Ralph Lauren’s Man with a Plan; Voila! French Rogue Trader Gets Last Laugh…Almost;Ya-Who Will Get the Winning Bid?

 

Plan of attack…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Ralph Lauren will bite the very preppy bullet and start cutting jobs, closing stores and cashing out on some real estate as the retailer tries to climb out of a dismal fiscal year. Out of its 15,000 full-time employees, 1,000 of them will soon be getting their walking papers so the company can restructure itself and go from nine management layers to six. Spearheading these new changes are CEO Stefan Larrson, who is the person responsible for lifting Gap Inc.’s Old Navy out of its own retail funk awhile back. And Larsson’s got his work cut out for him. The retailer posted sales losses for every quarter of fiscal 2016, resulting in a full year sales decline of 3% and a 30% decline in shares in the last twelve months. Part of Larsson’s plan to lift Ralph Lauren out of its misery is to speed things up. Literally. It currently takes well over a year for a design to hit shelves ,which accounts for improperly forecasting supply and demand. Instead, Larsson will shorten that turnaround, as he feels that nine months is a perfectly reasonable amount of time for designs to reach stores. Unfortunately, 50 of those stores will be closing. But at least there will be over 440 other stores from which to purchase those expedited designs. Phew. While this restructuring will cost Ralph Lauren a whopping $400 million, not to mention an additional $150 million in inventory reduction, this new plan will also help the retailer save $220 million a year and Ralph Lauren needs every million it can get.

Wait a minute…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Societe General Bank’s very own rogue trader, Jerome Kerviel, just got his day in court. Even though his poor trading skills cost the French bank billion in euros, and got him convicted of fraud and breach of trust in the process, the trader still managed to win a wrongful dismissal case against his former employer. What was, in fact, wrongful, was that SocGen waited too long between the time it discovered Kerviel’s misdeeds and the time it booted him from the firm. French labor code allows companies a grand total of two months to sanction those who have been found guilty of misconduct. Kerviel, however, was dismissed in 2008, many many months after the time, in 2007, when it was discovered that he went rogue and lost 4.9 billion euros. The Labor Court has now ordered SocGen to pay Kerviel 450,000 euros, which is roughly equivalent to $510,000. SocGen’s lawyer, Arnaud Chalut, called the ruling “scandalous,” presumably in French, and plans to appeal the decision. Kerviel, however, is not in the clear just yet and neither is his $510,000. France’s highest court already ruled that the three years of jail time to which Kerviel was sentenced was justified. But the court didn’t feel that he should be liable for the whole 4.9 billion euros. So the bank has brought a civil suit against Kerviel, which begins next week, to determine exactly how much he should pay back to SocGen.

Bid adieu…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Verizon is on the prowl for some internet business and it is honing in on Yahoo. The telecom giant is said to be bidding $3 billion for the privilege of owning Yahoo’s core internet biz, however, Verizon is not the only company looking to scoop up that entity. AT&T is said to be licking its chops at the opportunity, in addition to private equity firm TPG , Advent International and Vista Equity Partners, to name but a few. Experts were thinking that bids would come in between $4 billion and $8 billion. But then some bidders lost interest after Yahoo CEO Marissa Mayer made a presentation last month showing how Yahoo’s online ad biz is headed south, losing digital advertising ground to Facebook, Google and even Twitter. Yahoo, however, might just prove to be the perfect fit for Verizon, which already picked up AOL last year for $4.4 billion. Together with AOL, the two companies attract over one billion users every month. There is probably going to be one more bidding cycle before any deals are reached and it’s still anybody’s guess where Yahoo will land. But if I were a betting man…well, I’m not.

Forbes/Trump Smackdown; Getting Chip-py With It; Ralph Lauren Preps New CEO

Donald Donald Donald…

Image courtesy of ponsulak/FreeDigitalPhotos.net

Image courtesy of ponsulak/FreeDigitalPhotos.net

To take your mind off the fact that we have yet to find a cure for cancer and AIDs, or that people all over the world are living in abject poverty, we now turn our attentions to the Donald Trump vs. Forbes magazine smack down. The two entities are going head to head over Donald Trump’s estimated net worth, with Trump insisting that Forbes has its facts all wrong. “I’m a private company […] I like the people at Forbes but they don’t really know my assets very well,” the Donald said during an interview for CNBC. Forbes says that The Donald’s real estate fortune can be pegged at $4.5 billion, a figure that has the Republican presidential candidate in a snit because he is convinced that the magazine is trying to paint him “as poor as possible.” As if that were possible. Trump insists he’s worth more than $10 billion, questioning Forbes arithmetic skills. Common core, perhaps?  Forbes, in its calculations, doesn’t place a value on brand and that irritates the real estate mogul because the Trump brand, according to Trump, is very valuable and might have led Forbes to a far different fiscal outcome. Maybe. Donald Trump apparently does not take comfort in the fact that he was ranked as the 19th richest American, or that he is by far the wealthiest of the presidential candidates. He’s also miffed that Forbes had the nerve to say that he has a paltry cash stash of just $327 million (forget the research that went into computing that amount) “But I have a lot of cash,”  he insists in a CNBC interview, explaining away that his cash bank account is bursting from the $793 million sitting in it, all green and crispy.

