The Urethane Blog
August 8, 2023
Klaussner Home Furnishings closes
August 7, 2023 | 5:17 pm CDT
Photo By Klaussner Furniture website
ASHEBORO, N.C. – Klaussner Home Furnishings is shuttering its operations effective immediately.
The residential furniture company manufactured more than 70 percent of its products domestically through its five manufacturing campuses in North Carolina, including at its Asheboro headquarters. Klaussner was ranked #36 on the FDMC 300, a listing of the largest North American wood products producers, with estimated sales of more than $300 million in 2022.
A statement posted on Klaussner’s website reads in part:
“As the result of challenging and unexpected business circumstances impacting our operations, Klaussner Furniture Industries, Inc. and its direct and indirect subsidiaries (“Klaussner” or the “Company”) must unexpectedly wind down the operations.
“Klaussner’s lending source has unexpectedly refused to continue to fund the Company’s operations. This outcome was not reasonably foreseeable, but due to these unexpected circumstances, Klaussner can no longer sustain its operations. As a result, Klaussner has made the difficult decision to permanently cease operations and is providing as much notice as possible.
“Klaussner anticipates closing all of its facilities entirely, and that process is underway as of today, August 7, 2023.
Klaussner is working to provide information and resources to assist with next steps for displaced employees as it becomes available. This information will be communicated directly to employees via the contact information we have on file.”
Founded in 1963, Klaussner Home Furnishings has been a leading provider of residential furniture, including upholstery, motion, sleepers, bedroom, dining occasional and accent furniture. Its licensed lifestyle collections included Trisha Yearwood Home Collection and Stacey Garcia Home. It is also affiliated with Prestige Fabricators Inc., a foam manufacturing company based in Asheboro.
https://www.woodworkingnetwork.com/management/fdmc-300/klaussner-home-furnishings-closes
August 7, 2023
CRE Turmoil Worsens As Office Delinquencies Accelerate
by Tyler Durden
Monday, Aug 07, 2023 – 04:40 PM
Readers have been well informed about the deteriorating state of the commercial real estate sector, with reports from major banks showing a downturn amid high-interest rates and tightened credit, which has pushed up borrowing costs and forced a rise in defaults.
The latest data from Trepp, which tracks commercial mortgage-backed securities (CMBS) securities market data, shows the delinquency rate of commercial property loans packaged up by Wall Street jumped again in July, with four of the five major property segments posting increases.
“While the rest of the US economy has seen relief in terms of higher equity prices, better-than-expected corporate earnings, and falling inflation numbers, the commercial real estate (CRE) market continues to be left behind,” Trepp wrote in the report.
Trepp data found the delinquency rate rose 51 basis points to 4.41% last month — the highest level since December 2021. Office delinquencies increased by 46 basis points to 4.96% — up more than 350 basis points since the end of 2022. The deterioration in the office segment is intensifying at an alarmingly rapid pace.
A broad overview of the US CMBS market shows the delinquency rate increased to 4.41%, a 51bps rise compared to the previous month, but still significantly lower than the 10.34% rate recorded in July 2012. The rate peaked at 10.32% in June 2020 during the government-forced Covid lockdowns.
Here are more highlights from the report:
- Year over year, the overall US CMBS delinquency rate is up 135 basis points.
- Year to date, the rate is up 137 basis points.
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is now 3.92%, up 20 basis points for the month.
- If defeased loans were taken out of the equation, the overall headline delinquency rate would be 4.64%, up 51 basis points from June.
- One year ago, the US CMBS delinquency rate was 3.06%.
- Six months ago, the US CMBS delinquency rate was 2.94%.
To better understand what might come next for the CRE market, Kiran Raichura, Capital Economics’ deputy chief property economist, recently warned in a note to clients that the office segment might experience a 35% plunge in values by the second half 2025 and “is unlikely to be recovered even by 2040.”
According to swipe data from Kastle Systems, the US office occupancy rate is less than 50%. The figure has plateaued since September, indicating a new reality of remote work.
One major hurdle for CRE space is that “more than 50% of the $2.9 trillion in commercial mortgages will need to be renegotiated in the next 24 months when new lending rates are likely to be up by 350 to 450 basis points,” Lisa Shalett, chief investment officer for Morgan Stanley Wealth Management, wrote in a note to clients.
Shalett expects a “peak-to-trough CRE price decline of as much as 40%, worse than in the Great Financial Crisis.”
Bank of America analysts expect challenges in the CRE space but noted, “They are manageable and do not represent a systemic risk to the US economy.”
