valleytalk/cw1st/mike2nd Productivity Enhancer If your business isn’t moving mountains, maybe you should be moving furniture. That’s right, no longer just for the home, companies are turning to Feng Shui the art of moving furniture to adjust an area’s energy balance as a way to improve business, or so says Tibetan Feng Shui master and Valencia resident Patti Robbins-Vignal. Vignal has done Feng Shui for just about every type of business over the last five years, from theme parks to insurance agencies. By placing furniture in a way to highlight wealth and the other areas of life, Vignal said businesses see improved finances, and their workers experience more satisfying careers and increased creativity and energy. “Businesses are extremely interested because they know that their success depends on how much they earn,” Robbins-Vignal said. “Feng Shui gets energy moving in a productive way.” Let Them Fly Coach Rep. Brad Sherman, D-Woodland Hills, gets a little irked when aviation interests at Van Nuys Airport say the city should back away from a proposal to limit the use of older, noisier corporate jets there. The solution to the problem of noise at the airport is to phase out the noisier Stage 2 jets and force corporate titans to pay the millions of dollars more it would take to buy newer, quieter Stage 3 jets. “The captains of industry can afford to buy quieter Stage 3 jets; maybe some of the colonels can’t, but they can always fly on commercial jets like the rest of us,” says Sherman. Van Nuys Airport Association President Jim Dunn says it’s not that simple. If older jets are phased out of Van Nuys, the colonels of industry will simply roost at Burbank Airport. That’s a far cry from clipping their wings. Pressing the Flesh What with all the networking that goes on at the various San Fernando Valley chambers of commerce, one chamber apparently thought it might be time to send out a little advice on how to press the flesh effectively. The Woodland Hills Chamber of Commerce in its most recent newsletter wrote a piece on “The Successful Networking Image,” to help members make the best use of their networking opportunities. For starters, the item suggests, “Don’t forget to have fun along the way. Networking does not have to feel like work.” It then goes on to talk about first impressions projecting a “friendly, sincere personal image” before getting to the most important aspect of networking, “the pitch.” The folks at the Woodland Hills chamber caution that networkers “remember to ‘be a real person,’ and to view the people you meet as real persons too, not simply as means to an end.” Now there’s a reminder that might seem to merely state the obvious. Then again, this is L.A. Money Troubles Local Internet executives may be making millions of dollars virtually overnight, but for the rest of L.A.’s population, making and saving money is tough. According to a study titled “The Best Cities to Earn and Save Money” conducted by research firm Reliastar Financial Corp., Los Angeles ranked 123rd out of the nation’s 125 largest cities. The survey was based on 15 criteria, including household income (L.A. ranked No. 54 at $34,040), housing costs (117) and crime (120). The only cities that ranked lower than L.A. overall were New York and Jersey City, N.J. Orange County, meanwhile ranked a respectable 56th. “People just get paid more down there,” said Tom Eckstein, who helped conduct the survey. Honesty the Best Policy At a press conference recently, the Elected Charter Reform Commission announced the winner of its $1,000 student contest to come up with the preamble that best encapsulates a vision for L.A.’s city government. When asked why he entered the contest, the winner, 17-year-old Belmont High School student John Du, grinned sheepishly and said, “Well, to be honest, I did it for the money.” The whole room burst out laughing. One person was heard to say, “Well, we know he’s not growing up to be a politician. He’s too honest.” Attention Collectors The big dash to get Michael Jordan memorabilia is on. Sports fans all over Los Angeles are rushing to get their Jordan jersey, poster, pendant or basketball card. Scott Damschroder, owner of Scorecard in Studio City, said the calls started flooding in after the media reported that the Bulls star was about to announce his retirement. “We have had an immense amount of calls from people who are asking what we have and how they can get it,” said Damschroder. “I have already reordered everything with Michael Jordan on it. Some companies won’t make any more and they will just sell what they have, so it will become very valuable.” Damschroder expects the craze will continue for weeks.

