured piglets as that practice "may not match the expectations of today's customer's or consumers" although it has been acceptable in the industry.

• Tyson’s support of the use of anesthetics and analgesics as pain mitigation for tail docking and castration of piglets. Tyson said current industry practices could use improvements and it will fund research to further improve practical pain mitigation methods for these routine procedures.

Tyson noted there are varying opinions on the issues addressed in its letter, but the company's stance is an effort to "balance the expectations of consumers with the realities of today’s hog-farming business.”

One animal activist group and Tyson shareholder, the Human Society of the United States, has repeatedly asked Tyson to require its hogs suppliers to abandon the use of gestation crates as more food companies such as McDonald’s have refused to source pork from companies who allow crating.

“While the letter contains several promising points on a variety of issues, like encouraging a shift away from 'euthanizing' sick or injured piglets through blunt force trauma and urging the development of pain relief during castration and tail docking, the stand-out, in our view, is Tyson’s language on the issue of sow gestation crate confinement,” said Anna West, spokeswoman for the Humane Society of the U.S.
 
She said unfortunately, Tyson’s letter does not mandate anything of its suppliers with regard to sow housing, nor does it outline any timeline by which alternative housing systems must be in place. 

“Nonetheless, this is big movement from an important company. Tyson may still have a ways to go when it comes to shoring up a gestation crate-free supply system, but its first steps on this issue – like all steps on the path toward a more humane way of living or conducting business – are most welcome,” West added.

Wal-Mart Stores Inc. outlined a long list of leadership and organizational changes for its growing global retail operations. Notice of these changes were given to corporate employees on Thursday (Jan. 9) via a 10-page internal memo, that was also obtained by The City Wire.

“Our customers’ needs are rapidly changing around the world, and they have very high expectations of us. Over the coming years, the global environment we operate in will continue to change and with great speed. So that means our business must evolve quickly so we continue to outpace and exceed our customers’ expectations,”according to the memo from CEO Mike Duke and incoming CEO Doug McMillon.

As McMillon takes the reins from Duke on Feb. 1, more than a dozen other managers and executives will also shift their positions, while Cathy Smith, chief financial officer for Walmart International will exit the company. As previously reported David Cheesewright will become CEO of Walmart International on Feb. 1.

“Cheesewright will continue to have a home in Toronto, and will also maintain a residence in Bentonville. He will be in Bentonville regularly, and will spend time in our markets across the globe,” said Walmart spokesman Kevin Gardener.

A replacement for Cheesewright has yet to be named.

OTHER INTERNATIONAL MOVES
Tony Rogers, senior vice president of marketing for Walmart U.S. has been named chief marketing officer-Walmart China, reporting to Sean Clarke, chief operating officer-Walmart China. In this role, Rogers will be responsible for the marketing of Wal-Mart’s Hypermarket business in China. Additionally, he will work closely with Andrew Miles, chief operating officer-Sam’s Club China and his marketing team to grow the Sam’s Club brand in China while helping to build an even stronger member base.

Rogers joined Wal-Mart in 2005, and since has helped lead the retailer’s U.S. marketing efforts in print, TV, radio and numerous interactive channels. He has a bachelor’s degree in marketing from the University of Texas. Pending work authorization, Rogers will begin work in China Feb. 10.

John Welling, senior vice president for supply chain management, information systems and global business process for Walmart Japan, will move to Canada, assuming the role of SVP of operations for Walmart Canada. Welling will work with the regional operations teams to ensure consistency for all activities that impact Walmart’s stores and customers in Canada. He joined Wal-Mart in 2006 and has a bachelor’s degree in industrial engineering and business management from Bradley University in Peoria, Ill. Welling will begin work in Canada March 3, pending work authorization.

With Welling’s move to Canada, Geoff Sease, vice president of replenishment, planning and space for Sam’s Club has been named as Welling’s replacement in Japan as SVP for supply chain management. Sease joined Wal-Mart in 2000 and was promoted to VP of Sam’s Club Logistics and Supply Chain in 2007. He has a bachelor’s degree in economics from North Carolina State University and a master's degree in business administration-logistics from the University of Tennessee. He will begin work in Japan Feb. 10.

FINANCE TEAM SHAKEUP

Brett Biggs, will replace Cathy Smith as chief financial officer for Walmart International as she has accepted a leadership postion elsewhere. Meanwhile, treasurer Jeff Davis will takeover as CFO for Walmart U.S., a position being vacated by Biggs. who is now serving as EVP and chief financial officer for Walmart U.S.

Biggs also will assume responsibility for finance, international real estate, and will continue to report to Charles Holley, chief financial officer for Walmart Stores Inc.

Claire Babineaux-Fontenot has been promoted to treasurer, and will retain the chief tax officer responsibilities while she assumes additional responsibilities for investor relations, capital markets and treasury operations.

Lisa Wadlin, VP of international tax was promoted to VP over global tax and she will report to Fontenot.

Steven Zielske, chief audit executive, will be the new the Senior Vice President, Finance Capital Markets, reporting to Claire.

