Air travel is on the rebound in Northwest Arkansas and in the Fort Smith area, with both regional airports posting year-to-date gains above 6%. More passengers is not the case in Little Rock where year-to-date enplanements are down almost 7%.

The January-May gains at the Northwest Arkansas Regional Airport (XNA) and the Fort Smith Regional Airport include the period of severe winter weather that cancelled thousands of flights nationally.

Travelers flying out of XNA during May totaled 58,410, up 6.94% compared to the 54,620 during May 2013. For the first five months of 2014, enplanements at XNA total 243,939, up 6.85% compared to the same period in 2013. The early 2014 traffic is up 4.39% compared to the same period in 2007, the year that XNA reached record enplanements of 598,886.

For all of 2013, XNA enplanements totaled 579,679, up 2.58% compared to the same period in 2012. The enplanement growth remained stable through the year, with enplanements up 2.42% at the end of the first quarter of 2013.

Enplanements at XNA totaled 565,045 during 2012, up just 0.4% compared to 2011. Although slight, the gain prevented XNA from posting two-consecutive years of enplanement declines. XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008.

FORT SMITH TRAFFIC
The Fort Smith Regional Airport, served by flights from Atlanta and Dallas-Fort Worth, posted May enplanements of 8,371, up 4.95% compared to May 2013.

Enplanements for the first five months of 2014 total 36,337, up 6.35% compared to the same period in 2013.

For all of 2013, enplanements at the airport totaled 84,520, down 2.46% compared to the same period in 2012. The decline ended three consecutive years of enplanement gains at the airport.

With 20,998 enplanements for the first five months of 2014, American Airlines accounts for 57.7% of commercial traffic out of Fort Smith. Delta Air Lines had the remaining market share for the first five months of 2014.

American enplanements out of Fort Smith are up 5.06% for the first five months of 2014 compared to the same period of 2013, and Delta enplanements are up 8.17%.

John Parker, executive director of the Fort Smith Regional Airport, said he does not get analysis on if passengers are flying for business or leisure, but said he believes business conditions are improving.

“We’ve had some positive business activity in the region lately,” Parker said, adding that consumer confidence is rising nationwide.

Indeed, The Conference Board reported Tuesday (June 24) that its index of consumer confidence reached a high not seen since January 2008.

“Expectations regarding the short-term outlook for the economy and jobs were moderately more favorable, while income expectations were a bit mixed. Still, the momentum going forward remains quite positive,” noted Lyn Franco, director of economic indicators for The Conference Board.

LITTLE ROCK NUMBERS
Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport) were 99,982 in May, down 4.4% compared to May 2013. Enplanements for the first five months of 2014 were 415,892, down 6.75% compared to the same period of 2013.

Enplanements in 2013 totaled 1.085 million, down 5.45% compared to 2012. Enplanements in 2012 totaled 1.147 million, up 4.07% compared to 2011. The 2012 numbers ended five consecutive years of enplanement declines at Arkansas’ largest commercial field.

Among the top three carriers in Little Rock, only one has posted enplanement gains between January and May. Southwest, the largest carrier, has seen enplanements decline 17.84% in the first five months. Delta, the second largest, has posted at 1.5% decline in the period, while American Airlines has a 0.86% gain in enplanements during the first five months of 2014.

FUTURE TRAVEL PLANS
Gains at XNA and Fort Smith could continue if estimates by Airlines for America (formerly the Air Transport Association) prove true. The group predicts that summer 2014 air travel will hit a six-year high as 210 million passengers – 2.28 million a day – fly on U.S. carriers between June 1 and Aug. 31.

International travel is expected to reach an all-time high with published airline schedules showing Canada, Mexico, the United Kingdom, Germany and Japan, respectively, as the top five nonstop destinations from the United States.

“It’s a great time to fly, as air travel remains one of the best consumer bargains in America, given its superior speed and affordability,” John Heimlich, A4A vice president and chief economist, said in a statement. “U.S. airlines are well prepared to accommodate the increased travel demand in the summer months by adding seats and continuing to make customer-focused investments in their product.”

The Northwest Arkansas Council received a $450,000 grant from Wal-Mart to foster economic development, diversity and inclusion in the local community. The gift was presented in conjunction with the Walmart NW Arkansas Championship — LPGA event held this week in Rogers.

“At Wal-Mart, we are dedicated to fostering growth and prosperity in our hometown of Northwest Arkansas,” said Kathleen McLaughlin, senior vice president, corporate affairs, and president, Walmart Foundation. “That’s why we provide support to organizations like the Northwest Arkansas Council, so we can help further economic development here at home.” 

The grant will impact more than 500,000 local residents throughout the region. The work being accomplished focuses on improving education, job opportunities, quality of life and infrastructure.

The Northwest Arkansas Council is a private, nonprofit organization committed to sustaining and improving the region as a great place to live and conduct business. Wal-Mart founder Sam Walton was instrumental in establishing the Council in 1990, and the organization played an active role in many of the region’s most notable successes over the past 20 years.

Wal-Mart and Sam’s Club employees remain actively involved in many of the projects being pursued by the NWA Council by volunteering hundreds of hours to participate in regionally-focused meetings and initiatives.

Wal-Mart’s financial support is benefiting the region as the NWA Council continues to work on the Greater Northwest Arkansas Development Strategy, a five-year regional improvement plan.

“We’re excited to see Wal-Mart and the Walmart Foundation continue to positively impact the lives of all people who live in Northwest Arkansas,” said Mike Malone, president and CEO of the Northwest Arkansas Council. “Their contribution helps us in our work to improve schools, create job opportunities and improve quality of life here. Wal-Mart is a fantastic partner in all of the goals we pursue.”

The Walton Family Foundation announced a $1.9 million grant to the University of Arkansas Foundation and the College of Education and Health Professions. This gift will help furnish teachers and administrators to some of the state's poorest public schools.

The grant announced Monday (June 23) will fund the Principal Fellows program that is intended to help students, build stronger communities and improve economic development, according to the release.

The Principal Fellows program was developed by the University of Arkansas to train school principals and assistant principals in high-need areas of the state. A total of 60 administrators from across the state will be chosen during the next four years to attend one-year leadership training through the program with a focus on improving the math and literacy skills of students.

Arvest Asset Management promoted Steve Burkhead to location manager in Springdale.


Burkhead began his career with Arvest Asset Management two years ago as a service manager. Before then, he worked 24 years with a St. Louis-based broker dealer and was a branch manager.

 “Steve has provided proven guidance for his customers both here at Arvest and with his extensive background elsewhere,” said Jim King, CEO of Arvest Asset Management. “We are confident that he will use that experience and knowledge to help guide our client advisor team in Springdale on behalf of our customers.”

Burkhead earned a bachelor’s degree from Illinois State University. He holds Series 7, 8, 24, 63 and 65 licenses and an Arkansas Insurance license. He is also a Financial Industry Regulatory Authority arbitrator.

