Jewel-Osco stores to be sold to Cerberus group









Jewel-Osco stores will be sold to a consortium of investors led by Cerberus Capital Management, Jewel's parent Supervalu said Thursday.

The deal, valued at $3.3 billion, also includes the Albertsons, Acme, and Shaw stores.

The announcement ends months of speculation that all or parts of the troubled grocery chain would be sold to New York-based Cerberus, an investment firm. Supervalu acquired Jewel in 2006 as part of a larger, complex acquisition of the Albertsons company.

Supervalu also reported earnings of $16 million, or 8 cents per share, in the third quarter ended on Dec. 1, compared with a year-earlier loss of $750 million, or $3.54 per share.

Excluding an after-tax gain related to a cash settlement from credit card companies and after-tax charges primarily related to store closures, it earned $5 million, or 3 cents per share.

As part of the deal, which includes $100 million in cash and $3.2 billion in debt, the five grocery chains will be acquired by AB Acquisition, an affiliate of Cerberus. Other investors in the deal include Kimco Realty Corp, Klaff Realty, Lubert-Adler Partners and Schottenstein Real Estate Group.

Following the sale, which is expected to close in the spring, a newly formed entity called Symphony Investors, led by Cerberus, will purchase up to 30 percent of Supervalu's outstanding shares for $4 each, representing a 50 percent premium over the stock's 30-day average. If Symphony cannot acquire at least 19.9 percent of the outstanding shares at that price, Supervalu must issue additional stock.

Wall Street has long expected Eden Prairie, Minn.-based Supervalu to sell some or all of its assets.

Following the deal, Supervalu will consist of its wholesale grocery business, the Save-A-Lot discount chain, and traditional grocery chains like Cub, Shop N' Save and Hornbacher's.

In a call with investors, outgoing CEO Wayne Sales said the deal brings Supervalu "a very strong balance sheet," and the ability to focus on investments in price reductions, fresh produce, and customer experience at its remaining chains. 

The new company is smaller, "with more bandwidth and leadership" to focus on its wholesale business, Save-A-Lot, and its traditional grocery stores, he said.

Sam Duncan, 61, will replace Wayne Sales as CEO. Duncan was CEO of Office Max from 2005 to 2011, and prior to that, was CEO of ShopKo, a Midwestern grocery chain. Five unidentified board members will resign as part of the deal, making room for Duncan, Albertsons CEO Robert Miller, and three new appointees. The size of the board will shrink from 10 to seven.

Concurrent with the announcement, Supervalu announced that it has secured access to a $900 million asset-based credit facility, and a $1.5 billion loan.

This deal ends a long and difficult year for one of the country's largest grocers.

Last April, Supervalu reported a loss of $1.04 billion for fiscal 2012, which included a $519 million operating loss and $509 million in interest expense. Sales also declined 3 percent, to $27.9 billion. In July, the company said it was exploring strategic alternatives, including a sale. Soon after, the company dismissed CEO Craig Herkert, with Chairman Wayne Sales stepping in to helm the troubled grocer.

Cerberus, an investor in the deal to acquire Albertsons in 2006 was long seen as the leading candidate. Last week, rumors that Supervalu was near a deal with Cerberus sent stock soaring nearly 15 percent.

In September, Supervalu said it would 60 underperforming stores, primarily from the Save-A-Lot and Albertsons chains. No Jewel locations were identified at the time. The announcement was particularly troubling to investment community because Save-A-Lot, a hard discount chain, has been Supervalu's primary growth vehicle.

Supervalu has long acknowledged that many of its stores are not price competitive. In 2012, it homed in on Jewel-Osco and the Chicago market. Supervalu surveyed customers and lowered prices throughout the store. When the company reported results for its second fiscal quarter in September, (Supervalu CEO Wayne) Sales said that Jewel had been "competitively priced throughout the store" for about six weeks.

Sales said that the initiative had resulted in "dramatic improvement" in how consumers "think about the quality of products we sell, how they feel about the service they get in various departments" and that the company was pleased with increased unit sales.

