EU Wants to Take a Big Tax Bite Out of Apple; Google Takes On Uber. Sort of; Abercrombie & Fitch Teen Ditch

Bite me…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The EU commission is coming down hard on Apple by slapping the world’s most valuable company with a $14.5 billion bill for back taxes. The EU felt Apple illegally received tax aid in the form of a sweetheart tax deal from Ireland. However, both Apple and Ireland deny that allegation and contend that everything they did was totally legit. More than 700 U.S. companies currently have some type of business set up in Ireland where they enjoy a reduced corporate tax rate compared to that of the U.S. The EU however says that rate is too reduced and says Apple pays much MUCH less than the 12.5% corporate tax rate in the country. Companies can set up tax structures that allow them to pay even less.  EU officials charge that Apple did just that and Apple paid only a .005% rate on its profits in 2014.  I’d love to meet Apple’s accountants who set that one up. Just saying. The U.S treasury isn’t happy about the situation either and feels U.S.firms are being unfairly targeted and that such investigations are unfair. Senator Chuck Schumer even called this latest judgement a “cheap money grab.” Don’t expect to bump into him on your next European vacay. According to the treasury, judgements of this type could undermine U.S. investments in Europe. Starbucks already got hit with a $33 million back-tax deal while Amazon and McDonald’s are currently staring at the wrong end of their own EU investigations. The government believes that U.S. taxpayers will likely bear the brunt of the EU’s very inconvenient decision because Apple would basically deduct the $14.5 billion from taxes that it owes to the U.S. government.

Anything you can do Google can do better…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Search engine giant, Google, is now offering its own ride-sharing app to San Francisco residents. If you’re thinking Google’s encroaching on Uber and Lyft’s turf then…you might be right. Sort of. Google began a pilot program back in May that allows commuters to carpool at cheaper rates then Uber and Lyft. Much cheaper. In fact, the rates are so cheap – think 54 cents per mile – that there is no incentive to even become a taxi driver. What’s more is that Google doesn’t even take a cut. Yet. By using Waze, which Google acquired back in 2013, commuters connect with other commuters headed in the same direction. Uber, which is currently valued at around $68 billion might begin to take issue with Google’s latest plans, assuming they’ll expand. And they will. Ironically, Google invested $258 million into Uber back in 2013. The situation between the two companies has gotten quite dicey as Google exec David Drummond recently resigned from Uber’s board given all the conflicts that are rising from these latest developments.

Smells like twenty-something spirit…

 

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Abercrombie & Fitch, purveyor of trendy teen clothing, has officially posted its fourteenth straight quarter of losses. The company saw a decline of a 4%, which was more than what was expected. A&F posted a net loss of $13 million, which was a brutal change from last year’s same quarter loss of $810,000. Net sales fell to $783, a far cry from last year’s $818 million. Naturally, as with all bad earnings reports, a tumble in shares ensued, with shares of the trendy retailer taking a 20% hit. Besides a strong dollar, the chain can’t compete with the likes of H&M, Zara and a whole bunch of other clothing sellers. Back in May, the company had predicted an improvement. But that didn’t happen and now A&F isn’t even expecting one in the near future. Which might explain why the company will reshift its focus from teens to bona-fide money making twenty-somethngs who can afford the clothes A&F is selling. Considering that more than 50% of A&F’s customers are adults over the age of 20, this seems like a prudent move. So if you find yourself at one of A&F’s 744 locations – of which 60 of them will be closing –  you might not want to be so quick to walk away as the company attempts to rebrand itself as the “iconic American casual luxury brand.” I don’t know why that just made me think of Harley-Davidson motorcycles. But it did.  The clothing company will be selling clothes for actual grown-ups who once upon a time were the same teens who spent their parents’ hard-earned cash at this very establishment.

 

 

Michael Bolton: IRS = Anus of Our Country; NY AG Schneiderman Takes Issues With Shifty Shift Practices; Rank and File: Airlines Get Graded

How am I supposed to live without you?

