In the news this morning, Lululemon pulls see-through pants from shelves, the CEO of Electronic Arts falls on his sword, Citigroup settles a lawsuit, Boeing gets a big order, Walgreen announces a new supply deal that includes a stake in AmerisourceBergen, Suntech Power misses a bond payment and Affymax makes major cuts.
Yoga-pants market Lululemon Athletica (LULU) has pulled black yoga pants off the shelves of its stores due to the sheer material being too revealing. The company's decision to pull the pants down from shelves and its website means there will be a temporary shortage of the popular pants. The company said it did not change the fabric or manufacturer for the pants and it talking to suppliers to figure out what happened. The company said about 17 percent of all pants in its stores are impacted by the issue. Shoppers who purchased the pants after March 1 can return them for a full refund or exchange. The company is also cutting its first-quarter revenue guidance to $333 million to $343 million, down from a prior range of $350 million to $355 million. Analysts had been anticipating $352.1 million.
Video game maker Electronic Arts (EA) announced Monday that John Riccitiello, the company's CEO, will leave the company on March 30. Larry Probst has been named executive chairman while EA looks for a replacement. Probst has been the chairman of the board since 1994 and was CEO from 1991 to 2007 when he was replaced by Riccitiello. Riccitiello said his decision to leave is based on the company's poor financial performance.
Banking behemoth Citigroup has agreed to pay $730 million to settle a lawsuit claiming disclosures surrounding the company's debt and preferred stock were misleading. The class-action suit covered purchases made from May 11, 2006 through Nov. 28, 2008. Citi denied the claims and said it settled to escape further expense and uncertainty that accompany ongoing litigation.
Beleaguered airplane maker Boeing (BA) will sell $15.6 billion worth of 737 NGs to Irish airline Ryanair under a deal announced Tuesday. Ryanair will buy 175 of the jets and its tries to hold on to its position as the top low-cost carrier in Europe.
Drugstore chain Walgreen (WAG) is acquiring a stake in AmerisourceBergen (ABC) and will also expand its supply agreement with the company. The new 10-year deal will mostly replace Cardinal Health (CAH).
Solar company Suntech Power Holdings (STP) said Monday that it defaulted on a $541 million bond payment. The company is “exploring strategic alternatives with lenders and potential investors,” CEO David King said. The payment was supposed to be made on Friday, but the company is short on cash after a year of heavy losses. The company had reached an agreement with 60 percent of bondholders to delay the payment, but the bond's trustee declared a default.
Biotechnology firm Affymax (AFFY) will cut 75 per cent of its workforce after recalling an anemia drug that caused allergic reactions and deaths among some users. The company is exploring a possible sale or bankruptcy and could also make further job cuts