Stuart Campbell will join Wal-Mart on Feb. 3 as chief audit executive. He joins Wal-Mart from KPMG International, where he recently retired as global chief information officer. He also has served as partner-in-charge of information risk management at KPMG and a general auditor for Wells Fargo & Co. Stuart has a bachelor's degree in economics from the University of Southampton, England.

Lori Flees will join Walmart on Jan. 13 as senior vice president of corporate strategy. She leaves Bain & Co, where she was a partner in the consulting firm. Prior to that she held roles at Intel and General Motors.

SAM’S CLUB CHANGES
In 2014, Sam’s Club is being fully integrated with Walmart’s Global eCommerce business unit as Sam’s Club works to deliver personalized shopping experiences that the retailer hopes will spur more growth, according to the memo.

Jamie Iannone is joining Wal-Mart to lead this effort as the new president and CEO of Samsclub.com, effective immediately. The entire Sam’s Club eCommerce team will report to Iannone, who will be based in San Bruno, Calif., reporting to Neil Ashe, president and CEO of Walmart Global eCommerce, as well as Rosalind Brewer, CEO of Sam’s Club.

John Boswell, SVP of marketing and member insights will leave Sam’s Club in May to lead an international mission for his church. With Bowell’s departure, Racquel Harris is being promoted to SVP for member strategy and marketing for Sam’s Club. She joined the company in 2012 and has nearly 20 years of marketing experience with Kraft Foods and IBM.

Sonya Gafsi Oblisk, senior marketing director for Sam's Club, will succeed Harris as VP of marketing. She joined the company in 2008 working with private brands.

Skot Covert, a native of Ozark and recent graduate of Arkansas Tech University, has joined Impact Management Group as director of Digital Media.

In this new capacity, Covert will be responsible for directing digital strategy for corporate and political clients to include website design, social media campaigns, and digital marketing.

“Skot is very talented and will add a lot of energy to our firm and give us the capability to offer digital support to our clients,” said Richard Bearden, the firm’s Managing Partner.

Covert is the National Co-Chairman of the College Republican National Committee and previously served as the state chairman of the Arkansas Federation of College Republicans. He graduated ATU with a degree in emergency administration and management.

Covert is excited about the new opportunity.

“Regardless of what you do, there is great value in being part of a team,” said Covert. “Impact Management Group is one of the market leaders in corporate and political communications and is full of very talented people. I’m excited about the opportunity to be part of that team and add value to what they do.”

Impact Management Group is a Little Rock based public strategy firm specializing in public relations, public opinion, and public affairs. They are entering their 15th year of business.

Tupelo, Miss.-based BancorpSouth is buying Ouachita Bancshares, a small regional bank with based in Monroe, La., and holding assets of $652.5 million.

BancorpSouth, which has more than $12.9 billion in assets, is acquiring the bank in a cash and stock deal with a top value of $112 million. Ouachita has Louisiana bank offices and branches in the Monroe-West Monroe area, Shreveport-Bossier City area and in Bastrop.

"We are very pleased to announce the first bank transaction for our Company since 2007," Dan Rollins, CEO of BancorpSouth, said in a statement. "We are excited about the opportunity to partner with the professionals at OIB. This transaction will give us the opportunity to significantly enhance our market share in both the Monroe-West Monroe and Shreveport-Bossier City markets. It will also provide an opportunity to enter the Bastrop market, a market which we've not previously served."

Clyde White, who recently retired from active day-to-day management of OIB, will continue to serve as chairman of the Board of OIB until the merger is completed. Kevin Koh will continue to serve as OIB's CEO until the merger is completed. After that date, he will become BancorpSouth's Division President with responsibility for Northeast Louisiana markets including Monroe-West Monroe.

Lee Copeland, BancorpSouth's Division President for North Louisiana will continue to serve as Division President for BancorpSouth's Northwest Louisiana markets including Shreveport.

The merger has been unanimously approved by the Boards of both companies and is expected to close during the second quarter of 2014. The transaction is subject to the approval by OIB's shareholders and typical state and federal agencies.

BancorpSouth Bank operates 292 commercial banking, mortgage, insurance, trust and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois.

Talk Business Arkansas asked seven Arkansas CEOs across a broad spectrum of industries to look into their crystal balls and share what they expect in 2014.

Ed Drilling, President
AT&T Arkansas
I think we’re going to continue to see growth in our area of the business. We started a process last year that we call Project VIP as a result of all the demand that we’re seeing in wireless data traffic from individuals and companies that need more bandwidth.

I think in terms of the economy, we’ve seen a few slow growth years. Businesses and consumers were cutting back, but the business has seemed to be coming back into the marketplace. We’re seeing more technology purchases. I think it’s either they can’t wait any longer and they’re seeing so many needs that they’ve got to fill with more bandwidth and more robust technology products, such as Ethernet and fiber – we’re seeing that all come back in. And we’re certainly seeing an explosion in mobile.

