December 12, 2017

Ryanair Promises to Improve Customer Service

The Irish airline said it would overhaul the way it communicates and be more lenient about fining customers over luggage sizes.

“We should try to eliminate things that unnecessarily” irritate people, Michael O’Leary, Ryanair’s chief executive, said at the company’s annual meeting after several shareholders complained about the impact of customer service on sales.

He said the airline would overhaul its Web site, set up a new team to respond to e-mail and stop fining customers whose carry-on baggage exceeded maximum sizes by a matter of millimeters.

“A lot of those customer-services elements don’t cost a lot of money,” Mr. O’Leary said. “It’s something we are committed to addressing over the coming year.”

While Ryanair’s focus on cost-cutting has helped it to grow — it flew more scheduled international passengers last year than any other airline — shareholders said the company’s reputation for poor customer service was limiting its room for growth.

“I have seen people crying at boarding gates,” said Owen O’Reilly, a shareholder. “There is simply something wrong there that needs to be addressed.”

Mr. O’Leary, who for years has played down such complaints, citing statistics about revenue growth and on-time departures, nodded as other shareholders told anecdotes about being verbally attacked at dinner parties and having family members who refused to fly Ryanair.

“I am very happy to take the blame or responsibility if we have a macho or abrupt culture,” he said. “Some of that may well be my own personal character deformities.”

Mr. O’Leary said he was personally irritated by the fact that some Ryanair employees fined customers when their carry-on baggage was slightly above the maximum size. He said management would now be encouraging staff members to be more lenient.

“If it’s a millimeter over size, get on with it,” he said. “We are not trying to penalize people for the sake of a millimeter.”

A front-page headline in an Irish newspaper the morning of the shareholder meeting said, “Ryanair sinks to new low,” after a Dublin surgeon was charged 188 euros ($254) to reschedule a flight days after his entire family was killed in a fire in England.

Mr. O’Leary apologized, said the customer’s money would be refunded and promised to deal more quickly with similar cases in the future.

Article source: http://www.nytimes.com/2013/09/21/business/global/ryanair-promises-to-improve-customer-service.html?partner=rss&emc=rss

Harder Edge From Vanity Fair Chafes Some Big Hollywood Stars

But even the best relationships can hit a rough patch. Recently, Vanity Fair has toughened its coverage of Hollywood with articles about the troubles plaguing the making of Brad Pitt’s movie “World War Z” and the intrusiveness of Scientology in Tom Cruise’s romantic life and marriage to Katie Holmes.

Some celebrities and their handlers, accustomed to more control over coverage, are not pleased. In May, Gwyneth Paltrow, who recently cooperated on cover articles for People and Good Housekeeping, asked friends not to deal with Vanity Fair.

“Vanity Fair is threatening to put me on the cover of their magazine,” Ms. Paltrow wrote by e-mail, according to someone who had seen the message. “If you are asked for quotes or comments, please decline. Also, I recommend you all never do this magazine again.”

The magazine still has enormous influence in Hollywood. Graydon Carter, its editor, remains a figure to be reckoned with, and the Vanity Fair post-Oscar party remains the hottest ticket in town. But Ms. Paltrow’s move has prompted other Hollywood insiders to push back.

“Everyone grovels to Graydon and other writers there and covets invitations to their parties,” said Leslee Dart, a publicist whose clients include Tom Hanks, Woody Allen and Meryl Streep. “They’re going to be in for a rude awakening.

“I don’t think people care the way they used to anymore,” Ms. Dart said. “It’s not important to them to grovel as they once did.”

As early as last year, a cover story about Tom Cruise attracted not only the usual denials from the Church of Scientology but also an angry denunciation from Bert Fields, Mr. Cruise’s lawyer and a longtime Hollywood fixer. “Anyone associated with this sleazy story should be ashamed of themselves — not just for publishing lies, but also for being unoriginal, sloppy and dull,” he told E! Online.

In response to the criticism, Vanity Fair released a statement from Mr. Carter: “We wouldn’t be doing our job if there wasn’t a little bit of tension between Vanity Fair and its subjects. In any given week, I can expect to hear from a disgruntled subject in Hollywood, Washington, or on Wall Street. That’s the nature of the beast.”

The chill between the magazine and Hollywood is one indication of how much the relationship between celebrities and the media has changed. Celebrities and their publicists can now circumvent traditional media outlets and communicate with their fans directly through Twitter and Facebook. “Magazines are less relevant,” Ms. Dart said.

