All posts by siribulusu

How small short-term loans draw vulnerable borrowers into big long-term debt

By Siri Bulusu

KANSAS CITY, Mo.– Elliott Clark was working a shift as a security guard when his daughter called to tell him his wife had broken her ankle in two places.

She would need surgery to implant a metal plate and two screws in her foot.

Over the following six months, his wife rehabilitated at their Kansas City home while the disabled Vietnam veteran carried the family’s financials on his own. That meant paying $45,000 in hospital bills in addition to allowances for his two college-bound daughters, a mortgage, car insurance, and home utility bills.

Clark resorted to short-term borrowing, more and more, at high interest rates permitted by Missouri law.

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Englewood sources talent from community

By Siri Bulusu

For Rachel Bernier-Green, business and baking were always inextricably linked.

As a child, the Chicago native learned math by following baking instructions from her mother and was selling brownies and homemade potpourri to classmates. A strong aptitude for math led Green to business school and a successful accounting job.

“Even before I was baking, I was a kid-preneur,” Bernier-Green said. “I’ve been scheming for a while. Finding out how math could assist in my ventures helped me fit it all together.”

After five years of working as a public accountant in Chicago, Bernier-Green decided to transition her experience with numbers and love of baking, into her own enterprise — Laine’s Bake Shop.

“I was a cook that went to business school, and now I’m an accountant that is a chef,” Bernier-Green said.

With the math and baking skills down, what Bernier-Green needed was guidance with setting up her own bakery. In July of 2013, Bernier-Green sold her cookies at an event hosted by the Bronzeville Retail Initiative, an organization focused on returning retail business to Chicago’s South Side. Gina Caruso, assistant commissioner of the City of Chicago’s new Small Business Center, noticed Green and her cookies and told her about a new Whole Foods opening in Englewood. Caruso connected Green with the Greater Englewood Community Development Corporation.

“Our aim is to change the conversation about the South Side of Chicago,” said Jim Harbin, program director at the GECDC. “The stories coming out of here are about a tiny percentage of the population here. People really need to start focusing on the potential that the residents of Englewood see in themselves.”

In a 2013 press release, Whole Foods announced it would open a new store in Englewood that would bring 100 jobs to the area and provide healthy food options to the community. In October of 2014, the GECDC began a series of three workshops in collaboration with Whole Foods to connect the store with local vendors to support the company’s local sourcing initiative.

“When we open a store, we plant deep roots in the community we serve; creating a space that is more than a daily grocery, but a community gathering place where everyone can share their love of food,” said Alison Phelps, a spokesperson for Whole Foods in an e-mail.

Bernier-Green attended all three of the GECDC workshops, with the intention of pitching to Whole Foods, gaining skills ranging from packaging to kitchen protocol.

“She did everything we asked her to do plus more,” said Jennipher Adkins, marketing director of the GECDC. “If we weren’t on her, she was on us. She wanted to exploit the opportunity and use it to the fullest extent.”

According to Harbin, about 260 unique businesses attended the three-day workshop and of those, 49 pitched to Whole Foods. Laine’s Bake Shop was one of 15 Englewood businesses selected to sell in Whole Foods stores, and not just in Englewood.

Phelps said that while Whole Foods buyers were impressed by the taste and quality of Laine’s Bake Shop cookies, it was Bernier-Green’s “community supportive business approach” that developed the link.

Bernier-Green said that although for now Laine’s Bake Shop is just her and her husband, part of her desire to create a small business on the South Side was to impact the community by bringing jobs that can become career paths.

“The people we want to hire are from areas that are chronically unemployed due to homelessness or incarceration,” Bernier-Green said. “They struggle to find a decent job that gives them the opportunity to turn it around.”

When the time comes to expand Laine’s Bake Shop, Bernier-Green plans to hire employees straight out of job training programs held by South Side organizations such as Growing Home, an organic farm in Englewood, and Young Moms Inc., a group that supports young mothers and their children.

“We’ll be based in the South Side for the foreseeable future so we’ll be hiring workers who have the closest proximity,” Bernier-Green said.

Adkins of GECDC went on to say that the success of the Englewood store will rest on the Englewood community itself.

“All eyes are on the community and it’s their responsibility to make this work,” said Adkins. “When a premium food company comes to one of the most poverty-stricken neighborhoods in  the city, it made everyone shake their head.”

Phelps  said that by investing in Englewood, the company has decided to “challenge” the perception that quality food is exclusive to certain citizens.

Jim Harbin, of GECDC, said that Whole Foods made a smart move by tapping into the existing market on the South Side of Chicago.

“When retailers ask you for your zip code, they document where people come from,” Harbin said. “They are using data to make decisions to build stores in Englewood. They know this is a good business decision.”

When Laine’s Bake Shop products were first offered at Whole Foods, Bernier-Green estimates that sales were about $1000 per month, or 15 to 20 pounds of cookies,  for three locations, in Lincoln Park, the South Loop and West Loop.

“We started in three stores because we were only baking part-time then,” Bernier-Green said. “It was the quickest, easiest and most cost-effective way to get our foot in the door. That move was crucial.”

At the outset Bernier-Green was almost completely self-financed, but she had invaluable support from Englewood Blue, an accelerator program operated through the GECDC.

“We offer a place for people to conduct business before they have a business,” Harbin said. “We have counselors to help if someone is worried about a business plan or a social media campaign.”

Members of Englewood Blue pay a monthly fee of $25 to use its Englewood office space, which has Internet-connected computers and conference rooms.

“The money that is offset by Englewood Blue is then recycled back into the small business,” Harbin said. “Those savings should be able to accelerate the growth of your business.”

In addition to support from Englewood Blue and the GECDC, Bernier-Green procured a $5000 crowd-funded loan from Kiva Zip.