Smallbiz/LK1st/mark2nd PRODUCTION PLEASE NOTE SUBHEADS ALSO, LET’S CALL COLUMN SIG “ENTERPRISE” AND NOT SMALL BUSINESS By ALF NUCIFORA A combination of Mardi Gras, the Academy Awards and the Kentucky Derby, the Super Bowl is a once-a-year opportunity for advertisers and ad agencies to create reputations and flaunt their best. It’s gotten to the point where some people stay for the ads and go to the bathroom during the game. But not this year. Rarely has there been so much money spent for so little impact. At a hefty rate card price of $1.6 million for a 30-second commercial, this year’s Super Bowl advertising was a monument to excess with an abundance of questionable taste and painful waste. Movie companies were big spenders in their headlong rush to promote their latest blockbusters. Like some never-ending migraine headache, the Fox network pounded us with incessant promotion for their new season’s cheesy programming. The auto, truck and SUV brands served up the same clich & #233;-driven mush. The rare exception was Oldsmobile, now trying to reposition itself as a contemporary player with some nifty new brands. Probably too little, too late. For the first time, high-tech was everywhere. From Hotjobs to Hotbot, the Web fraternity was all over the screen. The Good Budweiser: I don’t know if it sells beer, but Budweiser advertising is still the funniest and most intelligent advertising to appear on the sports screen. The frogs and lizards still hold up. The Dalmatian spot pulled an approving sigh from both sexes. The “Toilet Paper/Check-Out” and “Catapulting Mouse” spots produced a requisite chuckle for Bud Lite. In a category where it’s hard to stand out, Budweiser performed in an exemplary fashion. Pizza Hut: Donald Trump, Spike Lee and Fran Drescher, quintessential New Yorkers all, helped make the point that, at $9.99, Pizza Hut’s New York Style Pizza is a mouthful and a helluva buy. Point well made. World Wrestling Federation: Gratuitous sex and violence, marvelously portrayed. Hey, that’s what professional wrestling is all about. They captured the spirit, tone and attraction of the spectacle with pinpoint accuracy. VISA: Two clever spots illustrate the perils of writing a check instead of using a VISA check card, one featuring Buckingham Palace guards and the other, a guy locked in a bathroom awaiting the services of a locksmith, while his drop-dead gorgeous female companion waits despondently on the other side. Sex Still Sells: A beautiful vamp sets off fire sprinklers as she munches on Smokey Red Doritos, while pneumatic babes from Victoria’s Secret provide the come-hither as they entice us to watch their upcoming fashion show on the Web. Meanwhile, Jerry Seinfeld performed well for American Express; FedEx gave us an entertaining spot featuring the Stanley Cup; Yahoo! continued its effective campaign illustrating the benefits of working with a great search engine; and Mountain Dew hit the mark with blue-collar Gen-Xers with its tongue in cheek look at “What Snowboarders do in Summer.” The Bad First Union: Why is it that banks consistently deliver misguided and irrelevant advertising that talks to self image as distinct from true customer need? First Union’s over-produced extravaganzas, with Blade Runner motifs and mountain themes, are nothing more than a gigantic waste of the advertiser’s money and the viewer’s time. Apple: A decent exposition of the Y2K problem from Macintosh, but one wonders how many people, particularly those under 50, got the “2001 A Space Odyssey” connection. Australian Tourism: A strange spot from the Aussies. Some expensive schmaltz with kids in different lands “calling Australia home.” It’s the old “I want to buy the world a Coke” theme revisited. But what was the point? Speaking of Coke, once again the beverage giant provided nothing memorable. Expensive, disappointing stuff from Pepsi One, with a misused Cuba Gooding Jr. And uninspiring animation for new Crispy M & Ms.; The Ugly Buy.com had a guy on all fours sniffing a dog’s rear end. No doubt, in their follow-up campaign, they’ll have the dog hiking its leg. Is there no shame? An interesting concept for 7-Up, “The Uns,” was destroyed by people who think trite is funny. A classic example of bad, expensive advertising. Will 7-Up ever get it right? Jon Lovitz for the Yellow Pages was a perfect manifestation of the notion that if you don’t have an idea, hire a celebrity. The hardest part was finding the message amid the waste. And “Just For Feet” this is what happens when production technique runs amok and replaces the idea. There are better ways to promote a brand. And less expensive ones to boot. There it is. Another year of advertising’s purported best. The patient’s got problems. We’re not on life support yet, but unless the ad community recommits to strategy, discipline and treating the consumer with intelligence, we’re headed for the graveyard. Alf Nucifora is an Atlanta-based marketing consultant. He can be contacted via e-mail at [email protected], his Web site www.nucifora.com, or by fax at 770-952-7834.