Chipped off…

Image courtesy of sscreations/FreeDigitalPhotos.net

Image courtesy of sscreations/FreeDigitalPhotos.net

Today marks the dawn of a new -and hopefully less fraudulent-riddled – era, as business owners large and small now become liable for fraudulent activities. If a consumer’s info gets swiped, the business from which the offense originated eats the cost and not the bank that issued the card. Consumers, many who are now armed with credit cards containing EMV chips –  as in Europay, MasterCard and Visa (what you thought it was going to stand for some obscure tech jargon?) will now be able to conspicuously consume using new terminals intended to reduce exposure to fraud. In order for the chip to be really secure, a pin number should be used with it. Otherwise, don’t come crying to EMV. I say reduce, because sadly, it does not completely obliterate the cold, callous felonious act. It’s estimated that about 32 million consumers had their credit card info swiped last year, nearly triple that of 2013. The chip creates a unique code for every transaction. But if you have yet to receive your chip card, rest assured that your magnetic stripe-outfitted cards can still be used. Sorry to say but the chip cards won’t be of much use for your cyber-shopping excursions. So make sure the site with which you transact is legit. American Express is getting their chip-action going on October 16 while gas stations get until 2017 to upgrade their terminals.  So far more than 200 million cards with chips in them have been sent out.

Movin’ on up-market…

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

A new king has been crowned over at Ralph Lauren, as its namesake CEO, Ralph Lauren himself, “stepped up.” That is not a typo but rather a direct quote from the preppy American style icon, who also happens to be the largest shareholder and intends to maintain his creative input at the company. The new CEO is none other than Stefan Larsson, CEO extraordinaire to fast-fashion brands Old Navy and H&M. His resume actually had some haters doubting the dude who has a lack of luxury goods experience. But Wall Street doesn’t seem to mind as it sent shares of Ralph Lauren up a much needed 12% on Wednesday while also taking a 6% chunk off of shares of Gap Inc for losing its rock star executive. The haters apparently aren’t paying enough attention to the fact that under Larsson’s leadership, Old Navy saw three consecutive years of growth and was the only one of the Gap Inc. brands to show growth at all, 5% just this year. In the meantime, Ralph Lauren had some quarters that were anything but, shall we say, fashion-forward, and is down a dismal 37% for the year.

GoPro Makes a Gnarly Debut, IKEA Makes a Gnarly Wage Hike and GM Might Have a Not So Gnarly Recall

Would you like some meatballs with that…

Image courtesy of fotographic1980/FreeDigitalPhotos.net

Image courtesy of fotographic1980/FreeDigitalPhotos.net

In case you didn’t know, IKEA is a really industrious company and not just because you furnished your entire first apartment with it without ravaging your bank account. Today the Swedish company announced that it is raising its minimum wage by 17% from $9.17 to 10.76. “It’s driven from our vision of wanting to create a better everyday life for our co-worker.” Well amen to that, IKEA President Rob Olson! But the company also think it’s going to help keep turnover to a minimum and recruit more employees. IKEA is going by the MIT wage calculator that takes into account all sorts of factors and how much it would cost to afford life’s basic necessities. Gosh darn those smarties who did the math! The Gap and Old Navy also have plans to raise their minimum wage as well. The federal minimum wage is $7.25. However, the perennial buzz killers argue that raising the minimum wage is bad because it could lead to lay-offs and a decrease in hiring (cue the chirping crickets).

Wall Street is like totally stoked…

Image courtesy of M - Pics/FreeDigitalPhotos.net

Image courtesy of M – Pics/FreeDigitalPhotos.net

GoPro made its extreme Wall Street Debut today and it was not a disappointing ride. Founded in 2002 by Nicholas Woodman, the company pulled in close to a $1 billion in 2013. GoPro is all about documenting life’s awesome adventures with a special camera that would shame the one on your phone. No really, it would. Would you actually whip out your iPhone mid-skydive or mid-surfing? Didn’t think so. The camera and all its gnarly accessories make for some fun digital media, of which GoPro, naturally makes it easy to use on a variety of platforms. Valued at close to $3 billion, the company began its day at $24 a share but rose quickly to $30 a share making for a totally rad Wall Street ride.

Oops! It happened again…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It would almost seem weird to go a week and not hear about another GM recall. Okay so this next one didn’t happen yet. But it’s coming because of a potential defect with airbags on Chevy Cruzes- a major problem and not just because it’s GM’s number two selling vehicle right after the Chevy Silverado.  So far, 120,000 of them have been sold this year. The defect, incidentally is not entirely the fault of GM who uses airbag supplier Takata – a supplier used by several car companies, in fact. Meanwhile, over at the Today Show, Matt Lauer has been taking heat over some questions he posed to GM CEO Mary Barra. He asked her if she got the position because she is a woman and that GM needed to present a softer image considering all its problems in the past year. Then Matt not-so-politely asked if she could even handle the job with all its challenges as well as being a super awesome mom with all the demands of that role. Would he have dared asked such questions to male CEO’s, many wonder? Back over at GM, Barra said the there would be no more firings over the recalls. Isn’t that a relief? Or isn’t it? Hmmm.