Sears and Whirlpool: The Breakup; Mall Rats: Target vs. Amazon; 3M Earnings: It’s More Than Just Post-its

It’s not you. It’s me…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Breaking up is hard to do. Especially if the numbers don’t add up. Which is precisely why Sears is dumping Whirlpool along with all of its other brands including Maytag, KitchenAid and JennAir. According to Sears, “Whirlpool has sought to use its dominant position in the marketplace to make demands that would have prohibited us from offering Whirlpool products to our members at a reasonable price.” Which I guess is Sears’s way of telling everyone that Whirlpool really just needed to get over itself because it felt people weren’t going to pay a lot of money for appliances that don’t say Wolf on them. If you know what I mean. And I think you do.  And just like that, a one-hundred-year-old relationship was brought to its knobby knees.  In case you were wondering if this breakup had anything to do with Sears’s own fiscal woes, you’d be mistaken.  After all, you can still walk into your local Sears and pick up a very fancy schmancy Bosch or LG appliance. And while Sears stock took a 3% hit today on the news, Whirlpool’s stock fared worse with investors sending the stock down over 10%.As for Whirlpool, while the company did report disappointing earnings, it can’t really point the finger at Sears, since the beleaguered retailer was only responsible for 3% of Whirlpool’s global sales.

Down with Amazon…

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Image courtesy of hyena reality/FreeDigitalPhotos.net

Could it be that the unstoppable, unflappable Amazon is actually getting stopped and flapped? Apparently, that’s the case as it goes up against Target and other major big-box retailers, not in the online arena, but in the real estate realm. Of course Amazon’s A-game is in its e-commerce, but it’s the big box retailers that have the advantage when it comes to brick-and-mortars. Just ask Whole Foods, who can tell you a thing or two about trying to find a place to call home. You see, it all boils down to leases. Think of a co-op board, except the president of the board in this case tends to be big companies like Target, Best Buy and Bed Bath & Beyond, among others. Those guys get a lot of say in who moves into their malls. And because Target and friends are paying the biggest amount of money in leases, they get to make all sorts of demands, like who is and isn’t allowed to move into a particular mall and under what conditions they can move in. Now that Whole Foods calls Amazon its boss, it’s finding it challenging to get into new locations if there are already other big retailers installed that find themselves competing with Amazon. See how the tables have turned?

Post this!

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Image courtesy of photostock/FreeDigitalPhotos.net

If you used a Post-It note today then you helped contribute to 3M’s third-quarter boffo earnings. All those office supplies and little pieces of paper may not look like much but they raked in $8.2 billion in sales with a profit of $1.43 billion that added $2.33 per share. That profit, by the way, was an 8% increase over last year’s profit at this time. But in all fairness, the company’s not just about it post-it notes and tape. The company also makes industrial coatings and ceramics and those items bring in big money. The stock itself is up over 30% in the last year and today’s news sent shares up the most in eight years. Crazy, I know. It also helps that two-thirds of 3M’s sales come from overseas. So even when there’s a strong dollar working against U.S.-based business, a company that earns a majority of its money outside the country is able to hold its own very well and can offset losses. The icing on the cake, for 3M anyway, is that the company beat Wall Street’s expectations. And who isn’t a sucker for a good Wall Street beat?

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Washington State’s New High, Uber Vs. NYC Cabbies and Bed Bath Not Above and Beyond

On a high note…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

A big shout out goes to Washington today as it becomes the second state to legalize selling and using recreational marijuana. Medical use of the buzz-inducing plant has already been legal there for quite some time. While you might wonder if Washington is doing this out of the kindness of its heart or to increase revenue of the snacking industry, you might also consider the $200 million in taxes and fees related to marijuana that the state expects to rake in over the next four years. “I think they’ve got a good handle on what they’re doing,” says Andrew Freedman, Colorado’s Director of Marijuana Coordination. I wonder what he listed as skills and relevant experience on his resume. Colorado, which had the financial prescience to legalize marijuana much earlier this year, has already generated tens of millions of dollars for the state. Tourists and residents of Washington can expect some shortages and unusually high – no pun intended (well maybe just a little)  – prices until the state can work out the supply and demand kinks of the newly legalized substance but it should be worth it as experts say that legalization leads to better pot potency.

Uber Vs. New York Cabbies…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Uber made a big in your face decision to temporarily reduce prices on its Uber X service in New York City. The app, which is still fighting numerous regulatory hurdles in numerous cities, wants to take a big bite out of the Big Apple’s market share. Uber’s alleged logic is that even in a city where hailing a cab is easier than looking at your smartphone, if it can lure customers away with cheaper fares, than those customers will just get used to using the app, even if and when those fares go back up. And in case you were wondering, yes, the folks behind Uber are probably taking a huge hit by dropping its prices by 20%. But the company figures that’s what it takes to compete against the already reasonably priced NYC taxis. No doubt that $1.2 billion in funding it just received probably softens the blow. That and the fact that the company is currently valued at $17 billion.

Buybuy shares…

Image courtesy of John Kasawa/FreeDigitalPhotos.net

Image courtesy of John Kasawa/FreeDigitalPhotos.net

Bed Bath & Beyond announced plans to buy back $2 billion in shares over the next fiscal year. Perhaps all those coupons I regularly use are responsible for the the company’s stock slump. But the board seems to think (and hopes) a buyback will help alleviate that and cause shares to go back up. The board clearly feels confident about the company and its long term growth and potential. Sounds like a middle school report card. The company, which also owns Buy Buy Baby and Cost Plus World Market, and has about 1500 stores, has seen its stock tank this year by around 26%. It wouldn’t be right if some of that blame wasn’t attributed to bad weather. But culprits, like Amazon and other e-commerce sites have been giving the chain some fierce competition as well. And even though the company did post a profit this quarter, it was still down 8% over last year’s gains.