Welcome to the May 2 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Rudyard Kipling space undergoing rebirth, to reopen as restaurant/music venue
Louisville residents have read this story before: The Rudyard Kipling is coming back.
However, this time, the business won’t be called The Rudyard Kipling, or The Rud for short, and there will be quite a few changes. Real estate investor Gary Ross plans to open a restaurant/sports bar/music venue called Seven in the more than 180-year-old building at 422 W. Oak St., according to Damon Burgess, who represented Ross in the lease negotiations and is acting as a consultant and spokesman for Seven.
“Gary is a more behind-the-scenes-type of guy,” Burgess said.
Gant Hill and Associates represented property owner Ken Pyle, who for years operated The Rud with his wife, Sheila.
Once finished, the space will feel like a lounge in Miami or New York City with modern decor, a chandelier and white leather couches, Burgess said. “We want to be big city.”
The split-level first floor will mostly serve as a kid-friendly cafe or lounge where customers can hang out and watch sporting events. However, Seven will continue the tradition of live music on the weekends by bringing in live jazz bands. The lower portion will include a small stage, a bar and seating, while the upper section will offer some additional seating, and have a dance floor, a larger stage and a second bar.
“We want to be a destination entertainment spot,” Burgess said. “Jazz is more universal, and it’s more mature.”
While customers won’t have to pull out their suits and ties, those coming to Seven for late-night drinks and music will be expected to dress nice, he said.
For lunch and dinner, Seven will serve sports bar-type fare such as burgers, fries, chicken wings, and chicken and waffles. “It’s not going to be gourmet because that is not the crowd we are looking for,” Burgess said.
The second floor will be renovated into a VIP lounge with seating, an optional buffet area and a space for a deejay stand, so people on the first floor will hear the music but have to look up to see the deejay. The back porch also is being expanded and LED lights will be installed to allow for more outside seating.
Although the fire marshal hasn’t given Seven an occupancy limit, Burgess said he hopes to have room for 200 to 300 people, though he suspects it will only get that busy on weekend nights and during major events, sporting or otherwise.
There is a lot of work to be done, and the project is under a tight deadline of 90 days. While it may not hit that goal exactly, Burgess said they want Seven to open while the weather is still nice and warm. The second floor will likely open later, possibly in the winter.
Seven will employ about 20 staff members and hire private security on the weekends as “a safety precaution.” Some residents of Old Louisville have complained about high crime rates in the area, while others say it’s blown out of proportion.
Burgess said he and Ross liked The Rud because of the historic look of the building and the neighborhood.
“Old Louisville is a melting pot,” he said. “You’ve got young. You’ve got old. You’ve got black. You’ve got white. You’ve got Asian.”
The Rud has gone through many ups and downs during the years, with owner Pyle saying several times that he was on the verge of closing the more than 30-year-old music venue for good. Finally in late 2013, Pyle found a buyer for The Rud, but it did eventually close in June 2015. And the new owners sold the building back to Pyle in September.
Now that Pyle has found a new business owner to lease the unique space, our fingers are crossed that this venture will forgo the lows and keep the space hopping for years to come. If all goes well, Ross has an option in his lease to buy property. —Caitlin Bowling
Rough year for (most) local stocks
Stocks had a rough week, and some stocks of local importance (Amazon, Churchill Downs) recorded some wild swings on Friday.
Both the Dow Jones and the S&P 500 lost more than 1.25 percent last week — though numbers at Friday’s close looked significantly better than only hours earlier. The Dow on Friday closed down 57 points, but had been down 100 points just two hours earlier.
Meanwhile, shares of Amazon jumped nearly 10 percent Friday as the online retailer beat earnings estimates.
On the flipside, Churchill Downs, with only days before the big event, reported disappointing earnings, and shares plunged nearly 6 percent.
Ford, too, had a terrible Friday, seeing shares fall nearly 4 percent — a day after getting a nice bump for announcing record earnings.
So how have stocks of local importance fared so far this year, now that it’s a third over? Take a look at the graphic, and you’ll see: They haven’t performed very well.
Only three stocks of local importance have beaten the Dow (+2 percent) and S&P (+1 percent) for the year, while eight have posted losses.
For example, despite Friday’s big gain, Amazon is still down for the year. Yum and Brown-Forman are down nearly 3 percent each. Churchill Downs has declined more than 5 percent.
But the region’s problem child is PharMerica Corp. The Louisville-based pharmacy services provider, which has made headlines primarily related to court rulings and settlements, has seen its share price plunge more than 32 percent this year. The bulk of that decline came on Feb. 26, when the company announced the year would be challenging and would produce no earnings growth.
