Wayfair buys upscale N.Y. design store

Boston-based online home furnishing retailer Wayfair.com, on the heels of its best quarter to date, has bought an eclectic New York City-based lifestyle retailer as it seeks to create its own product lines and offer new brands.

The purchase of DwellStudio, a catalog and e-commerce retailer with a flagship store in Soho that is known for modern design in home furnishings, is Wayfair.com's first major acquisition.

"We think there's more of an opportunity to have more unique product," Wayfair.com CEO and founder Niraj Shah said. "We don't just have the same item as the next guy."

The addition of unique brands that will be sold on Wayfair.com is the logical next step for a company that is on track to hit $1 billion in sales this year, Shah said. Wayfair.com sales increased by 46 percent in the second quarter compared to the same period a year ago.

By offering specific brands targeted toward specific markets, Wayfair.com will be able to expand its reach and appeal to consumers, he said.

"We want to service all those different customers," Shah said. "It's impossible to do that with one brand that stands for one look."

DwellStudio products, which include furniture, bedding, home accessories and children's furnishings, will combine with Wayfair.com's retail prowess, Shah said.

"The sky's the limit," said Christiane Lemieux, CEO, founder and creative director of DwellStudio.

Wayfair.com was an attractive partner because of their extensive retail logistics system, she said.

"This whole retail landscape is changing daily because of online technology," she said.

Lemieux and her team will also play a large role in Wayfair.com.

"We view it as the best of both worlds," Shah said.

"The customers who have that aesthetic love that brand, and we really thought that the team would be a fantastic addition to Wayfair.com."

DwellStudio will remain a standalone brand, joining Joss & Main and AllModern.com as a Wayfair company.

Financial terms of the deal were not disclosed.

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New Zealand botulism scare triggers global recall

WELLINGTON, New Zealand — New Zealand authorities have triggered a global recall of up to 1,000 tons of dairy products across seven countries after dairy giant Fonterra announced tests had turned up a type of bacteria that could cause botulism.

New Zealand's Ministry of Primary Industries said Saturday that the tainted products include infant formula, sports drinks, protein drinks and other beverages. It said countries affected beside New Zealand include China, Australia, Thailand, Malaysia, Vietnam and Saudi Arabia.

Fonterra said its customers were urgently checking their supply chains.

One New Zealand company has locked down five batches of infant formula and China is asking importers to immediately recall products.

Fonterra is the world's fourth-largest dairy company, with annual revenues of about $16 billion.

The news comes as a blow to New Zealand's dairy industry, which powers the country's economy. New Zealand exports about 95 percent of its milk.

Consumers in China and elsewhere are willing to pay a big premium for New Zealand infant formula because the country has a clean and healthy reputation. Chinese consumers have a special interest after tainted local milk formula killed six babies in 2008.

The Centers for Disease Control describes botulism as a rare but sometimes fatal paralytic illness caused by a nerve toxin.

Fonterra said it has told eight of its customers of the problem, which dates back more than a year, and they were investigating whether any of the affected product is in their supply chains. Fonterra said those companies will initiate any consumer product recalls.

At a news conference Saturday, Fonterra repeatedly refused to divulge the companies, countries or specific products affected. Gary Romano, the managing director of Fonterra's New Zealand milk products, said his company supplies raw materials to the eight companies and it is up to them to inform their consumers of what products might be tainted.

The company did acknowledge its chief executive, Theo Spierings, planned to fly to China Saturday, in part to deal with the fallout from the botulism scare.

New Zealand's Ministry for Primary Industries said Saturday that New Zealand company Nutricia had used some of the tainted product in its Karicare line of formula for infants aged over 6 months. Nutricia had locked down all five batches of infant formula it believed contained the tainted product, the ministry said. But it advised that parents should buy different Nutricia products or alternative brands until it verified the location of all tainted Nutricia products.

China's product quality watchdog issued a statement urging importers of Fonterra dairy products to immediately start recalling the products.

