You are much better off gifting direct cash instead of gifting gift cards.. Which only provides profit to issuer of the gift cards.. first in the way of surplus cash and even more importantly.. in pure profit for unused or lost gift cards.. As per conservative estimates one fourth to one third gift cards are never used.
This is really ridiculous.. In order to look fancy or cool.. we gift something which is highly uncool and has big potential for being pure waste of money. Where as Cash, on other hand, in all probability will never be unused or lost..
This so called cool factor gives birth to IPOs of gift card unit!!! though not bad for my local economy.. but in general, the business practice which is not good for anyone.. can never be good for a company or even for a society in general..
my 2 cents..
Safeway is planning to spin off its gift-card subsidiary via an initial public offering slated for 2013. The division has been a bright spot for the company.
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This is really ridiculous.. In order to look fancy or cool.. we gift something which is highly uncool and has big potential for being pure waste of money. Where as Cash, on other hand, in all probability will never be unused or lost..
This so called cool factor gives birth to IPOs of gift card unit!!! though not bad for my local economy.. but in general, the business practice which is not good for anyone.. can never be good for a company or even for a society in general..
my 2 cents..
BRIGHT SPOT FOR GROCER
IPO for Safeway gift-card unit
Supermarket operator says stock offering will be forminority stake in lucrative sector
By George Avalos
gavalos@bayareanewsgroup.com
PLEASANTON — Safeway said Wednesday it will spin off its gift-card subsidiary, Blackhawk Network Holdings, through an initial public offering of Blackhawk’s stock.
If the offering proceeds as planned, an IPO could occur during the first half of 2013, the supermarket operator estimated.
“Blackhawk is doing very well,” said David Livingston, a Milwaukee-based retail consultant. “That has been one of the bright spots for the company. Safeway has not done that well with selling groceries.”
The potential IPO would be for a minority stake in Blackhawk, Pleasanton-based Safeway said. Blackhawk Network Holdings is a subsidiary of Safeway and operates Blackhawk Network. A cash infusion from an IPO, were it to occur, would come at an opportune time for Safeway. “The grocery end of the business has been pretty tough,” Livingston said. “Safeway faces an onslaught from Walmart markets in most of their major regions. The cash could also help keep Safeway in the black. And they can keep paying a dividend.”
IPO for Safeway gift-card unit
Supermarket operator says stock offering will be forminority stake in lucrative sector
By George Avalos
gavalos@bayareanewsgroup.com
PLEASANTON — Safeway said Wednesday it will spin off its gift-card subsidiary, Blackhawk Network Holdings, through an initial public offering of Blackhawk’s stock.
If the offering proceeds as planned, an IPO could occur during the first half of 2013, the supermarket operator estimated.
“Blackhawk is doing very well,” said David Livingston, a Milwaukee-based retail consultant. “That has been one of the bright spots for the company. Safeway has not done that well with selling groceries.”
The potential IPO would be for a minority stake in Blackhawk, Pleasanton-based Safeway said. Blackhawk Network Holdings is a subsidiary of Safeway and operates Blackhawk Network. A cash infusion from an IPO, were it to occur, would come at an opportune time for Safeway. “The grocery end of the business has been pretty tough,” Livingston said. “Safeway faces an onslaught from Walmart markets in most of their major regions. The cash could also help keep Safeway in the black. And they can keep paying a dividend.”
Safeway is planning to spin off its gift-card subsidiary via an initial public offering slated for 2013. The division has been a bright spot for the company.
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Blackhawk Network sells gift, phone, sports, ticket and prepaid debit cards through a network of more than 80,000 retailers. The company offers more than 300 brands of prepaid cards from firms such as iTunes, Barnes & Noble, Visa, Starbucks and the NBA. People can buy the cards online or at racks in participating retailers. The cards can be found in grocery, big-box, convenience, pharmacy and specialty stores, and at Internet retailers including GiftCardMall.com. “People are more enthusiastic about giving gift cards, as well as receiving gift cards,” said Patty Edwards, chief investment officer with Trutina Financial, a Seattle-area investment firm. “Gift cards are considered a great store of value. They are almost like a second currency.” Earlier this year at an investor conference, the supermarket revealed that the value of the money stored on the cards totaled $6.9 billion in 2011. That was up 25 percent from 2010.
The Blackhawk unit produced pretax income of $62 million in 2011. The firm’s adjusted earnings before interest, taxes, depreciation and amortization, also known as EBITDA, was $78 million. “Safeway has done well with how they display the gift cards,” Edwards said. “They are very prominent. I know that I can stop at Safeway, get a gift card, buy it, and be done with it.” Shares of Safeway rose 4.2 percent, or 66 cents, and finished at $16.48. The grocer’s stock continued to rise in after-hours trades.
The timing and scope of the IPO will depend on “market conditions,” Safeway said in a prepared release.
“I think the Blackhawk IPO will do very well, especially with the growth Blackhawk has been able to get,” Edwards said. “You don’t want another Facebook. Half the battle is to price it right and market it well.”
Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.
The Blackhawk unit produced pretax income of $62 million in 2011. The firm’s adjusted earnings before interest, taxes, depreciation and amortization, also known as EBITDA, was $78 million. “Safeway has done well with how they display the gift cards,” Edwards said. “They are very prominent. I know that I can stop at Safeway, get a gift card, buy it, and be done with it.” Shares of Safeway rose 4.2 percent, or 66 cents, and finished at $16.48. The grocer’s stock continued to rise in after-hours trades.
The timing and scope of the IPO will depend on “market conditions,” Safeway said in a prepared release.
“I think the Blackhawk IPO will do very well, especially with the growth Blackhawk has been able to get,” Edwards said. “You don’t want another Facebook. Half the battle is to price it right and market it well.”
Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.
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