Swiss watchmaker destroys $539m of luxury watches to keep them off the wrong wrists
Richemont, the Swiss luxury company that owns Cartier and Montblanc, destroyed $539m of their own watches to prevent them from ending up on non-riche wrists over the past 2 years, reportedThe Guardian.
After shifting habits and new competitors caused a slump in the timekeeping market, the well-to-do watchmakers resorted to deluxe destruction -- a common strategy to keep branded products off the “gray market” -- to preserve their prestige.
Luxury brands should be as hard to afford as they are to pronounce
For luxury producers like Hermès and Cartier, brand is everything -- but these companies can only charge exorbitant markups when their products are as rare as the trust funds that can pay for them.
So to keep items from resale at a *gasp* discount, brands from Chanel to many others limit availability of their luxury goods by lighting them on fire or ripping them to shreds -- usually (but, as Cartier proves, not always) behind closed doors.
Slumping market + overproduction = watch smashing
Swiss watch exports fell 13% from 2014 to 2016 to hit a 6-year low, and they only began inching their way back last year with a 2.7% increase. But while demand remains diminished, inventories continued to increase.
“Our retail partners . . . are still being force fed like geese producing foie gras,” Richemont Chairman Johann Rupert told analysts last year, complaining about overproduction.
In the name of “long term brand equity,” the brand decided to destroy the overproduced watches to keep them off Amazon.
The problem is: e-commerce loves discounts
Even as Richemont destroys watches by the thousand, unlicensed 3rd parties continued to use e-commerce marketplaces to sell Cartier watches to wind up with some of their $20,000+ value.
In the past Richemont has sued Amazon, Alibaba, and eBay for listing counterfeit watches.
But whether demand for analog watches that cost more than cars ever returns or not, Richemont’s “approach to the grey market remains uncompromising,” confirms Chairman Rupert (a cricket enthusiast with a net worth of $7B).
Cuz if he can’t sell ’em, then nobody can.
It's pronounced "Air-mess," you swine
PayPal processes its largest transaction yet with $2.2B acquisition of Swedish iZettle
Payment-processing powerhouse PayPal purchased Swedish mobile payment company iZettle for $2.2B, the largest acquisition in the company’s history.
With the purchase of iZettle, which offers mobile credit card payment and point of sale systems across Europe, PayPal hopes to swipe some of the small business market from its primary competitor, Square.
All the cool kids are Square
PayPal’s overall market cap ($94B) still dwarfs Square’s (around $22B), but it’s losing ground due to Square’s dominance among small businesses that rely on its “omni-channel” tools to process sales on and offline.
Traditionally, PayPal has processed payments for big companies like eBay (who ditched former subsidiary PayPal in February) -- and it has only recently begun to tap the small business market.
But iZettle (often called the “Square of Europe”) will give PayPal crucial point-of-sale tools to help it cash in on transactions across the EU.
But the chip readers are just heating up
PayPal’s acquisition will give it a headstart, but Square debuted in the UK last month (its 5th country and 1st in Europe) and it plans on continuing to expand across Europe.
Last year was unexpectedly hot for PayPal (revenue grew 24%), but it still didn’t match an underperforming Square (whose revenue grew 33%).
‘Summer of disruption’: TGI Fridays employees in the UK stage walkout over tips
Employees from two TGI Fridays restaurants in the UK held a 24-hour walkout over a dispute on tips and wages -- and according to CNBC, other locations are making reservations to join them.
In a statement on their website, union reps for the American dinner chain brought the Friday noise with a side of extra Jack Daniels BBQ sauce threatening a “summer of disruption” if workers’ needs are not met.
Fridays employees staging a walkout on Friday = so tight
(Non sequitur alert: Remember when Fridays servers would wear goofy hats to work ON Fridays?)
Anyway, the anger stems from a policy introduced by the chain in February to redistribute tips from waiters to kitchen staff to reduce turnover rates in their kitchens without increasing costs for the company.
Unite, the UK’s largest union, said that the change would cost Fridays’ waiters, a lot of whom are already working for the bare minimum, up to $286 a month in lost income.
The tipping economy = not so tight
According to the BBC, the UK government has advised that workers should keep all tips given by the public, however there are currently no laws in place restricting restaurants from controlling distribution.
This isn’t the first time Fridays has taken advantage -- In March, they were fined for not even attempting to pay its staff the UK minimum wage.
According to Unite’s regional officer Dave Turnbull, “[TGI Fridays] shareholders have gotten so greedy that they no longer want to pay their hardworking staff anything above the bare minimum.”
Dang, Turnbull, would you like some onion rings with that burger, no charge?
Soup’s out of the can: Campbell CEO announces surprise retirement
As reported by CNBC, Campbell Soup CEO Denise Morrison retired unexpectedly on Friday morning after 8 years at the company.
Morrison, 64, will be replaced by board member Keith McLoughlin in the interim, with her seat on the board still intact, according to Campbell.
No reason for the departure has been provided.
Not enough salt in the soup
Campbell’s has been anything but successful since Morrison took over in 2011: The synonymous soup king has suffered a decline in sales over the last 4 years, and Campbells announced Friday that their adjusted yearly earnings will likely be down close to 11% from their previous projections.
But, Campbell’s poor performance can’t be dumped on Morrison’s leadership entirely -- packaged food companies like Campbell have been in dire straights as consumers have shifted to healthier, less processed food options in recent years.
According to JP Morgan, there have been 28 CEO changes in the US packaged food and protein industry since 2010, with 10 of those changes occurring since the start of 2017 alone.
We don’t know her, but it’s sad to see her go
Morrison’s retirement is another hit to the already scarce world of female CEOs for Fortune 500 companies.
According to CNN, her departure brings the number down to just 23.
They’ve graced our lil’ newsie quite a bit these last few months, and for good reason.
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