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Younkers stores in Iowa look to be closing

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Reports indicate the parent company of the Younkers stores will be sold to a liquidation company that will shut the stores down.

Younkers has 15 stores in the state and Iowa Workforce Development indicates seven of the stores have given notice they are expecting to make layoffs. Iowa State University Economist Dave Swenson says the closings would follow a trend among this type of store.

“Downtown retail has struggled in all places for decades and retaining and sustaining downtown retail — especially legacy retail has been something that many major cities, many major metropolitan areas have struggled with,” according to Swenson. Younkers began in Iowa 162 years ago, and was a downtown anchor store in many cities. Swenson says the closings indicate a basic issue of supply and demand in retail as says the economics of the situation dictate there  are too many retail outlets and not enough business to sustain the stores.

Swenson says the economy in the areas where the Younkers stores close will adjust. “Some fraction of its employees will be absorbed by the rest of the retail sector — especially by the sector that that store was in,” Swenson says. “So, the overall economy doesn’t change. What you will see with the closing of a store like this, like Younkers in an area, is just the economy adjusting to the actual demand in the regional economy and where that demand is.” Swenson says cities have tried to adjust to keep these “legacy” type stores, but he says they can bring in new people to the community and they may not be the same ones that would shop at a department store.

He says there are some similarities to other store chains which have had problems. “J.C. Penneys was a store that struggled to adapt to a different demographic. Sears is a different category altogether,” he says. “Sears was bought up and basically badly managed for over a decade — which is most of its problems.” Swenson says online shopping has impacted all types of retail stores and it has had an impact on Younkers as well. But, he says it’s the type of store that Younkers is that is one of the biggest factors.

“You can go back far enough you can remember Montgomery Wards or other kinds of categories of what are called legacy retailers that might have been historically anchors to downtown commercial activities. Many of them have closed,” Swenson says.

The Younkers stores which have given notice to Iowa Workforce Development of pending layoffs are in: Dubuque, Mason City, Coralville, Sioux City, Des Moines and West Des Moines.

 

State grants awarded to 18 towns to help make old buildings a catalyst for new development

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This bank building in Cascade is one of the projects.

Eighteen Iowa communities are getting grants of $100,000 from the Iowa Economic Development Authority to redevelopment of buildings under the Community Catalyst Program. Jim Thompson oversees the new program which has a simple goal.

“Communities select a building that’s in need of remediation that will not only serve as an economic catalyst — thus the name — but also serve as an example to other property owners that are adjacent. To be able to see that economic activity can happen, even in the smallest of towns,” Thompson says. The program is open to all communities, but the rules require 40 percent of the grants to go to those with populations of less than 15-hundred residents. Fifty percent of those size communities that won grants in this first year.

“Smaller communities have less capacity,” Thompson says, “and it’s not just always in dollars. Sometimes it’s in administrative function and in leadership. So, we have been really working hand-in-hand with these communities as applicants for these buildings.” Fifty-three communities applied for the program and 18 received the maximum $100,000 award.

“One unique thing about this program is that it did not require any local match — although it was scored competitively against the other applicants based on their match,” Thompson says. “So, it didn’t’ have to be just a cash match. We also allowed communities to come up with an in kind contribution.” He says communities provided the in-kind match in a lot of ways, such as waiving building and other permit fees.

He says they allowed the communities to be creative and some are supplying trucks and labor to help renovate the buildings. Thompson says some of the projects are already in the works and are paying off.

“I look at a project like the city of Pocahontas. They had a vacant Odfellows building and they were able to recruit a dentist on the first floor in a downtown location and they are actually going to improve all floors of the office building and they are actually going to be able to serve patients right in their downtown location,” Thompson says. He says the program saves old buildings that may’ve been torn down and turns them into something that creates new things.

“We really did look at preservation as an economic development tool. So, we wanted these projects remediated in a way that was appropriate to the building and to the downtown,” according to Thompson. “And when you do that and can make them economically feasible — boy it makes a great example in a community.” The communities have two years to complete the projects.

Here are the projects and their total costs:

Bellevue: rehabilitate Old Button Factory with public restrooms, welcome center and a business development center ($1,789,600.00)
Brooklyn: rehabilitate the Brooklyn Opera House ($2,233,310.00)
Cascade: restoration of the Old Bank Building 1st floor business improvements 2nd floor 2 apartments ($257,500)
Clarence: rehabilitate the Clarence Motor Company Building façade restoration, 2 storefront improvements, office space. ($430,174)
Clearfield: rehabilitate 300 Broadway 1st floor for business development 2nd floor apartment and 2 rentable overnight rooms ($190,000)
Dyersville : rehabilitate Riverfront Landing Brewery with a Tasting Room, Event Space: redevelope the sewing factory building ($620,000)
Grinnell: rehabilitate Fourth Avenue Beyer Block Exterior Improvements creation of 6 residential units & 2100 sq. ft. commercial ($1,888,700)
Hawkeye: West Main Street Opera House Project Exterior Façade Rehab, Commercial space rehab & apartment rehab ($188,500)
Jefferson: rehabilitate Odd Fellows Building & Software Development Workforce Training Initiative ($1,706,667)
Keota: rehabilitate the Ramsey Building 1st floor Law Office, 2nd floor two apartments ($430,150)
Lenox : rehabilitate the Bunn Jewelry Building Mexican Restaurant & Woodworking Shop with four apartments upstairs ($571,000)
Maquoketa: rehabilitate110 S. Main Street Façade rehab 1st floor commercial build out & two 2nd story apartment ($300,000)
Mason City: rehabilitate B & O Building 2 commercial bays rehabed & 4 apartments 2nd floor($339,648)
McGregor: rehabilitate The Sullivan Opera House: Bringing quality downtown housing & shopping ($756,000)
Pocahontas: rehabilitate the Oddfellows with façade improvements, New Dental Office & 2nd floor banquet hall and office space ($920,000)
Stanton: rehabilitate Historic Mason Building Mixed Use Renovation Adds Downtown Living & Additional Business Spaces ($284,000)
Stuart: rehabilitate. Hotel Stuart: 1st floor restaurant Upper level hotel suites ($761,964)
Zearing: rehabilitate 108 N. Main Street Façade rehab, windows, two 2nd story apartments ($200,000)

Ackley, Eldon, Mapleton, Northwood and Oxford Junctione each received community technical assistance planning grants of $5,000 each.

 

Iowa Business Council survey shows economic growth expected in next 6 months

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Georgia Van Gundy

Leaders of Iowa’s largest employers are predicting economic growth over the next six months, but they’re also concerned about an ongoing shortage of qualified workers.

A new survey from the Iowa Business Council (IBC) shows 80% of its members expect higher sales through summer. IBC executive director Georgia Van Gundy says those employers are struggling to attract and retain a quality workforce.

“We have our 2.8 percent unemployment rate and Iowa ranks fourth as far as the number of people already employed in the workforce,” Van Gundy said. “We just don’t have a lot of people to draw from.”

The IBC recently formed a Business Education Alliance to get at the root of the problem. “Our first meeting was great in February. Our members had the opportunity to talk about what their challenges are and we had a great conversation about how we start moving forward,” Van Gundy said.

According to the survey, half of the IBC members say they will increase capital spending and nearly half forecast hiring more workers over the next six months.

(Thanks to Rob Dillard, Iowa Public Radio)

 

 

Owner of Clinton packaging company named SBA ‘Small Business Person of the Year’

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Bob Simpson

The president of an eastern Iowa company that makes empty boxes primarily for the bakery industry is being named Iowa’s Small Business Person of the Year by the U.S. Small Business Administration.

Bob Simpson heads Big River Packaging Company in his hometown of Clinton. The 66-year-old former electrician says putting his staff first is one key element to his business philosophy.

“It was primarily focused on the employees,” Simpson says. “How to keep people happy and productive and realizing that their job is important and really getting them to take ownership in what they were doing, like they own it.” International Paper closed its Clinton plant in 2001, putting more than 350 people out of work. Simpson saw an opportunity for a niche market utilizing some of the experienced professionals who remained in town. He opened his company a few years later and now has 39 employees.

“If their job isn’t important, we wouldn’t have them, that role wouldn’t be filled,” Simpson says, laughing. “Every job is critical to the customer and to the quality of the product that we produce. People are surprised when they tour the plant to discover that making empty boxes is a lot more complicated than you might think it is.” The boxes can be ordered online (www.brpboxshop.com) and tasty treats from cupcakes to macarons all over the planet now come in cardboard containers made in Clinton. The company boasts 120,000 customers globally.

“The boxes that we make, the designs that we’ve incorporated into our offerings, many of them are unique,” Simpson says. “While it costs more to ship the boxes than the boxes cost, we have customers that are willing to do that.”

As Iowa’s Small Business Person of the Year, Simpson is invited to attend National Small Business Week ceremonies in Washington, D.C on April 29th and 30th. All 50 winners will be recognized and the National Small Business Person of the Year will be named.

Audio: Matt Kelley interview with Simpson. 6:53.

No change in state unemployment rate for third straight month

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The state unemployment rate held at 2.9% in February, marking the third straight month at that level.

Iowa Workforce Development spokesman Cory Kelly says some businesses have still been adding workers despite the very low unemployment. “We saw a decrease again in unemployed Iowans — that went down to 47,900 from 48,300 in January. That estimate is about 8,500 lower than one year ago,” Kelly says. He says the number of jobs has steadily been increasing from last February when the unemployment rate was three-point-four percent.