Millie Ward, CEO
Stone Ward
We don’t do political, but it is going to be an advertising-rich year for our industry. There is going to be a lot of money spent in the advertising sector on political advertising, in this state and nationally. I heard a statistic the other day that when Carter ran against Ford in the ’70′s, they spent $65 million. Last year in the governor’s race in Virginia, they spent $65 million. That’s just so compelling to me.

We’re excited about the economy and the recovery because we are seeing, across our client base, people beginning to invest more in growth. A few years ago it was a time for everybody to get very lean, and in our business, a number of our clients at a national level have done that. Now, they’re all looking to grow.

Duane Highley, CEO
Arkansas Electric Cooperatives Corp.
We’re really excited about the future for Arkansas right now because unlike any year in recent history, we’re seeing more inquires, more economic development prospects, more people asking about getting electric service to new areas. It’s just at a higher pace then it has been, so I’ve got to believe that even if some of that comes true, it’s going to be good news for Arkansas. The economy appears to be turning, slowly, but turning.

We’re also entering a brave new world in the way power is bought and sold -where computers talk to each other and make arrangements between generating plants across the entire United States grid, and find the cheapest source of power every five minutes… It will provide us an opportunity to continue to provide power at some of the lowest rates in the country.

Bo Ryall, CEO
Arkansas Hospital Association
As we reach the end of 2013, it has been a very difficult year for hospitals financially. The implementation of Medicare reimbursement reductions, sequestration cuts, and 10% declines in hospital admissions have all contributed to a very difficult year. Couple that with the federal government’s healthcare.gov website issues in enrolling the uninsured for insurance and it does not make for a positive outlook for 2014 in health care.

We are very pleased with the enrollment in the Private Option with more than 60,000 in the program and increasing daily. We remain cautious as far as the enrollment on the federal website, but improvements have been noted.

We are also keeping a watchful eye on how Congress deals with the Sustainable Growth Rate formula, which governs Medicare physician fees. We are fully in favor of a change that would remove the threat of annual physician fee rollbacks, but we are also apprehensive about the “pay for” of such a change, which could rely heavily on steeper Medicare spending reductions for hospital care.

The uncertainty in the impact of a changing health care system leads to widespread concern going forward. An improved 2014 will be dependent on the number of uninsured that will now have some type of insurance.

Darrin Williams, CEO
Southern Bancorp
I am optimistic about 2014, but cautiously so. I see challenges but also opportunities in the year ahead for the rural markets served by Southern Bancorp. As a rural community development bank, we’re seeing firsthand the anemic post-recession recovery that rural communities are experiencing.

As banks continue to abandon rural America, more small towns are left with either limited or no access to capital and traditional banking services. Less access to capital means an even weaker recovery because community banks have been the driving force behind small business growth. That said, I think the situation lends itself to opportunities for innovation in these areas.

At Southern we are looking at a variety of ways to bring new financial products and services to these communities to help jumpstart those economies and put them on a similar track as their urban counterparts. From that perspective, it’s an exciting time to be a rural community development bank. Southern is proud to be one of nearly 900 Community Development Financial Institutions (CDFI) across the country that are stepping into underserved communities and creating more fairness of opportunity across America.

With challenges come opportunity, and I choose to see the coming year as the latter.

Judy R. McReynolds, President & CEO
Arkansas Best Corporation
My outlook for the 2014 economy is that while certain markets like manufacturing and auto may be stronger, I anticipate slow growth in general.

The good news for Arkansas Best is that we have growth opportunities in many industries and verticals we serve, despite my expectations for a slow-growth economy overall. I’m bullish about those areas, especially given the wide variety of transportation and logistics services we now offer customers from all of our operating companies. But I’m also concerned that government regulations and programs like The Affordable Care Act are hurting business and job growth in particular.

Also concerning is the fact that banks aren’t seeing loan growth, which indicates that businesses in turn are not seeing many opportunities to invest. I’m having a difficult time identifying a catalyst for more rapid economic growth any time soon.

Ray Dillon, CEO
Deltic Timber Corporation
We’re looking for 2014 to be as good and, hopefully, better than this year. We continue to see growth expand at a moderate rate. We think we’ll see positive housing starts and that will help our lumber business. And from a real estate standpoint, we think central Arkansas will begin to show more growth than it’s shown as we come out of this recession.

Unemployment is the biggest factor that will impact us. It drives free cash flow for consumers. We hope to have people in their starter homes looking for their next larger home. That will generate new household formations and new home starts. That’s what we’re expecting, and we see that activity impacting our lumber business in a good way.

Tyson Foods Inc. is known as one of the largest meat processors in the U.S. with a growing global presence. It operates more than 70 plants across the country that slaughter chicken, pork and beef while it processes those raw commodities for sale in retail and food service channels. But that reality is slowly changing.

During the last few years Tyson has began to focus less on commodity production and more on value-added sales. More recently, Tyson announced plans to expand its prepared foods division. Tyson operates 23 plants that are dedicated solely to prepared foods that produce items such as tortillas or pizza toppings. This prepared foods segment comprises roughly 10% of Tyson’s annual sales equaling roughly $3.2 billion.

