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Coffee Talk
Business Observer Friday, Mar. 10, 2006 14 years ago

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Chicos stock takes a hit: As every novice investor learns, past performance is no indication of future returns.Villares leaves GravityFree: GravityFree, Sarasota's oldest web-design company, is undergoing a leadership change.Ringling would like to thank the Academy: It could grow into a nice trend. For the second straight year, Sarasota's Ringling School of Art and Design grads were nominated for Academy Awards.Venice company in award spotlight, too: Speaking of awards, a Venice-based company took home the top prize for its industry at an awards show in Las Vegas last month.A tale of two 'WCI's: Sarasota upscale home builder and developer Westwater Construction Inc. is dropping the "CI" from its revised logo.Shareholder shakes up Source Interlink: California billionaire Ron Burkle appears frustrated with the go-nowhere stock of Bonita Springs-based Source Interlink.
by: Adam Hughes Staff Writer

Coffee Talk

+ Chicos stock takes a hit

As every novice investor learns, past performance is no indication of future returns.

Case in point: Fort Myers-based women's retailer Chico's FAS.

As Coffee Talk reported last week, an analysis by the Wall Street Journal showed that Chico's stock had the best 10-year track record out of 1,000 companies it analyzed for its annual Shareholder Scorecard, with an average annual return of 68.2% for the decade ending last year.

But investors who bought Chico's stock on the day the Journal reported its findings (February 27) paid as much as $48.26 per share. Then, on March 1, Chico's reported slower-than-expected sales and the stock fell to $41.35, a 14% drop in one day.

Since then, Chico's stock has continued to fall to just below $40 a share. Tempted to buy now? Consider Chico's price-earnings ratio is still double that of the Standard & Poor's 500-stock index, which may indicate the stock is still too pricey.

+ Villares leaves GravityFree

GravityFree, Sarasota's oldest web-design company, is undergoing a leadership change. Scott Heaps bought out his partner, Ray Villares, and is now the sole owner of the 9-year-old firm.

Villares left the firm, and Sarasota. He moved to Chicago and opened a high-end photography studio called Artisan Photographer. Villares told Coffee Talk he might look to expand the Artisan Photographer concept. As part of Villares' relocation, he has resigned from the positions he held with the Sarasota Chamber of Commerce. Villares says he plans to visit Sarasota during Chicago's harshest winter months.

Heaps says although the management change will make the company a little more nimble in adjusting to industry trends, he doesn't anticipate any major changes.

+ Ringling would like to thank the Academy

It could grow into a nice trend. For the second straight year, Sarasota's Ringling School of Art and Design grads were nominated for Academy Awards. This year, four computer-animation graduates were up for their work with Sony Pictures Imageworks for Best Visual Effects for "The Chronicles of Narnia: The Lion, The Witch and the Wardrobe." The nominees included: Thelvin Cabezas, class of 20003; Josh Beveridge, class of 2005; Joseph Rosensteel, class of 2005; and Patrick Osborne, class of 2003. Another graduate, Jason Wen, class of 1999, who worked for DreamWorks in the United Kingdom, was involved in creating "Wallace & Gromit: Curse Of The Were-Rabbit," which won the Oscar for Best animated feature film of the year.

Last year, Jeff Fowler, class of 2002, had the film he wrote and directed for Blur Studio, "Gopher Broke," nominated for an Oscar for Best Animated Short Film.

+ Venice company in award spotlight, too

Speaking of awards, a Venice-based company took home the top prize for its industry at an awards show in Las Vegas last month. The company, One to One Gulfcoast, won the PODi Best Practices Award in the Small Business Category. One to One isn't new to the spotlight: It was a finalist in the Gulf Coast Business Review's 2005 Technology Innovation Awards.

PODi is a Rochester, N.Y. based group serving companies that use digital printing technology.

Member companies include Hewlett-Packard, Xerox and IBM. Its annual awards seek out companies using new technology to aid marketing efforts; the awards are considered by some to be the Oscars of the industry.

