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Business news briefs — Nov. 27

AIRLINES

Cost for pet transport

It will soon cost more to bring a pet when you fly on Southwest Airlines. The airline is citing higher costs in raising its pet fee to $95 per flight from $75 beginning with flights on Jan. 15. Southwest Airlines Co. lets passengers bring a vaccinated dog or cat that fits in a carrier that goes under an airline seat. Pets are taken on a first-come basis, up to six per flight. Southwest, which began carrying pets in 2009, charges less for the service than many other U.S. carriers. United, Delta, American and US Airways all charge $125 each way, while JetBlue and Alaska charge $100.

RETAIL

Penney CEO invests

J.C. Penney CEO Mike Ullman seems confident the slumping retailer will bounce back during the holiday shopping season. Ullman showed his faith by buying 112,000 shares at a price of $8.95 at the end of last week. The $1 million investment comes as Ullman tries to snap Penney out of financial trouble that has seen the Plano, Texas, company lose more than $2.4 billion since late 2011.

Penney fired CEO Ron Johnson in April and brought back Ullman for a second stint as CEO. Since his return, Ullman has been restoring more of the sales promotions that Johnson, a former executive at Target and Apple, had eliminated.

The strategy has yielded some modest progress so far. In October, Penney reported monthly sales at stores open for at least a year had risen by 0.9 percent, the first year-over-year increase since December 2011.

But that wasn’t enough to stop a loss of $489 million in its most recent quarter ending Nov. 2. Penney’s woes have caused the company’s stock to plunge by about 53 percent in 2013.

FINANCE

Rates tick up

Average U.S. mortgage interest rates rose modestly this week, a move that makes home-buying a bit less affordable. Still, rates remain near historically low levels.

Mortgage buyer Freddie Mac said the average rate on the 30-year loan increased to 4.29 percent from 4.22 percent last week. The average on the 15-year fixed ticked up to 3.3 percent from 3.27 percent.

Rates have risen nearly a full percentage point since May after the Federal Reserve signaled it might slow its bond purchases by the end of the year. Rates peaked at nearly 4.6 percent in August. But the Fed held off in September and most analysts expect it won’t move until next year.

The increase in mortgage rates has contributed to a slowdown in home sales over the past two months.

ACQUISITIONS

CVS buys Coram

Drugstore chain CVS Caremark Corp. says it has agreed to buy the drug infusion business Coram LLC, a unit of Apria Healthcare Group Inc., for $2.1 billion.

Coram, which is based in Denver, provides customers with medication and nutrition that is administered through a vein. The medication can be delivered to a customer’s home, clinic or doctor’s office.

CVS expects the deal to close by the end of the first quarter of 2014.

CVS expects Coram to generate revenue of about $1.4 billion in the first year after the deal closes and add earnings of between 3 cents per share and 5 cents per share in 2015.

Apria Healthcare Group Inc., Coram’s parent company, is owned by investment firm The Blackstone Group LP.

Compiled from staff and wire reports



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