Opinion and Editorials

EDITORIAL: Business strength benefits city

May 22, 2010

The recession is dragging on, unemployment remains above 9 percent, and Lilly is chopping its way through 5,500 layoffs. Business bummers abound.

But it’s not all bad news. Some of IBJ’s top stories in the May 17 issue highlighted major local companies that are bucking the trend.

Consider Finish Line Inc. The 684-store chain of athletic-footwear stores has built up almost $250 million in cash and has no long-term debt. And last month it reported its biggest quarterly increase in same-store sales in five years.

These successes come in spite of some expensive missteps in recent years, including a failed acquisition and unsuccessful new store concepts. The nation’s second-largest retailer of its kind now plans to build its core brand as well as return more profits to shareholders and pursue diversification—carefully.

Then there’s shopping mall owner Simon Property Group, the area’s fifth-largest public company. It just gave up on its bid to purchase Chicago-based General Growth Properties. Though that attempt to grow was foiled, the company still has $3.6 billion in cash and a $3.2 billion line of credit. One securities analyst recently termed the company “best in class” among real estate investment trusts nationally.

Another story in the May 17 issue looked at CNO Financial (formerly Conseco). The Carmel insurer has managed five straight profitable quarters while its largest competitors have been sucking wind.

This achievement pales in comparison to CNO’s glory days under former CEO Steve Hilbert. But it’s pretty impressive for a company that sank so low last year that CNO’s own auditor suggested it might default on its bank loans, which could have led to a second bankruptcy.

CNO executives recapitalized the company by selling new stock and bonds, resolving regulatory issues and moving some problem policies into a separate trust.

“It’s not going to be like the old Conseco,” Randy Binner, an insurance analyst, told an IBJ reporter this month. “This is just back to being a normal insurance company.”

These days, “normal” doesn’t seem half-bad. Indianapolis is lucky to have such solid corporate citizens to rely on during this difficult economy. So the next time you’re feeling dragged down by another negative earnings report, take a look around. Good news is not hard to find.

An ill-timed request

Convention planners typically pay attention to every detail. But their call this month for more spending on the convention center overlooked a major factor: timing.

The city is already overwhelmed by the Indiana Pacers’ request for $15 million a year to cover Conseco Fieldhouse expenses. And a proposal to close six library branches was barely cold in its grave. So this was a poor time to rally public support to spend more on a major local facility that is already getting a $275 million expansion.

Convention officials actually made a decent case for the need to invest in the current portion of the facility, lest it sit empty because planners favor the building’s more modern section. We don’t quarrel with the eventual need. But this is not the right time to ask.•

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To comment on this editorial, write to ibjedit@ibj.com.

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