He and is wife, Lesli Burkhead, have two children.

Fort Smith-based OK Foods has denied accusations leveled by the National Labor Relations Board that it interfered with a union vote at its Heavener, Okla., food processing plant.

The accusations from the NLRB came in a letter from the agency's Amy Novara, a field examiner, who detailed a list of nearly 20 different accusations against the company and individuals from on-site supervisors to CEO Trent Goins.

Novara said the company attempted to use financial incentives to influence the May 1 vote on whether or not employees should join the United Food and Commercial Workers Union Local 1000, a vote that ultimately failed. She also said after March 20, OK Foods denied wage increases and retroactive pay to employees that had engaged in union activities.

Novara's letter continued, alleging the company threatened employees if they voted in favor of unionizing with the United Food and Commercial Workers Union Local 1000 during the May 1 vote.

"In or about February 2014, the Employer, but Supervisor Sparks, informed employees that they could not address wage increases and retroactive pay because of the Union and threatened employees with loss of wages if employees selected the union as their collective bargaining representative, in violation of Section 8(a)(1) of the Act," she wrote.

Other similar allegations were made in her letter against OK Foods CEO Trent Goins, who she said "informed employees that wage increases and retroactive pay were being withheld because of union activity in violation of Section 8(a)(1) of the Act.” A settlement agreement attached to Novara’ letter "notifies employees or members that the Charged Party (OK Foods) will cease and desist from engaging in conduct proscribed by the Act," adding that the May 1 election would be thrown out and another election on unionization would be held.

According to a press release Tuesday (June 24), the company will not agree to any sort of settlement with the NLRB.

"OK Foods continues to deny any and all allegations and stands behind the May 1 vote," the release said.

The OK statement also claims that during the investigation, the NLRB "made no formal findings based on the union's allegations; conversely, it has dismissed some allegations and found that the union should present remaining allegations to an Administrative Law Judge.”

Goins also released a statement, saying that he was looking forward to challenging the allegations made by the UFCW.

"We look forward to presenting our case and refuting the union's remaining allegations," he said. "Our employees are important to OK Foods, and we will continue to stand behind them, determined to uphold their May 1st choice. As I stated in May, I continue looking forward to working with our employees to make OK Foods the best possible place; we are a team, and each member — and their voice — is valued and respected at OK Foods.”

UFCW's Anthony Elmo said the allegations detailed in Novara's letter were not union accusations, but were allegations directly from OK Foods workers.

"All of those are things that came from the employees themselves," he said. "Those workers brought those to the NLRB in sworn testimony. I think at the end of the day, for OK Foods to act like the union is making up the allegations is ridiculous. They came from employees and just put them in front of the (National Labor Relations) Board."

Consumers reined in spending across Northwest Arkansas in April which set sales tax revenue collections in the most recent report back 2.8% among the combined four largest cities in the region.

The individual city collection reports were mixed in June, which reflect sales tax collected in April creating a two-month lag in the reporting. Fayetteville, Springdale, Rogers and Bentonville cumulatively reported tax revenue of $4.325 million this month, down from $4.454 million in the year-ago period.

Each of the cities collect a 2% sales tax on good and services, 1% of that goes to repay debt and the other 1% flows into the city budgets for operating expenses. This report reflects the latter.

Sales Tax Revenue (June)
Bentonville: $714,355, down 26%
Fayetteville: $1,475,961, up 1.8%
Rogers: $1,184,283, up 0.2%
Springdale: $950,962, up 12%

Denise Land, finance director for Bentonville, said collections have been on a roller coaster for several years now. But the one important thing to remember is that year-to-date collections are better than what the city budgeted.

“We hope it continues,” Land said.

City officials, including Land, said there were some very strong months in early 2013, which are tough for comparison purposes, and the ups and downs month-to-month are not a surprise.

Springdale receipts captured the biggest bump upward in June, increasing more than $98,000 from the same month in 2013. It was the city’s highest revenue collection since prior to the 2008 recession.

Springdale Mayor Doug Sprouse said the increase was welcome and helped the city stay ahead of budget. He couldn’t attribute the gains to anything in particular except that maybe more residents were spending their money in the hometown.

“We believe the new Walmart Supercenter at Elms Springs road will help us retain sales tax dollars we may have been losing to other cities,” Sprouse said. “We are excited about other future developments in that area of the city and plan to reinforce some of the road infrastructure there in future months.”

Wal-Mart plans to open the new Springdale supercenter later this summer. It is one of 12 new building projects the retail giant has announced or finished this year in the two-county area.

The new Walmart AMP has Rogers city officials hopeful that sales tax revenue will continue to increase this summer along with the water park attraction which both make the city an entertainment destination.

Sales tax collections in Fayetteville grew by just $26,000 from a year ago, and city leaders said that does not begin to cover the economic losses sustained this winter as people were snowed in and businesses were closed.

City finance director Paul Becker said Fayetteville is still playing catch-up from weaker reports earlier this year. He expects the revenue swings to flatten out in the coming months.

Sales tax revenue has a strong correlation with consumer sentiment. U.S. consumer sentiment rose in April, according to the Michigan Sentiment Index. The final April reading on the overall index of consumer sentiment came in at 84.1, beating an expectation of 83.0. The number was the highest reading since July 2013.

"Perhaps the more important question is whether consumer confidence will show greater resistance to the backslides that have repeatedly occurred in the past few years," survey director Richard Curtin said in a statement. "Resilience is dependent on positive long term economic expectations. While near term expectations have improved substantially, longer term expectations for personal finances as well as the overall economy have not improved as much.”

Dr. Evan Young will join Dr. Kent Magrini at the Cooper Clinic Foot Health Center and begin accepting patients on July 7.

Young earned his Doctor of Podiatric Medicine degree at the Scholl College of Podiatric Medicine & Surgery. While in Residency training at Mercy Hospital and Medical Center in Chicago, Young served as chief resident and completed more than 800 surgical cases.

Treating foot and ankle conditions of both children and adults, he will specialize in sports medicine, trauma, and injuries.

Young’s office will be located at 5004 S. U St., Suite 101-B, Fort Smith.

Cooper Clinic is a physician-owned multi-specialty group with doctors in 25 specialties/subspecialties at 16 locations.

On July 1, Mosley Title Company will officially change its name to Waco Title. In 2006, Mosley Title joined WACO and the name change completes the transition and helps to further unite the Waco teams across Arkansas and Missouri.

For more than 61 years, Mosley Title has operated in Sebastian, Crawford and surrounding counties and will continue to do so under the Waco Title name.

The Waco family of companies has been in the abstract, title insurance and closing needs of this region since 1885 and employs more than 140 people. Waco Title and its employees are covered by a fidelity bond as well as errors and omissions insurance and maintains in-house title plants in each of the markets they serve.