labor/35″/LK1st/mark2nd By JESSICA TOLEDANO Staff Reporter For more than a decade, Verdia Daniels has emptied bedpans, washed clothes and offered companionship to homebound disabled and elderly patients all at minimum wage and with no benefits. But Davis is fed up. And like thousands of other home health care workers in Los Angeles, she thinks joining a union might be the best way to get some relief. “We really help these people,” said Daniels, a widow who lives in the Crenshaw district. “One lady I took care of had bedsores all over her when she came home from the hospital. I nursed her back to health. These people really depend on us. We want respect and the union will help us get that.” Daniels is among more than 10,000 home health care workers who are voting this month on whether to join the Service Employees International Union, bringing to a close a decade-long effort to organize a workforce of 70,000 people scattered countywide. It’s certainly one of the most unusual organizing drives in recent memory. Rather than working at a single site for a single employer, these home-care workers are spread throughout the region, many of them working several hours a week for several different clients. Complicating matters, they are paid by a combination of federal, state and county funds. Union organizers have spent years tracking down these workers, enlisting hundreds of volunteers to scour the rolls of social service agencies and churches. “It has been a logistical nightmare,” said David Rolf, deputy general manager of SEIU 434B, the home health care workers union. “It takes weeks to find workers and once you get to their door they have quit or been fired. There is 40 percent turnover in this business, so it is not easy to keep a running list of people. There were so many nights I went home and said, ‘we just can’t win.’ ” But by the end of last year, organizers had finally located 10,000 home-care employees, enough to hold a National Labor Relations Board-sponsored election. Ballots were mailed Feb. 1 and results are expected by the beginning of March. Labor leaders are keeping a close eye on the election. If it succeeds, the drive could have far-reaching implications for thousands of other low-wage workers in Los Angeles. “If this is successful, it will increase union density by 10 percent in Los Angeles,” said Jon Barton, organizing director for the Los Angeles County Federation of Labor, AFL-CIO. “It gives all of the unions more clout.” More clout is key. For years, organized labor has been losing ground, dropping from 30 percent penetration in the nation’s workforce in the early 1980s to the low teens by the 1990s. As a result, labor organizers are targeting workers that traditionally have not been unionized, such as women, minorities and recent immigrants who, not coincidentally, make up the bulk of home health care workers. Government officials have offered no resistance to the SEIU’s organizing efforts for programs like In Home Supportive Services, which is administered by the county’s Department of Health and Human Services. It is an assisted-living service for very low-income elderly and disabled individuals. “The partnership with SEIU in this circumstance is a natural,” said Supervisor Zev Yaroslavsky. “This program saves the county a lot of money by keeping people out of nursing homes. Usually we are on opposite sides of the table, but it is not the case here.” Under the program, patients requiring assistance contact the county, which sends a social worker to evaluate how many hours the patient needs. Patients can receive between 20 and 283 hours of home care a month. About one-third of home-care workers are family members and the remainder are found through churches, civic organizations or the newspaper. Once the appropriate amount of hours is allocated, the state sends each patient a timecard to fill out so the worker can get paid. The workers receive minimum wage, currently $5.75 an hour, for tasks like food shopping, cleaning and cooking. But home-care workers complain that the system is flawed. Checks arrive weeks late. Clients will refuse to sign timecards unless workers agree to perform unpaid overtime. In other cases, abuse has been alleged. Complicating matters is that there has been no employer of record with which to file a grievance. About a decade ago, some workers contacted the SEIU and asked for help. The union wound up suing the county in an effort to make it accountable as the employer of record. They lost. So they went to Sacramento and lobbied to create a new agency to regulate the industry. Under legislation passed in 1993, the state created a 15-member public authority to begin monitoring the industry. The authority, set up last year with roughly $1.8 million in state start-up funds, is still in the process of organizing, but home-care workers say it is a major victory. Not only will it be a forum for complaints and other matters, it will keep a running list of workers and offer avenues for training.

Glendale/28″/mike1st/mark2nd By CHRISTOPHER WOODARD Staff Reporter Glendale, one of the most ardent pro-growth local cities for years, is poised for a dramatic shift toward slow growth. The leading candidates for both open seats on its five-member City Council are in favor of instituting stricter growth controls and a more arm’s-length approach in the city’s dealings with business. The election is April 6. Fed up with what they see as rampant development that has left Glendale’s hillsides scarred with housing and its streets clogged with traffic, the city’s powerful homeowner groups are laying siege to City Hall. “This is an absolutely critical election in terms of where Glendale is going as a city,” said Bud Ovrom, from his vantage point as city manager of neighboring Burbank. “There is a huge negative reaction in Glendale to the amount of growth taking place, and the homeowner groups are flexing their