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

With tax day on Wednesday, John Oliver, host of HBO’s Last Week Tonight thoughtfully explained our national aversion to taxes and the IRS: namely, they involve “someone taking our money and math.” To further complicate things and strengthen our aversion, Congress has drastically cut funding to the IRS, causing activity at the agency to come to an almost virtual standstill. Mr. Oliver urged us to redirect our anger, rage and frustration at Congress and not the folks at the IRS who perform “a dangerously boring job.” So what better way to pay tribute to the IRS than to call it the “anus of our country” which is precisely what, crooner Michael Bolton did, on John Oliver’s show, when he sang a not-so-moving ballad that was sort of meant to be a show  “… of reluctant support for their appropriate funding.”  To help taxpayers truly grasp the anus/IRS comparison, Mr. Oliver articulately explained that we should, “Think of our government as a body. The IRS is the anus: It’s nobody’s favorite part, but you need that thing working properly or everything goes to s–t real quick.” Pure poetry.

Oh shift!

Image courtesy of  iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

More than a dozen retailers are getting probed for some shifty shift scheduling practices that are not only downright rude, but according to New York Attorney General Eric Schneiderman, might just be illegal, as well. The practice in question, dubbed”on-call shifts” basically lets hourly wage employees know if they will be working only hours before they need to show up for work. The practice is not cool for so many reasons. First, for many employees, the practice does not give them ample time to make care-giving arrangements for children and and elders in their care. “On-call shifts” also don’t allow for employees to make other arrangements for alternative sources of income.  If an employee reports for work for which they had been scheduled, then according to New York State law, that employee is entitled to be paid for four hours of work at basic minimum wage. Some of the big retailers who were sent letters about their shift scheduling practices include Target, The Gap, Abercrombie & Fitch, J.C. Penney and J. Crew.

Would you like some pretzels with that?

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

The 25th annual Airline Quality Report is out and the least shocking observation on it is Virgin America taking the top spot for the third year in a row. If you’ve ever flown Virgin America, and also American Airlines, then you’ll clearly see why Virgin America gets the top spot while American – which merged with US Airways – doesn’t. However, American still managed to snag the number seven spot. A bit high, if you ask me. In fact, I am shocked that American isn’t in last place. Its regionally operated Envoy/American Eagle airline does place last, though. Yikes. The report, which measures airline performance quality, takes into account four major aspects – or as the pros say “core elements”: on-time performance, involuntary denied boardings, mishandled baggage and customer complaints. No doubt, if the AQR measured how travelers were treated, I am certain American/US Airways would have claimed the last spot. In any case, Hawaiian Airlines came in at number. Too bad it doesnt fly anywhere I need to go. Delta took the number three spot, the only large carrier to break into the top four, while some were left scratching their heads over JetBlue’s fourth place ranking, since the airline came in second last year.

 

A&F Earnings Are Out of Fashion; McDonald’s Biotic Changes; Target-ing Change

Teen-y tiny…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Teen-centric apparel company Abercrombie & Fitch took a fourth quarter beating. One of the (many) reasons seems to be that the fickle adolescent community got tired of advertising the A&F logo on their chests and butts. And like so many other companies, the strong U.S. dollar also seemed to be putting a crimp in the retailer’s numbers, especially considering that a third of the company’s revenue comes from outside the country.  Same store sales also decreased by 10%. Then there’s the part about how teens have been spending less money on clothing than in recent years, yet they are increasingly looking to outfit themselves through the likes of H&M, Forever 21 and Zara. Those chains tend to offer “fast fashion” that kids today totally dig at much better prices. Does that make A&F’s fashions slow? Hmmm. Oddly enough, American Eagle, one of A&F’s competitors actually beat the street with its earnings and even hit a 52-week high. Net sales of Abercrombie & Fitch fell 14% to $1.12 billion with  profits coming in at $44.4 million and 63 cents per share. Analysts expected $1.15 per share on $1.17 billion in revenue.  To add insult to injury, Abercrombie & Fitch is looking to unload its company jet , a relic from the days when big mouth CEO Michael Jeffries ruled the A&F empire.

Cured!