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Baseball Hall of Fame to render verdict on Steroid Era




















Jon Keller reports




















































Rank-and-file members of baseball’s Steroids Era – most notably Barry Bonds, Roger Clemens and Sammy Sosa – finally were facing a jury Wednesday that would decide whether they are worthy of the Hall of Fame. The 2013 induction announcement is set for 1 p.m. Chicago time.

Their inclusion on this year’s ballot overshadowed those who were thought to have the best chance of being voted into baseball’s hallowed shrine in Cooperstown: former Chicago White Sox outfielder Tim Raines, the Houston Astros’ long-time duo of Craig Biggio and Jeff Bagwell and All-Star pitcher Jack Morris.






Also in contention was former Chicago Cubs closer Lee Smith, who was on the ballot for the 11thtime.

This Hall of Fame eligible class has received more attention than most because of the inclusion of Bonds, who won seven MVP awards; Clemens, who won seven Cy Young awards and Sosa, the former Cub who won a National League MVP award after his famous 1998 home run duel with the Cardinals’ Mark McGwire.

McGwire, the only one of those who publicly has acknowledged using performance-enhancing drugs, has failed seven times in his Hall of Fame election bid. Former Cub Rafael Palmeiro, who tested positive for a drug, has failed three times.

The so-called Steroids Era has caused division within the electorate, comprised of 10-year members of the Baseball Writers Association. They historically have been very stingy with their votes, especially considering it takes 75 percent to be included in the summer induction ceremonies.

dvandyck@tribune.com

Twitter @davandyck




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Why bother with a Facebook phone? Facebook’s app is already on 86% of iPhones and iPads






Rumors suggesting Facebook (FB) is working on a smartphone have resurfaced a number of times over the past year. Each time, Facebook denied the various claims. Facebook may indeed still be working on its own phone but as a new report from market research firm NPD Group shows, it probably doesn’t need to.


[More from BGR: Is Samsung the new Apple?]






Facebook makes money by gathering information about its users and serving targeted ads based on that data. Allowing users to update Facebook with fresh data as often as possible is obviously beneficial to the company, and smartphones present a terrific opportunity to give users access to their Facebook accounts from anywhere. The more people using Facebook’s mobile apps, the better, and Facebook’s smartphone penetration is absolutely staggering right now.


[More from BGR: iPhone 5 now available with unlimited service, no contract on Walmart’s $ 45 Straight Talk plan]


According to data published by NPD Group on Tuesday, Facebook’s iOS application was used by 86% of iPhone, iPad and iPod touch owners as of November 2012. On the Android platform, 70% of smartphone and tablet owners used Facebook’s mobile app in November.


No other third-party app even comes close to approaching Facebook’s mobile penetration. Google’s (GOOG) YouTube app is the next most popular third-party app on iOS with 40% penetration and Amazon’s (AMZN) mobile application is the second most popular third-party Android app with just 28% penetration.


So why would Facebook bother making its own phone?


One answer — perhaps the obvious one — is that an own-brand smartphone with custom software would give Facebook access to far more personal data than it can reach using third-party applications. Considering Facebook’s track record with matters relating to privacy, however, users may be reluctant to buy a Facebook phone.


In any case, a Facebook phone certainly doesn’t seem like a necessity for the time being. Instead, focusing on ways to effectively monetize the hundreds of millions of users who interact with Facebook from a smartphone or tablet each month might be a wiser use of resources.


This article was originally published on BGR.com


Social Media News Headlines – Yahoo! News




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Oprah to interview Armstrong for Jan. 17 show






LOS ANGELES (AP) — Lance Armstrong has agreed to an interview with Oprah Winfrey in which he is to address allegations he used performance-enhancing drugs during a career in which he won seven Tour de France titles.


According to Winfrey’s website on Tuesday, this will be a “no holds-barred interview.” It will be the first with Armstrong since his cycling career crumbled under the weight of a massive report by the U.S. Anti-Doping Agency. The report detailed accusations of drug use by Armstrong and teammates on his U.S. Postal Service teams.






It’s unclear if the interview at Armstrong’s home in Austin, Texas, has already been taped. Nicole Nichols, a spokeswoman for Oprah Winfrey Network & Harpo Studios, declined comment.


The show will be broadcast Jan. 17 at 9 p.m. EST on OWN and Oprah.com.