Vanity Fair remains one of the most thoroughly reported and written magazines in the industry. As enterprise journalism has been under siege and however soft their celebrities covers may have been, the magazine aggressively covers business and scandal, including in Hollywood.

Since Mr. Carter took over the magazine in 1992, it has won 14 national magazine awards. Apart from its Hollywood features, the magazine publishes articles on subjects as various as dating habits in Silicon Valley and the journalist Richard Engel’s experience as a hostage in Syria. While it features plenty of slender actresses like Fiona Shaw, it does not hesitate to print in the same issue a portrait of the stouter titans of Watergate, Carl Bernstein and Bob Woodward.

“Vanity Fair’s influence is still enormous,” said Ron Meyer, president of Universal Studios, who in recent years has hosted an annual dinner honoring Mr. Carter the Thursday before the Oscars.

Because Vanity Fair must plan covers months in advance, it can stumble, as happened in July when the magazine featured Channing Tatum for an article on his latest film, “White House Down,” which bombed at the box office. The magazine is on surer footing with celebrities from bygone eras. The July issue also featured recollections about the actress Ava Gardner and an essay about Mary McCarthy’s 1963 book “The Group” about young women from Vassar, even though the college began admitting men 44 years ago.

The magazine has been mockingly called “Kennedy Fair” for its steady coverage of a president who died a half-century ago. The September issue features Princess Diana on the cover.

Alain Delaqueriere contributed research.

This article has been revised to reflect the following correction:

Correction: September 10, 2013

An article on Monday about Hollywood’s displeasure with Vanity Fair’s sharper celebrity coverage erroneously included one establishment on a list of restaurants in which its editor, Graydon Carter, invests. Mr. Carter invests in the Beatrice Inn and Monkey Bar, but he is not an investor in the Minetta Tavern.

Article source: http://www.nytimes.com/2013/09/09/business/media/harder-edge-from-vanity-fair-chafes-some-big-hollywood-stars.html?partner=rss&emc=rss

European Central Bank Holds Rate Steady at 0.5%

“I can’t share the enthusiasm” about budding growth in the euro zone, Mario Draghi, the president of the E.C.B., said at his monthly news conference. “These shoots are still very, very green.”

The E.C.B. left its benchmark interest rate unchanged at a record low of 0.5 percent Thursday, a decision that had been expected after recent economic indicators showed the euro zone economy was beginning to recover, albeit weakly. But he said the central bank had not ruled out future rate cuts.

“We certainly are alert to the geopolitical risks that may come from the Syrian situation,” he added.

Mr. Draghi’s remarks were unexpectedly pessimistic and could dampen hopes by some economists and political leaders that the euro zone is finally on the mend, following a stubborn recession that has pushed unemployment to more than 25 percent in Spain and Greece.

The central bank also revised down slightly its forecast for euro zone growth in 2014, to 1 percent from 1.1 percent.

The E.C.B. may not welcome undue optimism about the euro zone economy because it could cause market interest rates to rise and make credit even more unaffordable for the businesses and households in Southern Europe that need it most.

“Mr. Draghi believes investors are jumping the gun on the state of the euro zone economy and is providing a reality check in an effort to talk down market rates,” Nicholas Spiro, managing director of Spiro Sovereign Strategy, said in an e-mail.

European stocks headed higher and the dollar reached a six-week high against the euro while Mr. Draghi was speaking, as investors took his words as a sign the bank would keep interest rates low.

On Thursday in Britain, which does not use the euro currency, the Bank of England also held interest rates at a record low, as policy makers there, too, were hesitant to celebrate tentative signs of an economic recovery.

Mr. Draghi indicated that the E.C.B. Governing Council, which held its monthly monetary policy meeting Thursday, had not ruled out further cuts in the benchmark interest rate. During the debate Thursday, he said, some members argued against a cut because of signs of better growth, while others noted that growth remained tentative.

Some analysts agreed that it was too soon to feel optimistic about the euro zone economy.

The E.C.B.’s outlook showed “caution that we think is warranted,” Marie Diron, an economist who advises the consulting firm Ernst Young, wrote in an e-mail.

Mr. Draghi also addressed suggestions that Greece might need further restructuring of its debt, which many analysts argue is still well beyond the country’s ability to pay.

He repeated his recent insistence that the central bank would not be willing to take any losses as the largest holder of Greek bonds in any sort of debt relief that international creditors might be planning for Greece. Replying tersely to a question on the topic, Mr. Draghi said that the E.C.B. charter prohibited it from financing governments.

Earlier in the day, Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers, told the European Parliament that Greece would need more aid next year. But he studiously avoided using terms like bailout or loans, opting instead for terms like “support” and “measures.”