In mid-November CEO Donnie Smith announced the company was separating the prepared foods segment from its poultry division and named Donnie King to head up the prepared foods unit’s major expansion goals. 
King will devote his talents to our growing value added foods business and creating an integrated sales and marketing organization to deepen our relationships with customers, Smith said.

It also looks as if Tyson is returning to its early roots as it continues to buy birds on the open market, in lieu of growing them out. Tyson began this buy versus grow practice two years ago in the face of record grain costs which roiled the entire industry. This is a page right out of Tyson’s history book, as founder John W. Tyson Sr. made a name for himself by selling live chickens which he hauled from Springdale to larger markets in Chicago and St. Louis during the mid-1930s.

It was some 22 years later before Tyson built its first processing plant at the urging of second generation poultry pioneer – the late Don Tyson. While Tyson grew exponentially through acquisition over the next 35 years, more recent corporate expansion efforts have been linked to prepared foods and valued-added meats that carry higher margins than the pennies per pound gleaned in commodity chicken, pork and beef.

Smith told analysts in November that the company would continue this buy-versus-grow practice as it focuses on expanded value-added sales by 6% to 8% annually. During fiscal 2013, Smith said value-added sales increased by nearly 6%. Tyson declined to give the total revenue associated with those value-added sales, but in 2012, Fitch Ratings estimated Tyson’s value-added sales totaled $15 billion – some 45% of the company’s total annual revenue.

CHANNEL EXPANSION

Tyson management is also focused on expanding sales (retail and food service) in nontraditional markets such as dollar stores and drug stores. Tyson recently declined comment to The City Wire about its plans to expand its prepared foods segment, citing its quiet period, as allowed by the Securities and Exchange Commission ahead of its corporate earnings release Jan. 31.

The meat giant already does huge volume with mini-marts and gas stations in deli meats, cold cuts and pizza toppings and a recent interview with Meat & Poultry Tyson executives detailed efforts underway to tap more sales in the convenience store and deli channels.

“Who would’ve thought several years ago, you’d be going to your local drugstore to grab a sandwich,” Eric Le Blanc, vice president of marketing for deli and convenience stores at Tyson Foods told Meat & Poultry.


He said Tyson brings more to the table for these venues than just chicken because of its expertise in foodservice and retail, two very different sectors. Le Blanc added that Tyson is striking a balance between delivering what consumers want and what foods the retailers can handle with a limited production platform is the goal.

“Americans are looking for what they want, when they want it,” he said.

This convenience store channel consists of roughly 150,000 locations in the U.S. To put this in perspective, a report from Neilsen said there are more convenience stores than
than warehouse clubs, supercenters, dollar stores, supermarkets and drug stores combined. Neilsen said there is one convenience store for every 2,000 people in the U.S. As a segment annual sales topped $123 billion in 2012, growing 4.9%, a better market when compared to a $310 billion grocery segment which grew just 1.5% year over year.

One of the fastest growing segments within convenience stores is fresh food, such as pizzas, wraps and sandwiches made onsite. Neilsen reports this type of fresh food has increased 38% in sales among convenience stores in the past year.

MARKETING PUSH
Le Blanc said much of the convenience store opportunities lie in densely populated urban areas. These consumers who shop convenience stores for food options tend to be urban, single males. In rural areas the shoppers tend to be females, including busy working moms often middle-to upper income households.

Tyson said it will adjust its marketing strategy to appeal these different customer demographics as it works to build brand awareness using social media as well as targeted television advertising.

Analysts consider Tyson a marketing machine, despite the fact many of its products do not bear the Tyson brand, such as the taco shells sold at Taco Bell or the pizza toppings and crust used by Pizza Hut. The most recent social media initiative was launched last week in conjunction with the popular New Year’s resolution to eat healthier.

“Just Add This” is a motivational social media campaign on Facebook where consumers can find tips that help them lead a healthier lifestyle while making small changes in their daily routines.

Consumers can join the "Just Add This"  conversation online.

Siloam Springs-based Allens Inc. is in the midst of raising cash in the company’s bankruptcy proceedings by selling assets in order to satisfy debtors. Recent court records show creditors in the case are owed nearly $287.94 million with $108 million of that being unsecured claims.

Allens reported assets of $294.46 million, which does not include real property. There was no estimate of real property values provided in the court records. But on Thursday (Jan. 9), GA Keen Realty Advisors announced they had been retained to market and sell six industrial properties along with vacant land and other miscellaneous properties in Arkansas, Louisiana. Mississippi and Oklahoma as part of Allens Chapter 11 bankruptcy case.

Keen Realty's listings showed the approximate values of the combined properties exceeds $16.16 million. However those values were based on appraisals dated January 2012.


Arkansas properties for sale:
• A 329,667 square-foot warehouse and distribution facility on 17.34 acres located at 4601 Newlon Road in Fort Smith – $4.6 million

• A 209,963 square-foot food processing plant and industrial warehouse on 9.49 acres, located at 1208 Virginia St. and 1211 Mary Allen St. in Van Buren – $4.1 million 



• Eighty acres of vacant land in Van Buren – No value provided.