The General Administration of Quality Supervision, Inspection and Quarantine also told quality agencies around China to step up inspections of milk products from New Zealand.

Romano said the problem was caused by unsterilized pipes at a Waikato factory. He said three batches of whey protein weighing about 42 tons were tainted in May 2012, adding that Fonterra has since cleaned the pipes.

The New Zealand ministry says the tainted product has been mixed with other ingredients to form about 1,000 tons of consumer products worldwide.

The company said in a release it identified a potential quality problem in March when a product tested positive for the bacteria Clostridium. Many strains of the bacteria are harmless, the company said, and product samples were put through intensive testing over the following months. It said that on July 31 it discovered the presence of a strain of the bacteria that can cause botulism.

Romano said Fonterra hasn't received reports of anybody getting sick and added that the problem hasn't affected any fresh milk, yoghurt, cheese or long-lasting heat-treated milk.

New Zealand's Ministry for Primary Industries said it was working with the company to investigate.

Spierings, the chief executive, said in the release that food safety was the company's top priority.

"We are acting quickly," he said. "Our focus is to get information out about potentially affected product as fast as possible so that it can be taken off supermarket shelves and, where it has already been purchased, can be returned."

Earlier this year, Fonterra announced it had discovered trace amounts of the agricultural chemical dicyandiamide in some of its products, prompting a ban on the chemical's use on New Zealand farms.

Rabobank's 2012 Global Dairy Top 20 report ranked Fonterra as the world's fourth-largest dairy company by revenue behind Nestlé, Danone and Lactalis. The company is a cooperative, partially owned by thousands of farmers.

In 2011 the company collected 15.4 billion liters (4.1 billion gallons) of milk in New Zealand, representing about 90 percent of the country's total.

In 2008, six babies in China died and another 300,000 were sickened by infant formula that was tainted with melamine, an industrial chemical added to watered-down milk to fool tests for protein levels. Fonterra at the time owned a minority stake in Sanlu, the now-bankrupt Chinese company at the center of the scandal.

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Red Sox owner enters $70M deal for Boston Globe

BOSTON — Businessman John Henry, the principal owner of the Boston Red Sox, has entered into an agreement to buy The Boston Globe for $70 million, a massive drop from its record $1.1 billion price two decades ago.

The impending purchase from The New York Times Co. marks Henry's "first foray into the financially unsettled world of the news media," the Globe said Saturday. The deal will give Henry the 141-year-old newspaper, its websites and affiliated companies, it said.

The Times announced in February it was putting the Globe and related assets up for sale four years after calling off a previous attempt to sell it. The company's CEO said at the time selling the Globe would help the company focus attention on The New York Times brand.

Times spokeswoman Eileen Murphy confirmed the planned sale of the Globe and other media properties to Henry. The Times said the all-cash sale, expected to close in 30 to 60 days, includes BostonGlobe.com, Boston.com, The Worcester Telegram & Gazette, Telegram.com, the direct mail marketing company Globe Direct and the company's 49 percent interest in Metro Boston, a free daily newspaper for commuters.

Henry, in a statement published by the Globe, cited the "essential role that its journalists and employees play in Boston, throughout New England, and beyond."

"The Boston Globe's award-winning journalism as well as its rich history and tradition of excellence have established it as one of the most well respected media companies in the country," Henry said.

Henry, who also owns the English Premier League soccer club Liverpool F.C., said he would reveal details about his plans for the Globe in the next few days.

Globe editor Brian McGrory said the newspaper's Red Sox coverage and its editorial decisions won't be affected by the sale.

"We have no plans whatsoever to change our Red Sox coverage specifically, or our sports coverage in general, nor will we be asked," McGrory told the newspaper. "The Globe's sports reporting and commentary is the gold standard in the industry."

The Times bought the Globe from the family of former Globe executive Stephen Taylor in 1993 for what it said was the highest price paid for an American newspaper. The price Henry is paying is less than 7 percent of the 1993 price.

