Amazon’s Kindness Almost Knows No Bounds; Uber Cleans House; Crew-Cut: CEO Drexel Waves a Preppy Goodbye

Yep, they went there…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

It’s the American Dream. Well, for Amazon anyway. Rather than worry about disenfranchising an entire portion of the population that can’t comfortably afford Amazon’s Prime subscription service, the e-commerce giant is now offering this highly esteemed membership privilege for a 50% discount to those on government assistance. All it takes is a valid Electronic Benefits Transfer card. Because why should the fact that someone is receiving government assistance stand in the way of their Amazon shopping experience, right? It is incredibly thoughtful of Amazon to think of those less fortunate by reducing the cost of subscription for them. However, if it were not to Amazon’s fiscal advantage, then this latest initiative might not have been unveiled. That fiscal advantage comes in the form of a competitive edge over Walmart, whose low prices have attracted the very countless customers that Amazon is trying to woo with this new incentive. After all, studies have shown that once customers sign up for Prime status, they tend to beef up their orders. So, we’re talking a win-win for Amazon. And a lose for Walmart.

Job openings…

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Looks like karma may finally be catching up with some folks over at Uber, as the ride-sharing company just fired 20 employees over sexual harassment claims. Apparently 215 claims were leveled against these 20 individuals, which sort of begs the question: Was there anybody left at Uber who didn’t get sexually harassed? The investigation was conducted by law firm Perkins Coie and disturbingly enough, it found that no action was even taken in 100 of those claims. Oh, and there are still even more claims being investigated.  In addition to the 20 terminated fiends, seven other employees received written warnings, while 31 more employees need to get “special training” to teach them how not to harass people and behave like stupid, thoughtless destructive pieces of trash. CEO Travis Kalanick launched the investigation back in February after a former Uber employee named Susan Fowler wrote in a blog post about her personal experiences of sexual harassment and gender bias at the company. However, when asked about the issue back in May, Uber’s head of HR, Liane Hornsey, said it wasn’t an issue that had come up. Especially if you had your head firmly entrenched in the sand, of course.

And that’s a wrap…

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After 14 years, J. Crew’s Mickey Drexler is calling it quits and handing over the reins to West Elm CEO James Brett. While Drexler may be out as CEO, he’ll still stay on as Chairman. And why not? After all, he owns 10% of the preppy apparel company. Drexel decided to step down from his role after declining sales – 6% in just the last year – led to a whole bunch of other problems including restructuring, layoffs and the departure of its pseudo-celebrity, high-profile creative director, Jenna Lyons. Not that any of that was entirely Drexel’s fault. Only a bit of it, some might argue. Because apparently the problems and challenges he faced were industry wide for apparel companies in general, as so many of them continue to struggle to get a leg up on fast-fashion, affordable competitors like Zara and H&M.

 

Tesla Takes On Ford; J. Crew Says Bye to Own Icon; Burberry Wants to Go Big

Race to the finish…

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Tesla’s market cap just left Ford Motor Co. in the eco-friendly dust today. It’s all because of a much anticipated, yet massive Model 3 rollout scheduled for later this year. Assuming everything goes smoothly with that massive rollout – and why wouldn’t it? – Tesla has pinned some very pricey hopes and dreams in the form of growth targets. Those growth targets sent the company’s stock up 5.7% and why shouldn’t they? After all, the luxury electric car company smacked down analysts estimates when it reported a shipment of 25,000 vehicles for its first quarter. In case you were wondering – because I know you were – that was almost a 70% increase from last year at this time. To be fair, however, the increase is not as impressive at second glance considering that Tesla experienced some production pains beginning in October. So the company was basically making up for the pains. In the meantime, as the second largest auto company in the United States, Ford delivered 6.7 million cars and trucks last year while Tesla delivered less than 80,000. Then, last year Ford hauled in a revenue of close to $152 billion while Tesla took in just $7 billion. Yet Tesla’s very magical market capitalization now comes in at $47.6 billion, compared to the much much older Ford Motor Co.’s $44.9 billion. Let that one sink in for a bit. And in case you were in the market for some Tesla shares, its stock is currently trading at around $293 a share.

Crew-cuts…

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J. Crew’s long-time creative director, Jenna Lyons, is out after just five years on that gig and over 20 years at the label. Which is just so cray cray since she is responsible for making so much of what made J. Crew…well, J. Crew. She is credited with turning the brand around a few years ago and making it super-popular and ultra-hip. In fact, she was so good at what she was doing that she became the face/icon of the prepster brand. But then there were a bunch of unfashionable issues, a 6.7% sales drop, following a more than 8% drop the year before.  The company, if you recall – and it’s okay if you don’t – was purchased for $3 billion back in 2011. Now the retailer is staring at the wrong end of $1.5 billion in debt. All that had company brass scratching its preppy head and wondering where did things go south and how could they be remedied. Apparently, part of that remedy involved saying goodbye to Lyons. Despite that, J. Crew is a retailer like any other, and we all know how darn ugly the fiscal landscape has been like as of late for all the players, big and small. But back to Lyons, rumor has it that her exit was a mutual decision.  Although, I’ve often wondered if the word mutual takes on a very different definition when describing people who find themselves leaving their high-level executive jobs.