Mr. Dijsselbloem’s testimony, which lasted nearly two hours, appeared crafted to avoid irritating voters in countries like Germany, which faces a general election this month and where there is weariness at the prospect of bailing out other euro zone countries after three years of debt crises.

According to official European Union data, the euro zone grew at an annualized rate of 1.2 percent in the second quarter of 2013, marking the end of a recession that began in mid-2011.

James Kanter contributed reporting from Brussels.

Article source: http://www.nytimes.com/2013/09/06/business/global/european-central-bank-holds-rate-steady-at-0-5.html?partner=rss&emc=rss

Times Site Is Disrupted in Attack by Hackers

The hacking was just the latest of a major media organization, with The Financial Times and The Washington Post also having their operations disrupted within the last few months. It was also the second time this month that the Web site of The New York Times was unavailable for several hours.

Marc Frons, chief information officer for The New York Times Company, issued a statement at 4:20 p.m. on Tuesday warning employees that the disruption — which appeared to be affecting the Web site well into the evening — was “the result of a malicious external attack.” He advised employees to “be careful when sending e-mail communications until this situation is resolved.”

In an interview, Mr. Frons said the attack was carried out by a group known as “the Syrian Electronic Army, or someone trying very hard to be them.” The group attacked the company’s domain name registrar, Melbourne IT. The Web site first went down after 3 p.m.; once service was restored, the hackers quickly disrupted the site again. Shortly after 6 p.m., Mr. Frons said that “we believe that we are on the road to fixing the problem.”

The Syrian Electronic Army is a group of hackers who support President Bashar al-Assad of Syria. Matt Johansen, head of the Threat Research Center at White Hat Security, posted on Twitter that he was directed to a Syrian Web domain when he tried to view The Times’s Web site.

Until now, The Times has been spared from being hacked by the S.E.A., but on Aug. 15, the group attacked The Washington Post’s Web site through a third-party service provided by a company called Outbrain. At the time, the S.E.A. also tried to hack CNN.

Just a day earlier, The Times’s Web site was down for several hours. The Times cited technical problems and said there was no indication the site had been hacked.

The S.E.A. first emerged in May 2011, during the first Syrian uprisings, when it started attacking a wide array of media outlets and nonprofits and spamming popular Facebook pages like President Obama’s and Oprah Winfrey’s with pro-Assad comments. Their goal, they said, was to offer a pro-government counternarrative to media coverage of Syria.

The group, which also disrupted The Financial Times in May, has consistently denied ties to the government and has said it does not target Syrian dissidents, but security researchers and Syrian rebels say they are not convinced. They say the group is the outward-facing campaign of a much quieter surveillance campaign focused on Syrian dissidents and are quick to point out that Mr. Assad once referred to the S.E.A. as “a real army in a virtual reality.”

In a post on Twitter on Tuesday afternoon, the S.E.A. also said it had hacked the administrative contact information for Twitter’s domain name registry records. According to Whois.com, the S.E.A. was listed on the entries for Twitter’s administrative name, technical name and e-mail address.

Twitter said that at 4:49 p.m., the domain name records for one image server, twimg.com, were modified, affecting the viewing of images and photos for some users. By 6:29 p.m. the company said, it had regained control, although as of early evening, some users were still reporting problems receiving images.

The social networking company, based in San Francisco, said no user information had been affected.

Mr. Frons said the attacks on Twitter and The New York Times required significantly more skill than the string of S.E.A. attacks on media outlets earlier this year, when the group attacked Twitter accounts for dozens of outlets including The Associated Press. Those attacks caused the stock market to plunge after the group planted false tales of explosions at the White House.

“In terms of the sophistication of the attack, this is a big deal,” Mr. Frons said. “It’s sort of like breaking into the local savings and loan versus breaking into Fort Knox. A domain registrar should have extremely tight security because they are holding the security to hundreds if not thousands of Web sites.”

Vindu Goel contributed reporting.

Article source: http://www.nytimes.com/2013/08/28/business/media/hacking-attack-is-suspected-on-times-web-site.html?partner=rss&emc=rss

New Chinese Agency to Increase Financial Coordination

HONG KONG — The Chinese authorities said Tuesday that they would set up a group to coordinate financial regulation, in an apparent attempt to reduce risk and wean the economy off of easy credit and steer it toward slower, more sustainable expansion.

The new agency will, among other things, coordinate monetary policy and financial regulatory policies, help regulate financial products where jurisdiction overlaps, and coordinate information-sharing and statistics, an announcement on the Chinese government’s Web site said.

