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Going-Concern Statement

Just like you never want to hear a doctor say "oops" in the operating room, you never want to see a going-concern statement in a financial report about a company you own. Accountants throw these in when they've been over the books, talked to customers, and checked the horoscopes and have concluded there is "substantial doubt" about a company's ability to remain in business. In short, don't blame the accountants if the company files for bankruptcy protection.

You¿d reckon that a going-concern statement would be enough to send investors running to the exits, but it's not. True, many large institutions automatically bail when an existing company gets slapped with one of these, but many individuals (often wrongly) take a chance they know more than the bean counters.

During the tech boom of the late 1990s, many companies actually went public even though they had been hit with going-concern statements. Many of those companies subsequently disappeared. Enough said.

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Innovation

Retailers Tap Social Networks for Back-to-School

 
Donna Fuscaldo
FOXBusiness
 

New York--Standing out amid the clutter of back-to-school advertising has gotten tough to do. Trying to draw in fickle tweens and teenagers can be a Herculean task.

But some of the nation’s retailers think they’ve found an edge that will hopefully create a buzz along the way: social networking.

Sears (SHLD), Macy’s (M) and J.C. Penney (JCP) are just some of the retailers that launched social-networking marketing campaigns in an attempt to boost sales during the ever important back-to-school selling season.

They’re betting the campaigns will create loyalty among the coveted demographic. It comes at a time when retailers are struggling as the economic weakness is keeping many shoppers at home. Sears, of Hoffman Estates, Ill., on Thursday reported a 62% decline in second-quarter profit.

“They're looking for new ways to engage consumers,” said Patti Freeman Evans, a research director with JupiterResearch. “Traditional circulars and newspaper advertisements are not in the hands of many people” as they once were.

While the newspaper is still a viable medium, many newspaper companies have seen their circulation -- and hence, their advertising dollars -- decline at a precipitous rate. That in turn has resulted in fewer advertisements, which were once a mainstay among retailers. With the Internet becoming the main communication vehicle for the Millennial generation, it makes sense that retailers want a presence online. But since this group is cynical to advertising, in-your-face banner ads and email promotions don’t cut it anymore.

“The social-network generations are much more jaded about advertising. There a tough group and that’s why the efforts really need to have to be relevant from a content perspective,” said Freeman Evans. “They’ve got to make sure there not overwhelming the user base with adds and made up stuff.”

For the first time, Cincinnati, Ohio-based Macy’s will unveil a series of documentaries at the end of September on YouTube called “Ragged Road.”

The Webisodes will follow the lives of five young people who want to break into the music business. The aspiring musicians will wear Macy’s five year-old American Rag clothing line.

“There is certainly more than enough evidence about the popularity of YouTube and similar social-networking media online,” said Nancy Slavin, senior vice president of marketing for Macy’s merchandising group.

She said the idea for “Ragged Road” was to reinforce Macy’s American Rag’s root in the music industry in an interactive way. Slavin noted that there’s “nothing ‘manufactured’ about it.”

Sears is going about its social networking marketing a little differently than Macy’s. The retailer created the Arrive Lounge, which is a Web site that has content from Sears' back-to-school campaign with High School Musical star Vanessa Hudgens. The Web site gives visitors a chance to pick the male cast member that will star with Hudgens on a five-part Internet series, as well as the chance to enter sweepstakes to win prizes. Sears is teaming with several online partners including Alloy.com, Disney (DIS) and Gofish.com for its back-to-school the promotion. For instance, Gofish created a Sears' clothing store online. Sears is hoping that by targeting tweens and teenagers in their own environment will build loyalty and drive sales.

J.C. Penney, of Plano, Texas, created a portion of its Web site called “Get That Look” where teenagers could interact with other teenagers, dress an online character and put the outfits in a shopping cart that links to the Web site to purchase the clothes. J.C. Penney also launched a new brand of home furnishings called Dorm life geared toward young adults. J.C. Penney had a Facebook page that showcased the dorm furnishing.

According to a spokeswoman, J.C. Penney’s back-to-school promotions are ending Monday.

 
 

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