Personal income fell 0.2% in the first quarter as earnings for Arkansas workers failed to keep pace with inflation and Arkansas farms lost more than $1 billion, according to estimates released Tuesday (June 24) by the U.S. Bureau of Economic Analysis (BEA).

“First-quarter farm earnings declined more than $1 billion in North Dakota, Minnesota, Iowa, Arkansas, and Nebraska,” the BEA report said. “The declines reflect falling crop prices.”

Travis Justice, chief economist for the Arkansas Farm Bureau, said he concurred with the BEA’s report, but cautioned that the Labor Department’s first quarter snapshot doesn’t capture parts of the state’s largest industrial sector that are on the upswing.

“Yes, we have seen some declines in the grain sector as crop prices have drifted lower, but on the animal side of the picture – we are seeing record prices for hog and cattle (futures),” Justice said.

According to the National Crop Insurance Services, Arkansas’ agriculture industry contributes more than $10 billion to the state’s economy. A 2012 census by the U.S. Department of Agriculture shows that Arkansas has more than 45,000 farms and 13.8 million acres of farmland.

Justice said the agriculture sector’s economic and revenue picture could turn positive quickly, especially from quarter to quarter.

“We could come up spades in just a few months,” he said.

Nationwide, the BEA report shows that state personal income rose slightly to 0.8% on average in the first quarter of 2014, an acceleration from the 0.5% growth in the fourth quarter of 2013. The fastest growth, 1.4%, was in Washington state, Vermont, and West Virginia. Personal income fell 2.9% in North Dakota, 0.3% in South Dakota, and 0.2% in Arkansas and Nebraska.

Inflation, as measured by the national price index for personal consumption expenditures, was 0.3% in the first quarter, the same as in the fourth quarter.

The personal income report stands in contrast to another economic bellwether from the BEA earlier this month showing the state’s gross domestic product (GDP) grew at 2.4% in 2013, ranking Arkansas 16th among the 50 states. Arkansas’ GDP growth was well ahead of the U.S. average in 2013, which slowed to 1.8% in 2013 after increasing 2.5% in 2012, according to the statistics from the U.S. Labor Department analysis arm.

Nationwide, real gross domestic product (GDP) increased in 49 states in 2013, but the surprise takeaway from the yearly report is that U.S. growth was widespread but lost momentum. Per capita real GDP ranged from a high of $70,113 in Alaska to a low of $32,421 in Mississippi. Per capita real GDP for the U.S. was $49,115.

SECTOR EARNINGS
Overall, personal income grew $79.5 billion in the first quarter of 2014, after increasing $75.1 billion in the fourth quarter of 2013. Earnings grew in 19 of the 24 industries for which BEA prepares quarterly estimates, with the largest increases in professional services ($22.1 billion), construction ($19.4 billion), and finance ($9.2 billion).

Mining earnings grew $8.6 billion in the first quarter, compared with a $2.5 billion increase in the fourth quarter. More than half of the mining earnings growth (which includes earnings in the oil and gas industry) was in Texas. The contribution of mining to earnings growth was larger than every other industry in eight states including Texas, North Dakota, and West Virginia.

Construction earnings grew $19.4 billion in the first quarter, more than double the $9.5 billion fourth-quarter increase. More than one-fourth of this growth was in Texas and California. Construction made a larger contribution to earnings growth than any other industry in 20 states including Nevada and Utah.

Earnings fell in five industries: farming ($16.4 billion), information ($9.2 billion), management of companies ($2.6 billion), durable goods manufacturing ($1.7 billion), and forestry ($0.1 billion).
Information earnings fell $9.2 billion in the first quarter after rising $14.3 billion in the fourth quarter. Earnings declined $11.1 billion in six states and grew $1.9 billion elsewhere. California’s $11.0 billion first-quarter decline followed a $15.5 billion fourth-quarter increase that included special lump-sum bonuses.

Durable goods manufacturing earnings fell $1.7 billion in the first quarter, following a $2.2 billion increase in the fourth quarter. Bonuses and other special pay contributed to a $1.4 billion first-quarter rise in Washington, the first increase in that state in a year.

Of home sales in Arkansas’ four largest metro markets, the Fort Smith region is the surprise leader with the best percentage growth for the first five months of the year. And although the Northwest Arkansas market is below the red hot pace of 2013, the four markets combined are up almost 4% against what was a robust market for home sales in 2013.

Home sales in Arkansas’ four largest metro areas during the first five months of 2014 totaled 8,148, up 3.97% compared to the same period in 2013, According to The City Wire’s Arkansas Home Sales Report. The average price per home sold in the four markets was $159,251, down 3.24% compared to the same period in 2013, and the total sales value of $1.297 billion in the four markets was up just 0.6%.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, the Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales. The report is sponsored by Fort Smith-based Weather Barr.

MAY NUMBERS
May home sales totaled 2,028, up 3.52% in the four markets compared to May 2013, and up 14.84% compared to May 2012. The average price per home in the four markets during May was $169,844, down 0.69% compared to May 2013, but up 4.79% compared to May 2012. The total value of homes sold in the four markets during May was $344.443 million, up 2.81% compared to May 2013 and up 20.33% compared to May 2012.

There were 968 homes sold in central Arkansas, up 8.76% compared to May 2013, and up 14.42% compared to May 2012. The value of the sales in May were up 5.21% compared to May 2013.

May home sales totaled 698 in Northwest Arkansas, down 8.99% compared to May 2013, and up 6.58% compared to May 2012. The value of the sales in May were down 3.51% compared to May 2013.

Jonesboro area home sales totaled 218, up 8.46% compared to May 2013 and up 31.33% compared to May 2012. The value of the sales in May were up 16.47% compared to May 2013.

In the Fort Smith area, home sales totaled 194, up 24.36% compared to May 2013, and up 32.88% compared to May 2012. The value of the sales in May were up 7.11% compared to May 2013.

Randy Miller, executive broker at J.E. Jones Real Estate in Van Buren, said he is not certain the large percentage gains in home sales in the Fort Smith area will continue through 2014.

"I don't think that you'll see a continued 10% (improvement in Sebastian County) each month. There's always a leveling we see in this market. We don't have big dips. It's always been gradual for us in this part of the country," Miller said. "I don't anticipate that it will be 10% for the next few months, but it would be exciting if that would happen."

THE REGIONAL PICTURE: January-May 2014
Central Arkansas — Home sales
Jan.-May 2014: 3,883
Jan.-May 2013: 3,662
Jan.-May 2012: 3,362

Fort Smith area — Home sales
Jan.-May 2014: 747
Jan.-May 2013: 635
Jan.-May 2012: 627

Jonesboro area — Home sales
Jan.-May 2014: 860
Jan.-May 2013: 756
Jan.-May 2012: 696

Northwest Arkansas — Home sales
Jan.-May 2014: 2,658
Jan.-May 2013: 2,784
Jan.-May 2012: 2,353

The top five counties in terms of Jan.-May 2014 home sales:
Pulaski — 1,817, up compared to 1,680 in 2013
Benton — 1,713, down compared to 1,736 in 2013
Washington — 935, down compared to 1,048 in 2013
Craighead — 688, up compared to 564 in 2013
Saline — 659, up compared to 606 in 2013

Link here for a PDF document of the May 2014 data.