muscles.” Indeed. The homeowners helped elect two of their own to the five-member City Council in 1997, upsetting two incumbents and nearly knocking off Mayor Sheldon Baker. Now, with two other incumbents deciding not to seek re-election April 6, the homeowners are widely expected to consolidate their grip on City Hall, as 14 residents vie for the two vacant seats. “All the candidates that have any chance of winning this time are part of the homeowners organization agenda,” said Nat Read, a political consultant who managed the campaigns of many of the city’s old-guard leadership. “There’s the perception that (the city’s pro-business attitude) went too far. And that there’s a need to take it in a direction that is more neighbor- and resident-friendly.” While no one can speak for all 14 contenders, Read and others expect the council newcomers to take a much more skeptical approach toward development, preventing what they see as a further erosion of the city’s hillside-preservation law and placing a bigger burden on developers to make expensive traffic and other improvements for new projects. Councilman David Weaver, who led the homeowner groups’ charge into City Hall with his election in 1997, is even pushing for the city’s first business license tax, a move Weaver sees as essential to weaning Glendale off its development jag. “This city has had the attitude that we have to have more redevelopment and more businesses because we need more property and sales taxes,” he said. “Everything we’ve gotten has given us congestion, but it hasn’t given us the dollars.” Peter Hillman, a partner with PacTen Partners LLC, which developed a luxury high-rise in Glendale, said Weaver’s call for a business tax is the same “bureaucratic, liberal thinking” that has made a mess of Washington. Developers already pay substantial fees to “mitigate” the impacts of their developments, such as paying for traffic and other improvements, and there is only so much the market will bear. “They’re going to find out people aren’t going to pay these mitigation fees. They’re basically going to shut down the city,” he said. In years past, control of the city rested in the hands of a power elite consisting of company executives and chamber of commerce types. Business leaders would often get together over lunch and martinis at the Verdugo Club, a Glendale businessmen’s club. “There was the perception that city government and elected officials didn’t care at all about residents, that they were only receptive to what the existing power base wanted,” said Weaver. But a couple of things happened that caused a turnaround. As Glendale matured, a younger, more ethnically diverse crowd began moving into the city, and they became active in the business community. Meanwhile, as the former power brokers died or faded into retirement, they weren’t replaced. Then in 1996, the Verdugo Club the business community’s symbolic stronghold closed, the victim of declining membership and a changing city. “The only group with the citywide organization and energy to step into the void was the homeowners,” said Read. “They are the power, and they are the only power.” The “new establishment,” as Read describes it, is made up of two dozen homeowner groups linked by the Glendale Homeowners Coordinating Council. Weaver is a former president of the council, and City Council candidates Gus Gomez, Mike Smith and Bob Yousefian all came up through the ranks of the homeowner groups, said Weaver. In 1997, Weaver, and Ginger Bremberg, a former council member who was able to remake her image from that of old guard to homeowner advocate, handily beat incumbents Rick Reyes and Mary Ann Plumley, garnering more votes even than Mayor Sheldon Baker. “There’s definitely been a major shift in the power structure of Glendale. It signals the death of what I’ve labeled ‘In-Dale’ (meaning the city’s political in-crowd),” said Read. Thomas Greer, executive director of the Burbank Glendale Pasadena Airport Authority, characterized the movement taking hold in Glendale as a “political cancer,” the same disease that has infected Burbank. “Some people may see it as a good ol’ boy network, but Glendale has enjoyed a stable environment,” said Greer. The airport director believes that the majority of Glendale residents have been lulled into a sense of complacency by the city’s prosperity, giving the homeowners a free hand that ultimately may hamper the airport authority’s plan for a new air terminal. But Gomez, a council candidate who works as a prosecutor for the state Attorney General’s Office, said the slow-growth movement is more broad-based than critics would like to believe. “With people all over the city, there’s a broad consensus that we need to preserve what little open space there is,” he said. “And that goes beyond just the homeowner groups.” While Gomez doesn’t go so far as to support a business tax, he does believe the city must take a hard look at any new growth. Nick Doom, a candidate and political science teacher at Glendale’s Hoover High School, said while he is not a member of the homeowners’ clique, he shares their thinking. Doom doesn’t support a business license tax, but he does believe it’s time for the City Council to crack down on hillside homes and high-rise office buildings. “The City Council can say ‘We’ve had enough. It’s gone a little too far,’ ” he said. “It’s up to the City Council to reign it in.” While Read concedes that the city may have swung too far in accommodating business, he asserts that the pendulum inevitably will swing too far in the other direction. Weaver agreed there is that danger, but he said he hopes to act as an elder statesman for the homeowners in an effort to find a balance between the needs of business and residents. “The homeowners do have the upper hand, but if they stay too introverted and ignore the business community, there’s going to be a backlash in the other direction,” he said.