GE, Ford and Humana have seen losses of less than 1 percent this year. Aetna’s would-be new owner, on the other hand, has recorded a plus of more than 4 percent. UPS has seen a solid gain of 10 percent, but the big success story of the year, so far, is Kindred Healthcare.
The Louisville-based health care services company’s share price dipped early in the year (along with the rest of the market), closing as low as $8.17 on Feb. 16. When the company announced earnings on Feb. 26, the share price soared more than 21 percent, and on Friday, shares closed at $14.76, up more than 25 percent for the year. —Boris Ladwig
Boutique IP law firm adds entrepreneur-focused lawyer
Woman-led IP Law firm Cahill IP has hired Michelle Browning Coughlin, an attorney who works primarily with entrepreneurs on trademark and copyright matters, cybersquatting matters, as well as the enforcement of brands online. The firm has three lawyers.
Browning Coughlin spent the last two years in the IP group at Dinsmore & Shohl and four years of practice at Bingham Greenebaum Doll working with clients from large corporate entities to early-stage companies
“It’s thrilling to assist companies of every size to protect their intellectual property, but I have a particular fondness for working with early-stage companies and startups. The energy of entrepreneurs and their passion for their ideas is what draws me to this practice area. I love collaborating to find cost-effective strategies to protect their brand so my clients can focus on developing their new company,” said Browning Coughlin in a press release.
Amy Sullivan Cahill, the firm’s founder, added, “We’re excited to add a seasoned attorney like Michelle to our firm. Her experience advising companies on trademark matters has a significant impact on the economic vitality of our city and region. Michelle has dedicated her practice of law to growing our entrepreneurial community in Louisville.”
At first we questioned the use of “seasoned” in the press release, given Browning Coughlin earned her JD from University of Louisville’s Brandeis School of Law in 2009. (I’m currently wearing a shirt older than her law degree.) However, it certainly sounds like Browning Coughlin has some solid chops: Louisville Magazine named her a Top Lawyer in Trademark and Copyright Law, as well as Technology Law and Privacy/Information Law; and she was a Business First 40 Under 40 recipient in 2013. —Melissa Chipman
First Link Discount Foods — to be auctioned May 18 — has storied history
The soon-to-be auctioned First Link property at 431 E. Liberty St. wasn’t just a grocery store and USDA-approved meatpacking facility.
The basement, where the meatpacking facility used to operate, served as community “fallout shelter” in the 1960s, according to the Robin Silverman, whose family owns the property and ran First Link Discount Foods. Thankfully, it wasn’t needed.
The site also was home at one time to the Fehr’s Brewery Rathskeller. The Rathskeller, a German term historically used to describe an ornate basement-level bar where government officials met and drank, is now underneath First Link’s parking lot, Silverman said, but they were told it was filled with sand first by a previous owner in case someone wanted to restore it.
The Silvermans are auctioning off the property — Rathskeller and all — at 10 a.m. on May 18. (Editor’s Note: IL’s April 22 edition of The Closing Bell printed the incorrect date for the auction. It is May 18.)
Galaxie opening event venue and bar
The bar Galaxie in NuLu — which makes some of the strongest drinks $7 can buy — is debuting a venue and outdoor bar called The Outer Space.
The Outer Space is located in back courtyard of The Green Building, 732 E. Market St., where Galaxie is also located. The space is partially covered and will feature free live music every Friday and Saturday this summer.
It will make its debut on Oaks Day with a weekly event called “Science Friction,” which will include deejays Sam Sneed, Alex Bell and JC Denison. Science Friction will take place from 10 p.m. to 2 a.m.
The Outer Space was part of the plan from the get-go, but owners Thor Morgan and Doug Petry, who also are partners in Rye, wanted to get Galaxie going before tackling the added task of running an event venue. —Caitlin Bowling
E-commerce growth fuels UPS revenue gains
UPS’s first-quarter net earnings rose 10.2 percent, to $1.1 billion, as both the domestic and international package divisions reported improved profitability.
Diluted earnings per share, at $1.27, were up 13.4 percent.
First-quarter revenues, at $14.4 billion, rose 3.2 percent. The logistics company said that lower revenues from fuel surcharges and a negative impact from currency fluctuations were more than offset by growth in e-commerce, the impact of the Coyote Logistics acquisition, greater productivity and lower per-unit costs.
The Associated Press said that UPS’s first-quarter profit beat Wall Street expectations, but that revenues were lower than expected.