The entity will be led by the central bank and will include representatives from banking, stock market and insurance regulators, as well as the State Administration of Foreign Exchange.

Described in a Xinhua report as an “interdepartmental joint conference system for financial regulation,” the body appears to lack real enforcement or policy-making powers, which will remain with a host of other agencies in the financial sector. The group will “not alter the current system of financial regulation, and will not replace or weaken the current division of responsibilities of the relevant agencies,” the government announcement said.

The new arrangement appears to be “more of a coordinating scheme rather than a decision-making agent,” Zhu Haibin, chief China economist at JPMorgan in Hong Kong, said in an e-mail. “However, given the member composition, it will have a very important advisory role on financial regulation.”

The plans for better coordination also highlight Beijing’s acute awareness of the need to contain the risks that have built up within the country’s financial system amid a lending splurge that followed the global financial crisis in 2008.

At the time, the authorities in Beijing announced a stimulus package worth 4 trillion renminbi, or $654 billion at current exchange rates, and instructed banks to lend freely. Those efforts helped the Chinese economy bounce back quickly from the global downturn.

But the availability of cheap cash also led to a sharp increase in debt and in credit-funded projects undertaken with little regard to their ability to pay off the loans.

More recently, a sharp increase in so-called shadow banking — activities outside the formal banking sector that often entail riskier, less regulated lending — has further fanned concerns about credit quality.

The government leadership that took the helm in Beijing in March has been fairly outspoken about potential financial risks and has sought to rein in shadow banking activities. A cash crunch engineered by the central bank in June, for example, was widely seen as an effort to prompt banks to adopt a more prudent approach to lending.

But that episode also caused a period of market nervousness and concerns about the effect that more restrictive lending would have on economic activity. A report from a major government research body warning of risks to the financial system from poor coordination appeared to show that Beijing was eager to minimize disruption and exert more control over the shadow banking system.

“During the course of withdrawing stimulus policies, the major tightening of monetary policy and regulatory policies has lacked effective coordination,” said the report from the State Council Development Research Center, which advises the central government. It was published in the China Economic Times on Tuesday.

“This has had a massive impact on the entire financial system, especially the banking system,” the report said.

The center’s researchers said the financial tightening policies had successfully prevented excessively fast growth and a rebound in inflation but had also created risks of their own by encouraging the growth of financing activities outside the regulated system and by encouraging banks to rapidly expand new products off of their usual balance sheets.

“Lack of unity in regulatory policies and the lagging of development of the related legal framework has increased the difficulty of defusing risks from the shadow banking sector,” it said.

Those failings have allowed banks to get around regulators by, for example, using investment funds and other entities, the report said.

“The even deeper reason why regulatory policies have been so disparate and lacked unity is that reform of our country’s current financial legal system lacks so badly behind,” it added. “This is also at present the biggest difficulty we face in establishing effective mechanisms to isolate risks and defuse the risks in shadow banking.”

Article source: http://www.nytimes.com/2013/08/21/business/global/chinese-agency-to-increase-financial-coordination.html?partner=rss&emc=rss

Obama Seeking to Take Credit and Set Course for Economy

It may also be a reflection of how little the president — any president — can do to alter the country’s economic trajectory while he is faced with global forces that shape the financial system in the United States, as well as a domestic political system that has ground to a standstill, particularly over economic issues like taxes and spending.

The new public relations effort, which begins with a major address Wednesday and as many as six economic-themed speeches over the next two months, is intended to give Mr. Obama a chance to claim credit for the improving economy and to lift his rhetoric beyond the Beltway squabbles that have often consumed his presidency.

But the speeches will not contain big new proposals, senior administration officials said Monday, speaking to reporters on the condition that they not be quoted. Nor are they designed to break the hardening stalemate on economic issues between a president and his Republican adversaries in Congress. Instead, they will repackage economic proposals that the president has offered for years — sometimes in new formats, the officials said.

“The point is to chart a course for where America needs to go,” Dan Pfeiffer, the president’s senior adviser, said in an e-mail to the president’s supporters Sunday night. Officials said that course has improved significantly during Mr. Obama’s administration, giving Americans a sense of stability, if not complete economic security.

Mr. Obama’s adversaries on Monday were quick to point out that the president has frequently launched similar efforts to redefine or restate his economic agenda, often accompanied by rhetoric from his advisers about a new direction or emphasis. Most have run headfirst into opposition on Capitol Hill.