Techschools/27″/cw1st/mark2nd By JENNIFER NETHERBY Staff Reporter The demand for workers at high-tech firms along the 101 corridor and throughout Los Angeles is creating a business boom elsewhere in San Fernando Valley classrooms. Colleges and technical schools across the Valley and into Ventura County are scrambling to provide new or improved course offerings to meet the demand for techies. Chicago-based DeVry Institute of Technology recently broke ground on a 20-acre campus in West Hills its third in Southern California. The college, scheduled to open in fall, will have 2,700 students and 100 faculty. ITT Technical Institute’s Sylmar campus will add a new computer network systems engineering program this March, while Cal State Northridge is overhauling its computer engineering program to keep up with changing industry demands. “We’re seeing huge increases in fields related to computers,” said Sharlene Katz, CSUN associate dean at the college of engineering and computer science. “Our experience is that our students are in very high demand. We can’t supply enough students to employers.” Growth in high-tech employment is expected to slow somewhat this year. The number of high-tech jobs in L.A. County is expected to decline from 38,800 in 1998 to 38,200 this year, according to the Los Angeles Economic Development Corp. The California Employment Development Department, meanwhile, says that high-tech jobs, especially computer engineers, systems analysts and computer programmers, are the third fastest-growing job sector in Southern California “The common complaint in technology is, ‘I can’t find enough workers,’ ” said Jack Kyser, chief economist with the Economic Development Corp. of L.A. County. “Demand is not being met and, from what we hear, it won’t be met anytime soon.” That’s why schools like DeVry and others are moving in or expanding their Valley programs to cater to high tech. DeVry will spend $12 million to turn the former West Hills Hughes Aircraft Co. site on Roscoe Boulevard and Fallbrook Avenue into a full-scale campus with a two-story, 110,000-square-foot building housing 30 classrooms, computer and electronics labs, and a library. “This was a long-term goal,” said DeVry Southern California President Rose Marie Dishman. “It’s a dynamic, growing area.” Ken Bauer, vice president of human resources at Xircom Inc., said the company has officials on college curriculum committees and works closely with students from area junior colleges. Bauer said schools are finally getting the message in terms of what businesses need. “They’re really jumping on the bandwagon,” he said. Bauer said the company has 50 open positions, each of which typically takes two to four months to fill. “It’s a huge problem,” he said. “There’s just not enough fully qualified computer scientists coming out of the schools. There’s a lot of people applying for jobs, but not with the relevant experience.” Cliff Numark, program director with the Los Angeles Regional Technology Alliance, said the biggest complaint he hears from high-tech employers is the lack of quality workers. “The number one problem affecting high-tech businesses in the L.A. area is the need for experienced management teams and a need for quality workers,” he said. LARTA is a non-profit organization representing high-tech businesses in L.A., Orange, Ventura, Riverside and San Bernardino counties. Tech companies aren’t the only ones looking for workers. Gary Groth, director of development at CSUN’s college of engineering and computer science, said more traditional companies such as Anheuser-Busch Inc. are looking for hard-to-find tech workers. At a technology job fair later this month, more than 100 employers are expected to mine the school’s student body. As long as the jobs are there, schools say they will have little trouble finding students. Valley market surveys done by DeVry show a strong interest in education. School representatives visit area high school students and report more interest in a Valley campus than DeVry’s other two Southern California locations. Katz at CSUN said because different types of students go to DeVry versus CSUN and other types of schools, DeVry won’t pose serious competition to the university. Lisa Montgomery, a spokeswoman for ITT, said her company is not worried about the competition from the new DeVry campus either. “Really with the demand employers say there is for technologically skilled workers, there’s room for ITT, DeVry and others,” she said. Dishman said she plans to reach out to other schools in the area, especially the community colleges, to form working partnerships. “We’re not expecting to have a threatening relationship with any of the other schools.” A degree at a private technical school doesn’t come cheap. DeVry costs students on average $4,000 a semester, and students graduate in five to nine semesters depending on the type of degree they get. ITT’s average tuition is $17,000 for an associate’s degree. To obtain an associate’s degree in computer systems networking, it costs $23,000. That compares with $946 a semester at California State University system and as little as $144 a semester at a community college.

Econowatch/dt1st/mark2nd By JENNIFER NETHERBY Staff Reporter Hotel occupancy in the San Fernando Valley held steady in 1998 despite a 6.4 percent increase in room costs, as well as trouble abroad with the Asian economic crisis and weather problems stateside from El Nino, according to PKF Consulting, which tracks the hotel industry. The average 1998 Valley hotel occupancy rate held steady at 73.54 percent, up just barely from 73.15 percent the previous year. At the same time, the average cost of a hotel room rose from $99.12 to $105.50. “Since 1994, occupancy has been high enough that hotel owners thought they could successfully increase rates. And they did,” said PKF researcher Melissa Mills. Hotel room rates have been increasing by 6 or 7 percent each year since 1995, Mills said. Occupancy rates have stayed steady. Valley occupancy rates were slightly below 1998 rates for Los Angeles as a whole, which averaged 74.41 percent. Tourism was the third-largest industry for L.A. County in 1997, generating $26 billion. For 1999, PKF predicts Valley hotel occupancy rates will drop while room rates will continue to rise.

