Using Wallets to Fight Terrorism; Marriott Hotels Gains More Hospitality; Urban Outfitters Now Satisfies Pizza Cravings

Insult to injury…

Image courtesy of basketman/FreeDigitalPhotos.net

Image courtesy of basketman/FreeDigitalPhotos.net

Because terrorists are pure evil on so many levels, they’ve likely calculated that besides causing devastating loss of life, they can also harm an economy as well. And thus, as the holiday season is upon us, while the French are still in the midst of mourning the tragedy that befell its people just days ago, they are likely to endure yet more damage and fallout as businesses, both big and small, see less traffic and sales in the days ahead. In fact, hospitality chains and airlines have been seeing little activity in major markets and indexes, and several shops, cafes and markets remain closed. American performers Papa Roach and Marilyn Manson had to cancel shows this week and artist Prince canceled performances scheduled for December. As the sixth largest economy in the world, and the second in the eurozone, these losses could have a ripple effect on several other economies as well. However, economists and investors all tend to agree that the economic fallout will be minor and brief. Already today, European indexes either remained flat or rebounded from the dips they took before the markets opened. Unfortunately, tourism might not be as fortunate. Back in 2013, France saw almost 85 million tourists who brought in 42 billion euros in revenue with them. With almost 8% of France’s gross domestic product coming from the tourism industry, it might be the one area to suffer most, as major tourist destinations like the Eiffel Tower and Louvre lost two days of business and other places, like EuroDisney, still have their doors closed.  But as President George W. Bush urged American following the September 11, 2001 attacks “go out shopping more.” And if that’s one way to defeat those terrorist, then I’m happy to travel to Paris to do so.

Do not disturb…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

The “Deal of the Day” award goes to Marriott International, as in the hotel chain that has over 5,500 properties and 1.1.million rooms, which just scooped up its rival, Starwood, to the handsome sum of $12.2 billion. The deal, in which Marriott will pay approximately $72.08 per share, means it becomes the world’s biggest hotel chain, leaving the second largest chain, Hilton Worldwide and its 4,500 properties, in the dust. This deal also gives Marriott some nice new brands, including the push-posh St. Regis. And who doesn’t like a little pish-posh? According to research firm STR, 67% of available hotel rooms were filled in the first nine months of the year by occupants who shelled out an average of $120.35 a night. However, there are many watching, from investors to travelers alike, to see how this merger is going to affect the various partnerships on both sides. Marriott has partnerships with Chase and United Airlines, while Starwood has deals with American Express, Delta and Über. Wall Street seems to think this is the start of a new trend of hotel chain mergers, as companies like Airbnb, have been eating up a chunk of the industry. Sit tight and you might just see another deal coming ’round the Wall Street bend.

Cheesy…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Because nothing says trendy like tomatoes and cheese, Urban Outfitters is getting into the pizza business. I’m serious. The company, whose apparel tends to attract millennials, is plunking down an undisclosed sum to buy the Vetri Family Group of restaurants, which includes the Pizzeria Vetri chain. You’re not the only one who finds this acquisition…strange. Investors think so too and sent the stock down 10%. But it’s not like Urban Outfitters has anything to lose. The retail sector has been hitting the fiscal skids with companies like Nordstrom and Macy’s reporting sales that are nothing short of disappointing. It’s also got many wondering if the brick and mortar model is passé. Urban Outfitters has 240 locations, in addition to the Anthropologie and Free People brands (and more than a couple of them already have food establishments in them). And while other retail companies are looking to amp up their e-commerce and tweak their brands in an attempt to improve those sales, Urban Outfitters is taking an entirely different approach by acquiring a business in an industry that is making tons of money at the moment. Marc Vetri of the Vetri Family Group likes the deal and calls it “a perfect match.” It means his company gets to focus more on the food it serves, while Urban Outfitters has to figure out how to help those restaurants expand. Now if only Urban Outfitters can figure out how to grow and expand its own business instead of losing money…

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Wal-Mart Misses Profits, But Who Can Blame Them?; Spotify-ing Starbucks; Urban Outfitter’s Un-Trendy Quarter

Wager on this…

Image courtesy of digitalrt/FreeDigitalPhotos.net

Image courtesy of digitalrt/FreeDigitalPhotos.net

Wal-mart took a hit on its first quarter earnings but would it be really fair to blame the world’s largest retailer? After all, that miss had a lot to do with the fact that Wal-Mart threw $1 billion towards raising employee wages and training programs.  Some might even call that profit miss noble. While Wal-Mart expects this initiative to actually lift sales in the long term, I bet management is hoping for a really short long term. Another reason not to completely blame Wal-Mart for its earnings miss is that recent Commerce Department report detailing how spending is down because would-be consumers are actually choosing to save money and pay down their debt. Of course, we also mustn’t forget to blame the strong dollar, which rumor has it, was responsible for eating a few cents per share off of Wal-Mart’s earnings, as well. The giant retailer pulled down revenue of $114 billion when analysts expected $116 billion. Even though that figure is down just .1% from last year, considering it’s Wal-Mart, that number is not as small as it seems. Analysts were hoping to see $1.05 per share earned, however, Wal-Mart only managed to score $1.03 per share on $3.34 billion. I suppose that figure sounds impressive – anything with the word “billion” usually does – except for the fact that it was a 7% drop from the $3.6 billion and the $1.11 per share it took in last year.