Armstrong has strongly denied the doping charges that led to him being stripped of his Tour de France titles, but The New York Times reported Friday he has told associates he is considering acknowledging the use of performance enhancers.


The newspaper report cited anonymous sources, and Armstrong lawyer Tim Herman told The Associated Press that night he had no knowledge of Armstrong considering a confession.


Earlier Tuesday, “60 Minutes Sports” reported the head of USADA told the show a representative for Armstrong offered the agency a “donation” in excess of $ 150,000 several years before an investigation by the organization led to the loss of Armstrong’s Tour de France titles.


In an interview for the premiere on Showtime on Wednesday night, USADA chief executive Travis Tygart said he was “stunned” when he received the offer in 2004.


“It was a clear conflict of interest for USADA,” Tygart said. “We had no hesitation in rejecting that offer.”


Herman denied such an offer was made.


“No truth to that story,” Herman wrote Tuesday in an email to the AP. “First Lance heard of it was today. He never made any such contribution or suggestion.”


Tygart was traveling and did not respond to requests from the AP for comment. USADA spokeswoman Annie Skinner said Tygart’s comments from the interview were accurate. In it, he reiterates what he told the AP last fall: He was surprised when federal investigators abruptly closed their two-year investigation into Armstrong and his business dealings, then refused to share any evidence they gathered.


“You’ll have to ask the feds why they shut down,” Tygart told the AP. “They enforce federal criminal laws. We enforce sports anti-doping violations. They’re totally separate. We’ve done our job.”


Entertainment News Headlines – Yahoo! News





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Lampert plans to be a new kind of merchant








He's been a big-time investor in the retail sector for more than 15 years and was chairman of Kmart after it emerged from bankruptcy about a decade ago. A few years later, he paired it with once-dominant Sears.


Yet even as Eddie Lampert is poised next month to add the role of chief executive to that of chairman at retail giant Sears Holdings, he's still characterized generally as just a hedge fund guy.


This, Lampert suggested in a rare interview Tuesday, fails to acknowledge changes in the 21st century retail industry as well as the Hoffman Estates-based company he seeks to revive.






"The most successful guy in retail right now is Jeff Bezos, and he was a (Wall Street) hedge fund guy," Lampert, 50, said by phone. "I think a lot of times when people talk about merchants it's almost a nostalgic look back at the time where the world moved at a very different pace and information was very different."


Lampert has decided to succeed Lou D'Ambrosio, who is leaving to tend to a family health issue. Critics complain that this is just the latest missed opportunity to have a world-class merchandiser run the struggling company.


"So it's Eddie Lampert who's going to be there, and he's a smart guy and insightful when it comes to doing deals, but he doesn't have a track record at running a retail operation," said Evan Mann, an analyst with Gimme Credit.


Lampert argues that a new kind of sales, one that encompasses e-commerce, traditional bricks-and-mortar, mobile and more, requires a new kind of merchant.


"Trying to move the volume of products we're talking about from place to place to get it ultimately into the customer's hands, to price these items, to market these items, I think the retail business is incredibly complex," Lampert said. "But if you get it right, it's a beautiful thing."


"I'm not denying that there are still great merchants," he said. "But to operate a company of the size of Sears Holdings or Wal-Mart or Target or Home Depot or Lowe's, you need a combination of skills, and each of those skills needs to be sufficiently strong."


Lampert can make the case that he is a modern-day merchant. He still hasn't proved he's a good one. For six successive years, Sears Holdings has seen no top-line growth, due to slipping sales and store closings.


"I understand and I appreciate people looking at same-store sales as an indicator," D'Ambrosio said during the call. "I think when you look at the financial shape of the company, there's clear progress."


D'Ambrosio noted four consecutive quarters of EBITDA growth and the fact the company raised $1.8 billion of liquidity in 2012 while reducing net debt by $400 million.


Overshadowed in Monday's news of the leadership change were other glimmers of hope: Sears' domestic comparable-store sales for the nine weeks ended Dec. 29 were up 0.5 percent.


Meanwhile, the strategy of technological convergence, which included a loyalty program, has yielded a wellspring of consumer data and changed customers' relationship with the retailer. Kmart and U.S. Sears' online sales are up 20 percent.