HOUSING TRENDS
Through the first five months of 2014, a trend has developed in the four areas covered in The Arkansas Home Sales Report – units sold are up and average sales prices are down.

The City Wire Economist Jeff Collins said one thing still weighing on home prices is the unemployment rate – 6.4% in May in Arkansas which was an improvement of 1% over the same month last year but still higher than historical norms.

That high unemployment rate has led to at least one good thing for potential home buyers – the Federal Reserve is still interested in keeping interest rates low to encourage people to purchase homes. That policy probably won't change until the labor market improves, Collins said.

Still, the average interest rate on a 30-year, fixed mortgage on June 20 was 4.2%, an increase from 3.93% a year ago. Higher interest rates – or at least the perception of them – mean consumers are under the impression they will have to buy more modest homes due to higher monthly mortgage prices. That is one of the reasons average prices have declined.

Collins said people do need to keep in mind that mortgage rates are still hovering around historical lows.

“People have short memories,” he said. “They don't recall getting money at higher rates.”

WATCHING NORTHWEST ARKANSAS
Colllins said summer is traditionally the best time for Realtors so he'll keep a close eye on how sales go in the summer before predicting any trends developing for the remainder of 2014. He said one area of the state he will watch is Northwest Arkansas.

An “amazing” amount of building activity has taken place in northwest Arkansas and Collins said some people are concerned there could be too many new subdivisions. The concern, he said, is that real estate developers have been getting ahead of the unemployment picture and, if true, could mean that area of the state could be dealing with an excess of inventory and the lower sales prices that result.

MountData.com analyst Paul Bynum, who gathers real estate data for the Northwest Arkansas and Fort Smith area markets, said the May decline in Northwest Arkansas is the result of a tough comparison with May 2013. Bynum said last year was one of the best on record in Northwest Arkansas and anything remotely close to those levels is good.

ASSOCIATED COMMERCIAL GROWTH
In central Arkansas, Realtor Mike Cottingham with Baxley-Penfield-Moudy in Bryant said there is increased building activity in Saline County but most of it is commercial. The commercial construction is due to growth in the county.

“We don't have a lot of new (residential) construction going on and that's helping existing home sales,” he said. “Existing homes are moving well and more people are wanting to buy.”

He said more commercial development is on the way and that shows confidence in the residential growth of the area. Saline County is still in need of some more employers, but Cottingham said hopes are high that more jobs will come with increased commercial activity in the area.

In Jonesboro, Executive Broker Sherlyn Blackwell of Fred Dacus Associates said she has certainly noticed an improvement in sales this year.

“If a person isn't making money at real estate these days, they're not trying,” she said. “We're hopping here. I'm not getting home until late every night. … It's very good here.”

She said most development in her area is also commercial and the majority of homes sold are existing ones.

Bicycling helps keep him fit and trim, but on the June afternoon of the interview Rodney Shepard appeared tired, possibly a result of trying to meet directly with the hundreds of Arvest employees at 25 banking locations that stretch from Fort Smith to Russellville.

Shepard has returned to Fort Smith as Arvest’s regional CEO after more than three years of being the CEO for Arvest’s relatively new banking region in Springfield, Mo. He follows in Fort Smith Craig Rivaldo, who was named the CEO of Arvest-Benton County when the former CEO there was removed after allegations of fraud.

“For the most part, it’s been good,” Shepard said when asked about his first few weeks of getting reacquainted with the Fort Smith-River Valley market. “I’ve been trying to get out and meet the team.”

Chances are a majority of the “the team” know Shepard. And vice versa. He’s from the area, and was employed in the regional banking sector almost 18 years before the move to Springfield. In July 1993 he joined what was then Superior Federal Bank as one of a number of loan makers. He moved up the ranks, and when Superior was acquired by Arvest in 2003, he was one of the young leaders in a Fort Smith metro market in which Arvest was still the newcomer. His star rose, and when Arvest needed new leadership in Springfield, he was given his first chance as a regional CEO for the banking company owned by Jim Walton, son of Wal-Mart Stores co-founders Helen and Sam Walton.

LEADERSHIP CHANGES
Shepard, active with various organizations in the Fort Smith region before his Springfield move, sat silent for a few seconds when asked about what has changed in the Fort Smith area during his more than three years in another market.

“There has been a change of leadership in a few key places,” Shepard said, listing Sparks Health System, Mercy-Fort Smith, and Carl Albert Junior College among entities with turnover at the top spot.

“And then there is the whole mission change at the 188th,” Shepard added, referring to the 188th Fighter Wing based in Fort Smith losing its manned mission for a mission involving operations tied to remotely piloted aircraft.

Shepard also admitted to being surprised by something that had not happened.

“In the three and a half years, I would have thought they (U.S. Marshals Museum) might have had the groundbreaking,” Shepard said, adding that he realized the groundbreaking is set for September. “That’s not good or bad, I should say, but I just thought that would have happened by now.”

NO MORE WHIRLPOOL
Yet another change resulted in a brief moment of reflection on Shepard’s younger days.

“That closed while I was gone, but I guess they were closing it down before I left.”

“That” is Whirlpool’s refrigerator manufacturing plant in Fort Smith. Whirlpool Corp. closed the doors on the plant in June 2012. At the height of employment, the Whirlpool plant employed more than 4,600 in what were considered some of the best paying jobs in the region. One of those jobs was held for 38 years by Bobby Shepard, Rodney’s father.

“It supported our family,” Shepard said of his father’s job with Whirlpool.

And Rodney, like thousands of area youth, would work there during the summer months to make money to pay for college. Rodney Shepard spent three summers inside the Whirlpool plant doing a variety of jobs.

“You would meet some really good folks there; some great, hard-working people,” Shepard said, his voice trailing off as he stared beyond the interviewer and into the memory of that experience.

NEW JOB PRIORITIES
But good people are hard to find, and finding and retaining them are one of several key goals Shepard mentioned when asked about his Arvest priorities now that he has returned to Fort Smith. This role is one of the reasons Shepard has spent time traveling the region.

“On the front end, I want to find out what is going on. … What is working? What is not working as well?”

The process of finding and keeping good people is conjoined with the effort to deliver the type of community service Shepard says is necessary to grow market share in the region for which he is responsible. Market share growth is another of his priorities.