In the fall of 2011, Mr. Obama addressed a joint session of Congress to unveil a $447 billion jobs bill that has not passed. In 2012, as his re-election campaign neared its end, Mr. Obama renewed his vision with a 20-page economic plan. In his State of the Union speech in February, the president refocused on the economy after beginning his second term focused on gun control, immigration, climate change and gay rights.

And just this past May, Mr. Obama announced he was restarting his “Middle Class Jobs and Opportunity Tour,” with stops in Baltimore and Austin.

“They’ve been saying the same thing for four years,” said Don Stewart, a spokesman for Senator Mitch McConnell, the minority leader in the Senate. “The previous Democrat Congress passed his agenda — Obamacare, the stimulus, thousands of pages of regulations — and the economy is treading water. More taxes, more regulation, and more failures to unleash American energy jobs are not the answer.”

Republicans say Mr. Obama should have spent less time passing health care legislation early in his presidency and more time improving the economic fortunes of Americans.

“Memo to Obama and the White House: speeches don’t create jobs,” said Kirsten Kukowski, a spokeswoman for the Republican National Committee.

Senior administration officials on Monday conceded that the president was partly to blame for the Washington conversation veering away from the economic issues that many Americans believe are the most important. One official said that it was incumbent on Mr. Obama to shift the overall focus of the debate in Washington, and that has not happened.

In some cases, the White House has chosen to spend its time and political capital on other topics. Mr. Obama made it clear early this year that he wanted Congress to make a major push to pass an overhaul of the nation’s immigration system. The president also responded to the shooting of 20 children at Sandy Hook Elementary School by calling for broad new gun laws. His allies argue that the health care law and an immigration overhaul will help the economy, and they blame Republicans for blocking many of Mr. Obama’s economic policies.

But officials also criticized Republicans, especially in the House, for seizing on what the White House says are overblown scandals: the targeting of nonprofit groups at the Internal Revenue Service and the actions of officials in the wake of the attacks in Benghazi, Libya.

And they noted that some of the distractions in Washington have been out of Mr. Obama’s control. When oil spilled from the Deepwater Horizon well in the Gulf of Mexico in the summer of 2010, it consumed the White House for weeks. Hurricane Sandy’s destruction late last year and the tornadoes in Oklahoma City in May required presidential attention, as did tensions in the Middle East. Even the verdict in the Trayvon Martin case prompted presidential remarks on Friday.

Administration officials said the timing of the speeches was broadly related to the looming fiscal deadlines that are likely to spark bitter fights in Congress later this fall. Republicans are already promising big fights over extension of the nation’s debt limit and new budget battles.

But Mr. Obama’s aides said that the president wanted to avoid using the speeches as a negotiating platform over legislative programs. They said he would talk about housing, jobs, education, retirement and health. But they cautioned reporters not to expect a Congressional to-do list from Mr. Obama.

That decision is driven, the president’s top aides said, by a conclusion that there are no magic answers that will accelerate the economy’s recovery or help provide jobs to the millions of people who are still having trouble finding one.

Administration officials said they hoped Mr. Obama’s speeches would help frame the contours of a conversation that was broader than the Congressional debates in Washington, in part by reaching out to Americans, business owners and others.

Article source: http://www.nytimes.com/2013/07/23/us/politics/for-obama-another-round-with-the-economy.html?partner=rss&emc=rss

Court Tells Reporter to Testify in Case of Leaked C.I.A. Data

In a 118-page set of opinions, two members of a three-judge panel for the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., ruled that the First Amendment does not protect reporters who receive unauthorized leaks from being forced to testify against the people suspected of leaking to them. A district court judge who had ruled in Mr. Risen’s case had said that it did.

“Clearly, Risen’s direct, firsthand account of the criminal conduct indicted by the grand jury cannot be obtained by alternative means, as Risen is without dispute the only witness who can offer this critical testimony,” wrote Chief Judge William Byrd Traxler Jr., who was joined by Judge Albert Diaz in Friday’s ruling.

Mr. Risen has vowed to go to prison rather than testify about his sources and to carry any appeal as far as the Supreme Court. But some legal specialists said an appeal to the full appeals court was a likely first step. Mr. Risen referred a request to comment to his lawyer, Joel Kurtzberg, who wrote in an e-mail: “We are disappointed by and disagree with the court’s decision. We are currently evaluating our next steps.”

Judge Roger Gregory, the third member of the panel, filed a vigorous dissent, portraying his colleagues’ decision as “sad” and a serious threat to investigative journalism.