Meanwhile, analysts at UBS warned:
“About $1.3 billion of office mortgage loans are currently slated to mature over the next three years.
“It’s possible that some of these loans will need to be restructured, but the scope of the issue pales in comparison to the more than $2 trillion of bank equity capital. Office exposure for banks represents less than 5% of total loans and just 1.9% on average for large banks.”
We’ve already seen major building owners returning their office towers and malls to lenders in California (here & here) and elsewhere (here). This will result in an uptick in CMBS delinquencies moving forward.
… and remember what we wrote during the regional bank crisis earlier this year — the note was titled “Nowhere To Hide In CMBS”: CRE Nuke Goes Off With Small Banks Accounting For 70% Of Commercial Real Estate Loans.
https://www.zerohedge.com/markets/cre-turmoil-worsens-office-delinquencies-accelerate
August 7, 2023
Privacy Storm Brewing As Zoom’s Updated Terms Greenlight AI Model Training With User Data
by Tyler Durden
Monday, Aug 07, 2023 – 12:25 PM
Zoom has added a clause to its Terms-of-Service (TOS) which allows the video conferencing company to use customer-generated content for any purpose they see fit, including to train artificial intelligence (AI) models, with no opt-out.
Zoom’s TOS, last revised on July 26th, conceals a concerning caveat. Nestled within section 10.4, for those brave enough to venture, is language that confers upon Zoom a carte blanche right to exploit what it coins as “Service Generated Data” (SGD). This expansive designation encompasses a cornucopia of user-generated information – from innocuous telemetry data to incisive diagnostic insights – all grist for the AI mill.
Section 10.4 also describes the company’s use of Customer Content (defined as “data, content, files, documents, or other materials”), not just telemetry data and the like, which it can use “for the purpose of product and service development, marketing, analytics, quality assurance, machine learning, artificial intelligence, training, testing, improvement of the Services, Software, or Zoom’s other products, services, and software, or any combination thereof.”
The company makes clear that it will be using data for, among other things, fine-tuning AI models and algorithms. The potential consequences are manifold, raising red flags for privacy pundits and sparking debates over the boundaries of user consent.
Zoom’s data net is cast even wider with a perpetual, worldwide, non-exclusive, royalty-free, sublicensable, and transferable license. This legal carte blanche emboldens Zoom to undertake a multitude of actions that span the entire data lifecycle. From reconstituting, republishing, and accessing user content to the deep recesses of data modification, redistribution, and algorithmic processing, the breadth of Zoom’s dominion over user-generated data now defies conventional comprehension.
Zoom contends that these data maneuvers are vital to service provision, bolstering software quality, and enhancing the broader Zoom ecosystem. The augmentation of AI capabilities, epitomized by Zoom IQ, has been touted as a beacon of collaboration, promising efficient meeting summaries, task automation, and optimized follow-ups, all enabled by the seamless integration of user data.
“With the introduction of these new capabilities in Zoom IQ, an incredible generative AI assistant, teams can further enhance their productivity for everyday tasks, freeing up more time for creative work and expanding collaboration,” said Zoom chief product officer, Smita Hashim. “There is no one-size-fits-all approach to large language models, and with Zoom’s federated approach to AI, we are able to bring powerful capabilities to our customers and users through Zoom’s own models as well as our partners’ models.”
In 2021, Zoom agreed to settle a class-action privacy lawsuit for $86 million, after plaintiffs accused the company of violating the privacy of millions of users by sharing personal data with Facebook, LinkedIn and Google.
The controversial section of the TOS reads (emphasis ours):
Customer License Grant. You agree to grant and hereby grant Zoom a perpetual, worldwide, non-exclusive, royalty-free, sublicensable, and transferable license and all other rights required or necessary to redistribute, publish, import, access, use, store, transmit, review, disclose, preserve, extract, modify, reproduce, share, use, display, copy, distribute, translate, transcribe, create derivative works, and process Customer Content and to perform all acts with respect to the Customer Content: (i) as may be necessary for Zoom to provide the Services to you, including to support the Services; (ii) for the purpose of product and service development, marketing, analytics, quality assurance, machine learning, artificial intelligence, training, testing, improvement of the Services, Software, or Zoom’s other products, services, and software, or any combination thereof; and (iii) for any other purpose relating to any use or other act permitted in accordance with Section 10.3. If you have any Proprietary Rights in or to Service Generated Data or Aggregated Anonymous Data, you hereby grant Zoom a perpetual, irrevocable, worldwide, non-exclusive, royalty-free, sublicensable, and transferable license and all other rights required or necessary to enable Zoom to exercise its rights pertaining to Service Generated Data and Aggregated Anonymous Data, as the case
August 6, 2023
Yellow shutdown likely means LTL price increases, analysts say
The low-cost carrier’s rivals see an opportunity to bring in loads at higher rates as bankruptcy looms.