The Globe and other newspapers have faced difficulties in recent years as readers have fled to the Internet and advertisers have cut spending on newspapers and moved more ads online. Still, the Globe is a journalistic institution in New England and was lauded for its coverage of the deadly Boston Marathon bombings in April.

A 2009 round of cost-cutting, involving pay cuts, helped put the Globe on better financial footing and prompted the Times to call off a planned sale. In late 2011, the Globe started charging for access to its online version at BostonGlobe.com, which helped to boost circulation revenues.

The Times company doesn't separate Globe revenue from The New York Times revenue in its financial statements. But the Globe had an average weekday circulation of 230,351 in the six months through September, according to the Alliance for Audited Media. The newspaper's increase in digital subscriptions more than offset declines in print. But the total is still down significantly from the nearly 413,000 it boasted in September 2002.

The Globe isn't the only newspaper to see a huge drop in its price at sale time.

In April 2012, Philadelphia's two largest newspapers sold for $55 million, a fraction of the $515 million paid by a group of investors in 2006. The buyers of the Philadelphia Inquirer and Philadelphia Daily News included influential New Jersey Democrat George Norcross III, former New Jersey Nets owner Lewis Katz and cable TV mogul H.F. "Gerry" Lenfest.

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Red Sox owner John Henry to buy Boston Globe

Red Sox owner John Henry has entered into an agreement to buy The Boston Globe and the rest of the New England Media Group, the paper's parent company, The New York Times Company, announced early today.
The $70 million cash agreement is expected to close in 30 to 60 days, according to The Times, and pales in comparison to the $1.1 billion it bought the Globe for two decades ago.
"We are excited about the prospect of working with John Henry and committed to giving Boston and New England high-quality news, information, and entertainment for years to come," said Christopher M. Mayer, Globe publisher and president of New England Media Group, said in a statement released early today.
The news is likely to deliver shockwaves to Morrissey Boulevard, where staffers have toiled under tense and uncertain conditions since the Times announced it was putting the paper up for sale in February.
The sale includes not only the Globe broadsheet, but its web sites, bostonglobe.com and boston.com; the Worcester Telegram & Gazette  and its web site; GlobeDirect, the newspaper's direct mail marketing company; and the company's 49 percent share interest in Metro Boston.
Henry, in a statement, said the paper's "award-winning journalism as well as its rich history and tradition of excellence have established it as one of the most well respected media companies in the country."
"Until the transaction has officially closed and a change in ownership is completed, it would be inappropriate for me to comment specifically about the future of the New England Media Group," Henry said. "This is a thriving, dynamic region that needs a strong, sustainable Boston Globe playing an integral role in the community's long-term future.  In coming days there will be announcements concerning those joining me in this community commitment and effort."
Mark Thompson, president and CEO of The New York Times Company, said the company was "very proud" of its ties to the Globe and Telegram & Gazette.
"We're delighted to have found a buyer in John Henry, who has strong local roots and a deep appreciation of the importance of these publications to the Greater Boston community," he said in a statement.
Henry's ownership of both a major sports franchise and a big-city daily newspaper that covers it is likely to raise both eyebrows and serious conflict of interest questions.
But it's not unprecedented.
When Henry first bought the Sox in February 2002, the New York Times owned both the Globe and a 17 percent stake in the team.
The Chicago Tribune also owned both the Chicago Cubs and Wrigley Field until 2007.
But it can often be an awkward arrangement. The Los Angeles Times faced criticism over a profit-sharing agreement in 1999 to publish a special magazine issue about the then-new Staples Center without disclosing it to readers and staff.
Henry emerged late in the Globe bidding process and had at one point been rumored to be partnering with Delaware North, which is run by Bruins owner Jeremy Jacobs.
Speculation of a Henry buy intensified on July 16 when several Globe staffers Tweeted that Henry and his wife, Linda Pizzuti Henry, had toured the newsroom.
"I just met #RedSox owner and Globe suitor John Henry, who is walking around @BostonGlobe checking us out," Tweeted Globe associate editor Shirley Leung.