• A 153,090 square-foot food processing facility and warehouse on 7.64 acres located at 404 Fayetteville Ave. in Alma – $1.9 million

• A single-family residence and agricultural land with 4,788 square feet on 10.76 acres located at 21764 and 21935 Meadow Wood Dr. in Siloam Springs – $650,000.


• Four acres of vacant land located at 116 Main in Lowell – No value provided


Other properties for sale:
• A food processing facility with four buildings totaling 210,929 square feet on 32 acres located at 1581 Hwy 114 in Hessmer, La. – $317.050 assessed value

• A warehouse facility with four buildings totaling 186,276 square feet on 23.7 acres located at 501 Guidry St. in Lafayette, La. – $3.495 million

• A 297,625 square-foot warehouse and distribution facility located at 12 Moorhead-Ittabena Road in Moorhead, Miss. – $1.1 million

• A 15,000 square-foot metal warehouse located at 119-120 W. Cherry St. in Westville, Okla. – No value provided

• Sixteen acres of vacant land in Delaware County, Okla. – No Value provided


“These strategically located properties are available for immediate occupancy,” GA Keen Realty Advisors Co-President Matthew Bordwin said in the statement. “The substantial size of the food processing facilities and warehouses, along with the excess land available in certain locations, create tremendous investment and/or redevelopment opportunities.”


Bordwin said these properties can be sold individually or as a package and offers are now being considered. The letter of intent deadline is Feb. 28.


Drama over UA deficits, reaching the middle class in China and the potential impact of Allens’ bankruptcy on the Siloam Springs economy are part of the Northwest Arkansas Friday Wire for Jan. 10.

NOTES & ANALYSIS
• Corporate job losses
We’ll likely found out sooner rather than later what the loss of a corporate headquarter presence will have on the Siloam Springs economy. A federal bankruptcy judge has approved a $148 million bid by Seneca Foods to buy Siloam Springs-based Allens Inc., which filed for bankruptcy in December.

Allens reported in bankruptcy documents that it had 1,173 employees, with 162 of those being salaried jobs. Many of those salaried jobs are likely based in Siloam Springs, and it’s doubtful that Seneca will need a second corporate presence. Siloam Springs is part of the booming Northwest Arkansas economy, but a loss of 100 or more corporate jobs will not be easily or soon absorbed.

• The drama over UA financial deficits
Odds are that no (more) heads will roll resulting from more than $6.5 million in deficits in the Advancement division of the University of Arkansas. Several high profile UA employees have been fired, but UA Chancellor G. David Gearhart appears to have avoided direct jeopardy.

In September 2013, Roger Norman, director of the state’s division of Legislative Audit, forwarded an investigative report to Prosecuting Attorney John Threet of Fayetteville. Threet eventually decided to not pursue an investigation based on the audit report.

Testimony before several Legislative panels included accusations that Gearhart was culpable in a cover up related to the deficits, but Gearhart has emerged (relatively) clean.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Wal-Mart’s China plan
China holds huge opportunity for Wal-Mart Stores and the retail behemoth has pledged to stay the course by building on the billions in annual sales it recorded there last year.

• Obamacare and premiums
The impact of health coverage through Obamacare was touted as a way to cap rising insurance costs and provide benefits to the masses of uninsured. But as 2014 gets under way many Americans are finding that is not exactly the case.

• Auto sales and the Internet
The persistent car salesman trying to put a customer behind the wheel of a car they were not looking for is likely a relic of the past thanks to the Internet.

NUMBERS ON THE WIRE
90%: The number of shoppers in China who arrive at Sam’s Club in a car, giving them the ability to stock up and buy more volume. This compares to 10% of Walmart China’s shoppers at a supercenter.

$192 million per day: The amount of money U.S. families spend supporting their children’s sports activities. That ranges from gear, uniform fees, private lessons and travel to games often played each weekend during their appropriate seasons.

55 pounds: Per person beef consumption in the U.S. in 2012. Beef consumption has fallen more than 20 pounds per person since the mid-1970s.

11,694: Number of unemployed persons in the Northwest Arkansas metro area during November, down from the 12,351 in October but more than then 11,069 in November 2012.

OUTSIDE THE WIRE
• National attention for Mulberry, Ark.
Ray Chung's family has been in the food business for more than 30 years and a few years ago, they decided to produce edamame on American soil, instead of importing it from China. After months of research, the Chungs opened their first edamame factory in Mulberry, Arkansas, which is a huge surprise to most people.

• The cost of the so-called Polar Vortex
Hunkering down at home rather than going to work, canceling thousands of flights and repairing burst pipes from the Midwest to the Southeast has its price. By one estimate, about $5 billion.

• Want to Save Money? Stop Thinking About the Big Picture
Many of us made a New Year’s resolution to save more money. Just like the resolutions to go to the gym more and eat better, though, our financial resolve will probably fall by the wayside before the snow melts. A new study says that’s because you’re probably going about it all wrong.