“With nine-thousand-900 jobs having been added. That growth has been mostly concentrated in private service sectors, and that’s about five-thousand-700 jobs,” Kelly says. “Although goods producing industries have also been trending up.” The job additions have offset loses — with one area in particular continuing to see fewer workers.

“Construction is again shedding jobs in February — now marking the fourth consecutive loss stretching back to October,” Kelly says. “As a reminder, last year we had historical highs (in construction jobs) and we are coming off of those and going back to a state of normalcy,” Kelly says. Kelly says Iowa’s unemployment rate continues to be one of the lowest in the country.

“Nationwide the unemployment rate remained at 4.1% in February,” Kelly says, “Iowa’s currently ranked sixth nationally, tied with Maine and Wisconsin.” One Iowa city stood out on the national stage.

“Ames has the lowest unemployment rate for the entire United States for this past month of January,” Kelly says. Ames had an unemployment rate of 1.8% in January, just ahead of Honolulu, Hawai. Kelly says we’ll know next week if Ames held that spot when local unemployment numbers are released again.

 

Towable trailers continue to push up sales for Winnebago

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Winnebago Industries reports its best-ever second quarter. Net income for the Forest City-based motor home maker was $22.1 million, an increase of almost 45% compared to the same period a year ago.

President and CEO Michael Happe says the second quarter marked another period of solid, consolidated results for the company. “Our second quarter performance continues to reflect the journey we are on here at Winnebago Industries to build a more robust, balanced, increasingly profitable overall business model,” Happe says. “Much has changed in recent quarters at Winnebago Industries and our results this period are both a reflection of those accomplishments but they also highlight that we continue to have unfinished work to do.”

Second quarter revenues for the motor home segment of the business were up 1.5% from the previous year, while the towable segment for the company was up over 55% with the combination of the Winnebago and Grand Design branded lines. “This will be a net positive journey we believe,” Happe says. “We are pleased with our consolidated results in the second quarter, which are record numbers on both the top line and in profit generated.

Overall strong sales growth and meaningful margin improvement for the company were hallmarks of this quarter, certainly highlighted and generated by our growth in the towables segment. Another reflection in what’s changed in the last two years.”
Happe says he’s proud of the significant progress the company has made in the towables segment of the industry in the 18 months since acquiring the Grand Design brand.

“The Grand Design acquisition has been strategic and effective, and our own Winnebago brand of towables business is growing rapidly as well,” Happe says. “In an industry where 85-percent-plus of the units are towables, we have advanced our segment share from less than one-percent market share at the beginning of 2016, to somewhere in the mid-single digits presently, and most importantly doing that with favorable margins. We are optimistic about the ability of our towables businesses to make materially more progress in the market and help generate net-positive results for the company in the future.”

Winnebago reported revenue for the quarter rose over 26% to $468.3 million, up from $370.5 million last year.

(By Bob Fisher, KRIB, Mason City)

 

ABI survey finds optimism among businesses for second quarter

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Mike Ralston

A new survey from the Iowa Association of Business and Industry finds three-quarters of the business members expect increased sales in the second quarter of this year — with the rest expecting them to stay the same.

ABI president, Mike Ralston, says more than half the businesses expect to add more employees.  “The good news is that this is the second quarter in a row where we see this optimism, so hopefully it’s a trend,” Ralston says. He says businesses are seeing a lot of good things in the current economy to make them optimistic.

“Employment’s up, sales are up, revenue is up “You’ll notice in the survey there was a lot of talk about capital expenditures — so that’s always a great sign,” according to Ralston.

“Seventy-nine percent, almost 80 percent of the survey respondents plan to make a capital expenditures here in the second quarter of 2018. And that’s fantastic.” There are a couple of concerns amidst the optimistic figures.

“The first concern that we saw is one that we’ve seen for many years here in Iowa — and that’s people,” Ralston says. “…it doesn’t matter how big the company is, where it’s located or what industry it is in, everybody is looking for people. Hiring and being able to find enough people is still a concern.” The other concern involves the administration’s talk about trade issues.

“At ABI we believe more markets are good and free trade is good and there is a lot of concern about the president’s comments and actions related to trade and that sort of thing. So, that’s a concern too,” Ralston says. He says two key trade issues impact Iowa businesses.

“He’s been very aggressive on renegotiating NAFTA. NAFTA has been a huge positive for Iowa…and then to talk about steel tariffs on top or it. Our members are already seeing an increase in their costs. All of that is a real concern,” Ralston says. Ralston says they’ve expressed their opinions on the trade issues and can only sit back and wait. When it comes to finding workers — he says companies are trying all sorts of things to get people hired — including adjusting shifts and working hours.

