THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Monday, July 25, 1994 TAG: 9407230113
SECTION: BUSINESS WEEKLY PAGE: 9 EDITION: FINAL
SOURCE: BUSINESS WEEKLY STAFF
LENGTH: Medium: 87 lines
Rising interest rates could slow Hampton Roads' economic growth in the second half of 1994 and next year by cutting into consumers' appetite for new cars and homes, a regional economist said.
The local economy has shown surprising strength in the first six months of the year - thanks in large part to surging home, auto and other retail sales, said economist John Whaley.
All of that buying on credit has helped keep jobs growing at a respectable 1.5 percent here this year, slightly higher than last year.
But the party may soon be ending. Higher interest rates make big-ticket items like cars and homes more expensive.
Fine's Men's Shops Inc., which is operating under the protection of U.S. Bankruptcy Court, received approval for an agreement that provides the retailer with crucial financing.
The agreement with GBFC Inc., a Boston-based financial concern, will make available as much as $4 million of working capital, said Mitchell Fine, president and chief operating officer of the Norfolk-based chain of apparel stores.
The financing is essential for Fine's to stock its stores for the back-to-school and Christmas shopping seasons, he said.
Fine's was organized in 1933.
Starting this month, health maintenance organization customers can now use their health cards at any pharmacy they want, provided the pharmacy agrees to accept what the HMO will reimburse.
The change may not result in cheaper drugs for consumers and, HMOs contend, may actually increase some prices. But it will give consumers more freedom to choose their pharmacist.
Before the new law, which went into effect July 1, HMOs were permitted to force their customers to buy medicines from preselected companies, usually chain discount stores or mail-order houses.
In the latest exchange in the bitter struggle between rival groups of Dominion Resources Inc. directors, the company's chairman and chief executive officer attacked three directors for boycotting a board meeting earlier this month.
Dominion chairman and CEO Thomas E. Capps also refused a request from the three directors to turn over documents describing the sudden departure of a former director in June.
Dominion, based in Richmond, is the parent of Virginia Power, the state's biggest utility. A struggle over its management became public June 17 when state regulators ordered an investigation into relationships between the utility and its parent.
The frost destroying a third of the coffee crop in Brazil, one of the leading coffee-producing countries in the world, is spiking java prices in Hampton Roads.
Coffee prices in local stores and restaurants have almost doubled. Some of the stores are so sensitive to the perceptions of gouging that they are literally making apologies.
Though crop damage to coffee in Brazil should not affect current supplies, prices have skyrocketed to reflect the impending shortage. Local retailers and distributors say they are not making a profit from supplies on hand but reacting to higher costs passed on from manufacturers.
Cost-cutting seems to be having the desired effect at nVIEW Corp.
The projection-equipment manufacturer said it has posted its second straight profitable quarter since laying off 10 percent of its work force and taking an ax to other areas of the budget.
nVIEW reported a net income of $577,000 for the three-month period that ended June 30, up from $225,000 in the same quarter last year. For the year, nVIEW has earned $945,000, which comes after two years in the red.
The boost in profits hasn't come from a surge in sales. In the second quarter of 1994, revenues essentially were flat at $9.78 million. For the year, sales were up 8 percent.
One of Hampton Roads' two leading tugboat companies has a new owner.
Moran Towing Corp. was bought for an undisclosed sum earlier this month by Mormac Marine Group, a Moran official confirmed.
A subsidiary of Greenwich, Conn.-based Moran, Moran Towing of Virginia Inc. operates 10 tugs in the port of Hampton Roads.
Mormac Marine, based in Stamford, Conn., operates a fleet of tankers and iron-ore bulk carriers on the Great Lakes among other business interests. by CNB