Published Aug. 4, 2023
David TaubeAssociate Editor
Yellow Corp.’s shutdown has left shippers without a major player in the less-than-truckload space — a development that means higher costs are likely in store, according to trucking industry analysts.
“There’s probably going to be an increase in the pricing charged to the shipper,” said Craig Decker, who leads investment banking activities across supply chain, logistics and transportation areas at Brown Gibbons Lang & Co.
The price difference could be a 20% to 25% price per pound increase depending on the circumstances, DAT Chief of Analytics Ken Adamo suggested on a weekly market update show. All together, he said the price increases could be 7% to 10% higher.
“[If] you decided late last week to send ArcBest, Old Dominion, XPO and FedEx Freight your data to get some rates back, probably by late this week you’re going to be fully processing the sticker shock of how much of a price increase you’re going to have to take over what Yellow was charging you,” Adamo said.
XPO executives noted Friday on a Q2 earnings call that Yellow’s shuttering is disrupting the market and accelerating their pricing. ““Our customers understand: When you take 10% of capacity out of the market, it’s going to cost more to move freight,” incoming CFO Kyle Wismans said.
The increase to rates comes as a result of Yellow’s role in the trucking market: Shippers who relied on the low-cost carrier are likely left with higher-priced alternatives, analysts said.
“As one of the US’ most cost-effective LTL transport companies, businesses switching from Yellow to a more expensive rival carrier will experience a twofold cost increase,” Charles Haverfield, CEO of U.S. Packaging & Wrapping, said in emailed comments.
Haverfield said this is particularly true if shippers have not built relationships with other carriers to secure discounted prices or if they switch to smaller trucking companies that cannot leverage Yellow’s economies of scale to lower prices for their services.
“The best approach is for businesses to adopt a comprehensive approach, encompassing both major carriers and smaller freight companies,” Haverfield said.
Shippers had been diverting freight to other carriers, brokers and the spot market even before Yellow confirmed it was shutting down terminal operations and laying off workers.
August 3, 2023
Green Bay Packers Acquires Foamation, Maker of PU foam Cheesehead Hats
The Green Bay Packers announced today the organization has acquired Foamation Inc., the company responsible for creating the original Cheesehead® hat, along with a wide variety of specialty foam products.
Foamation, based in Milwaukee, was founded by Ralph Bruno in 1987. Bruno first wore the Cheesehead hat to a Brewers game, after having the idea for the unique headwear while reupholstering his mother’s couch and seeking an opportunity to poke fun at the sports fans south of Wisconsin. He burned holes in the foam to give it a Swiss cheese-like appearance and painted it yellow to look like cheddar.
The one-of-a-kind hat turned out to be big hit while Bruno was tailgating before the game, and a new tradition began; the Cheesehead has since become a universally recognized symbol for Wisconsinites and Packers fans.
After more than 30 years of growing Foamation, which offered the hats and a variety of other specialty cheese-like foam products, the Brunos were ready to shift gears. Since the Packers were already the largest purchaser of their products – in order to keep them stocked in the Packers Pro Shop – the couple approached the team to determine the next steps for Foamation.
With an already beloved, iconic brand like the Cheesehead, the Packers were excited about the opportunity to continue growing the brand.
“The popular Cheesehead hats have come to represent Packers fans all over the world and we’re excited to officially welcome this special brand to the Packers organization,” said Packers vice president of marketing and fan engagement Gabrielle Dow. “We’re looking forward to building upon the legacy the Bruno family has created over the years and offering our fans even more Cheesehead items to love.”
The Packers have sold Foamation’s products in the Packers Pro Shop for several years. All Cheesehead hats and related foam products will continue to be manufactured in Wisconsin.
“After many years of working with family and friends to build the Cheesehead brand, we are pleased to pass it on to the Green Bay Packers,” said Ralph Bruno. “We have had a very special relationship with the Packers over the years, and my wife, Sue, and I are both very excited about what the Packers can do with the Cheesehead going forward.”
A variety of Cheesehead products are currently available in the Packers Pro Shop in-store and online at packersproshop.com, and the team is exploring several opportunities to grow the brand and create new products for fans to enjoy this coming season.
https://www.bizjournals.com/milwaukee/news/2023/07/24/green-bay-packers-acquire-cheesehead-maker.html
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