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Old tobacco playbook gets new use by e-cigarettes

RICHMOND, Va. — Companies vying for a stake in the fast-growing electronic cigarette business are reviving marketing tactics used to hook generations of Americans on regular smokes.

They're using cab-top and bus stop displays, sponsoring race cars and events, and running slick TV commercials featuring celebrities.

The Food and Drug Administration plans to set marketing and product regulations for electronic cigarettes in the near future. But for now, almost anything goes.

The battery-powered devices heat a liquid nicotine solution, creating vapor that users inhale.

So far, there's not much scientific evidence showing e-cigarettes help smokers quit or smoke less, or how safe they are.

The marketing tactics are raising worries that the devices' makers could tempt young people to take them up. But the makers of e-cigarettes defend their strategy and their products.

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Netflix rolls out new tool to profile viewers

SAN FRANCISCO — Netflix is introducing a long-awaited feature that will make it easier for the Internet video service to track and analyze the viewing habits of people sharing the same $8-per-month account.

The tool coming out Thursday can splinter a single Netflix account into up to five different profiles at no additional charge. The Los Gatos, Calif., company is hoping its 37.6 million worldwide subscribers will use the profiles feature because it will help Netflix's recommendation system gain a better understanding of the different tastes of viewers using the same account.

The feature initially will only be available on Netflix's own website and several other viewing outlets, including the iPad, iPhone, Apple TV, PlayStation 3, Xbox 360, Apple TV and some smart TV models. It may take up to two weeks before the profiles choice pops up in these options. Profiles should be available on the Wii console before the end of August and on Android devices before the end of the year. Netflix subscribers who use Netflix on Roku's set-top box probably won't be able to use profiles on that device until early next year.

Until now, deciphering the preferences in large households could be tricky because Netflix's system couldn't distinguish between when a 50-year-old dad was watching its Internet video service and when his 10-year-old girl might be viewing under the same account.

"If the kids have been watching a lot of 'Shaun the Sheep,' that doesn't particularly help us help you find the next gritty drama to watch after they have gone to bed," said Neil Hunt, Netflix's chief product officer.

Profiles will now make it possible for several members of the same household to click on their screen name to get customized recommendations, based on what they have previously watched and seemed to enjoy in Netflix's library of movies, old TV shows and original programs. Netflix relies on viewers' own ratings of video, as well as computer-driven analyses of the genres previously watched.

Netflix Inc. considers its recommendation system to be one of its biggest advantages over rival Internet video services run by Amazon.com Inc., Hulu.com and Redbox. As long as Netflix keeps steering its subscribers to videos that they like, the company figures customers will be less likely to cancel the service.

Even though it's often analyzed a jumbled mix of viewers, Netflix's recommendation system apparently is hitting a sweet spot more often than not. The company says about three-fourths of the video watching on its service is driven by its recommendations.

The new profiles can also be used to link to each user's Facebook account. That connection allows Netflix members see what the other people in their online social network have been watching on Netflix, too.

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US unemployment claims fall to 326K, 5 ½-year low

WASHINGTON — The number of Americans applying for unemployment benefits fell 19,000 last week to a seasonally adjusted 326,000, the fewest since January 2008. The decline shows the job market continues to strengthen.

The Labor Department said Thursday that the less volatile four-week average slid 4,500 to 345,750. The July figures are typically volatile as the government has a difficult time adjusting for seasonal layoffs in the auto industry.

Still, the trend in weekly unemployment claims has been positive and offered hope that a better job market could help lift a sluggish economy later this year.

Applications, which are a proxy for layoffs, have fallen more than 12 percent this year. That's coincided with average job gains of 202,000 a month since January, up from an average of 180,000 in the previous six months.