“It’s hard to find good people. So when you find a good person, you have to do whatever you can to keep them,” Shepard said. He added later in the interview: “The heart of our business may be in Fort Smith, but are we doing all we can in these other communities” to grow market share?

Arvest Bank grew its marketshare in the Fort Smith market by 1.26% or $50 million from June 2012 to June 2013 – the most recent data period available through the FDIC. Arvest ranks No. 2 behind First National Bank Fort Smith in that metro area with 14.56% of the market or $590 million. First National has 18.31% of deposit market share.

Priorities related to growing market share include reviewing facilities in the region “to make sure we are as convenient” for the customer as possible. Another aspect of growing the business is to focus on “being smart” about giving back to the communities in which Arvest operates.

“It’s not just about giving a check. It’s also about volunteer time. … The company really wants us to help these communities be better places to live,” Shepard explained.

REGULATION RESPONSE
Like most community bankers, Shepard is concerned federal regulations related to the implementation of the controversial Dodd-Frank bank bill will make it difficult for community banks to remain an viable player the socio-economic development in their areas.

Dodd-Frank was approved by Congress following the near financial sector collapse of 2008. Proponents of Dodd-Frank say the rules are necessary to prevent actions of a few large financial institutions from dragging down the entire economy. Others say regulation was needed, but that Dodd-Frank goes too far and is resulting in industry consolidation and other unintended consequences that may limit the access to capital in rural areas.

Shepard is not a fan of Dodd-Frank.

“While it may have been well-intended, the people they were trying to help will get hurt in the end,” Shepard said.

He said the rules coming from federal regulators are forcing banks to balance the costs of new regulations with providing customer service.

“I’m not optimistic. … I don’t think that (moderation of federal rules) will happen, and what we will see is these communities will get hurt by bank consolidations,” Shepard said.

A few days after the interview, Shepard was mowing the yard around his Springfield home and reflected on questions asked and answers given. He wanted to offer a few more thoughts, with one of them including what will be a tall order for himself and those around him.

“I want us to be great. Great is better than bigger and great will create all the other measureable attributes of being successful. Be it meeting customer needs or having efficient internal processes; we should and do continually look for improvements,” Shepard said in finishing his e-mail note.

Online retail giant Amazon had high hopes of using mechanical drones to deliver small packages to its vast customer base. But, the Federal Aviation Administration released a memo this week that strikes down the use of such devices for business applications.

Amazon outlined plans to use drones for 30-minute deliveries for its Prime customer base back in December.

The FAA notes that drones or any model aircraft can only be used for hobby purposes. Model aircraft are restricted from flying over populated area, flying above 400 feet or flying within five miles of an airport. The model aircraft must also be visible by its operator during flight.

The agency is also clear on the fact that these models cannot be used in conjunction of delivering a package to people for free.

"If an individual offers free shipping in association with a purchase or other offer, FAA would construe the shipping to be in furtherance of a business purpose, and thus, the operation would not fall within the statutory requirement of recreation or hobby purpose," the FAA noted in the memo.

Cable is not a utility bill but in the average household but about $120 is forked over each month for a plethora of channels that are getting watched less and less, according to Nielsen Ratings. The market firm also reports the average cable television household clicks on just 17 of the 189 channels it receives.

Analysts said it’s no surprise so few channels are watched because the bundling tactics used by cable providers force consumers to purchase channels they don’t want to get the ones they do.

PULLING THE PLUG
Some consumers who spoke with The City Wire have found the television programming costs have reached a tipping point in their households and they are finding other alternatives.

Julie Cox and husband Chris subscribe to the Dish Network, but they usually only watch the local channels, which is why they want to drop the Dish.

John Smith of Elkins opted to subscribe to NetFlix and forego the cable or dish options. Kurt Voigt of Fayetteville said his household is saving $100 per month since subscribing to NetFlix with an HD antenna.

Brandy Arena, a second year law school student, said she uses NetFlix and Hulu instead of cable, which is also good enough for Jason Smith and his Springdale household.

The average U.S. household spends between $120 and $148 per month for wireless cell service, according to Ars Technica. The combined cable and cell phone bills total about $5,000 per year amid stagnant wage growth and inflation in food and fuel.

These consumers agreed that pulling the cable programming plug made sense for them given they weren’t watching the majority of the channels and there are more efficient internet based options available.

CONSOLIDATION PLAYS
This migration to Internet-based programming is helping fuel consolidation in the cable programming universe and likely why AT&T is reinforcing its arsenal with the $48.5 billion offer to acquire DirecTV.

The $95-a-share merger will affect about 25 million combined subscribers to the companies’ services, closing in on one-quarter of the households in the U.S. This deal has yet to past the antitrust scrutiny. The U.S. Senate and House Judiciary Committees’ antitrust panels held  hearings Tuesday (June 24) to examine the proposed deal between  AT&T and DirecTV.

AT&T has said the plan to acquire DirecTV is part of its game plan to offer consumers access to video in variety of media and to grow scale more on par with larger cable competitors. Earlier this month AT&T released comments about the merger with DirecTV, saying the deal will allow competition in the cable market to flourish, taking aim at the Comcast and Time Warner Cable another $42 billion deal in the making.

COMPETITIVE SPACE
A recent report from Nielsen indicates that television homes and the potential audience in those households are growing at about 0.4% per year reaching 116.3 million in 2013. That smidgen of an increase is fueling hyper competition between cable programming providers like Cox Communications, AT&T, DirecTV and Dish.

One need not look any further than their mailbox to see cash back offers from each of these providers. AT&T routinely is offering $300 to $400 in a Visa rewards card for new Uverse, Internet and phone bundle. There are free upgrades and premium channels offered by Dish on a limited term basis, while Cox is offering a $200 prepaid Visa rewards card for new subscriptions on qualifying bundles.

Consumers say what they really want is a way to order the specific programming they want and pay accordingly on an “al a carte” type of system.

Kelly Zega, spokeswoman for Cox Communication, said the “a la carte” discussion is an active one in the industry, as “it comes with a complicated economic model and raises concern over stifling programming diversity.”

COX CONTOUR
She said Contour, a new service offered by Cox, is proving to be popular because it does offer a more personalized video experience that also provides for mobile access.

Zega explained that Contour provides recommendations for eight unique profiles and then tees up what customers already like and helps them discover more content that meets their personalized viewing habits with suggestions they might enjoy. She said each person in the household can have their own profile.

Though the Contour App interface users can view their personal programming choices which include access to more than 100 channels of live TV and 4,000 video on demand selections. This access is mobile helping to meet this growing consumer demand.

Lastly, Contour includes a DVR which can record six programs at once, storing up to 300 High Density shows.

“Customer response has been very positive and we’ve found strong engagement with both the recommendation engine on the primary screen as well as with the Contour app on the second screen,” Zega said.

She reports 99.5% of Contour customers are using the recommendations. Over half (56%) say it made them aware of content they hadn’t known about before.