“Under the majority’s articulation of the reporter’s privilege, or lack thereof, absent a showing of bad faith by the government, a reporter can always be compelled against her will to reveal her confidential sources in a criminal trial,” he wrote. “The majority exalts the interests of the government while unduly trampling those of the press, and in doing so, severely impinges on the press and the free flow of information in our society.”

Friday’s ruling establishes a precedent that applies only to the Fourth Circuit, but that circuit includes Maryland and Virginia, where most national security agencies like the Pentagon and the Central Intelligence Agency are. As a result, if it stands, it could have a significant impact on investigative journalism about national security matters.

It has long been unclear whether the Constitution protects reporters from being forced to testify against their sources in criminal trials. The principal Supreme Court precedent in that area, which is more than 40 years old, concerns grand jury investigations, not trials, and many legal scholars consider its reasoning to be ambiguous.

“We agree with the decision,” said Peter Carr, a Justice Department spokesman. “We are examining the next steps in the prosecution of this case.”

The ruling was awkwardly timed for the Obama administration.

Attorney General Eric H. Holder Jr. has portrayed himself as trying to rebalance the department’s approach to leak investigations in response to the furor over its aggressive investigative tactics, like subpoenaing Associated Press reporters’ phone records and portraying a Fox News reporter as a criminal conspirator in order to obtain a warrant for his e-mails.

Last week, Mr. Holder announced new guidelines for leak investigations that significantly tightened the circumstances in which reporters’ records could be obtained. He also reiterated the Obama administration’s proposal to revive legislation to create a federal media shield law that in some cases would allow judges to quash subpoenas for reporters’ testimony, as many states have.

“It’s very disappointing that as we are making such good progress with the attorney general’s office and with Congress, in getting them to recognize the importance of a reporter’s privilege, the Fourth Circuit has taken such a big step backwards,” said Gregg Leslie, the legal defense director for the Reporters Committee for Freedom of the Press.

Mr. Risen is a national security reporter for The Times, but the case revolves around material he published in his 2006 book, “State of War,” not in the newspaper. A chapter in the book recounted efforts by the C.I.A. in the Clinton administration to trick Iranian scientists by having a Russian defector give them blueprints for a nuclear triggering device that had been altered with an error. The chapter portrays the operation as reckless and botched in a way that could have helped the Iranians gain accurate information.

Article source: http://www.nytimes.com/2013/07/20/us/in-major-ruling-court-orders-times-reporter-to-testify.html?partner=rss&emc=rss

DealBook: Royal Mail Employees to Get Free Shares in I.P.O.

Postal workers in Britain are still opposed to plans to privatize Royal Mail.Suzanne Plunkett/ReutersPostal workers in Britain are still opposed to plans to privatize Royal Mail.

LONDON – The British government said on Wednesday that it planned to sell a majority stake in Royal Mail, the country’s postal service, and would give some shares free to workers.

The government said an initial public offering, which would be the biggest privatization in the country since the railroads 20 years ago, would proceed in London before the end of March 2014. As part of the sale, which has been considered for years, the government plans to give 10 percent of the shares to Royal Mail employees in Britain free on the condition that they hold them for three years.

Both institutional and private investors would be able to buy shares in the initial offering. Some analysts have said previously that the planned offering could value Royal Mail at about £3 billion ($4.5 billion). The government has yet to decide how much of the company it would sell.

“We will retain flexibility around the size of the stake to be sold,” Vince Cable, the business secretary, said in a statement in Parliament. “This will be influenced by market conditions, investor demand and our objective to ensure overall value for money for the taxpayer.”

Plans to privatize Royal Mail have become more concrete recently when the service’s finances improved and pressure to reduce the budget deficit increased. Royal Mail had struggled to compete with other postal services in an increasingly competitive market where many people prefer e-mail to handwritten letters. But a growing online retail market has helped Royal Mail, which delivered more online purchases by post.

Royal Mail said it welcomed the plan and that “private ownership will enable Royal Mail to become more flexible and fleet of foot in the fiercely competitive markets in which we operate.”

Moya Greene, chief executive of the Royal Mail Group, said in a statement that “employees will have a meaningful stake in the company and its future success” and that “the public will have the opportunity to invest in a great British institution.”

Royal Mail’s origins date to 1516, when post was carried for Henry VIII and the Tudor court. The service was opened to the public by Charles I in 1635. Royal Mail is now one of the largest employers in Britain, where it has 150,000 staff members.

But there was criticism from the Communications Workers Union, the trade union representing postal workers, which threatened a strike. The union “will continue to fight the sale and without worthwhile and legally binding assurances on terms and conditions, strike action is inevitable,” Dave Ward, the union’s deputy general secretary, said on the organization’s Web site.