WORD ON THE WIRE
“Frankly, this is another example of a pattern of shameful behaviors designed to protect themselves rather than be honest and accountable. Ladies and gentlemen, something is rotten in Fayetteville.”
– Brad Choate, a former UA employee in charge of the fundraising division, during recent Legislative Audit hearings into budget shortfalls at the UA Division of Advancement

“This could be the last hurrah for these low, low rates and a good time for consumers to pay down credit card balances and eliminate those home equity loans and other variable interest debt they have acquired in recent years.”
– Greg McBride, chief economist for Bankrate.com, in noting that recent tapering intentions from the Federal Reserve should push mortgage rates higher in 2014

"I am not downplaying what has occurred, but there is no scandal, no conspiracy and no malicious intentional disregard of the law. If there were, it would apparently involve multiple offices and agencies. It was an oversight that should have been noticed and corrected long before now and by multiple people including myself."
– Lt. Gov. Mark Darr, R-Ark., speaking for the first time since being slapped with an $11,000 fine by the Ethics Commission for misspending campaign and state funds.

"Going back to an increase in awareness, I don't believe the problem became that much worse. It's just during the months of working on this legislation, more people were talking about it. Our progress was in the news a number of times and we talked about the hotline a number of times. I'd like to believe the increase was more to do with people having greater knowledge."
– House Minority Leader Greg Leding, D-Fayetteville, speaking about the increase in calls to the human trafficking hotline in 2013, the same year the General Assembly passed laws tightening laws that address the problem.

The positives and negatives of a regional jobs report, Edamame production in Mulberry and a Lt. Governor that rejects many calls to resign are part of the Jan. 10 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Jobs numbers: The good and the bad
The Fort Smith metro jobless rate fell to 6.9% in November, bringing to an end 55 consecutive months in which the regional jobless rate was at or above 7%.

That’s a welcome direction for the rate, but the region has a LONG way to go to return to workforce and employment levels of less than 10 years ago. The size of the Fort Smith regional workforce during November was 132,163, down from the 132,867 during October, and below the 132,392 during November 2012. The labor force reached a revised high of 140,253 in October 2007.

More troubling is that the region employed 122,993 in November, almost 10,000 fewer jobs than the 132,392 employed in June 2008.

• The drama over UA financial deficits
Odds are that no (more) heads will roll resulting from more than $6.5 million in deficits in the Advancement division of the University of Arkansas. Several high profile UA employees have been fired, but UA Chancellor G. David Gearhart appears to have avoided direct jeopardy.

In September 2013, Roger Norman, director of the state’s division of Legislative Audit, forwarded an investigative report to Prosecuting Attorney John Threet of Fayetteville. Threet eventually decided to not pursue an investigation based on the audit report.

Testimony before several Legislative panels included accusations that Gearhart was culpable in a cover up related to the deficits, but Gearhart has emerged (relatively) clean.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Fort Smith, Sebastian County approve water park changes
The Fort Smith Board of Directors and the Sebastian County Quorum Court approved resolutions Monday evening (Jan. 6) that would add a wave pool to the Ben Geren Aquatics Center while moving a dive well to near the bottom of the governments' priority list for water park amenities, essentially killing a part of the project that had been the focus of much contention just 11 months ago.

• Uncertain future for Mitsubishi plant
The city of Fort Smith and the Fort Smith Regional Chamber of Commerce bet almost $1.8 million in 2010 that Mitsubishi would open and operate a wind-turbine assembly plant at Chaffee Crossing.

• Obamacare and premiums
The impact of health coverage through Obamacare was touted as a way to cap rising insurance costs and provide benefits to the masses of uninsured. But as 2014 gets under way many Americans are finding that is not exactly the case.

• Auto sales and the Internet
The persistent car salesman trying to put a customer behind the wheel of a car they were not looking for is likely a relic of the past thanks to the Internet.

NUMBERS ON THE WIRE
9,170: Number of unemployed persons in the Fort Smith metro area during November, down from the 9,714 in October and below the 9,704 in November 2012.

$192 million per day: The amount of money U.S. families spend supporting their children’s sports activities. That ranges from gear, uniform fees, private lessons and travel to games often played each weekend during their appropriate seasons.

55 pounds: Per person beef consumption in the U.S. in 2012. Beef consumption has fallen more than 20 pounds per person since the mid-1970s.

OUTSIDE THE WIRE
• National attention for Mulberry, Ark.
Ray Chung's family has been in the food business for more than 30 years and a few years ago, they decided to produce edamame on American soil, instead of importing it from China. After months of research, the Chungs opened their first edamame factory in Mulberry, Arkansas, which is a huge surprise to most people.

• The cost of the so-called Polar Vortex
Hunkering down at home rather than going to work, canceling thousands of flights and repairing burst pipes from the Midwest to the Southeast has its price. By one estimate, about $5 billion.

• Want to Save Money? Stop Thinking About the Big Picture
Many of us made a New Year’s resolution to save more money. Just like the resolutions to go to the gym more and eat better, though, our financial resolve will probably fall by the wayside before the snow melts. A new study says that’s because you’re probably going about it all wrong.