One to One Gulfcoast works with non-profit agencies looking to improve their mail-order fundraising programs. Clients include Selby Gardens, The United Way and Girls Inc. The PODi awards cited One to One's work with the Out-of-Door Academy, a Sarasota private school. New materials designed by the company helped the school raise $345,452, a 42% increase and a school record.

+ A tale of two 'WCI's

Sarasota upscale home builder and developer Westwater Construction Inc. is dropping the "CI" from its revised logo. According to the company, the former blue, large "WCI" logo had been the source of confusion with the name of Bonita Springs-based WCI Communities. The new logo uses just a blue "W" in a compass, above "Westwater" and the slogan "True to your vision."

A press release discussing the name change makes minor reference to the naming dispute and says "While WCI Communities could not confirm that they had used the logo since the mid 1990's, both sides agreed to drop all claims."

Current projects for Westwater include Burns Court Villas and Legends at Forest Lakes.

Could a suit from W Hotels be far off?

+ Shareholder shakes up Source Interlink

California billionaire Ron Burkle appears frustrated with the go-nowhere stock of Bonita Springs-based Source Interlink.

On March 2, the national distributor of magazines and DVDs said it had hired Burkle's Yucaipa Cos. to start the process of "evaluating strategic alternatives to enhance shareholder value."

Translation: Source Interlink is for sale. The price has to be right, of course, and a company news release says there's no assurance a transaction will be accomplished.

Source's stock (symbol SORC) jumped 6%, from $10.16 to $10.76 per share on the day after the announcement, but it has since settled back to about $10.50 a share, as investors mull over the news.

Burkle's AEC Associates owns about 34% of Source's stock, which hasn't broken out of its trading range of $9 to $13 a share for at least a year. Source Interlink recently reported third-quarter net income of $6.1 million on revenues of $426 million. Yucaipa officials couldn't be reached.

In a note to shareholders, Jefferies & Co. analyst Donald Trott warned that the news could signal that the current business hasn't been doing so well. He also speculates that the company issued the news release to soften the impact on the stock price should bad news be forthcoming. Trott, whose firm does investment-banking business with Source Interlink, lowered the company's earnings estimate for 2005 to 65 cents per share from 70 cents.

+ Correction

In this week's annual Gulf Coast 250, Bradenton-based Global Fusion is incorrectly ranked. The company inadvertently reported unfilled contracts as revenue. The correct net revenue for 2004 was $762,000.

+ What's Ahead...

March 16 - The Greater Fort Myers Chamber of Commerce will hold its general membership luncheon from 11:30 a.m. until 1 p.m. at the Holiday Inn Select Bell Tower in Fort Myers. The speaker is Don Paight, executive director of the Fort Myers Downtown Redevelopment Agency. Cost is $20 for pre-registered members, $25 for members at the door and $30 for guests. Register online at www.fortmyers.org or call 239-332-2930, ext. 215.

March 29 - The Chamber of Southwest Florida will host a lunch with F. Philip Handy, chairman of the Florida Board of Education, at International College in Fort Myers. Registration begins at 11:30 a.m. and the program ends at 1:15 p.m. Cost is $30 per person. Register online at www.chamber-swflorida.com.

April 11 - The Real Estate Investment Society in Fort Myers will host a luncheon with guest speakers Johnny Limbaugh, southwest area office manager for the Florida Department of Transportation, and Dave Loveland, manager of transportation planning for Lee County. The lunch starts at 11:45 a.m. at Pelican Preserve Town Center off Colonial Boulevard in Fort Myers. Admission costs $25 for members and $35 for nonmembers. Register by April 6 at www.reis-swfl.org, e-mail Sharon Heston at [email protected] or call 239-410-1253

April 2-27 - Manatee Community College's Center for Corporate and Community Development will offer a state-approved class for real estate professionals from 8 a.m. to 5 p.m. at MCC Lakewood Ranch, 7131 Professional Parkway East, Sarasota. The 63-Hour Principles and Practices Salesperson Prelicensing class qualifies students to apply to take the state examination for licensing as a real estate salesperson. The fee is $225. Call (941) 363-7000.

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