The Happs: the Russian Bear, The IBM fail & the death of Barbie
January 27, 2015
This is what entrepreneurs, small business and startups need to know in our world wrap up today!
Russia: The Russian bear is groaning as small business suffers
USA: IBM denies lay-offs even though the stock surges
USA: Why is Barbie going to the dogs? Profits collapse, CEO sacked
The Russian bear is groaning as small business suffers
The Russian economy is in further turmoil as the nation’s credit status is downgraded to junk status for the first time in more than a decade. The news comes on a bad day for Russian President Vladimir Putin who may be facing a fresh round of sanctions as audio of a taped phone conversation of Russian backed seperatists in the Ukraine indicates they were to blame for a bus bombing that has left nearly a dozen people dead. In announcing the downgrade Standard & Poors said: “The rouble briefly appreciated against the dollar but has since continued to depreciate, reaching about 66 roubles to the dollar, compared to about 35 a year ago,” and “We could lower the ratings if external and fiscal buffers deteriorate over the next 12 months faster than we currently expect,” With falling oil prices, downgrades and sanctions the Russian economy is about as bad as gets. One EntreHub member in Moscow indicated that sales at his small export business were down nearly 60% and the pipeline for future sales was looking pretty grim: “The sanctions may not be biting us directly but the trickle down is and now we are seeing costs increase from rent to food; I am going to have to lay staff off next month just to keep my doors open”
IBM denies lay-offs even though the stock surges
IBM has roundly criticised Forbes for publishing an article indicating that the global services business was about to lay off 1 in 4 of its employees. IBM’s spokesman Ian Colley said that the company “flatly denies” the movement reiterating that IBM had already announced layoffs affecting several thousand of its employees. News of the lay-offs had investors in a flap who generally welcome the news of large scale layoff’s as an indication a business is trying to bring its costs under control. Before the denial from IBM came shares in the company rose by about 4% with stock in normal trade closing up 49c at $156.36.
Why is Barbie going to the dogs? Profits collapse, CEO sacked
Meanwhile the news is not great over at Barbie-make Mattel who has fired the boss after the company reported a collapse in profits by 59%. Bryan Stockton, CEO and Chairman, was shown the door almost immediately. The company, which is home to well-known brands from Fisher Price to Hot Wheels has hit hard times as young girls appear to be falling out of love with Barbie who, as a product line, had fallen more than 19.6% in 2013. The Barbie line accounted for a quarter of all doll sales in the US. In 2014 the business lost the crown as the world’s leading toy company with some suggesting the business has not been able to change with the times – especially as kids now play more with smart devices than they did a five years ago. Profits for the last three months of 2014 were down 59% while revenue fell 6%
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