Image courtesy of  Idea go/FreeDigitalPhotos.net

Image courtesy of Idea go/FreeDigitalPhotos.net

If you’re not into chicken seasoned with antibiotics, then you’re in luck. McDonalds has decided to scrap that special feature from its poultry menu, except it’s going to take approximately two years to fully get there. Steve Easterbrook, who took over as CEO just three days ago, did promise some major changes at the the Golden Arches. The fast-food company has become increasingly concerned over “superbugs” that have caused about 23,000 deaths per year. McDonalds will still allow ionophores in its chicken products. Yum. But don’t sweat it too much. Ionophores are antibiotics meant for our feathered friends – not for humans. Phew. The chicken change will affect the 14,000 eateries in the United States, but don’t expect to see any changes in the 22,000 McDonalds restaurants abroad. At least not yet, anyway. While Chick-fil-A already did away with antibiotics-laced chicken a year ago, the fact that McDonald’s is set to make these changes is rather epic, being the largest fast food chain and all. Once McDonald’s gets its distributors and processors to alter the food (for the better, of course), it will make it substantially easier for smaller chains to follow suit. So, here’s to antibiotic-free chicken! Bon appetit!

About those unemployment benefits….

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Big changes are in store for Target and it’s safe to say some of them won’t be welcomed. The giant retailer, who is in the process of literally closing up shop in Canada, is also in the process of trying to cut $2 billion in costs. Part of that cost-cutting includes job-cutting. Several thousand people will need to polish up their reumes and update their LinkedIn accounts as Target looks to cut most of those positions from its corporate headquarters and some position in India, as well. But Target’s got other big ideas that don’t involve applying for unemployment benefits. It’ll be running a huge Hispanic millennial campaign – apparently the first of its kind – and part of it involves teaming up the CW’s “Jane the Virgin” together with Target’s baby department. Then Target’s also looking to open up 15 more stores, however, eight of them will be CityTarget and TargetExpress stores which – you guessed it – will be taking an urban approach seeing as how they will be geared toward an urban crowd in a presumably urban location.

Amazon: Deal With It; American Airlines Gets on Board (Finally); Abercrombie & Fitch CEO Ditch

Let’s make a deal…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Amazon has come up with yet another way to reinvent shopping – sort of. The e-commerce website added a new feature to its website dubbed the “Make an Offer” button. The ever-resourceful mega e-tailer surveyed a bunch of its sellers and wouldn’t you know it: Several sellers said that the ability to negotiate prices would help drive sales for them – and for Amazon, of course. 150,000 items will get that nifty little button added to their items’ options with hundreds of thousands more coming next year. Unlike eBay, there will be no bidding against others and negotiations are completely private.  A customer makes an offer and…voila! The seller gets to reject, counter or reply. If a seller counters, a customer has 72 hours to counter-counter (is that a thing?). Apparently it makes customers feel like they are getting the best possible price for whatever it is they are buying. In any case, if you’re into haggling over prices, you’ll have plenty what to choose from any number of fine art, sports and entertainment collectibles being offered up.

It’s about time…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

American Airlines, which merged with US Airways last December, is reaping huge earnings, along with just about every other US carrier. To celebrate, it’s giving itself a $2 billion upgrade. Which is really great, because last time I flew the airline, on its vintage aircraft sporting drop down televisions with poor picture quality, American Airlines kept showing commercials for its new fleet of aircraft. The commercials made it sound like the improvements were just a few days away. That was over a year ago. In any case, look for redone lounges and better aircraft. Flying international first-class? You’re in luck. Well…you’re paying a mint for that luck, but anyways, you get lie-flat seats (which I’m pretty sure other airlines have been offering for years now). Need to get online while in-flight? No problem. Buy an international ticket to anywhere and American will provide you with satellite-based internet. Or, if you don’t even need to leave the country, you can just fly Virgin America, which has been offering in-flight internet…for years now. If you’re flying on the most economical ticket, which will still be exorbitantly expensive, well then, screw you. You’re lucky just to be sitting in the new airplane. Wondering if that $2 billion will help improve the attitudes of some of American Airlines’ more surly flight attendants? Well, screw you again.