WORD ON THE WIRE
“I think that it’s important to realize that Mitsubishi is having to make bond payments and pay property taxes on a facility that is producing no income. So Mitsubishi has the greatest motivation to make something happen.”
– Fort Smith City Administrator Ray Gosack when asked his thoughts about the chances Mitsubishi will do something with its mothballed manufacturing plant in Fort Smith

“This could be the last hurrah for these low, low rates and a good time for consumers to pay down credit card balances and eliminate those home equity loans and other variable interest debt they have acquired in recent years.”
– Greg McBride, chief economist for Bankrate.com, in noting that recent tapering intentions from the Federal Reserve should push mortgage rates higher in 2014

"I am not downplaying what has occurred, but there is no scandal, no conspiracy and no malicious intentional disregard of the law. If there were, it would apparently involve multiple offices and agencies. It was an oversight that should have been noticed and corrected long before now and by multiple people including myself."
– Lt. Gov. Mark Darr, R-Ark., speaking for the first time since being slapped with an $11,000 fine by the Ethics Commission for misspending campaign and state funds

"Going back to an increase in awareness, I don't believe the problem became that much worse. It's just during the months of working on this legislation, more people were talking about it. Our progress was in the news a number of times and we talked about the hotline a number of times. I'd like to believe the increase was more to do with people having greater knowledge."
– House Minority Leader Greg Leding, D-Fayetteville, speaking about the increase in calls to the human trafficking hotline in 2013, the same year the General Assembly passed laws tightening laws that address the problem

A recent survey released in conjunction with the annual Consumer Electronics Show found that more than half of consumers polled believe mobile devices will replace television sets by 2022.


Media services company Irdeto, reports that its own research shows 53% of consumers believe mobile devices like smartphones and tablets will replace television sets in the next eight years as the preferred way to watch TV and movies.


Some 31% of those surveyed believe the change will occur sooner — in the next one to five years.


Over 30% of respondents believe they will be using a smart TV to watch movies and television within five years; 6% believe it will be gaming consoles; 6% said streaming devices like Roku will be popular; 5% point to tablets and mobile phones; and 2% cite devices, such as Google Chromecast.


Other results include:
• 65% of consumers still prefer to watch their favorite content live — either on their television or streaming on a mobile device.
• 60% of consumers ages 18 to 24 said they prefer viewing full series at once — so-called binge viewing.
• 18% said they are very interested in buying a 4K TV/Ultra HDTV
• 40% said they are somewhat interested
• 27% said they are not very interested
• 16% showed no interest at all in purchasing a 4K TV/Ultra HDTV

(The survey was conducted among 1,000 U.S. adults ages 18 and older between Dec. 17 and 23)

Tyson Foods Inc. is recalling about 33,840 pounds of mechanically separated chicken products that may be contaminated with a Salmonella Heidelberg strain, officials said.

"The products subject to recall bear the establishment number "P-13556" inside the USDA mark of inspection with case code 2843SDL1412 - 18. These products were shipped for institutional use only, nationwide. The product is not, available for consumer purchase,” the official news release states.

The major security breaches at Target, Neiman Marcus and at least three other anonymous small retailers this past holiday season are sending strong signals to retailers, consumers and local banks about the need for heightened cyber security in this electronic age.

The true cost of fraud to retailers is $2.79 for each dollar of fraud losses they incur, according to a September 2013 fraud study by LexisNexis. The cost rose 10 cents on the dollar from 2012, according to the report. The study attributes the increased cost to a spike in online purchases being driven by the proliferation of malware and data breaches, which facilitate the theft and misuse of consumers’ payment cards and other payment information.

Target CEO Greg Steinhafel told CNBC on Sunday (Jan. 12) that the security breach it suffered between Nov. 17 and Dec. 15. was perpetrated through point-of-sale malware installed in its payment system. This opened the floodgate of consumer information stored by the retailer including the vital payment card and PIN number information for some 40 million customers and the names, phone numbers, email and physical addresses for another 70 million customers.Target said there may be some overlap between the two groups.

Target has promised consumers they will face no liability for the security breach, and the company is offering one year’s free credit monitoring to any of the 110 million shoppers at risk from the recent security breach.

Despite Target’s candidness about the breach and willingness to accept full responsibility there is still a huge cloud over the retailer. Target reduced its fourth quarter earnings guidance by 20% late last week expecting between $1.20 and $1.30 per share, a 30-cent downward departure from the prior estimate, which was given before the hacker attack. Target also lowered its fourth quarter comps, which are expected to decline 2.5% in the period, down from prior guidance of flat comps.

Analysts quickly surmised that the high number of Target customers affected from the security breach likely shopped elsewhere. Faye Landes, retail analyst at Cowen and Company, said consumers do care about about the security breach, no matter what Target does to ensure no liability with the increased fraud risks. She expects the costs to Target will be millions when all is said and done and the lawyers get paid.

INSIDE JOB

Given the most recent update from Target about how the breach occurred, cyber security experts agree the information heist is likely an inside job of sorts.

