Neiman Marcus chain sold
NEW YORK – Luxury merchant Neiman Marcus is getting a new owner.
Ares Management and Canadian Pension Plan Investment Board announced Monday they are buying the luxury chain Neiman Marcus for $6 billion. The two new owners will hold an equal economic interest in Neiman Marcus, and the company’s management will retain a minority stake.
FDIC sells Citigroup bonds
WASHINGTON – The U.S. government is selling $2.4 billion in bonds issued by Citigroup Inc. during the financial crisis in exchange for federal guarantees against the bank’s possible losses.
The sale by the Federal Deposit Insurance Corp. ends the government’s holdings in the third-largest U.S. bank. Citigroup said in a regulatory filing Monday that it won’t receive any proceeds from the sale.
The FDIC received the bonds in November 2008 for guaranteeing hundreds of billions in potential losses on loans made by Citigroup. Citigroup was the only bank in which the FDIC took a stake during the crisis.
New York-based Citigroup was one of the hardest-hit banks during the crisis. It received a $45 billion bailout from the Treasury Department, one of the largest of the rescue program. Citigroup repaid the bailout.
Consumers’ borrowing shifts
WASHINGTON – Americans cut back on using their credit cards in July for the second straight month, while taking on more debt to buy cars and attend school. The decline in credit card use suggests consumers remain cautious, a trend that could hold back economic growth.
Consumers increased their borrowing $10.4 billion in July from June to a record high of $2.85 trillion, the Federal Reserve said Monday. That followed a gain of $11.9 billion in June.
A category that includes auto loans and student loans increased $12.3 billion in July to a record $2 trillion. But a measure of consumers’ credit card debt fell $1.8 billion to roughly $850 billion.
July’s pattern of consumers’ borrowing habits illustrated trends that have surfaced in the post-recession economy: Americans are using credit for their most urgent needs, while forgoing debt for discretionary purchases.
Firing over head scarf wrong
SAN FRANCISCO – A federal judge in San Francisco has recently ruled that trendy clothing retailer Abercrombie & Fitch wrongly fired a Muslim worker who insisted on wearing a head scarf.
U.S. District Judge Yvonne Gonzalez Rogers said the company violated anti-discrimination laws when it fired Hani Khan from its Hollister store in San Mateo, Calif., in 2010.
The company claimed the head scarf violated its policy governing the look of its employees, which it said was part of its marketing strategy. The store argued that deviating from its look policy would affect sales.
But the judge said Abercrombie & Fitch offered no “credible evidence” that Khan’s head scarf cost the company any sales.
Furniture maker files Chapter 11
ST. LOUIS – The maker of furniture brands such as Thomasville, Broyhill, Lane, and Drexel Heritage said Monday that it has filed for Chapter 11 bankruptcy protection.
Furniture Brands International Inc. said it hopes to sell the bulk of its business to investment firm Oaktree Capital Management.
The St. Louis-based company struggled like many other companies after the collapse of the housing market.
Furniture Brands reported in August that it widened its fiscal second-quarter net loss to $40.8 million on weaker revenue and major charges to write down the value of its brands.