"It's never a good time for a transition, but what I would tell you is, five years ago, we put in place a more distributed leadership structure," Lampert said. "Despite what people may have said or written, there is a difference between a chairman role and a CEO role, and I've never been in the CEO role in this company."


D'Ambrosio predicted Lampert will offer strategic continuity. But handicappers have long questioned whether the old horse had any giddy-up left in its step to catch up to and keep pace with Wal-Mart, Target and Amazon.


And not to beat a dead metaphor, but the suspicion among many all along has been that Lampert saw neither a thoroughbred nor tireless workhorse in the parent of Sears and Kmart as so many parts to be cut up, boiled down and sold off.


"I was very clear why we put these companies together and what our goals were," Lampert said. "It was really to allow both Sears and Kmart to compete in what I thought was going to be a more challenging but evolving industry. The framework which was placed upon me and the company was: 'OK, this was all about real estate. It's about selling real estate.' Then when we didn't sell real estate, it became: 'Well, they missed the opportunity in 2006, 2007 to sell the real estate.'


"I've never denied there was substantial real estate value in the company," he said. "Suffice it to say that … the most value can be created if we actually transform it."


Fortune in 2006 called Lampert "the best investor of his generation." A Forbes contributor last year ranked him No. 2 on a list of the worst CEOs, and while acknowledging Lampert was Sears Holdings' chairman and not CEO, the contributor argued that "Lampert has called the shots, he's missed every target" and that he had "destroyed Sears."


D'Ambrosio said he doesn't recognize the Lampert he sometimes sees described by critics.


"I've never worked with somebody who understands business models and how to re-imagine a business model and has a view on the way buying will change going forward better than Eddie," D'Ambrosio said.


It turns out, his image is the thing he's least interested in selling at Sears Holdings.


"I do think what we've been trying to do at the company has been very clear," Lampert said. "If people want to doubt it or put a spin on it, they're entitled to do it. We just have to perform."


philrosenthal@tribune.com


Twitter @phil_rosenthal






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Brown's Chicken killings: 20 years ago today













Brown's Chicken 1993


Seven people were found shot to death at Brown's Chicken & Pasta in Palatine on Jan. 8, 1993. Juan Luna and James Degorski were convicted and sentenced to life in prison.
(Chicago Tribune)






















































Twenty years ago today, Juan Luna and Jim Degorski entered a Brown's Chicken and Pasta restaurant in Palatine and committed one of the most awful crimes in Illinois history, killing seven people in what jurors later found to be premeditated murder.


The pair escaped justice for nearly a decade until investigators caught a break. Degorski had told an ex-girlfriend of his role in the killings, and a friend who overheard her talking about it in 2002 went to police.


Another piece of evidence was crucial to the case. Investigators had saved a discarded meal from the scene, and as DNA analysis improved, they were able to match DNA left on a chicken bone with Juan Luna's saliva. The two were arrested in May 2002.





Luna was convicted of murder in 2007, and Degorski followed two years later. Jurors spared them the death penalty, but both are serving life sentences with no possibility of parole.


Joy Ehlenfeldt, 38, daughter of slain restaurant owners Richard and Lynn Ehlenfeldt, said this year's milestone has been harder than most because her parents have been gone for more than half of her life.


She said she hoped the memory of the crime would lead to action to reduce violence in America.


"Every time (a mass shooting) happens, people say, 'This will make the difference,' " said Ehlenfeldt, now a Chicago physical therapist. "We really need to say enough is enough. I don't want the community of Palatine to have this as a black mark. It was a great place to grow up. But we need to remember that this happened, and is still happening, and we need to deal with it with greater urgency."


jkeilman@tribune.com


Twitter: @JohnKeilman 






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Target to match some rivals’ online prices year-round






(Reuters) – Target Corp said on Tuesday it will match on a year-round basis the prices found on the websites of key rivals Amazon.com Inc, Best Buy Co Inc, Wal-Mart Stores Inc and Toys R Us, its latest tactic to hold onto shoppers focused on price.


