Inventory

VeriFone Holdings Shares tumbled $22, or 46 percent, to $26.03 after the world's biggest maker of electronic-payment equipment said it expects to restate earnings for three quarters in 2007 because of errors in accounting for inventory.

Home sales across the Baltimore metropolitan region showed their first gain in 16 months in January, a sign that buyers are returning to the market in advance of the crucial spring selling season. The 2,156 units sold in Baltimore and the five surrounding counties last month marked a 3.75 percent increase from January 2006 and reversed months of double-digit declines, according to sales data released yesterday by Metropolitan Information Systems Inc., a Rockville firm that tracks homes sold through the multiple listing service.

THE COUNTRY'S largest auto retailer, AutoNation, announced last week that it is closing or converting its 37 used-car superstores, acknowledging that the multibrand megastores equipped with playrooms and computerized displays were not profitable. The company, the brainchild of Blockbuster founder H. Wayne Huizenga and based in Fort Lauderdale, Fla., will switch its focus to its 406 smaller new-car franchises and its car-rental services.What problems did AutoNation face? Can the used-car superstore concept work?

Filene's Basement Corp., which launched one of its prototype Aisle 3 stores in Towson last spring, filed for bankruptcy protection yesterday.The troubled, Wellesley, Mass.-based chain said it was taking the step because its vendors, nervous over the company's condition, have delayed shipping inventory.The off-price chain, which got its start in 1908 as the bargain-basement floor of Edward Filene's Boston department store and went public in 1991, said yesterday that it has no plans to close any of its 51 traditional Filene's Basement stores or any of four Aisle 3 stores, a weekends-only, warehouse-style superstore concept with locations in Towson Marketplace, New York and New Jersey.

Buyers are snapping up homes in the Baltimore metropolitan region seemingly faster than Realtors can get the signs in the ground.With February statistics for existing-home sales showing a 21 percent increase over the same month last year, area Realtors are reaping the benefits of a robust market, but are increasingly wary that dwindling inventories are squeezing the market."

Three years ago, while much of the country was enjoying a housing boom, homebuilders in Maryland were complaining about the sluggish state economy depressing new-home sales.There was plenty of inventory and land. Yet, builders and developers were cautious; shouldering additional land positions could be a fatal strategy. But by last year, everything snapped to life. The state's economy turned vibrant. Unemployment sagged. Consumer confidence soared. Mortgage rates dropped below 7 percent.First-time homebuyers were coming into the market in droves, allowing move-up buyers to purchase existing, as well as new, homes in numbers not seen since the mid-1980s.

Sales of existing homes in the Baltimore metropolitan area fell 2.34 percent last month, registering the first decline in more than 27 months.According to the Metropolitan Regional Information System, 2,374 units were sold in the area, compared with 2,431 in October 1998. Only the city and Baltimore County registered positive gains over last year, while every other jurisdiction dropped below October 1998 levels.Area Realtors discounted the drop, equating it to little more than a sneeze in what is still a healthy real estate market.

NEW YORK -- Bankrupt Caldor Corp. is being sued for $26 million by a liquidators' group that claims it paid too much for inventory at the discount chain's 145 stores.The liquidators -- Gordon Brothers Retail Partners LLC, Schottenstein Bernstein Capital Group LLC and the Ozer Group LLC -- agreed to pay $223.7 million for Caldor's remaining inventory in February, 85 percent of it up front. Norwalk, Conn.-based Caldor said in January that it was going out of business, shutting its discount stores and putting about 20,000 people out of work.

HOUSTON -- Compaq Computer Corp. will cut about 15,000 jobs at Digital Equipment Corp., or 27 percent of the work force, after its planned $9.55 billion acquisition of the computer maker, sources familiar with the plans said yesterday.Compaq will take a restructuring charge of $1.5 billion to $2 billion, which includes the costs of firing the workers, after completing the purchase, according to filings with the Securities and Exchange Commission. Digital shareholders are expected to vote on the acquisition June 11.Compaq faces a daunting task in absorbing the remaining 39,000 Digital employees and making sure that sales don't flounder, costs are reduced and customers don't flee while the companies are working on the combination.

There was a time -- as recently as last week -- when William Hurwitz believed he had made a terrible business decision by ordering so many cars earlier this year. But not anymore.While other new-car dealers are beginning to worry about their supply of cars as a result of the strikes in Flint, Mich., that have halted most of the vehicle production of General Motors Corp., Hurwitz, president of Fox Automotive Inc., insists he's "in good shape.""I thought I had made a big mistake," he said yesterday, "but it turned out to be one of my better decisions."