UPS said it generated revenues of nearly $9.1 billion in its U.S. Domestic Package business, up 3.1 percent from the first quarter of last year, thanks in part to high demand from e-commerce shippers.
The logistics giant had said late last year that e-commerce growth was fueling its expansion in Louisville. UPS plans to invest nearly $310 million in its package sorting facility in Louisville by 2018 and create 300 jobs. The building footprint will more than triple, to 838,000 square feet.
UPS is Louisville’s largest employer.
However, UPS also said last week that first-quarter revenue per package declined 1.3 percent, in part because of lower fuel surcharges.
The domestic division’s operating profit, at $1.1 billion, increased 7.6 percent because of lower fuel costs and technology-fueled productivity improvements.
The International Package division saw revenues fall 1.9 percent — though UPS said that revenues would have been flat without the impact of currency fluctuations. Lower fuel surcharges reduced revenues by about 2 percent.
The division recorded profits of $574 million, up 15.3 percent, thanks to “disciplined pricing” and “network efficiency gains,” the company said.
UPS said that revenues in its Supply Chain and Freight unit, at $2.4 billion, jumped more than 10 percent, primarily because of the third-quarter acquisition of Coyote Logistics.
However, the unit’s operating profit fell 2.6 percent to $147 million, though UPS said that was “better than anticipated.”
“We continue to execute well in all areas of our long-term enterprise strategy,” Chairman and CEO David Abney said in a press release. “The combination of revenue growth and benefits from our accelerated investments generated strong financial results in the quarter.”
Louisville Slugger Factory cranks out 300 pink bats for players to use on Mother’s Day
Things got a little more colorful at the Louisville Slugger Museum‘s bat-making factory last week. More than 300 bright pink bats were made to be used on Mother’s Day by Major League Baseball players like Jason Heyward (Cubs), Adam Jones (Orioles), Evan Longoria (Rays), Joey Votto (Reds) and David Wright (Mets).
The bats were donated to the MLB by the Slugger Factory, and after each game, the player signed his used bat to be auctioned off at MLB.com, with proceeds going to various breast cancer charities. You can also buy your own customized pink bat (for $59.95) by clicking here, and $10 from each sale goes to the same charities.
The dude was just abiding…
This summer’s Lebowski Fest is on, and founder Will Russell is back at the helm of the weekend-long festival dedicated to the Coen Brothers movie. The 15th annual event will be held July 8-9 in Louisville.
Tyler Gill tells us, “Will and I are the only two working for Lebowski Fest at the moment, and we definitely plan on bringing the show back on the road.”
Gill is managing the online store and helping out with planning.
Russell has been laying low since last year when he clashed with the law, opened and then abruptly closed Funtown Mountain in Cave City, closed his WHY Louisville stores, and spent time in rehab for addiction and for treatment of his bipolar disorder. The Funtown Mountain property sold at auction earlier this month.
Black Bear Combo will play the Friday night event at Lebowski Fest. According to their website, “Black Bear Combo is a raucous mutt channeling the common energy between traditional music from eastern Europe and the Balkans, punk rock, and free jazz.”
Michter’s comes out with a Barrel Strength Rye
For the second time in its company’s history, Michter’s is releasing a US*1 Barrel Strength Rye for all those whiskey aficionados who prefer a stronger spirit. The Louisville distillery’s regular Single Barrel Rye is sold at 84.8 proof, but this being barrel strength — meaning no water is added — bottles range from 110 to 114 proof.
The release comes on the heels of the company’s 10 Year Single Barrel Bourbon, which was equally highly anticipated by whiskey fans across the country. For the rye, Michter’s decided to put the whiskey into the barrel at a low 103 proof, which they believe creates a much smoother product compared to one that goes in at a higher proof.
“To enter the distillate for our US1 Rye and our US1 Bourbon into the barrel at 103 proof instead of a higher, more industry standard proof is very expensive, but our goal at Michter’s is to produce the greatest whiskey possible, regardless of the cost,” said Michter’s president Joseph J. Magliocco in a press release.
Phoenix Hill Farmers Market to open May 24
Phoenix Hill and NuLu dwellers and workers rejoice! The Phoenix Hill Farmers Market returns for the season on May 24. The market is now in its 10th year and is located at 1007 E. Jefferson St. in the parking lot of Fresh Start Growers’ Supply.
The farmers market, which operates from 3-6 p.m. every Tuesday, will run through October.
They accept debit cards, credit cards, SNAP cards, and Senior Farmers’ Market Nutrition Program vouchers — in addition to cash, of course.
Get your farm on! —Melissa Chipman