The move extends an online price-matching program that Target introduced over the holiday season and which was supposed to last only from November 1 to December 16. It also comes after Target last week reported flat sales growth in December at stores open at least a year.






In November Chief Executive Gregg Steinhafel said the retailer was not seeing a lot of price-match activity in its stores.


While shopping online has grown rapidly in recent years, it still represents a small fraction of overall shopping in the United States. Target’s policy of matching online prices differs from policies at several chains, which match only printed advertised prices for items sold at stores.


Target said that throughout the year it will match the price when a customer buys an eligible item at one of its stores and finds the same item at a lower price in the following week’s Target circular or in a local competitor’s printed ad. It will also match the price if the customer finds the same item at a lower price within a week on Target’s website or the websites of Amazon, Walmart, Best Buy and Toys R Us.


Amazon says it offers competitive prices and does not offer price matching when an item’s price drops after a customer buys it, with the exception of televisions. Walmart matches the prices of print ads from competitors. Walmart also says it checks the prices of 30,000 items at competing chains each week to make sure it has the lowest prices.


Best Buy matches the price from a local competitor’s store, a local Best Buy store or its own web site. Toys R Us matches in-store prices and certain online prices.


(Reporting By Jessica Wohl in Chicago and Phil Wahba in New York; Editing by Alden Bentley and John Wallace)


Internet News Headlines – Yahoo! News





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‘Downton,’ ‘Girls,’ ‘Idol’ and more this January






NEW YORK (AP) — Where once the post-holiday schedule was a blizzard of chilly reruns, January is aburst with premieres and finales.


Already, the much-adored British miniseries “Downton Abbey” has made its much-awaited season return Sundays on PBS.






On IFC on Fridays, the hilarious “Portlandia” is back for its third season of sketch comedy poking fun at the peculiarities of Portland, Ore., starring Fred Armisen and Carrie Brownstein.


And NBC‘s mystery melodrama “Deception” has arrived on Mondays. Meagan Good stars as a detective going undercover at the home of a rich family with whom she was once friendly, to investigate a murder within the clan.


On Tuesday, PBS’ “American Experience” begins a three-week documentary miniseries, “The Abolitionists,” spotlighting Frederick Douglass, William Lloyd Garrison, Harriet Beecher Stowe, John Brown and Angelina Grimke.


Also on Tuesday, the FX drama “Justified” is returning for its fourth season of Kentucky hill-country crime-fighting led by Deputy U.S. Marshal Raylan Givens (series star Timothy Olyphant).


On Thursday, comedic action centers at the White House with the premiere of NBC‘s “1600 Penn.” Josh Gad (“The Book of Mormon”) stars as the goofball son of the incumbent U.S. president (played by Bill Pullman) who keeps the first family in a stir, yet manages to make everything turn out all right by the final fade-out.


The Gallaghers of “Shameless” are a much different family. In this dark comedy, William H. Macy stars as the boozy single father of a brood of kids who manage their ragtag Chicago homestead in spite of Dad’s overindulgences. Also starring Emmy Rossum, it returns Jan. 13 for its third season on Showtime.


Also on Jan. 13, HBO’s comedy “Girls” returns for a second season sure to be at least as ballyhooed, discussed and argued about as the first. Lena Dunham (who also writes, produces, directs and created the series) stars as one of a quartet of twentysomething gal pals in New York.


Right after “Girls,” HBO launches the second season of “Enlightened,” an affecting comedy starring Laura Dern as a confused New Age-y activist who’s bent on changing the world.


What was Carrie Bradshaw like before Sarah Jessica Parker and “Sex and the City”? Find out on “The Carrie Diaries,” which debuts on the CW on Jan. 14. AnnaSophia Robb stars as the high-school era Carrie in this likable prequel.


“American Idol” returns on Jan. 16 on Fox. Veteran judge Randy Jackson will be joined by Mariah Carey, Nicki Minaj and Keith Urban. Ryan Seacrest, as always, is the affable host.


After five seasons, Fox’s lovably inscrutable sci-fi series “Fringe” concludes its head-scratching run on Jan. 18. Stars include Anna Torv, Joshua Jackson and John Noble.


