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Vans sk8ted back from bankruptcy in the ’80s, now US tariffs have them back on their heels. The Hustle We're hiring! Vans is coming off one of their best years ever, but tariffs may force a major faceplant Vans ollied...
By: Wes Schlagenhauf
July 25, 2018
Vans sk8ted back from bankruptcy in the ’80s, now US tariffs have them back on their heels.
Vans is coming off one of their best years ever, but tariffs may force a major faceplant
Vans ollied into the ’60s as a shoe manufacturer based in sunny California -- where the skate was chill, and the style was even chiller.
Employees at the then-fledgling company made rubber-soled shoes each morning and sold them directly from their factory in Anaheim, and just like that, their classic canvas slip-ons became an instant American staple for laid back streetwear.
But the company filed for bankruptcy in the ’80s, and by the late ’90s, Vans packed up and kick flipped its way into China for cheaper prices on manufacturing -- a move that got them back on their feet in a big way.
Now, they’re killing it: According to The Washington Post, Vans’ annual revenue topped $3B last year, up tenfold from a decade earlier, and their sales rocketed up 35% in the most recent quarter.
But new tariffs could mean they beef it again
Earlier this month, the US imposed tariffs on $34B worth of Chinese imports, including cars and industrial machinery.
Now, Trump is talking about upping the ante, telling CNBC last Friday that he wants to extend tariffs to all $500B worth of imports from China (shoes are the 5th-largest category for Chinese imports).
The footwear industry already pays nearly $3B a year in tariffs (canvas shoes come with particularly high tariffs, some as high as 68.5%), which has long led the shoe industry to look for cheaper alternatives in Asia, like Vietnam and Cambodia.
Now, the entire shoe industry is on high alert
And so they should be: 98% of all shoes are manufactured abroad, and nearly 71% come from China (last year, the US imported $14.8B worth of shoes from the country).
“We would be asleep if we weren’t concerned about it,” said Scott A. Roe, the CFO of Vans’ parent company VF Corporation.
Waiting for the other shoe to drop
GM launched a car-sharing service that lets car-owners rent their Cadillacs for cash
Owners of Chevrolet, Buick, GMC, and Cadillac cars can now rent out their rides when they’re not using them via GM’s new program, Peer Cars.
Since its bankruptcy, GM has bet big on alternative auto options to stay ahead of the curve.
Sharing is caring
According to a GM statement, Peer Cars will launch immediately in Chicago, Detroit, and Ann Arbor, offering “GM owners the opportunity to earn income by listing their vehicles.” The program, run by GM’s ridesharing division, Maven, will expand to other US cities in the fall.
Peer Cars will compete against growing on-demand car-sharing startups Turo and Getaround. Other automakers like Ford have formed partnerships with car-sharing companies, but none have launched their own programs.
GM has changed since grandpa bought his Buick
Since Uncle Sam sold off his last GM shares in 2013 (completing GM’s $49.5B bailout), the “new GM” has invested heavily in new technology.
GM launched the first widely available fully electric car, the Bolt, in 2016 -- beating rival Tesla to the mass market. Then, GM bought Cruise for $1B and quickly gained a lead in the race to bring self-driving cars to streets.
Now, with the debut of Peer Spaces, GM will become the first major automaker to dive into the sharing economy.
VC-funded cookie startup Doughbies shuts down -- because you can’t 10x everything
Doughbies, an on-demand cookie delivery startup, closed down overnight after the business failed to cook up hot enough returns for its investors.
The brand wasn’t just popular, it was also profitable -- Doughbies made 36% gross margins and 12% net profits. So why did they close?
It’s hard to run a bakery like a tech company
Daniel Conway, who co-founded Doughbies with Mariam Khan in 2014, left his venture capital firm to start the cookie company.
The duo launched the business like a tech startup, putting the company through the ‘500 Startups’ accelerator and raising $670k from investors. But several startup investors and advisors publicly questioned the company’s ability to scale.
Conway and Co. remained confident, insisting that “[compared to] cooking on stovetops, we can do thousands of cookies in one oven per hour.”
Cookies make profits, but not 10x returns
Doughbies’ revenue and cult following would have been a huge success for any other bakery -- but hungry investors didn’t want bigger batches, they wanted broader business models.
The company created an app to boost sales, but it turned out that people only needed so many cookies a week.
Since the size and success of Instacart, Seamless, and other competitors made expansion into other types of food delivery nearly impossible, Doughbies execs chose to go out on top and “move on to something new.”
Auto insurance startup aimed at low-mileage drivers, Metromile, raises $90m
Car insurance startup Metromile has snagged a $90m Series E led by a pair of insurance juggernauts: Japan’s Tokio Marine Holdings and Canada’s Intact Financial.
Currently available in California, Arizona, Illinois, and 5 other states, the SF-based company plans to use the new funds to continue nationwide expansion, and to further enhance the use of artificial intelligence in their claims processing.
Less money for less miles
Since its inception, Metromile has raised nearly $300m in funding (including a $191.5m round back in 2016). The company, aimed at low-mileage drivers, started out as an insurance broker but has since moved into handling claims as well.
According to Crunchbase, Metromile’s whole thing is that if you don’t drive much, you shouldn’t have to cough up as much for auto when your car isn’t moving -- who knew it could be so simple?
And the space is getting competitive
In March, Venturebeat reported that Midwestern auto insurance startup Root Insurance raised a $51m Series C, making it one of the largest Series C rounds ever raised by a tech startup.
But, Root doesn’t subscribe to a pay-per-mile plan, which could give Metromile the generational leg up on attracting heavy hitters like Tokio and Intact Financial.
Or, as Bloomberg puts it, “As baby boomers retire and millennials flock to cities, two insurance giants are betting on people to drive a lot less.”
“No really, humans have wanted to get f’ed up since the dawn of time.” If you don’t already have at least one friend quoting facts about human nature from this book, here’s your chance to be that friend.
Sapiens tells the story of how humanity evolved, the quirks we’ve held onto through the eons, and the ones we’ve ditched. Almost everyone here at The Hustle is listening to or reading this book, and our lunch conversations have never been more prehistoric.
An interview with the Navy-sailor-turned-IBM-employee-turned-Grammy-winning singer on manhood, how he overcame his stutter to record his first album (and #1 hit) at 33, and what it means to live a good life.
Death, Sex, and Money is about “things we think about a lot, and need to talk about more.” The podcast covers big topics via bite-sized stories on everything from dating, to living alone, to parenthood -- plus conversations with celebrities, like this episode, which is one of our all-time favorites.
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- Adam Meway from Fargo, ND
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