The government reports Friday on July job growth and unemployment. Analysts forecast 183,000 jobs were added last month, and the unemployment rate fell to 7.5 percent from 7.6 percent in June.

"The labor market continues to improve moderately," Sal Guatieri, senior economist with BMO Capital Markets, wrote in a note to clients.

The total number of Americans receiving unemployment benefits fell below 4.7 million the week that ended July 13, down from nearly 6 million a year earlier.

A private survey released Wednesday showed surprising strength in the job market. The payroll company ADP said that companies created 200,000 jobs in July, the most for that survey since December. And it revised up its estimate of the number of jobs the private sector created in June to 198,000 from 188,000.

The ADP report is derived from payroll data and tracks private employment. It does not report government hiring. ADP's survey has diverged at times from the U.S. Labor Department's more comprehensive monthly jobs report.

Hiring has remained solid despite a weak economy. The Commerce Department reported Wednesday that the economy grew at a 1.7 percent annual rate from April through June. That's better than the revised 1.1 percent growth rate from January through March. But it's still too sluggish to rapidly lower unemployment.

The Federal Reserve on Wednesday downgraded its assessment of the economy's strength, saying it is growing only modestly. The Fed expects growth will pick up in the second half of the year.

But the cautious message may signal that the central bank is not ready to slow its bond purchases, which have helped push long-term interest rates down and encourage more borrowing and spending.

Stronger job growth had fueled speculation that the Fed could start reducing its $85-billion-a-month in purchases as soon as September. Many economists now say the Fed could delay the start of the tapering until economic growth strengthens.

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US average rate on 30-year loan up to 4.39 pct.

WASHINGTON — Average rates on U.S. fixed mortgages ticked up this week but are still low by historical standards, a trend that has helped the housing market recover.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan rose to 4.39 percent from 4.31 percent last week. Rates are a full percentage point higher than in early May.

The average on the 15-year fixed loan increased to 3.43 percent from 3.39 percent last week.

Rates spiked in June after the Federal Reserve indicated it could slow its bond purchases later this year, which have kept long-term interest rates low.

But on Wednesday the Fed hinted it might hold off because the economy remains sluggish. And it noted for the first time that mortgage rates, which have fueled home sales, "have risen somewhat" from record lows.

Mortgage rates tend to follow the yield on the 10-year Treasury note, which has also jumped on speculation that the Fed could slow its stimulus.

Despite the increases, mortgages are still a bargain for those who can qualify. And low rates are helping boost home sales in most markets and driving home prices up.

Home prices jumped 12.2 percent in May compared with a year earlier, according to the latest Standard & Poor's/Case-Shiller 20-city index released Tuesday. That's the biggest annual gain since March 2006.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.7 point this week, down from 0.8 point last week. The fee for a 15-year loan also declined to 0.7 point from 0.8 point.

The average rate on a one-year adjustable-rate mortgage dipped to 2.64 percent from 2.65 percent. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage rose to 3.18 percent from 3.16 percent. The fee declined to 0.6 point from 0.7.

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Automakers report big July sales; trucks lead way

DETROIT — General Motors, Ford, Chrysler, Toyota and Nissan all reported double-digit sales gains last month, clear signs that U.S. auto sales will remain strong into the second half of the year.

Toyota led the way with nearly a 16.5 percent increase, followed closely by General Motors at 16 percent. Chrysler, Nissan and Ford all reported 11 percent gains. It was Chrysler's best July since 2006.

Pickup trucks led the way, a boon for the Detroit carmakers. But consumers also favored SUVs and smaller cars.

All major automakers report U.S. sales Thursday. Most industry analysts expect July sales to rise around 15 percent from a year ago. A performance that strong will signal that the industry's momentum can carry through December.

"We're almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond," said Alec Gutierrez, senior market analyst for Kelley Blue Book.

The industry's numbers for July come a day after the U.S. government reported stronger than expected growth for the April-June quarter.

"Solid industry sales in July point to a stable market indicating a recovering economy," Bill Fay, Toyota's group vice president, said in a statement.