Fasttrack/–“/dt1st/mark2nd By SHELLY GARCIA Staff Reporter Avi Cohen didn’t hesitate when a friend suggested they start a bed linens business. No matter that he didn’t know anything about manufacturing bed linens or the retailers who sold them. The two had $150,000 to invest and, thanks to Cohen’s father, who had sold fabric seconds (manufacturing irregulars sold at a discount), a few friends at textile companies in Israel. Since those seat-of-the-pants beginnings in 1991, Veratex, which makes bedding ensembles that retail for about $400 for a comforter set, has grown to a $25 million company with a customer list of about 400 retailers, including some of the biggest names in home fashions. But not before it narrowly escaped going bust twice. “It’s extremely impressive to come into such a (mature) business and make the inroads he did,” said Donna Aidekman, vice president and divisional merchandise manager for Strouds. “Most of it stems from his ability to recognize fashion and be on the cutting edge, as well as pricing it for a value equation.” As Cohen, who is president of Veratex, sits in his cluttered Van Nuys office chain-smoking cigarettes, he doesn’t bother to hide his astonishment at how far the company has come. He was an auto mechanic when he arrived in this country in 1980 from Israel and started his first business an auto parts distributorship with $30,000 in seed money financed from three credit cards at 25 percent interest. Later, he opened a small chain of pet stores. By the time his friend Moti Katz, who is now senior vice president in charge of the company’s production and operations, approached him with the idea of starting up Veratex, Cohen figured he could sell anything. What he didn’t know was, unlike the cash-and-carry businesses to which he was accustomed, the bedding industry is dominated by huge multinational textiles firms with powerful brand names and the ability to deliver hundreds of thousands of pieces of merchandise to stores nationwide. After plunking down their investment on a container of fabric from Israel, Cohen found little success at the specialty chains. Veratex had no track record to convince retailers it could deliver the goods. He made his first sale only after the chief executive of now-defunct 3D Bed and Bath demanded that they visit his Israeli suppliers together. Largely because of his father’s connections, the vendors they visited in Israel vouched for Cohen, and 3D placed an opening order. The pattern began to sell well enough so that 3D wanted to reorder it. But retailers typically take 90 days to pay their invoices and Cohen hadn’t received any payment on the first container yet. He had no money to reorder the goods. It was only after his father agreed to act as a guarantor for the shipment that the company secured its second container of goods. In 1994, Veratex caught the attention of a home textiles trade magazine. The story attracted a number of new customers, and the company’s revenues reached about $2 million. For the first time, Cohen was able to think about how he wanted to shape the business, and he decided to upgrade the line. He recognized that while domestic textile mills enjoy tremendous cost efficiencies, what they cannot do effectively is produce smaller runs for niche markets. “I couldn’t compete with the mills on the low end,” said Cohen. “Why would the retailers buy from me? So I said, ‘I have to go to sateen.’ ” Cohen decided to focus on luxury cottons and woven jacquards. He accessorized comforters and pillows with tassels and cording typically found on custom-made bed linens, and he upgraded the packaging. Orders were coming in at a brisk clip, but because of the industry’s 90-day payment terms, Cohen couldn’t meet his payroll or pay some of his suppliers. He tried traditional lenders, but because of the company’s short credit history and size, he couldn’t get the funding he needed. “We had the money on paper, but I was almost out of business,” Cohen said. Finally he stumbled on a program offered by Los Robles Bank, a community bank in Thousand Oaks. For a service fee that was comparable to some high-interest bank loans, Los Robles bought Veratex’s receivables, giving the company the operating cash it needed. “He’s your typical entrepreneur,” said Bob Young, vice president for asset-based loans at Los Robles Bank. “He had the energy to put into the business and he’s a good salesman, but at the same time, he seemed to have a good business sense of what he was doing and where he was going.” “From that moment, I stopped worrying about collecting money, and sold customers whatever they wanted,” Cohen said. “I also started buying like crazy.” Consumers seem to like the Veratex designs. Veratex makes six of Strouds’ 10 top-selling patterns, and the retailer recently opened a shop within a shop dedicated to the company’s lines. “I don’t even trust my own judgement anymore,” Aidekman said. “His track record is so good, why would I even second-guess him?” Cohen has built a client base of specialty chains that includes Linens ‘n Things and Bed Bath & Beyond, as well as Strouds. And Sears Roebuck and Co. has recently contracted for a private-label brand, which, with fewer adornments, will retail for about $199 for a comforter set. Last summer, Guess Home Collection awarded Veratex the license to manufacture its bed linens line, a business for which Cohen had to compete directly against the textile mills. “We were really impressed with what he’s done in such a short period of time with Veratex,” said Lawrence Sass, executive vice president of the Guess Home Collection. “We really respect his passion and commitment. His word is good.” Veratex, which now has showrooms in New York, Atlanta and South Carolina, this year will move from its current 55,000-square-foot facility in Van Nuys to a 140,000-square-foot build-to-suit in the new Panorama City industrial park, The Plant. “I believe business is always beautiful,” said Cohen. “The problem is, we don’t like to work hard enough.” Snapshot Veratex Year Founded: 1991 Revenues in 1994: $2 million Revenues in 1998: $25 million Employees in 1994: 20 Employees in 1998: 180 Top Executives: Avi Cohen, president, Moti Katz, senior vice president Goal: To repay the work and loyalty of the employees by providing them with a secure financial future Driving Force: “The consumer is spoiled. They want to see new things. If you bring them new items, they will buy it.”