Fox’s bloody suspense drama “The Following” premieres Jan. 21. Kevin Bacon stars as a former FBI agent drafted back into service to chase a serial murderer and his vicious disciples.


My, how Spartacus‘ army has grown! Commanding thousands of freed slaves, Spartacus is primed to bring down the entire Roman Republic as the final season begins for “Spartacus: War of the Damned,” Jan. 25 on Starz. Liam McIntyre plays the rebel leader.


The world of “Dallas” will be rocked during its second season with the death of arch-villain oilman J.R. Ewing (played, of course, by Larry Hagman, who passed away in November while the series was in production). Also starring Patrick Duffy and Linda Gray, this rebooted (so to speak) version of the long-running CBS prime-time soap returns on TNT on Jan. 28.


FX weighs in with an edgy new drama “The Americans” on Jan. 30. It stars Matthew Rhys and Keri Russell as two KGB agents posing as the heads of a normal American household in the 1980s, as they work tirelessly to bring down the U.S. on behalf of Mother Russia.


On Jan. 31, NBC unveils a new medical drama “Do No Harm.” Steve Pasquale (“Rescue Me”) stars as a neurosurgeon with a great bedside manner who inconveniently shares a body with his sociopathic alter ego.


The same night, NBC closes the book on the brilliant mockery of “30 Rock.” This Tina Fey comedy wraps seven seasons of making fun of pop culture, modern life and especially its own real-life broadcast network — which, like the rest of the TV universe, has even more midseason goodies in store come February.


___


EDITOR’S NOTE — Frazier Moore is a national television columnist for The Associated Press. He can be reached at fmoore(at)ap.org and at http://www.twitter.com/tvfrazier


Entertainment News Headlines – Yahoo! News





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Health Spending Growth Stays Low for 3rd Straight Year





WASHINGTON — National health spending climbed to $2.7 trillion in 2011, or an average of $8,700 for every person in the country, but as a share of the economy, it remained stable for the third consecutive year, the Obama administration said Monday.




The rate of increase in health spending, 3.9 percent in 2011, was the same as in 2009 and 2010 — the lowest annual rates recorded in the 52 years the government has been collecting such data.


Federal officials could not say for sure whether the low growth in health spending represented the start of a trend or reflected the continuing effects of the recession, which crimped the economy from December 2007 to June 2009.


Kathleen Sebelius, the secretary of health and human services, said that “the statistics show how the Affordable Care Act is already making a difference,” saving money for consumers. But a report issued by the Centers for Medicare and Medicaid Services, in her department, said that the law had so far had “no discernible impact” on overall health spending.


Although some provisions of the law have taken effect, the report said, “their influence on overall health spending through 2011 was minimal.”


The recession increased unemployment, reduced the number of people with private health insurance, lowered household income and assets and therefore tended to slow health spending, said Micah B. Hartman, a statistician at the Centers for Medicare and Medicaid Services.


In the report, federal officials said that total national spending on prescription drugs and doctors’ services grew faster in 2011 than in the year before, but that spending on hospital care grew more slowly.


Medicaid spending likewise grew less quickly in 2011 than in the prior year, as states struggled with budget problems. But Medicare spending grew more rapidly, because of an increase in “the volume and intensity” of doctors’ services and a one-time increase in Medicare payments to skilled nursing homes, said the report, published in the journal Health Affairs.


National health spending grew at roughly the same pace as the overall economy, without adjusting for inflation, so its share of the economy stayed the same, at 17.9 percent in 2011, where it has been since 2009. By contrast, health spending accounted for just 13.8 percent of the economy in 2000.


Health spending grew more than 5 percent each year from 1961 to 2007. It rose at double-digit rates in some years, including every year from 1966 to 1984 and from 1988 to 1990.


The report did not forecast the effects of the new health care law on future spending. Some provisions of the law, including subsidized insurance for millions of Americans, could increase spending, officials said. But the law also trims Medicare payments to many health care providers and authorizes experiments to slow the growth of health spending.


“The jury is still out whether all the innovations we’re testing will have much impact,” said Richard S. Foster, who supervised the preparation of the report as chief actuary of the Medicare agency. “I am optimistic. There’s a lot of potential. More and more health care providers understand that the future cannot be like the past, in which health spending almost always grew faster than the gross domestic product.”