“From May 2013 to May 2014, Contour customers went from average viewing of 22 channels per month to 29 channels per month,” Zega added.

A representative of the state’s largest electric utility on Wednesday compared the Environmental Protection Agency’s new far-reaching guidelines to reduce carbon emissions in Arkansas to Dante’s journey through hell in the epic Divine Comedy poem.

“This (EPA) rule is another level of hell, and I am talking about just trying to understand it,” joked Chuck Barlow, vice president of environmental policy and strategy for New Orleans-based Entergy Corp.

Barlow made his humorous yet serious comments at the first meeting between nearly 20 stakeholder groups and state regulators from the Arkansas Department of Environmental Quality and the Arkansas Public Service Commission since the Obama Administration announced the proposed greenhouse gas guidelines on June 2.

President Obama’s proposal, called the Clean Power Plan, mandates a 30% reduction in carbon dioxide emissions from existing power plants by 2030 from 2005 levels, mainly targeting the nation’s fleet of more than 600 coal-fired plants that currently supplying the lion’s share of the nation’s electricity needs.

In Wednesday’s meeting, Barlow’s comments stood out during the three-hour roundtable at the ADEQ headquarters where stakeholders began to explore options for complying with the newly proposal EPA regulations. Not only did the Entergy executive cite the complexity of the 645-page proposal, but complained that the EPA has since added an additional 500 pages of regulations to the mandate since announcing it in early June.

Entergy still has a lot of questions about the new EPA rules, Barlow said, and reiterated the utility giant’s previous public statements that the new proposals should be “legally defensible.” He also said that the EPA gives some consideration to utilities that include “nuclear megawatts” in their energy mix.

“We have been saying the same thing since this process started,” Barlow said of Entergy Corp., the parent of Entergy Arkansas. “We are approaching the (EPA) rule with a lot of caution because we are still trying to figure it out.”

Barlow also broached a subject that many stakeholders have said will be the most difficult to resolve — the possible shutdown of several of Arkansas’ older coal-fired power plants. “Let’s not pretend, we are talking about shutting retiring coal plants,” he said.

Coal-fired plants still supply nearly 53% of Arkansas’ electricity demand. As of Feb. 14, Arkansas ranked 29th among the 50 states in the amount of total carbon dioxide or “dirty air” emissions with 67 million metric tons. By comparison, Texas is ranked first with 656 metric tons of carbon emissions, while Vermont and the District of Columbia have the lowest emissions at three and six million metric tons.

Overall, coal-fired power represents 44.5% of Arkansas’ annual net electric generation. Natural gas-fired generation is second at 23.2% and nuclear energy is next at 19.4%. Renewable energy generates about 6.4% of the state’s power needs, and hydroelectric fills the remaining 5.4% of the state’s electric capacity. Petroleum-fired fuel, once a staple for heating oil, now generates less than one percent of the state’s power.

Besides Barlow, other stakeholder representatives at the meeting took a more positive approach to the proposed EPA regulations. Walter Bryant, division vice president of regional operations for CenterPoint Energy Inc., said the Houston-based natural gas utility sees the new rules as a chance for Arkansas to improve and diversify its electric generation and distribution system.

“Going forward, it is really important that we have a good mix,” said Centerpoint’s top Arkansas executive. “I have never been one to put all our eggs in one basket. We have a lot of natural gas in Arkansas and we ought to use it.”

Colette Honorable, chairman of the Arkansas Public Service Commission, told the stakeholders attending the meeting that she looked forward to working through the process and coming up with a solution that will benefit all Arkansas ratepayers.

“We have some thoughts about what we would like to see going forward,” Honorable said. “But we are glad to hear from stakeholders and get your input.”

The PSC and ADEQ have been tasked by Gov. Mike Beebe to oversee the process of developing new rules to meet the EPA mandate in Arkansas. ADEQ is in the process of preparing the necessary paperwork to seek the assistance of a meeting facilitator for future stakeholder meetings.

Also, the public comment period on the EPA docket began June 18 and must be received by federal regulators on or before Oct. 16, 2014.

Craig Box of Fort Smith announced Wednesday (June 25) that it had inked a five-year deal with Eureka Pizza to be its exclusive pizza box provider.

The deal extends an already-established relationship between Craig and Eureka that dates back to December 2010, when the company began producing pizza boxes for the company locally.

Previously, the company had its boxes printed by a large national company in Kansas City, which then shipped the boxes to Eureka's Springfield, Mo.-based food distributor, who would deliver boxes with the food for an extra charge.

At the time, Eureka Pizza was using about 2 million pizza boxes per year, or almost 5,500 each day.

In a statement announcing the new exclusive deal with the pizza company, Craig Box President Eddy Craig said the company would "print well over 1 million pizza boxes this year" for the company and said the deal was a benefit for both companies.

"It's great having a local high volume customer and this agreement gives clarity and stability to both parties," he continued.

Eureka Pizza President Rolf Wilkin said working with Craig Box made sense from a quality and customer service standpoint.

"We love the fact that Craig is local, just like us, it's great keeping dollars local for the benefit of us all."

Wilkin added that Craig's customer service couldn't be matched, especially in the middle of snow storms when Eddy Craig has personally delivered extra boxes.

"You don't get that kind of service with an out of state company."

Terms of the deal were not disclosed.

There was no shortage of new building projects taking shape in May among the region’s four largest cities. Bentonville, Rogers, Springdale and Fayetteville issues new construction — commercial and residential — permits valued at $90.895 million last month. The cumulative permit values rose more than 76% from the year-ago value of $51.637 million.

Nearly three quarter’s of the new projects breaking ground in May were located in Bentonville, thanks to $43.8 million multifamily expansion at Lindsey Management’s Linx at Rainbow Curve complex. Amazeum, the region’s first children’s discovery museum, also added $9.19 million to the Bentonville’s permit values last month.

Commercial projects, including multifamily among the four cities totaled $62.488 million last month. A year ago, the four cities issued a handful of new commercial permits in May with a value of $3.83 million. Med Express and Rogers Dental Clinic are under construction in Bentonville. Legacy National Bank’s new Rogers facility valued at $1.598 million also break ground last month.

In Springdale, Wal-Mart Stores got a permit ($117,690) for a fuel kiosk at the new supercenter at Elm Springs Road and I-49. The city also issue a permit to Memco and M&M Poultry for a new 60,000 square-foot warehouse and distribution center at 3001 E. Huntsville Ave. That project is valued in excess of $5 million. There were no new commercial or multifamily permits issued by the city of Fayetteville in May.

RESIDENTIAL SECTOR SLOWS
The residential building pace slowed again in May compared to the prior-year period as builders started half as many new homes. The four cities issued 104 permits for new single family dwellings valued at $28.397 million in May. This compared to 201 new home permits valued at $47.807 million a year ago.