Secedeside/8″/mark2nd By CHRISTOPHER WOODARD Staff Reporter The trouble Valley VOTE had in obtaining signatures for a study of secession may end up seeming like a petty hassle compared to the Herculean task of breaking up one of the nation’s largest cities. Separating the San Fernando Valley and its 1.6 million inhabitants from Los Angeles would represent the most complicated divorce in history, with both sides ready to go to war over the community property. “It will be monumental. It’s never been done anywhere in the country,” said Larry Calemine, executive director of the Local Agency Formation Commission, the agency that would referee any split. If Valley VOTE gets enough signatures on its petitions, the first step toward secession will be the filing of an application with LAFCO to detach the Valley from the city and create a stand-alone city. Richard Close, chairman of Valley VOTE, said his committee is preparing to file the application in the coming days. Calemine must then hire a team of professionals to undertake an unprecedented study looking at the economic ramifications of secession specifically, how revenue and expenditures, assets and liabilities should be divided. Initial estimates put the cost of the study at $1 million to $2 million, but Calemine now says that the cost will be $8.1 million. It’s unclear who will pay for the work, but certainly LAFCO doesn’t have that kind of money. If the money is found, and the study completed, LAFCO, a nine-member agency made up mostly of elected leaders from L.A. County and its cities, would then give the thumbs up or down to Valley secession. If the board agrees to the split, the issue would be put to the voters, where it will have to be approved by a majority in the Valley and a majority in the city as a whole. Close hopes the issue can be before the voters by 2000, but Calemine said the Valley will be lucky to see it on the ballot until 2002, due to the difficulty and complexity of the study. “Before we’re through with this process, we’ll have the eyes of the national media watching every step we take,” said Calemine.

Baja fresh/16″/dp1st/mike2nd By SHELLY GARCIA Staff Reporter Greg Dollarhyde is betting you’re hungry for healthy fast food. No french fries or secret sauce. Nothing that comes in a bun or a bucket. Just good low-fat food served with lots of fresh veggies. Dollarhyde and his partners, who recently bought the popular Baja Fresh chain, are among the growing number of fast-food purveyors trying to cash in on the hunger for all things healthy. They believe more and more consumers will favor healthy offerings over simple convenience when choosing a restaurant. “This is a part of the restaurant business that’s going to continue to grow rapidly,” said Dollarhyde, president and chief executive of Westlake Village-based Baja Fresh. “People want better food than just fast food.” Baja Fresh, with 49 restaurants and more than $50 million in annual sales, fits into a category known as upscale or adult fast food. In contrast to traditional fast-food restaurants, where food is pre-cooked and customers can only select from a fixed menu, chains like Baja Fresh cook some of their food to order and allow customers to substitute items on the menu. For instance, diners can order a burrito usually sold with rice, beans, onions, cilantro and salsa without some of those ingredients or with additional ingredients such as sour cream or cheese. There’s also a fresh salsa bar to top off your entree. “They offer value and large portions. And, above all, the thing that differentiates them is the perception that they serve fresh food,” said Ed Engoron, president and chief executive of Perspectives/The Consulting Group Inc., a Los Angeles firm that specializes in restaurant management. “Fresh food is driving the category today.” Dollarhyde said it takes 25 percent to 50 percent more staff hours to run a restaurant like Baja Fresh than a traditional fast-food outlet because of the food preparation that takes place on site. Workers’ pay also tends to be higher about $1 an hour more than traditional fast-food restaurant wages, which start at about minimum wage. For all its promise, the growth potential for restaurants like Baja Fresh is somewhat limited when compared with traditional venues. Unlike burgers, Mexican food is not widely accepted outside major metropolitan areas. And the pricing at these fresh-food restaurants, where an average meal runs $6 to $7 per person compared to under $5 for traditional fast food, also limits mass-market appeal. “This is not something that’s going to work in Wichita or Fargo,” said Engoron. He points out that El Pollo Loco, which operates in the same fresh-food category as Baja Fresh, attempted a national expansion and then pulled back to its regional roots. Rather than follow the far-flung strategy of McDonald’s Corp., the new owners of Baja Fresh want to capitalize on markets where the restaurant has already made inroads. The chain currently operates restaurants in Northern and Southern California, Nevada and Arizona, and has franchise-owned eateries in Colorado and Washington, D.C. “You’re much better off building 100 restaurants in a few cities than building a few restaurants in a lot of cities,” Dollarhyde said. By concentrating expansion in areas where the restaurant is already known, he believes brand awareness can be enhanced. “You get better word-of-mouth,” Dollarhyde said. “Baja Fresh doesn’t advertise, but if you’re good, word-of-mouth will carry your business.” Along with increasing the number of company-owned stores, Baja Fresh plans to expand its network of franchise-owned restaurants, which now total 35, during the next 18 to 20 months. The partnership that bought the chain includes Catterton Partners, a Greenwich, Conn., investment company; Oak Investment, a Minneapolis-based investment fund that specializes in retail enterprises; and Grumman Hill Group in New York. The partnership acquired a controlling interest in Baja Fresh in a cash transaction. Selling that controlling stake was Jim Magglos, who founded Baja Fresh in 1990.