GM said its July U.S. sales rose to just over 234,000 vehicles last month, largely due to gains in full-size pickup trucks. Sales of the Chevrolet Silverado and GMC Sierra pickups combined rose 46 percent to almost 99,000. The trucks accounted for 42 percent of GM's sales. But passenger car sales also were up, 24 percent over a year ago.

Ford sold nearly 194,000 vehicles, led by the F-Series pickup, with sales up 23 percent. One in three vehicles sold by Ford last month was a pickup. But the company was helped by the other end of its model lineup, too. Sales of the Fiesta subcompact rose 89 percent.

At Chrysler, sales of the Ram full-size pickup rose 31 percent over a year ago, buoyed by an improving housing market that's helping to drive purchases by small business. Jeep Grand Cherokee sales rose 30 percent, the SUV's best July since 2005.

Chrysler saw strong retail sales to individual buyers during the month, particularly in pickups and SUVs, said Reid Bigland, the company's U.S. sales chief. It was Chrysler's 40th straight month of year-over-year sales growth.

Chrysler is predicting that industry sales in July will run at an annual rate of 15.8 million vehicles.

At Nissan, sales rose to just over 109,000, a July record for the company. Sales of the Altima midsize car rose 11 percent, and sales of the redesigned Pathfinder SUV more than tripled.

Toyota will release numbers for individual models or brands later in the day.

Of automakers reporting early Thursday, only Volkswagen had a down month. Its sales were off 3.3 percent as the top-selling Jetta compact faltered. Jetta sales dropped 1.8 percent.

The consulting firm LMC Automotive said the second-half tail wind could push this year's sales to around 16 million. Sales last topped 16 million in 2007, just ahead of the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.

A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.

Incentives such as rebates and low-interest loans are helping sales. Incentives in July rose nearly 8 percent over a year ago to $2,684 per vehicle. That's the highest level of the year, said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.

Overall, though, the discounts haven't cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That's because buyers are loading up on options, which boosts the price, he said. To get lower monthly payments while paying a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.

Thirty percent of car loans now are six years or longer, up from 29 percent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24 percent of auto sales, up from 21 percent a year ago, LMC said.

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Obama orders review of chemical plant rules

WASHINGTON — President Barack Obama is ordering federal agencies to review safety rules at chemical facilities in response to the deadly April explosion at a Texas fertilizer plant.

In an executive order announced Thursday, Obama tasks agencies with identifying new ways to safely store and secure ammonium nitrate, the explosive chemical investigators say caused the blast. Agencies are also being told to determine whether additional chemicals should be covered by federal regulatory programs.

The massive explosion at the plant in the community of West, Texas, killed 15 people, leveled hundreds of structures and damaged three of the town's four schools. It also prompted new scrutiny of regulations at chemical plants and the risks posed by deadly chemicals to people living in surrounding areas.

While the explosion is still being investigated, preliminary findings have been presented to Congress. A report sent to the Senate Environment and Public Works Committee in June showed that the decades-old standards used to regulate fertilizer chemicals are far weaker than those used in other countries.

The report concluded that the safety of ammonium nitrate fertilizer storage "falls under a patchwork of U.S. regulatory standards and guidance — a patchwork that has many large holes."

The Environmental Protection Agency, for example, does not regulate the chemical. The Occupational Safety and Health Administration requires that ammonium nitrate be stored separately from other combustibles in a room that has a partition that can withstand fire for up to an hour. But the agency had not inspected the West plant since 1985.

Some agencies do have rules on ammonium nitrate, but none apparently applied to the facility in West.

With the investigation continuing, the White House said it wanted to move forward where it could to address chemical safety concerns. Obama's executive order also calls for improved coordination among state and local agencies that deal with chemical plants. And it tasks the federal government with modernizing its information sharing about the plants.

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Follow Julie Pace on Twitter at http://twitter.com/jpaceDC

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