Goldman Sachs and UBS were hired as the lead banks to manage the share sale on the London Stock Exchange. Barclays and Bank of America Merrill Lynch will also work on the sale.

Royal Mail had revenue of £9.3 billion in the fiscal year that ended March 31. Operating profit was £403 million.

Article source: http://dealbook.nytimes.com/2013/07/10/royal-mail-employees-to-get-free-shares-in-i-p-o/?partner=rss&emc=rss

You’re the Boss Blog: Deciding How Important It Is for a Business to Grow

She Owns It

Portraits of women entrepreneurs.

Alexandra Mayzler: The company is growing -- but slowly.Earl Wilson/The New York Times Alexandra Mayzler: The company is growing — but slowly.

At the most recent meeting of the She Owns It business group, we talked about the challenges of growing a business.

Alexandra Mayzler, who owns Thinking Caps Group, said her growth concerns are different than they were three years ago. Back then, she said she feared growth because she wasn’t sure she could find the right infrastructure and employees. Now, she said, she feels confident about the company’s infrastructure. The Thinking Caps playbook, which she recently updated, covers everything from how to draft an e-mail to the principles that underlie what the company does.

She said she believes that, with the resources she’s created, she can now communicate her vision to new employees. “I’m not saying I’m perfect and I don’t have a lot to learn,” she said, “but there’s enough infrastructure and training and leadership in place that you should be able to succeed unless it’s just not a good fit.” Now, she said, she needs to work on making the right long-term hires — and putting more focus on growth.

In the last few years, Thinking Caps has branched into Princeton, N.J., and Texas, with locations in Austin, Dallas, and Houston. It has also added a service called Prepare for Launch, a program for college students. “The company has been growing every year, but not a significant amount,” Ms. Mayzler said. The growth she has achieved, she said, has been primarily organic.

“At a certain point that sort of slows to a crawl, and then you need to put both oars in the water,” said Beth Shaw, who owns YogaFit.

“That’s exactly where I am,” Ms. Mayzler said. “In the beginning, you have to go out there pounding the pavement, and then it got to a place where we got our sort of low-hanging fruit.” The company is still growing — but slowly. Ms. Mayzler acknowledged she hadn’t made a concerted effort: “The conversation that I had with myself yesterday was, Is that good enough?”

“If you’re a true entrepreneur, it’s rarely good enough,” Ms. Shaw said.

Ms. Mayzler agreed. She conceded that she thought briefly about taking it easy. “I was like, Oh, this is fun, I can just take the summer off, this will be great,” she said. But when she woke up the next day, she said she realized she wanted to see the company “grow to the next level.”

And she said she thinks she finally knows what needs to be done. Much of her uncertainty, she said, was the result of her lack of infrastructure and her struggles to hire the right employees. “Maybe I have to deal with the fact that that perfect person doesn’t exist,” she said. She added that she had also realized that she may have to get better at making her expectations known to her staff and then following through when they fail to live up to them.

Looking back on the last two years, she said she now realizes she vacillated between micromanaging and stepping back too much. “I need to be consistent,” she said. “And I need to not be afraid of telling people what I think should be done. And when I’m evaluating things and when I think they’re not going well, I need to not be like, ‘Okay, let’s hope for the best next month.’”

With the infrastructure in place and some management lessons learned, Ms. Mayzler said she plans to “go after the middle-hanging fruit” in a strategic way. “We need to stop resting on our laurels and we need to get out there, and get out there in an organized way,” she said. In considering each location, she said she realized she had merely “gone through the motions” of expanding the business in New York. She added that she now sees she wasn’t truly committed to the idea because she was letting management issues distract her.

“I can say to myself, Oh, we didn’t get major results this year, but I tried,” she said of her efforts in New York. “But if I’m honest with myself, I don’t really think I really tried.” So, while she continued to work 12-hour days and cross items off her to-do list — for example, by sending a certain number of e-mails seeking partnerships with organizations like the Y.M.C.A. or the Jewish Community Center — her heart wasn’t in it.

But this summer, she is making plans. “I’m going to start September actually having very concrete goals because this year I was very flexible with myself,” she said. “I can’t wait for the school year to begin so we can actually do it.”

“That’s a big shift for you, because you haven’t been sure for a very long time,” Ms. Shaw said.

You can follow Adriana Gardella on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/07/08/growing-your-business-how-do-you-define-good-enough/?partner=rss&emc=rss

Searching for Capital: Mark Cuban Thinks I’m a Moron

Searching for Capital

A broker assesses the small-business lending market.