DEVELOPING LASTING BANKING RELATIONSHIPS By Barry Cohn Many business owners and managers today express concerns with their company’s banking relationship. These concerns are legitimate. The financial services industry is going through a massive restructuring due to mergers and acquisitions. There were over 14,000 banks in the United States five years ago. Currently, there are approximately 9,000 banks, and it is predicted that there will only be 2,000 banks in the country by the end of 2003. Ten years ago, who would have contemplated a time when First Interstate Bank, Security Pacific National Bank, Great Western Bank, and Home Savings of America, to name a few, would cease to exist? Since this trend in bank merger-mania will be continuing, it is important for owners and managers of both large and small businesses to understand how to identify a good bank for their company and how to develop an ongoing relationship where their bank and banker anticipates their business needs and helps the company grow. Businesses, depending on their size, have many choices of banks that can help them with their lending, cash management, and investment requirements. There are small community banks that specialize in a geographic area, niche players that target specific types of companies, medium sized banks that like small business customers and large banks that try to do it all. If you choose to work with a small community bank, recognize that the bankers you meet are working with consumers on car loans, small business loans under $100,000 and often larger companies that like a local flavor. If your company is large enough to borrow in excess of $2 million, you might even be reaching that bank’s legal capacity for making loans. There are a number of niche banks that specialize in small to medium size companies and loans between $100,000 and $5 million. These banks may focus on the medical industry, real estate developers, SBA loans, credit card processing or even portions of the entertainment industry. A few of these medium size banks just bank companies or high net worth individuals. The large banks usually divide up the business market into segments based on size. Loans below $2 million are usually handled in a centralized fashion, in small business centers using credit scoring and are moving to the 1-800-BANK type of relationship. Companies with credit needs above $2 million and sales usually between $20 million and $200 million are handled by the middle market group, or corporate banking group. These bankers are strategically located in major business centers primarily on upper floors of office buildings and never at the local branch. These bankers specialize in working with manufacturers, wholesalers and importers, adding value with their experience, knowledge and understanding of business. Now it’s time to think about your banking relationship. Do you have a banker that is interested in your business? Does he or she understand your industry? Is he or she proactive with all of your business needs? If the answer to any of these questions is not a loud shout of support then it’s time to re-evaluate your banking relationship. Given the wave of bank mergers and acquisitions, it is probably a good idea to learn about alternatives anyway, long before it is necessary. The first way to find a competent, proactive banker is to ask for referrals from your accountant, suppliers, customers, or competitors. 75% of companies change banks based on referrals. When you are introduced to a prospective banker, ask questions. Interview the banker as much as the banker interviews you. What is his or her experience and background? What types of companies does your prospective banker have in his or her portfolio? Are they larger or smaller than your business? Does he or she have any experience in your industry? How are loans approved? What types of loans does the bank make? Ask for a number of references, call these companies and ask how your prospective banker has performed. With this information you can determine if you are talking to the right banker and bank. Remember that business banking is built on relationships. All of the products are virtually the same. The bells and whistles are almost universal. There are only so many ways to make a loan. The real differentiation is your relationship with a live thinking and breathing banker. Make sure it is the type of relationship you deserve. Barry Cohn is Regional Vice President for the San Fernando Valley Regional Office of Imperial Bank.