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The biggest business story in Knoxville this year was the same as it was in just about every other American city; a poor stock market and slack retail sales resulted in a slow economy. Quite frankly, most of the business news this year was bad: layoffs, stock prices going down, deals falling through. Nevertheless, there were some strong points. Among the biggest business stories of the year in Knoxville:

Slam the door on your way out

A lot of Knoxville residents got pink slips in 2002, some in ways that make you wonder what ever happened to human dignity. In January, Plasti-Line closed its 58-year-old plant on Emory Road and laid off 200 employees, giving each of them $250 and one-and-a-half day's pay for each year in service as severance. In February, Eagle Automotive declared Chapter 7 bankruptcy, ending employment for about 90 people who worked at its call center on Stokely Boulevard. That same month, Goody's got rid of about 100 people at its corporate headquarters. And a few months later, Lay's closed its Knoxville meat packing facility, giving out 95 pink slips in the process.

April brought the big blow. That month, Levi's announced it was shutting down its Docker's plant in Powell, where 900 people worked. The closure marked the end of Knoxville's textile industry for all intents and purposes. But it wasn't enough to make the front page of the News-Sentinel. After all, that was the day that President Bush visited town!

Goody's takeover? Not!

In the spring, Goody's Family Clothing looked like it was on the upswing after hitting rock bottom and losing more than $20 million in 2001. The company's stock climbed from less than $4 a share in March to over $10 in July. But then same-store sales fell in July and August, causing the stock to plunge to about $4.

On Sept. 30, Goody's announced it was in negotiations to sell the company to an unidentified "private equity group" for between $6.50 and $7.50 a share. The stock price immediately rose to about $7 a share, but some shareholders filed lawsuits to block the deal. Two weeks later, Goody's announced that president Lana Cain Krauter had resigned. Then, on Nov. 1, Goody's suddenly announced that negotiations with the unnamed takeover party had been suspended, "primarily as a result of differing views as to the effect of the current retail environment and its impact on Goody's results," whatever that meant. By the end of the year, the stock was back below $5.

Turkey Creek

The big story retail-wise was Turkey Creek. Despite tough economic times and despite its share of not-so-good press (well, at least, from folks like us), commercial real estate agents had quite a bit of success getting new tenants moved in. Among the larger ones signed in 2002: automotive mega-dealer CarMax, Baptist Hospital West, University Health Systems, Thomasville Furniture, Turkey Creek Wine and Spirits, and Petsmart. By the end of the year, the 300-acre development included about a million square feet of developed space.

Other armadillos

Regal Entertainment Group, the California-based firm whose Regal Cinema division is in Knoxville, emerged from bankruptcy, went public in May for $19 a share, and held its value through the rest of the year.

Screen Art, a Knoxville sign making company, announced in March that it would be shut down by the venture capital firm that bought it in the late 1990s. A few weeks later, Maurice Richardson, an executive with a firm that had once owned Screen Art, bought what was left of Screen Art out of bankruptcy and hired back many of the people set to be fired.

AdvancedPCS, a pharmacy benefit company, opened a call center on Pellissippi Parkway that the firm hoped would eventually employ 400.

Hotel visits were up in Knox County. According to consultant Smith Travel Research, hotel occupancy in the Knoxville market rose 6 percent in May, 4 percent in June, 10 percent in July, and 13 percent in August.

December 18, 2002 * Vol. 12, No. 51
© 2002 Metro Pulse