And you’re out!

Image courtesy of  iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Who can the forget the days when Abercrombie & Fitch CEO Michael Jeffries not so charmingly said back in 2006, “We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong, and they can’t belong. Are we exclusionary? Absolutely.” Well now, he doesn’t belong anymore after abruptly “retiring,” something a lot of folks wish he’d done a long time ago, including activist investor Engaged Capital which last year said the company’s lousy numbers  (Engaged Capital said it way more eloquently) “is a result of a failure of leadership.” Amen. Investors celebrated news of the “retirement” by sending shares of the stock up over 6%. The company, which has  834 stores in the United States with 166 stores in other parts of the globe, also owns Hollister and Gilly Hicks. Abercrombie & Fitch has been doing poorly for awhile now, unable to compete with the likes of H&M and Forever 21. Abercrombie & Fitch even tried ditching the logo on a bunch of its merchandise, which did little – if anything – to help boost its earnings.

 

 

Delia*s Final Chapter;New Mortgage Nirvana Thanks to Fannie Mae and Freddie Mac; Frech Toast Crunch Epic-y Comeback

Down and out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Delia*s is joining the ranks of the bankruptcy protected now that it has officially filed for Chapter 11. While several of Delia*s teen apparel cohorts, including Abercrombie & Fitch and Urban Outfitters, are merely posting very unfashionable earnings, Delia*s will be getting $20 million just to help liquidate and close down its stores. The retailer, to which bright-eyed teenagers once flocked, can no longer compete with the H&M’s and Forever 21’s of the world. And don’t even get me started on competing with the behemoth that is Amazon. The New York-based chain has 92 stores scattered in malls across the country. With $74 million in assets and over $32 million in debt, its no wonder that Delia*s CEO Tracy Gardner and COO Brian Lex Austin-Gemas resigned. It’s probably safe to say that no one is mourning their departure – well, except maybe for them.

It’s baaaaaaaack…

Image courtesy of foto76/FreeDigitalPhotos.net

Image courtesy of foto76/FreeDigitalPhotos.net

Justin Timberlake brought sexy back so its only fair that General Mills is bringing back French Toast Crunch. Yes, my fellow cereal aficionados, the dark days are behind us as the maker of Cheerios, Yoplait and Progresso Soups has finally found the wherewithal to bring us back our French Toast Crunch. The sister cereal to the ubiquitous and oft-loved Cinnamon Toast Crunch has been absent from grocery shelves in the United States for almost a decade – I shutter to think. With the invasion of Greek yogurt and fast-food wars breaking out, the cereal was unceremoniously discontinued as other alternatives shoved their way onto the breakfast scene. But consumer demand brought General Mills to its corporate knees, together with an online petition and a Facebook page dedicated to resurrecting the sweet, breakfast sesnation. Besides, General Mills figures those kids who group in the nineties downing French Toast Crunch are now at that age where they are paying for their own cereal now (at least they should be) and can buy it themselves (at least they should be).

3% down with that?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

There are some very lucky soon-to-be first-time homeowners milling about thanks to Fannie Mae and Freddie Mac. New terms established by the companies are allowing applicants to put up just 3% down payment to get them into a new home. That’s down from 5%, fyi. Fannie Mae is starting to offer that deal December 13. Looking to refinance? How does reducing your equity to 3% sound? If you haven’t owned a home in three years, guess what? You still qualify.  Starting in March, Freddie Mac will let lower-income first-time home-buyers hand over a 3% down payment provided they agree to housing counseling. Melvin Watt, head of the Federal Housing Finance Agency and the dude who oversees Freddie Mac and Fannie Mae, wants to spur lending to minorities and young adults because the lenders have made more stringent standards following the crash, and the tens of billion of dollars they had to pay towards lawsuits for underwriting less than ideal loans. Republicans, however, are not digging the idea, finding the whole thing too risky and eerily reminiscent of the policies that led up to that awful crash – from which the country is still not fully recovered.