Just so ya know…

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Pish-posh designer Burberry just signed a $225 million licensing deal with Coty. – as in the musk-maker. However, rest assured as there will be no trench coats involved. Instead, Coty will get exclusive global rights to Burberry’s make-up and fragrance brands – which might make zero sense to you but makes plenty of cents – and dollars for both Burberry and Coty. And here’s how it’s going to work: Burberry, which pulled down revenue of 203 million pounds last year (well, it is an English company) has got the creativity end covered because, well, it does. There is a reason, after all, why Burberry can charge so much money for its merchandise. But Coty is all about distribution, and in fact, the company is quite accomplished in that arena. Burberry was shrewd enough to recognize where it could use a little oomph. Or in this case, the English brand needed a lot of oomph. So the brand did some research and shopped around before it settled on a deal with Coty.  And Burberry will be in good company at Coty, as it will join other premium fragrances including Balenciaga, Gucci and Marc Jacobs, not to mention the Clairol and Rimmel brands.

Target-ing the Preppy; No Clowning Around, Cirque du Soleil Goes to Private Equity Firm; Former Fed Chief Wants Overhaul, But Does Anybody Care?

I guess that means it was a success…

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Image courtesy of cuteimage/FreeDigitalPhotos.net

Things are looking up for Lilly Pulitizer (did they ever look down?) as the line of 250 pieces it made for Target  – from dresses to beach chairs – nearly sold out within hours, with many crowing the moment as “Preppy Black Friday.” Just darling. In fact, the line of merchandise was so successful that 16,000 of the line’s items even made it onto eBay, priced much much higher than Target’s prices. Target’s website nearly crashed because of the traffic caused by the hype for the Lilly Pulitzer merchandise. Good thing Target already learned its lesson the hard way back in 2011, when it launched a line with Missoni, which did, in fact, cause the site to crash. This time, however, Target just made the site inaccessible for 15 minutes to deal with the onslaught. Much to the annoyance and disappointment of many, Target has no plans to restock the line since that might make the 250 items not as precious. No doubt the opportunists selling the marked up merchandise on eBay aren’t too sad about this decision. You know who’s not disappointed, or even annoyed? Oxford Industries, that’s who. Parent company to Lilly Pulitzer, Oxford Industries’ stock surged 9% because of all the success and excitement surrounding the Lilly Pulitzer/Target merchandise.

Send in the clowns…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

There’s no clowning around at TPG, the private equity firm that just picked up a majority stake in the world-famous circus sensation, Cirque du Soleil. Its founder, Guy Laliberté, has decided to take on new creative challenges instead of grooming his five children to take over the family biz. TPG has already helped companies, including J. Crew, Neiman Marcus and Ducati. So it’s safe to assume they know a thing or two about how to grow a brand. Quebec pension fund manager the Caisse de depot, and Chinese investment firm, Fosum, will take on minority stakes in the entertainment company. While the price for the deal is being kept under wraps, some analysts have pegged the deal between $1.5 and $2 billion. Not bad for a guy who started a traveling show with a bunch of street performers back in 1984. Laliberté will stay on with the company and its 1,400 employees to continue to offer strategic and creative advice. It pays for him to do so as he’ll still be left with a 10% stake.  Cirque du Soleil sells 11 million tickets a year and has been seen by 160 million people in 330 cities and 48 countries.

I said Volcker! Not Vulcan!

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Image courtesy of sdmania/FreeDigitalPhotos.net

Way harsh words from former Federal Reserve chief Paul Volcker who slammed the current U.S financial regulatory system during a speech in Washington, D.C. The former chief and close financial advisor to President Obama said if we don’t revamp the current system, it will only “…make us more vulnerable to the next financial crisis.” Mr. Volcker wants a complete overhaul of a system he says was developed piecemeal over the last 150 years in response to fiscal emergencies. He says the Dodd-Frank financial reform act of 2010 is not enough to head off an even greater economic disaster and wants to see a smoother, streamlined regulatory system instead of the current one we have in place which he thinks is “…highly fragmented, outdated and ineffective.” Ouch. In his fiscal eden, banks and other select Wall Street firms would be centralized. Then he’d merge the SEC and CFTC into one big happy family. In case you haven’t guessed it by now, plenty of people on Wall Street don’t seem to care for what the former fed chief had to say.

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?

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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!

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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?

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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.