The biodefense lab at Fort Detrick in Frederick began a thorough search of its freezers yesterday to ensure that it has an accurate inventory of the deadly bacteria, viruses and toxins accumulated there over a period of 40 years, Defense Department officials said. Col. John P. Skvorak, commander of the U.S. Army Medical Institute of Infectious Diseases, ordered a "stand-down," or pause in ordinary operations, and a complete inventory last week after 20 vials of "biological select agents and toxin" (BSAT)

Consumers are expected to pack stores and malls this weekend for a final stretch of shopping before Christmas, but they probably won't spend enough to turn around what has been a difficult holiday season for retailers. Desperate retailers trying to clear out racks of merchandise will pull out all the stops to squeeze that last dollar from shoppers in what has already been a season of steep discounts. JCPenney will slash prices as high as 70 percent on some items, while Loehmann's is offering 25 percent off entire purchases through Christmas Eve. Macy's will open 13 stores throughout the country for 24 hours, including Tysons Corner, Va., in the Baltimore-Washington area.

Working capital is the difference between current assets and current liabilities. Lack of close control on working capital is one cause of business failure. The small business owner must be constantly alert to changes in working capital, the reason for them, and any resulting business implications. It is helpful to think of working capital in terms of six components: 1. Cash and equivalents. The most liquid form of working capital requires constant supervision. Among considerations: whether the cash level is adequate to meet current expenses; timing of cash inflow, cash outflow and peak cash needs; amount to borrow to meet cash shortfalls; and the timing of repayment of loans.

As your business matures, you're likely to see steady profits - success you will want to build on going forward. Plowing profits back into your company may be the shrewdest move you can make in good times. Lowering your overhead is a logical place to begin, particularly if your rental payments keep rising. This could be a time to buy your current building or to find one for purchase so that you acquire a mortgage that costs you less per month than renting. Once you own your location, you can design the layout that will best maximize productivity.

Shares of Under Armour slid more than 10 percent yesterday after the Baltimore sports apparel company said plans to get rid of excess merchandise by reducing prices at its outlet stores would force it to lower year-end earnings and gross margins. The company said it expected year-end income from operations of $103.5 million to $104.5 million, down from its previous estimate of $108.5 million to $110.5 million. Gross margins are expected to fall 30 basis points to 50 percent. Under Armour had previously expected gross margin improvements of 40 to 50 basis points.

Jos. A. Bank Clothiers stock has fallen by nearly half since last spring. The menswear chain is defending itself against two shareholder lawsuits. Analysts worry it might get squeezed between a falling economy and rising costs. "Short sellers," who will profit if the shares fall further, are betting on it. How does the company respond? With a passive-aggressive pout guaranteed to egg on the skeptics. Bosses Robert N. Wildrick and David E. Ullman don't take questions on conference calls with stock analysts.

I'm worried about my favorite bookstore. Borders Group is having some financial issues, just got a capital infusion and has said the company might be sold. Its relatively new chief executive officer, George L. Jones, isn't from the book business and is revamping inventory to increase sales and profitability. Borders' decision to cut back on audio CDs is already obvious in its Columbia store, where you'll see lots of empty space in the music section. "We do have an inventory program under way, where we're really doing our best to have in our stores products that customers want - that sell," said Anne Roman, the Ann Arbor, Mich.

Jos. A. Bank, which has been criticized for what some analysts and others consider high inventory levels, said yesterday that it believes the practice of stocking up on menswear in its stores could assist the company during slow economic times. The Hampstead-based men's clothier had $207 million in inventory at the end of last year, 12.7 percent higher than the $184 million in inventory in 2006, David Ullman, Bank chief financial officer told analysts in a conference call yesterday. "While others are cutting inventory, we will continue to have a strong inventory position," said Chief Executive Officer Robert N. Wildrick.

Crocs Inc. Shares fell $1.78 to $15.55. A JPMorgan analyst downgraded shares of the colorful plastic-shoe company on weaker-than-expected U.S. sales, high inventory and a poor domestic economy.

Not every would-be entrepreneur wants to start a small business from scratch. There is an attraction to going into a business that already has a location, name, permits, customers and cash flow. But there are risks. Here are 10 questions to consider regarding the purchase of business: Have you assembled an acquisition team consisting of a banker, accountant and attorney? Why does the owner really want to sell the business? What assets convey with the business? Do there seem to be more fixed assets than it warrants?