Texas Business Report: Neiman Marcus Spending Spree
You Can’t Spell Formalwear without ‘Malware’
Neiman Marcus told customers Wednesday that hackers lifted as many as 1.1 million credit and debit card numbers in a data breach last year, a much larger figure than originally thought. In a statement posted on its website, the Dallas-based luxury retailer said fraudulent activity has been reported on about 2,400 of the cards involved in the theft, which began last July and continued through October. Neiman—which plans to notify everyone who shopped at its stores for the last year and offer them “one free year of credit monitoring and identity-theft protection”—says the breach did not target online transactions, nor did it expose any customer social security numbers or debit PINs.
The Bottom Line: Hackers apparently accessed the data by installing malware on Neiman’s payment system, which they then used to “scrape” unencrypted credit card information. The New York Times reports that the same software was used to collect payment info from more than 100 million Target customers in November and December. U.S. credit card companies and retailers are evaluating a possible switch to microchipped EMV cards, which are widely used in Europe and are “nearly impossible to counterfeit” in the same manner as American cards, according to the Times.<>
Southwest Airlines reported a massive increase in fourth-quarter revenue this week, as its profits hit an all-time high. The Dallas-based airline took in $212 million in net income in the final three months of the year—an increase of more than 170 percent from the same period in 2012—contributing to a total of $805 million for all of 2013, the Dallas Business Journal reports. The company’s annual profit jumped by nearly 80 percent from the previous year, up to $753 million.
The Bottom Line: Southwest CEO Gary Kelly said the airline “saw a healthy rebound in traffic and revenue trends” after a slow start to the quarter resulting from the federal government shutdown. According to the DBJ, about 26.8 million passengers flew SWA in Q4, and the average fare increased by 5.4 percent to $156.05 in 2013.
Truth or Con-sea-quences
Gulf Coast seafood companies are demanding that BP continue paying out $2.3 billion in settlements related to the 2010 Deepwater Horizon oil spill, despite an ongoing investigation of a San Antonio attorney accused of filing claims on behalf of fictitious clients. The U.S. Justice Department, the Secret Service, and federal prosecutors began investigating Mikal Watts late last year to verify the authenticity of his client list, which includes more than 40,000 fishing boat deckhands who claimed to have been financially harmed by the spill, Businessweek reports.
In December, after those investigations came to light, the British energy giant sued Watts, claiming he fabricated the list “to extract fraudulent payments from the settlement.” BP then sought to halt its settlement payments until the case is resolved and prosecutors “determine how much of the money still in the fund should be returned” to the company.
The Bottom Line: The seafood industry’s lawyers said in a filing this week that the payouts should continue, arguing that suspending them would harm thousands of businesses that had nothing to do with the alleged fraud. Watts’ attorney expects prosecutors to indict his client within the next two months, according to Businessweek.
Winners of the Week: Organic Couch Potatoes
Whole Foods is looking to reach the Millennial generation in the place most sacred to the 18-to-34 demographic: their couches. Dark Rye, a new TV show produced by the Austin-based natural grocery magnate, debuted this week on Pivot, a cable network that launched last summer. According to The Austin Business Journal, the show “focuses on food, health, design and technology” and will cover a variety of topics ranging from “artists seeking social justice, to entrepreneurs rebuilding Detroit, to culinary masters maintaining sustainable food traditions.”
In a teaser for the program, Whole Foods appeals to the Millennial set with tagline billing the show as “the stories of dreamers who became doers.” Episodes air Wednesday nights at 9:30 p.m.
Pivot, which is currently available in about 45 million households, also broadcasts an original variety show produced and hosted by Joseph Gordon-Levitt called HitRecord, as well as rerun marathons of Millennial favorites such as Veronica Mars, Farscape, and Buffy, the Vampire Slayer.
Losers of the Week: Houston Startups
Venture capital funding in Houston continues to lag behind that of other major Texas cities, according to a new report from PricewaterhouseCoopers and the National Venture Capital Association. VC firms in the Bayou City made 25 deals worth a total of $172.4 million in 2013, which was up from the previous year but “significantly less” than the value of deals made in 2010 and 2011, The Houston Business Journal reports. Meanwhile, Dallas led the state with $693.6 million in funding (about half of which went to a single company, Genband Inc.), followed by Austin’s $406.9 million. Companies in the software and biotech industries received the largest amount of funding in each city, reflecting statewide and national trends.