New construction starts were off sharply in three of the four cites compared to May 2013. Bentonville issued 42 permits, less than half of the 79 new projects reported last year. This comes on the heels of a 58% decrease in April.

The same could be said for Fayetteville whose new permits (22) were valued at $6.446 million, down 41.7% from the same period in 2013. In the month prior, new construction in Fayetteville declined 81%.

Rogers issued just 19 permits last month for new homes. This was down from 49 new starts a year ago. Permit values also declined to $4.7 million, some 49% from the May 2013.
Springdale reported steady home construction with 21 new project permits valued at $6.55 million last month. This compares to 20 permits worth $5.92 million in the year-ago period.

STAYING BUSY
Despite fewer new starts, homebuilders report an active year with sales. Through the first five months of this year there have been 278 new homes sold in the two-county area, that compared to 267 in the same period of 2013, according to Paul Bynum, market analyst with MountData.com

Nicky Dou, a sales broker for three new subdivisions in Benton County, said the new home market is strong. Dou said in the first half of 2013 she had 66 closed sales totaling $18.6 million. In mid-June her sales pending and finalized totaled 69 with $19.5 million in production values.

"Out of my 73 sales so far 41 were new construction and 32 were resales,” Dou said on Wednesday (June 25). "The new homes in good locations are selling before they are even finished. In my experience – some of our subdivision like Hyde Park I can barely list them before they are is an offer. It is a great market for new construction homes and even resale homes if they are in a good location, priced properly and marketed well."

CONSTRUCTION ACTIVITY
Brent Hanby, co-owner of Encore Flooring & Building Products in Springdale, recently told The City Wire his own business is bustling thanks to builders and remodelers. He said every contractor he has spoken to is busy with work throughout the summer.

Builders say there lost some days throughout the long winter and rainy spring, which has had them playing catch-up. They report a tight labor pool for skilled trade because of the active commercial building and infrastructure work underway in the region.

“With demand for construction growing in most states, many firms are slowly rebuilding their depleted payrolls,” said Stephen E. Sandherr, CEO of the Associated General Contractors Association.

Sandherr warned that if the overall economic growth slowed, construction employment could backslide in many states. In Arkansas, the group reports 400 fewer construction jobs in May from the prior month. Year-over-year the state’s construction sector has added 1,500 jobs, a 3.3% gain.

NEW PERMIT VALUES (MAY)
Bentonville $65.988 million, up from $23.521 million
Fayetteville $6.446 million, down $11.184 million
Rogers $6.749 million, down from $9.3 million
Springdale $11.702 million, up from $6.19 million

(Permits include new commercial and residential projects and exclude remodels and alterations and additions.)

Arvest Bank named Zane Ludwick as a vice president. He is a commercial banker working from the Joyce Boulevard location in Fayetteville.

Ludwick joined Arvest Bank in 2008, starting as a credit analyst. He was promoted to commercial lender in 2012.

 “Zane has a real drive to help Arvest customers realize their financial goals and get the most from their financial services,” said Bryn Bagwell, area loan manager for Arvest Bank in Fayetteville. “He is always conscious of their needs and how Arvest can best fill those needs within the local and national business climate. He is a great asset to our Arvest team.”

 Ludwick graduated from Springdale High School in 2004 and from the University of Arkansas in 2008 with a bachelor’s degree in finance with concentrations in banking and real estate.

 Ludwick serves as treasurer for the Benton County Chapter of Ducks Unlimited and as a diplomat for the Fayetteville Chamber of Commerce. He is also an active member of the Susan G. Komen for the Cure Ozark Affiliate.

He and his wife, Morgan Ludwick, have a three-month-old son, Owen Cecil Ludwick.

Clete Brewer, CEO of BlueInGreen announced the hiring of Roy Pearson as vice president of manufacturing and Greg Gaffney was appointed as regional sales manager at the Fayetteville firm.

Pearson will be responsible for BlueInGreen’s manufacturing growth and product improvement initiatives as the company continues to establish a more powerful presence in the water treatment industry.

He brings to the role more than 14 years of experience within engineering and manufacturing. Product quality and post-sale support will be key initiatives for Pearson as BlueInGreen continues focus on leading the water treatment industry. He holds a bachelor’s degree in mechanical engineering from the University of Arkansas and a master’s degree in business from Webster University.

“We are excited to have Roy join the BlueInGreen team,” said Brewer. “Throughout his career, he has managed some very large manufacturing projects, and will be driving our efforts to standardize and improve the manufacturing of our systems. We believe that focusing on manufacturing improvements, at this point in time in the company’s growth, will accelerate our sales.”

Additionally, Greg Gaffney has been hired as a regional sales manager. Gaffney comes to BlueInGreen after working in the water and wastewater business with Severn Trent for 16 years where he managed sales networks in the United States, Canada and Mexico.

Gaffney will assist in BlueInGreen’s expansion into all of the North American markets. He holds a bachelor’s degree in business market from the University of Houston.

“We are very excited about the skill sets that Greg brings to our team,” Brewer said. “Greg will be able to utilize and leverage his sales network and contacts within the industry to continue to expand sales for BlueInGreen. We have a great line of products and believe that Greg will be instrumental in the growth of the company.”

Wal-Mart and many other retailers are wrestling with inventory levels growing faster than sales. In April, Wal-Mart acknowledged during its Year Beginning Meetings that the retailer lost about $3 billion in sales last year because some products were out of stock, while at the same time its overall merchandise inventory grew a faster clip than its sales.

Inventory has been rising for the past three years at Wal-Mart, but execs with the retailer say the retailer’s overall inventory levels are in good shape. However, analysts such as David Strasser at Janney Capital Markets have said the prolonged uptick in inventory is “likely getting marked down substantially, driving sales at lower margins.”

Strasser said weaker than expected holiday sales across the retail spectrum, were further pinched by a long, harsh winter that greatly condensed the prime selling window  the spring seasonal items.

Analysts believe the uptick in Wal-Mart’s inventory levels — up 5.5% between June 2012 and 2013 – continues to have a negative impact on margins and bottom line profits.

"There can be several reasons for high inventory levels such as slow sales due to product/store selection, seasonality issues, changes in consumer demand, and/or replenishment issues," said Jami Dennis, co-owner of Rapid Training Solutions. "It isn’t just a negative impact on suppliers, but also Walmart and the consumer. It clogs up the system and slows down the flow of new product scheduled to go into the store for the next season.”

Dennis said it's simple math.

"You cannot add, unless you subtract, therefore, they must price adjust to move through the goods to free up shelf space. Suppliers often help fund price adjustments to move through the inventory. Unfortunately, many suppliers are not proactively managing their store level inventories and watching order levels to ensure that their ship-to-sales ratios are appropriate to drive sales and profitability, without overstocking stores," Dennis explained.

She said Wal-Mart gives each supplier a handy tool in Retail Link access to help monitor the business and partner in the decisions to minimize the losses. The more collaborative the relationship, the less frequency of these issues.