Scott Schober, cyber security expert, told CNBC the malware had to be installed directly into the system from inside, given that Target does not use outside services like Google. He said the crime is highly sophisticated and unlike the usual breach schemes seen in Eastern Europe.

The retail industry is behind other sectors as they have not updated their point-of-sale infrastructure with the latest technology advances such as chip technology, according to David Kennedy, CEO of TrustedSec.EMV smart chips have been widely adopted in Europe. Kennedy said this chip, in combination with a PIN, unlocks the financial data, with is more secure than the magnetic strip technology now used by U.S. retailers.

He said the time estimates for U.S. retailers to adopt EMV chips is 2020 and until then they are vulnerable to these types of data scraping attacks. Part of the reason for the delay is the cost involved in changing out the point-of-sale systems in thousands of stores across the country. But experts say the timeline for EMV could move up with continued fallout from the recent breaches.

Credit card companies like Chase already use the technology in their Chase Sapphire credit card and Google wallet is also a mechanism for consumers to consider, Kennedy said.

CONSUMER ACTIONS
Kennedy urges consumers who used their cards at Target or Neiman Marcus to cancel those cards. But local banks did not give consumers the same advice regarding card cancelations.

Gaye Wilcox, sales manager for Arvest Bank in Fayetteville, said Arvest chose to handle the card cancellations on a case-by-case basis.

“We did not do a mass reissue from the Target breach. We did talk with several customers who had concerns and we raised the height of our credit monitoring to high alert. Consumers were told to monitor their accounts daily online or via mobile banking and our internal fraud department watched closely those accounts flagged at risk,” Wilcox said.

Karen Cardwell, senior vice president of operations at First National Bank of Fort Smith, said their internal fraud also department uses software to monitor debit card activity on a regular basis. Like Arvest, in the case of a major breach or security hack, Cardwell said the banking group will replace a card for a customer who has experienced a fraudulent charge, or anyone who requests a new card for their own peace of mind. Cardwell said the banking company has locations in Fort Smith and Northwest Arkansas were customers can get a card reissued instantly if they want it.

The bankers said there is often more inconvenience in canceling a debit card than a credit card given that consumers may have automatic payments linked to their debit cards, such as insurance premiums, utility bills, etc.

Arvest said many customers may never experience issues from the data compromise, but they should continue to monitor their accounts because it’s the cautious thing to do.

Four years ago, debit cards passed credit cards, cash and checks to become the most popular form of payment among consumers, according to creditcards.com. Debit card users total some 50 billion in the U.S., growing from 15.6 billion in the past decade.

Some 7% of debit card users and 10% of credit card users in the U.S. have been victims of fraud in the past five years, according to U.S. Department of Justice.

Debit card fraud has been rising by about 30% annually over the last few years, and the liability in case of fraud errors varies by issuer. About one in 14 consumers has been hit by debit card fraud in the last five years.
 Wilcox said Visa provides a no-liability guarantee for both debit and credit card holders, but the emotional stress can be higher for consumers with a debit card breach given it is linked directly to their financial liquidity.

In the typical case of debit card fraud, consumers spend 28 hours making phone calls, dealing with their bank and filing police reports to get the problem resolved.

The Austin-based Tex-Mex Chuy’s restaurant will officially open its doors in Rogers tomorrow, Jan. 14, at 11 a.m. The restaurant is located at 4889 W. Pauline Whitaker Pkwy., near the Pinnacle Promenade.

“We’re so excited to open our doors and introduce authentic Tex-Mex to Northwest Arkansas,” said local owner/operator Jason Crane.

The new restaurant added 175 jobs to this growing region and has also began giving back to the local community. Chuy’s partnered with Spay Arkansas in December and recently announced their community charity focus with Northwest Arkansas Sunshine School and Development Center.

Chuy’s has a rich 30-year history featuring authentic Tex-Mex cuisine, an Elvis Shrine, wall of local dogs photos, metal palm trees and hubcap-covered ceiling. Happy hour is offered Monday through Friday from 4 to 7 p.m. and features fully loaded nacho bar housed in the trunk of a classic car.

Harrison-based First Federal Bancshares recently outlined the terms of a pending name change to Bear State Financial and a private placement totaling $20 million, if approved by shareholders during a special meeting on March 5.

The terms were made public in a filing with the Securities and Exchange Commission on Friday (Jan. 10).

The meeting was called to give shareholders an opportunity to vote on the bank’s acquisition of First National Security Co. of Hot Springs — a $151 million deal announced in July.

Also proposed is a private placement involving the sale of 2.5 million shares to Bear State Financial Holdings — the largest shareholder of First National Bancshares. The value of this private placement is $20 million and would also result in a name change to Bear State Financial trading under ticker symbol (NASDAQ:BSF), according to the filing.

The proceeds of the private placement will be used to fund a portion of the cash paid to First National Security shareholder and raise additional capital.

Bear State Financial Holdings controls more than 15.6 million shares, roughly 78% of First Federal's outstanding shares.

Shareholders will also consider the authorization of an additional 70 million shares to accommodate the private placement and acquisition of First National Security.