Green said Laine’s Bake Shop has been successful due to Whole Foods’ commitment to helping small businesses grow at a “healthy pace.”

“We were able to enter wholesale so early in our endeavor because of the support of Whole Foods and GECDC, an opportunity that would have been several years away.” Bernier-Green said.

Now two years into the business, Bernier-Green said her 2016 goal is to bring in $500,000 in revenue, a 600 percent increase from 2015. Laine’s Bake Shop now has products in eight Chicago-area Whole Foods locations and Bernier-Green has doubled the number of flavors offered – including “Honey Nut Peanut Butter Cookies” and “Bourbon Carmel Chocolate Thumbprint Cookies.”

“This business is meant to be a success for a lot of people,” Bernier-Green said. “We are trying to create generational wealth so our kids have better options. This is meant to be transformational not just for the community, but for my family.”

Bernier-Green said Laine’s Bake Shop still faces many challenges, scaling to accommodate an increase in orders being one of them. She and her husband are currently working around the clock to keep up with meeting and order requests.

“Right now this has seeped into all aspects of our lives,” Bernier-Green said. “You have to do the best you can and pivot when things change.”

“It’s not easy when we run into obstacles but at the end of the day what makes it all worth it is knowing we’ll have a real impact on our community,” Bernier-Green said. “We can significantly change their lives and financial well being.”

Photo at top: Rachel Bernier-Green prepares cookies at a shared kitchen space in Chicago’s West Loop. (Siri Bulusu/ MEDILL)

Navistar shares slump on first-quarter loss

By Siri Bulusu

Navistar International Corp. shares tumbled after the company, citing “softer industry conditions” and lower export sales, reported a substantial first-quarter loss.

The commercial and military truck manufacturer disclosed a net loss of $33 million, or 40 cents per diluted share, a narrower deficit than the year-ago quarter’s $42 million, or 52 cents per diluted share. The latest quarter’s results, while negative, were still a better performance than the 69 cents per diluted share loss that analysts had been expecting.

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Roscoe Village businesses brace as Western Avenue overpass demolition kicks off

By Siri Bulusu

After years of delays and false starts, the crumbling Western Avenue overpass in Roscoe Village is under demolition, but some area businesses are worried their shops will come down with the bridge.

The 17-month and $26 million reconstruction of the overpass kicked off Tuesday with its permanent closing. Upon completion in 2017, the intersection of Western, Belmont and Clybourn Avenues will be transformed into a grade-level intersection designed to improve traffic flow and pedestrian walkways along this pivotal stretch of Western Avenue. Continue reading

Unemployment Insurance claims show unexpected rise

By Siri Bulusu

The number of Americans filing for unemployment benefits unexpectedly increased last week, although underlying trends continue to suggest a strengthening labor marker.

For the week ending March 3, the U.S. Department of Labor said Thursday, initial unemployment insurance claims rose by 6,000 to 278,000, surpassing consensus expectations of Bloomberg analysts who anticipated the figure to land at 272,000.

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Leading air-filter maker faces headwinds from strong dollar

By Siri Bulusu

Donaldson Company, Inc. reported softer than expected second quarter earnings Tuesday, citing “stagnant” marketplace conditions and pressure from the strong U.S. dollar.

For the quarter ending Jan. 31, the air-filtration company’s net income fell to $38.0 million, or 28 cents per diluted share, from $48.0 million, or 34 cents per diluted share, in the year ago quarter.

Excluding unusual items, Donaldson said, adjusted earnings slipped to 29 cents per diluted share, down from 36 cents a year ago, and 5 cents lower than the 34 cents a share Wall Street analysts surveyed by Yahoo Finance were expecting.

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U.S. home-builder confidence buckles under pressure of high labor costs

By Siri Bulusu

Confidence among U.S. home-builders reached a nine-month low in February, said a U.S. trade group Tuesday, after a series of lukewarm index figures fell shy of expectations in recent months.

The report stated the Housing Market Index, compiled by the National Association of Home Builders and Wells Fargo, dropped 3 points to 58 in February from a revised 61 in January. The reading fell well short of the consensus estimate of 61 by analysts surveyed by Bloomberg.

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Autonomous car features have some buyers reaching for steering wheel

By Siri Bulusu

Technology comes first at the Chicago Auto Show this week with car makers showing off autonomous safety features, ranging from self-braking systems to radar cruise-control.

Semi-autonomous safety features, such as anti-lock breaks and airbags, are standard staples in cars, indicating increased dependence on built-in safety features, but 2016 marks the official advent of completely autonomous cars. Continue reading

Analysts share positive outlook for Boeing as share price struggles

By Siri Bulusu

Despite disappointing 2016 outlook estimates and cuts to defense spending, the majority of analysts remain optimistic about the future of Boeing Co. due to the company’s substantial order backlog and new aircraft demand from emerging markets.

Following a jarring fourth-quarter earnings release in late January, the Chicago-based aerospace giant’s shares fell a whopping 10.5 percent to $116.58. Against a meager recovery over the past month, shares hit a new low Wednesday at $116.36.

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Residents seeking O’Hare noise relief say mayor offered none

By Siri Bulusu

Mayor Rahm Emanuel disappointed a residents’ coalition Wednesday by failing, the group said, to offer solutions to increased air traffic noise over neighborhoods near O’Hare International Airport.

After two years of requesting his attention, the Fair Allocaton of Runways Coalition finally snared the mayor at City Hall to review new data suggesting noise from east-west runways at O’Hare has reached what the group contends are unbearable levels.

Total complaints to the Chicago Department of Aviation’s Airport Noise Management System increased from 30,000 in 2012 to nearly 4 million in 2015, according to a 2015 CDA report.

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