Evidence of the new emphasis can be seen in a series of articles published in The Archives of Internal Medicine, now known as JAMA Internal Medicine, under the title “Less Is More.” The series highlights cases in which “the overuse of medical care may result in harm and in which less care is likely to result in better health.”


Total spending for doctors’ services rose 3.6 percent in 2011, to $436 billion, while spending for hospital care increased 4.3 percent, to $850.6 billion.


Spending on prescription drugs at retail stores reached $263 billion in 2011, up 2.9 percent from 2010, when growth was just four-tenths of 1 percent. The latest increase was still well below the average increase of 7.8 percent a year from 2000 to 2010.


Federal officials said the increase in 2011 resulted partly from rapid growth in prices for brand-name drugs.


Prices for specialty drugs, typically prescribed by medical specialists for chronic conditions, have increased at double-digit rates in recent years, the government said. In addition, spending on new brand-name drugs — those brought to market in the previous two years — more than doubled from 2010 to 2011, driven by an increase in the number of new medicines.


“In 2011,” the report said, “spending for private health insurance premiums increased 3.8 percent, as did spending for benefits. Out-of-pocket spending by consumers increased 2.8 percent in 2011, accelerating from 2.1 percent in 2010 but still slower than the average annual growth rate of 4.7 percent” from 2002 to 2008.


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Sears CEO D'Ambrosio to step down









Sears Holdings Corp. said Monday night that Chief Executive Officer Louis D'Ambrosio will step down Feb. 2, due to family health matters, and Chairman Edward Lampert will add the role of CEO.

The surprise move fuels uncertainty at the Hoffman Estates-based company, which has struggled for years to re-establish itself as a department store in an ultracompetitive retailing industry dominated by low-price giant Wal-Mart and big box and specialty stores.

Shares of Sears Holdings were down 5.6 percent in mid-morning trading to $40.51  on the news.

The decision by Lampert, a hedge fund operator who is the company's biggest shareholder, to take over day-to-day control represents a reversal from his naming of D'Ambrosio as chief executive nearly two years ago after operating with an interim CEO.

"In light of Lou's decision to step down, the board feels it is important that there is continuity of leadership during this important period of transformation and improvement at Sears Holdings," Lampert said in a statement. "I have agreed to assume these additional responsibilities in order to continue the company's recovery and sustain the momentum we are experiencing, as well as further the development of the management team under the distributed leadership model, which provides our business unit leaders with greater control, authority and autonomy."

Sears Holdings, which operates Sears and Kmart, also updated its fourth-quarter earnings outlook Monday night. The company said it expects to report a net loss $280 million to $360 million, or $2.64 to $3.40 per diluted share, for the quarter ending Feb. 2. The loss includes a charge of about $450 million because of pension settlements and an additional $42 million in pension expenses.

Excluding pension expenses, Sears said it expects to earn $132 million to $212 million, or $1.25 to $2 per share.

Analysts polled by Bloomberg had been expecting adjusted net income of about $137 million.

For the fiscal year, Sears said it expects to lose $721 million to $801 million, or $6.80 to $7.56 per diluted share, which includes pension-related costs and other adjustments reported late last year. Excluding those items, the company said it expects to lose $123 million to $203 million, or $1.16 to $1.92 per share.

D'Ambrosio became CEO after working for the company as a consultant. The 16-year veteran of IBM Corp. had been CEO of a telecommunications company before joining Sears.

"I have worked very closely with Eddie over the past two years. I can say this: there is simply no one in the world that cares more about Sears Holdings and has thought more deeply about our company than Eddie," D'Ambrosio wrote to employees.

Lampert gained control of Sears in 2005 after engineering the merger between Kmart and Sears Roebuck & Co. For years, speculation about Lampert's intentions for the company focused on the value of its real estate, but under D'Ambrosio, Sears appeared to pay more attention to retail aspirations.

The company reported improved performance — it beat Wall Street expectations — in the previous quarter, but Sears stock has lost more than 35 percent of its value since November, closing Monday at $42.92, up 1.7 percent.

 Crshropshire@tribune.com | Twitter: @corilyns 

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