“Maybe somebody’s going to work four hours in the morning and four hours at night and they want some time to do family stuff in between,” Ralston explains. “People are looking at split shifts, and I believe data shows wages are rising. All those are reflections of a tough labor market.” ABI is comprised of 1,500 member companies of all types and sizes in all 99 counties employing more than 330,000 Iowans.

The survey results may be found here.

 

Sales of beef to China going well for Omaha exporter

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Beef from Iowa is going to China through an Omaha exporter.

An official with the beef production plant, which became the first to ship beef to China when that market reopened last summer, says sales to the country are going well.

Jerry Wiggs is the senior director of export sales and marketing for Greater Omaha Packing Company. “Like any new market, it has its challenges,” Wiggs said. “However, if I do a comparison of where I was in the first eight months of, say, shipping to Europe, compared to where we are eight months into shipping beef to China, we are probably a 1,000-percent more…shipping into China than what we were into the European Union.”

Many cattle producers in southwest Iowa supply animals to the Omaha facility. According to Wiggs, there’s great potential for U.S. beef in China because of its growing middle class population.

“I’ve been to China now three times in the last six months and it is amazing the growth that is going (on) over there,” Wiggs said. Mexico is one of Greater Omaha Packing’s biggest customers. Wiggs claims the disputes over NAFTA and the border wall, so far, have not hurt their business with Mexico. One of the company’s fastest growing markets for beef, according to Wiggs, is the Middle East – especially Saudi Arabia.

“The beef into Saudi Arabia – it’s been legal to ship there for a while, but they put up some regulations that a lot of the packers…aren’t willing to jump through some of these hoops,” Wiggs said. “A lot of times we’re willing to do what, say, a major beef packer may not be willing to do.”

The Greater Omaha Packing Company processes around 2,300 head of cattle per day and employs over 1,000 people. The company ships beef to all 50 states and 70 countries around the world.

(Photo courtesy: Greater Omaha Packing Co.)

 

Unemployment rate holds steady in January

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The state unemployment rate was 2.9% in January. Iowa Workforce Development spokesperson Cory Kelly says that matches the December rate which had been adjusted upward after its original release.
“December was first reported at 2.8%, but was moved up to 2.9 part of the annual “benchmark process.”

January’s rate held steady after job increases in the “durable goods” manufacturing category. “We added the most jobs this month in that sector, up 1,100, much of that monthly gain was due to hiring in metal fabricating shops,” Kelly says. “Both durable and non-durable goods factories have steadily trended up since last summer and have been largely responsible for Iowa’s non-farm employment growth.”

December’s adjusted rate is the first time the unemployment rate has done up since August.
Kelly says it is worthy to note that Iowa “is the only state in the union in which manufacturing is still the number one industry. So, we’ve done a very good job of hanging onto our manufacturing core. So, they are doing very well.”

Kelly says retail lost the most jobs in January, and the industry lost more than expected.
“We’re down about 1,400. This sector has not fared well recently as consumers slowly shift away from our brick and mortar establishments, and instead are turning to online retail shopping,” according to Kelly.

There were some other areas that lost jobs. He says transportation, utilities and warehousing lost around 600 jobs — be he says the loses came after some large gains for those sectors in November and December.

Kelly says the last 12 months have been good on the job front. “Over the year we are only showing substantial loses are in construction, down 4,600 and then retail trade, 3,400,” Kelly says. “Up over the year, it goes back to manufacturing. Iowa expanded on it’s yearly growth in January and has been fueled by gains in durable and non-durable manufacturing. Combined these two industries have gained 11,000 jobs since last year.”

The number of unemployed Iowans decreased to 48,300 in January compared to 49,300 in December. The unemployment rate was 3.4% one year ago — and the U.S. rate was 4.1% in January.

Iowa Supreme Court rules small business corporations don’t have family members

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State Judicial Building

The Iowa Supreme Court ruled today on how becoming a corporation impacts small businesses under the Iowa Civil Rights Act.

The case involves Joanne Cote, an employee of the Derby Insurance Agency in Sioux City from 19918 to 2014, who alleged she and other women were sexually harassed by her supervisor. The supervisor accused of harassment is Kevin Dorn, the husband of agency owner Patricia Dorn.

Patricia Dorn argued her company is exempt from the Iowa Civil Rights Act under a provision for companies with less than four employees. Most of her employees were family members, who are normally exempt from being not counted as employees.

Cote argued the company is a corporation and does not have family members and cannot qualify for the exemption.

The Supreme Court ruling says the justices are mindful that the legislature chose to exempt small employers from the Iowa Civil Rights Act to protect their freedom of association. But it says corporations do not have family members and the court must defer to the legislature to amend that provision if it chooses to allow small incorporated employers to omit the owner’s family members. The ruling upholds the district court and appeals court rulings that corporations do not have family members.

Here’s the full ruling: Derby-Insurance-Ruling-PDF