PROMOTIONAL PRICING
Promotional pricing has become all too common, around the mall and off-mall areas, according to Ken Perkins, president of Retail Metrics.

Retailers from Wal-Mart to Old Navy are blasting customers with e-mail blasts featuring hourly sales for special items — in-store and online. Analysts say this promotional pricing with savings up to 30% or more is dangerous, because consumers quickly begin to expect it and will balk if the promotional discounts are taken away.

Wal-Mart began last fall to aggressively cut inventory in certain categories including health and wellness and home. The retailer had to take big markdowns late last summer to move through excess women’s apparel, and they were also left with an overhang of school supplies heading into the holiday season.

INSIDE THE BACK ROOM
A veteran Walmart employee who manages the back room of a Walmart Supercenter told the City Wire recently during Wal-Mart shareholder week that consumables rarely stack up, but apparel, home and seasonal merchandise are often carried over from year to year.

“My store is sitting on three years of school supplies. We donate some, but we will still have supplies in the back room this year when the new shipment arrives later this summer,” the employee said.

This inventory overhang creates a challenging climate for the retailer and its suppliers. The store employee said it is disconcerting to see a new shipment come in of something already setting in back room.

“I know that is going to affect my bonus,” the employee said, referring to the annual bonus pay that is tied directly to that facility’s operational performance and profitability.

REPLENISHMENT TRANSITION
There is some hope that Wal-Mart’s new Global Replenishment System (GRS), in use now by a few large suppliers will help with more accurate demand forecasting and in reducing empty shelf issues and curtain excess inventory stacking up.

GRS will eventually replace a system known as Inforem, which was created by IBM and last updated in 2007. Inforem uses an upward forecast modeling system, the complete opposite from the downward forecasting model used in GRS.

Duncan Mac Naughton, head of merchandising for Walmart U.S., told investors in April 2012 that the retailer was working on the GRS which is believed to be a better forecasting engine. He said minimizing inventory at the store level, improving out-of-stocks with better forecasting is an end-to-end commitment using technology to drive better performance in the store.

“It will allow us to be more real-time with our supplier on what our expectations and our needs are and we will deliver better real-time inventory to our stores,” Mac Naughton said at the investor conference.

Wal-Mart continues to slowly phase in the new GRS system and convert more departments and suppliers from the old Inforem system. The retailer is, according to sources, proceeding cautiously to work out any kinks in the system.

CONVERSION INSIGHT
Insiders said the early conversions have been frightful for some suppliers with lost shipments leading to high out-of-stocks at the distribution center and store. There are very few experts on GRS subject matter as the system still at this stage and Wal-Mart’s replenishment managers are also still learning the system.

Dennis said working through this transition with the replenishment manager and making sure all the different cut-over steps are uploaded and established correctly on the front end will be the deciding factor of a supplier’s transition success.

When a supplier is given little notice of the transition, Dennis said the best thing a supplier can do is review their “Item/DC” and “Item/Store” – items at the distribution center and items in the stores – forecast variances and offer their recommendation for a new forecast for each variance. She also recommends that suppliers complete a lead time audit, and make sure an accurate order increment and minimum order quantity is in place for each “Item/DC” combo, if the supplier stores product at the distribution center. The lead time audit is a validation of processing and transit time from supplier ship point to each Wal-Mart distribution center.

Dennis said suppliers who want to make an easy transition to GRS should make sure they have an open line of communication with their replenishment manager and a firm grasp of the new tighter forecast variance.

It is a story of recovery and growth at Riverbend Industries in Fort Smith, according to CEO Ron Embree.

It was just last year that Embree said the company had its worst year. The factory was reeling from the closure of Whirlpool the year before. With the company responsible for sometimes more than 90% of its business having closed its local Fort Smith operations, the company had to reposition itself.

During this time, Embree said he was able to invest in a company out of Northwest Arkansas called Kosmo Koolers, which had designed a one-of-its-kind three-legged liquid cooler. While terms of the deal were not disclosed, Embree did say he spent about $500,000 retrofitting equipment at Riverbend to manufacture the coolers.

The company had initial success with the product, getting it into Sam's Club stores across the nation and bringing its employee count from a low of 63 people in 2013 up to its current level of 150, including temporary employees.

And while Sam's Club had decided to "go in a different direction" and no longer carries the item, Embree said things are still looking up for what are now his two companies under one roof — Riverbend Industries and Kosmo Koolers.

During a showing of the company's three spicket cooler at the National Hardware Show in Las Vegas the week of May 5, the cooler won one of the show's top awards, he said.

"We were won innovative product of the year and this cooler will be coming out in their July magazine — National Hardware Retailers Magazine. Out of over 6,000 products, one of the top 20 or 30 products at the show and there's some big, big names there. So we were pretty pleased with it.”

The award, he said, is not solely based on cool new concepts. Instead, he said various business factors come into the decision making process with regard to the award.

"It's supposed to be based on sellability and what they think the market will like to buy.”

While Sam's Club is no longer carrying the cooler, the world can still get their hands on the product and another innovative product designed and manufactured by Kosmo Koolers — the freestanding Kosmo cooler.

Even though the designation from the National Hardware Show takes into account market factors and and an item's sellability, Embree said he does not expect to compete with the big dogs in the industry anytime soon.

According to figures cited by the Outdoor Recreation Association, more than $646 billion was is spent annually in the United States on outdoor recreation, resulting in 6.1 million direct jobs. The same organization said in Arkansas, more than $10 billion in consumer spending is associated with outdoor recreation accounting for $2.9 billion in wages and salaries spread among 125,000 direct Arkansas jobs. The consumer spending results in more than $696 million in state and local sales tax revenues, the ORA said.

While no specific figures were found for the cooler industry, a 2012 Houston Chronicle report about the expansion of Igloo's Houston-area manufacturing facility said the company held 45% of the cooler marketshare, up from 38.1% in 2010.

Embree said he does not expect to compete for marketshare against the big dogs like Igloo or Coleman. Instead, he said Kosmo Koolers will focus on online sales through retailers like Amazon.com and getting their products in local stores. The company's products are for sale at retailers like CV's and Marvin's IGA in the Fort Smith and Northwest Arkansas areas at retail prices ranging from $40 to $59.97.

"We're not going to have hardly any marketshare. I mean, compared to Igloo, Coleman, Rubbermaid and them, we'll have small marketshare. I don't know exactly the market, but you know if I was selling $1 million to $3 million worth of product, I would be pretty pleased. And that's a drop in the bucket for the total marketshare.”

The goal, he said, was to increase sales to 35,000 units in 2015. Even at that pace of sales, he said it will still take a while to get the company's staffing levels back to the peak of 300 employees in 2007.

"I think it will take at least three years unless something happens that I'm not aware of right now.”