Deal of the day…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

CD’s are out and barista’s are in at Starbucks as the coffee chain teams up with streaming music provider Spotify. In what just might become remembered as one of the more creative business collaborations to come along in a long time, Starbucks employees – some 150,000 of them –  will be getting an unusual job perk: premium subscriptions to Spotify. The baristas will get to hone their deejaying skills by making playlists for the stores from the Starbucks music that has been wafting through the coffeehouses, together with the smell of espresso beans, for the last twenty years. So where’s does the money part come in? Starbuck’s promotes Spotify’s premium service, which can be yours for $9.99 per month. (the company already has 60 million users), while the playlists from Starbucks’ 7,000 locales will be conveniently accessible to those premium subscribers from Starbucks’ own mobile app. Then, as an added bonus, Spotify users can earn “stars” from the Starbucks reward program, of which there are 10 million members. I mean, can it get any better, well, for Starbucks and Spotify anyway?

Passe?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

There’s nothing trendy about lousy earnings. Urban Outfitters and Anthropologie can attest to that as the apparel companies took a hit in their latest earnings report. In fact, it was Anthropologie’s worst quarter in more than two years as sales of the brand were only up by a paltry 1%. Sales for the company, as a whole, were only up 3.8% at over $311 million. Even though same store sales were up 4%, analysts predicted growth of 5.3%. So that was nothing short of disappointment at its peak. Revenue was also up, but only by 8% to $740 million. But it was the company’s net income that had everybody aghast. Urban Outfitters took a 12.5% beating on its profits coming in at $32.8 million and earning just 25 cents per share. Analysts were pulling for 30 cents per share on revenue of $758 million. Fiscal rumor has it that the clothing company can’t seem to get a fashionable leg up on the faster fashion companies of H&M, Zara and Forever 21. Whatever the reason, here’s wishing them a better second fiscal quarter.

Bob Marley’s Smokin’ Legacy; Oil Prices Are Down So Why Aren’t Airline Fares?; Urban Outfitters Unhip Earnings

Toke on this…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

He’s been gone a long time, smoking a big fat joint in the sky, but Reggae icon Bob Marley still managed to score a worldwide exclusive, 30 year licensing deal for the “world’s first cannabis brand” appropriately dubbed Marley Natural. With the help of a Seattle-based, cannabis-focused (how industrious!) venture capital firm, Privateer Holdings, Marley Natural will feature strains of heirloom Jamaican cannabis. Kind of like heirloom tomatoes, except I’d never put tomatoes into a batch of brownies. But it won’t just be cannabis that you can purchase under the Marley Natural brand. The brand will also be putting out other useful stuff like lotions and containers (in which to store your cannabis to optimize freshess). No doubt those items will certainly make nice gifts (but again, you can’t smoke ’em). And bonus: the products will even have a “strong social conscience.” Expect to see the cannabis and other products in places where Federal law allows this sort of thing.

Up up and away…

ID-10012701

Image courtesy of federico stevanin/FreeDigitalPhotos.net

The joys of dropping oil prices will only carry you so far – by car anyways. Because even though airlines saved over a billion dollars in fuel costs last year, they seem to be pretending that they didn’t get the memo about dropping airfares prices. And why should they? After all, we’re still booking tickets at the prices the airlines set. Those prices are coming in at an average of over $370 per ticket, which by the way, does not include fees and taxes. Planes are still full – and often oversold. Airlines are posting great profits and would much prefer to order new planes and give their terminals face-lifts than pass those fiscal delights onto the very contingent that brought about those profits in the first place.

Time to move to the suburbs?

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Urban Outfitters is not looking as hip and cool as it used to be, at least according to its third quarter earnings. Sure the company posted growth, but mainly from its Anthropologie and Free People brands – not from its namesake. Which I suppose stings a bit in the portfolio. While the company beat its sales estimates by $1 million, coming in at $814 million, it was its earnings that provided the fiscal bummer. The company earned just over $47 million and $0.35 per share which might seem solid, but really Wall Street expected earnings of $0.41 per share. What made those earnings that much more fashion-backward was the fact that the same time a year ago the company pulled in $70 million and $0.47 per share. Some were wondering if maybe the company’s disappointing earnings had more than a little to do with some of its more offensive merchandising offerings, like the blood-spattered Kent State sweatshirt or the women’s “Eat Less” t-shirt. Even though the items were eventually pulled from the shelves, it still begs the question if they left an un-hip impression on the very consumers it tends to attract.