I was recently reviewing press reports from the Clinton Global Initiative, and I was struck to find an interview with Mark Cuban where he said that any entrepreneur or small-business owner who starts a business with borrowed money is “a moron.” As someone who borrowed money to start a loan brokerage, I guess it’s pretty clear what that makes me — along with thousands of other small-business owners and entrepreneurs I have met over the years.

There are three ways to finance the start of a company: one is by giving away equity, another is by taking on debt, and the third is through personal savings. It is one of the trickiest and most personal decisions an entrepreneur has to make, and the decision can change as a company begins to grow and evolve. Personally, I strongly disagree with Mr. Cuban’s black-and-white assertion, and I fear that he, as an icon of American entrepreneurship, is doing a disservice to hundreds of thousands of entrepreneurs who look up to him. Decisions about how to finance your company can be tough — and filled with lots of gray.

First of all, it bears noting that persuading a bank to lend money to a start-up is no easy proposition — nor should it be. If a bank does choose to make a loan to a start-up with no established business model, you can bet that the bank will demand some form of collateral, frequently involving the owner’s home. Risking your home to start a business — especially given the poor survival rate of start-ups  — is not a decision to be taken lightly. But I would never call people who choose to do what it takes to pursue their dreams morons.

Mr. Cuban and I had an e-mail exchange about this. “If you are profitable and need capital to grow and can easily cover the debt service, sure, go for it,” he wrote. “If the loan is all risk and you don’t yet have consistent cash flow or any cash flow at all, you are crazy.” Mr. Cuban is surely right that taking on debt before cash flow is established is a scary proposition, but it’s also a fact of life for many business owners. If they choose to go for it, they routinely tap credit cards, home-equity lines, Small Business Administration loans, and friends and family. And of course if their businesses fail, as many do, this debt will follow them.

But there are many examples of business owners whose tough choices led to great companies and lots of jobs. In fact, two of Mr. Cuban’s fellow sharks on “Shark Tank” started companies with borrowed money. Barbrara Corcoran started her real estate empire by borrowing $1,000 from a boyfriend, and Daymond John, the fashion mogul, started his business by mortgaging the house that he and his mother owned together.

I asked Mr. Cuban whether entrepreneurs who cannot raise equity should borrow money to pursue their dreams. “No,” he said, “they shouldn’t take the loan. They are better off starting smaller and slower using sweat equity than taking a loan and basically killing their future. The banks don’t care about their dreams; they care about your financial statements.”

One alternative that Mr. Cuban favors is raising equity. The risk with this approach is that it is not always clear that equity investors have the true interests of entrepreneurs at heart, either. And while it is possible to pay off a loan, investors, if you can get them, are likely to stay with you forever. In many cases, they insist on putting your company on a fast-growth treadmill so they can extract big returns, and this strategy often leads to disaster. The options have to be evaluated carefully, and they are rarely black and white.

When I started my company, I was fortunate enough to have investors who were interested in backing me. But rather than part with a significant percentage of my company, I chose to fight it out on my own, keeping control of my company and taking on some debt in the process. I believe in myself and my vision of my company, and I did not want to put myself in the position of having to pursue risky strategies in the hope of pleasing demanding investors. I invested slowly and carefully, but I still needed to incur debt to get to where I am today.

Entrepreneurs wrestle with decisions like these every day, and the issues are never black and white. What are the terms of the debt or the equity? What is the potential upside of the investment opportunity, and what are the risks? Is there another way to do the job with less investment? These are tough questions, and we all need guidance.

I think Mr. Cuban’s comments demonstrate a narrow perspective on what most small-business owners go through. I don’t have data to back this up, but I believe there are millions of successful businesses in America today that were started by entrepreneurs who believed so strongly in what they were doing that they were willing to put their necks on the line and take on some debt before they had cash flow. I also believe there are millions of small-business owners who elected to take the path less traveled and decided to keep control of their companies and not have outside investors constantly looking over their shoulders. Of course, I also know that there have been lots of business owners who took on debt only to see their businesses fail. Those owners were passionate about their dreams, too.

Sometimes I lie awake at night worrying about the debt that I have incurred. But my business is growing, and I look forward, not backward. So far, at least, I don’t think I have been a moron. How about you? Please tell us how you financed your business. How has it worked out? What would you do differently if you could do it over again?

Ami Kassar founded MultiFunding, which is based near Philadelphia and helps small businesses find the right sources of financing for their companies.

Article source: http://boss.blogs.nytimes.com/2013/07/01/mark-cuban-thinks-im-a-moron/?partner=rss&emc=rss