THE BUSINESS WEEK

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EDITED BY DEBorAH STEAD

019

see no evil, import no evil
Given the year’s much publicized problems with tainted toys, toxic toothpaste, and faulty tires from China, you might expect companies importing Chinese goods to be gumshoeing their suppliers. Not so. In a recent survey of big consumer product manufacturers conducted by Smart Cube, a Chicago business intelligence firm, some 80% of supply chain managers said they feel no need to review their vendor selection and other procedures. Only 12% of the executives—including those in the electronics, auto, and toy industries—said onsite inspectors are called for. While some managers did say they planned to “be more cautious,”

most said the worst thing about doing business with China isn’t the risk of poorly made or dangerous goods. It’s the fear that the vendors will knock off their companies’ products. –David Welch

it’s a cash cow, charlie brown
A Charlie Brown Christmas, airing next on Dec. 3, continues to take its anticommercial message to the bank. The animated special, first shown by CBS in 1965, has been aired twice a year on ABC since 2004. Last year the shows pulled 21 million viewers and $8.7 million in ad sales, reports TNS Media Intelligence. That’s $218,000 for a 30-second spot, about what prime-time’s pricier programs get. And the jazz piano soundtrack? Still wailing. Recorded by the late Vince Guaraldi on Fantasy Records, it went multiplatinum last year, having sold 2 million-plus copies in its lifetime. “It’s more than 40 years old, but new generations who know the TV special find the CD and love it, ” says Joel Amsterdam, spokesman for Concord Music Group, which owns Fantasy. That’s staying power, Charlie Brown. –Arik Hesseldahl

‘you’re fired’ delivered in arabic
Add a touch of The Donald to the booming Abu Dhabi real estate market, and what do you get? Plans for a reality TV show. The Hydra Executives is the brainchild of Sulaiman Al Fahim, CEO of Abu Dhabi-based Hydra Properties. Al Fahim is putting millions into the program, to be produced by Showtime International, jointly owned by Viacom and Dubai Infinity TV. Executive producer Ziad Batal also wants The Hydra Executives to be shown in the U.S. First up as contestants on the show, to be launched in March, 2008: Teams of American and British entrepreneurs who will be set loose on local projects to impress Al Fahim, known for building residential high-rises. In 2005 a Mideast version of The Apprentice failed to make it to the air. But that doesn’t faze Batal, who says The Hydra Executives will be “a cut above” the Trump show. —Ronald Grover
Like Trump, Hydra’s Al Fahim will judge the contestants in the reality show

(top) Christopher silas Neal; (lower, left) david rudes/bw

DECE M B E R 10, 2007 l BUSINESSWEEK

THE BUSINESS WEEK

020 btw

la-z-boy’s reclining position
A pile of U.S. economic woes—weak housing, cheap imports, and nervous consumers—has landed smack in the lap of an iconic American brand: La-Z-Boy. In mid-November the company told analysts that sales for the latest quarter declined almost 12% from the previous year, to $365 million. Earnings came in at a measly 1¢ per share, down from 6¢. With up to 25% of furniture sales linked to housing market, La-Z-Boy isn’t the only U.S. furniture maker in an uncomfortable position these days. But the company has been hit especially hard by imports, as well. Chinese manufacturers are pushing into upholstered furniture, once thought to be too expensive to ship. Now, imports account for 26% of U.S. padded furniture sales. La-Z-Boy is cutting costs, but in a Nov. 14 statement, CEO Kurt Darrow said that economic conditions make it “difficult to see the fruits of our labor.” The famous brand name hasn’t helped much: Customers may ask for a “La-Z-Boy,” says Morgan Keegan analyst Laura Champine, but many use the term generically, content to leave the store with any recliner. –Ben Steverman

a pretty penny for art from the middle east
The latest destination for the still-high-flying contemporary art market: the Middle East. Paintings, photographs, and sculptures by Iranian and Arab artists hit records this fall at the big auction houses—bringing a total of $15.2 million in a Christie’s International sale in Dubai. The top seller: a painting depicting Koranic texts by Egyptian-born Ahmed Moustafa. It went for $657,000, double the pre-auction estimate. At a recent Sotheby’s auction in London, a painting of calligraphic Arabic letters (above) by Iranian artist Mohammad Ehsai fetched $218,000—again, twice what experts predicted. Insiders say prices may soon rival those of contemporary Chinese and Indian art, which ring up nine-figure total sales at the two art houses. What’s fueling the Mideast art market? Mostly, interest from the newly rich in the artists’ home nations, says Sandy Heller, a New York art adviser whose clients include hedge fund manager Steven Cohen of SAC Capital Advisors. “The contemporary art market rises with the luxury goods market, Heller says. –Reena Jana ”

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Its soaring economy has given China a big appetite for oil and other commodities. Now add milk to the list. Under the old centrally planned system, milk was a luxury, with 250 grams costing a tenth of an average monthly income. Today, “as people’s living standards have risen, so has demand for milk,” says Liu Hailong, CEO of China Milk, which operates dairies and breeds Holsteins in Heilongjiang province. At the country’s biggest producer, China Mengniu Dairy in Inner Mongolia, first-half 2007 profits were up 41% from the year before, to $64 million. And there’s room to grow. In 2006, annual per capita milk consumption was 53 lb., reports the China Dairy Yearbook. While that’s way up from 11 lb. a decade ago, it’s low compared with, say, the U.S. per capita figure: 181 pounds, or 21 gallons.–Chi-Chu Tschang
BUSINESSWEEK l DECE M B E R 10, 2007

Drink up: China’s milk consumption has risen fourfold from a decade ago

(CloCkwise from top left) Christopher silas Neal; Courtesy of sotheby’s; keviN lee/bloomberg News

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