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?

Is Xiaomi the Next Big Thing to Hit the Smartphone Scene?; Russia’s Ruble in the Rubble; Shake Shack Shaking Up Wall Street

Third’s the word…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Here’s a riddle for you: If Samsung is the number one smartphone maker in the world, with Apple perched at the number two spot, then who has taken third? Hint: It’s not LG. Or Nokia. Or Motorola. Or… In fact, the number three smartphone maker in the world has yet to reach our shores, even though the company’s got a $45 billion valuation and is slated to become the most valuable IPO. Ever. In case you haven’t figured it out – and it’s okay if you didn’t –  I am talking about Chinese smartphone maker Xiaomi. The company which, just pulled in another $1.1 billion in funding, is number one in the mammoth Chinese market. It also happens to be the fastest growing smartphone maker and the most valuable start-up in the world right now (yes, even more so than Über and Pinterest, if you can believe it). And by fast I mean the company’s sales are up 211% in the third quarter, having taken a 5% bite out of the market share. Xiaomi, whose Mi4 smartphone coincidentally, bears a striking – make that very striking – resemblance to the iPhone, actually makes most of its money from apps and add-ons, and not from the phone itself. It also apparently has some nifty marketing strategies, though I can’t weigh in on that one. Xiaomi is currently focusing on branching out into places like Indonesia, Russia and Mexico with no immediate plans to come to the US, which clearly hasn’t been a problem for it.

Is that a recession I smell…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Russia’s not having a very good week. News is out now that the economy there shrank for the first time in five years. The GDP fell by .5% with the Russian government saying that next year the GDP could go down by as much as 4%. How do you say “yikes” in Russian? The ruble is continuing its slide,  falling the most in two weeks, and is about 40% weaker than the dollar. It’s down by about 70% since the beginning of the year. Of course the international sanctions imposed on Russia by other countries who were not cool with its incursions into the Ukraine are being blamed. And, of course, Russia then decided to block imported food – a move that has not been good for anyone on either side of the issue. Then there’s the price of oil which keeps dropping and dropping and…well, it’s no fun to see oil numbers drop if you happen to be the largest energy exporter and well, that’s exactly what Russia is.

Yeah, it’s that good…

Image courtesy of KEKO64/FreeDigitalPhotos.net

Image courtesy of KEKO64/FreeDigitalPhotos.net

Apparently the Shake Shack is so good that Wall Street will get to partake of its delicacies in the form of a $100 million IPO that the company just filed today. Conceived by restaurateur Danny Meyer, the chain will be listed on the New York Stock Exchange under the aptly named ticker symbol SHAK. The company began as a single “shack” in New York City’s Madison Square Park and quickly grew to 63 locations…worldwide, with half of those operated by licensees. Shake Shack reported sales of $140 million in 2013, a scrumptious $81 million gain from the year before. Investors are awfully curious to see how Shake Shack will fare considering the mixed results the market has seen from food companies like perennial fave Chipotle to less than stellar performer Noodles & Co. If that’s not enough to whet your IPO appetite, then how about the fact that they pay an average hourly wage of $10.70 with health benefits and paid time off?