Sometimes, business success makes people money… and enemies. Just look at Merck Mercuriadis, an unorthodox music mogul who flipped the script on music publishing… and pissed off a lot of people in the process (more on him below). Today:
- How one business made candles that smell like success
- Competitors are calling a new music mogul’s strategy BS
- Jeff Bezos’ donation to Australia wasn’t the best
Speaking of business ownership, make sure to check out our editor’s note below — and if you’re a franchise owner that’s willing to get in touch, shoot us an email.
EDITOR’S NOTE: Have you, or anyone you know, bought a franchise in recent years? The Hustle is looking to talk to owners for an upcoming Sunday story. If you’re up for it, please email firstname.lastname@example.org.
Did a candle company accidentally sniff out the secret to retail success?
But there’s a lonely outpost of hibiscus-scented hope that masks the stench of malodorous malls: Bath & Body Works, which has increased its sales for 40 consecutive quarters.
The Bath & Body biz is booming
At Bath & Body Works, online sales AND in-store sales are increasing — a rare retail bright spot and a big boon to its parent company, L Brands.
L Brands also owns Victoria’s Secret. But the performance of the Dirty Secret compared to Bath & Body offers a study in contrasts…
At Victoria’s Secret:
- Overall sales have declined for 12 of the last 13 quarters
- Same-store sales fell 12% this past holiday season
At Bath & Body Works:
- Overall sales have increased for the past 40 quarters
- Same-store sales jumped 9% this past holiday season
So, what’s B&BW’s sweet-smelling secret to success?
It’s all about the candles
Bath & Body Works’ stores are designed to create a comfortable, relaxing environment — and with the rest of the world in literal flames, relaxing candle scents and friendly customer-service reps have become a winning formula.
In fact, to use the trendiest retail jargon, Bath & Body Works’ emphasis on its in-store experience could almost be considered… experiential.
But B&BW was “experiential” before that was even a buzzword
In recent months, “experiential retail” has become one of the hottest buzzwords in the ad industry (the advertising trade publication Adweek dedicates a whole category of its site to “Experiential” coverage).
Other retailers have gone “experiential” in desperate attempts to survive the retail-pocalypse (after all, 9.3k retail stores closed last year).
But for Bath & Body Works, sweet-smelling candles and friendly faces aren’t an innovative strategy — they’re just how the company has always done business.
As one former B&BW employee (and lifelong superfan) wrote on her Tumblr more than 6 years ago:
“BBW was started by… a large retail corporation. But this origin story didn’t fit in with BBW’s down-home style. So, the company created a fictional founder named ‘Kate.’ […] Each BBW store was seen as ‘Kate’s home,’ and employees were asked to treat customers as if they were guests in her home.”
Hey, y’all. Meg here, The Hustle’s own Media Strategist
I’m here to use my right Birkenstock to kick down the fourth wall and talk teamwork with you. Specifically, how our team works.
Now, I know what you’re thinking: “The Hustle is totally high functioning and 100% productive, and if you tell me otherwise I’m not gonna believe it because to me, you’re perfect.”
But I’m gonna let you in on a little secret — you have no idea what goes into bringing these funny little ads to life.
Hint: It rhymes with “Choir-Loft Memes”
You see, Microsoft Teams helps our ad team get on the same page with group chat, built-in audio, and video calling. That means I can do things like give Bobby feedback in real-time in Word. On the flip side, he can drop GIFs into my PowerPoint mood boards… thanks, Bob.
And because we’re not always in the same place at the same time (I like to work from home, whereas Bobby’s only social life is the office), we can spend our days chattin’ it up through Teams.
But don’t take my word for it. Did you know there’s a free version of Teams? Yes, free. As in $0 — so you have no excuse not to give it a try.
|Teams works →|
This unorthodox business invests in songwriter royalties like they’re financial instruments
In the past 3 years the Hipgnosis Songs Fund has purchased the licensing rights to almost 7.5k pop songs — including more than 1k #1 hits.
But, as writer Matt Hendrickson reports, Hipgnosis founder Merck Mercuriadis has bigger plans: Ultimately, he hopes to own as much as 20% of the music publishing market — and Hipgnosis has already raised nearly $1B to do it.
It’s all about the royalties
To understand Hipgnosis’ business model, it’s important to understand music royalties.
First off, there are 2 types: artist royalties and songwriter royalties. When Ariana Grande (artist) releases a song that’s written by Savan Kotecha (songwriter), they both get a cut of the song’s earnings.
Artist royalties are a big business (see: the feud of Taylor Swift v. Scooter Braun). But so are songwriter royalties…
And that’s where Hipgnosis comes in
Hipgnosis has bought up the catalogs of songwriters who have written songs for artists ranging from Bruno Mars to the Eurythmics, often paying top dollar to price out competitors.
Unlike other music publishers who invest in developing their songwriters’ talent, Hipgnosis only invests in songs that are already hits… and that it can count on to deliver a reliable return on their investment.
It’s been a winning strategy: Hipgnosis stock prices rose 10% in its first year of trading (2018) — and last year the company’s profit increased from $4m to $15.5m in 6 months.
So, what do other, more old-school publishing execs have to say about Mr. M?
According to Hendrickson, they say: “F*ck that guy.”
Bezos takes a beating for Amazon’s contribution to Australian wildfire relief
It wasn’t a good weekend for Jeff Bezos. The Amazon founder said in an Instagram post on Sunday that the ecommerce giant would donate $1m in Australian dollars — or about $691k in US dollars — to help fight the brush fires that are causing thousands of people to evacuate.
For a billionaire, $691k looks like pocket change
So suggests Business Insider, which rounded up the web’s most brutal reactions — people were quick to point out that Amazon’s pledge is equal to what Bezos himself (net worth: $117B+) makes in a matter of minutes.
Here’s a quick list of A-listers who’ve pledged or given as much or more:
It’s not just celebrities who are getting into the act: A sex worker claims to have raised 7 figures by selling her nudes in exchange for donations.
As Geeky’s website says: “Buying a sex toy has never felt so good.”
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📈 Pokémon GO is still going… and going. And going. The popular game made $894m in 2019 — more than it made during the year it launched and went viral (2016). The company managed to sustain interest in the game by rolling out near-constant updates and in-game events.
🎥 It was a big year for flicks. Global box-office numbers last year hit a new record of $42B. Powering that growth was the international market, where European and Asian box offices recorded big years (the numbers in China, Japan, South Korea, France, Germany, Russia, Mexico, Spain, Brazil, and Italy all grew). The US posted a slight decline from 2018 but brought in a reliable $11B+ for the 5th year in a row, a sign that the theater business in America isn’t dead yet.
💳 It was also a big year for… global debt. The international debt load increased by more than $9T last year to $253T (322% of its GDP). The US led the way in accumulating the most debt of any country, and, according to most analysts, it appears the “debt binge” will continue.
📣 Teslas talk to people now. Yep, Elon’s at it again. This time, the CEO of Tesla announced (via Twitter, of course), that Teslas will soon be able to talk to passers-by… and make fart noises.
👫 A Japanese billionaire is looking for a space girlfriend. Yes, you read that right: Yusaku Maezawa, the guy who’s paying a pretty penny to become SpaceX’s first space tourist, announced that he’s looking for a life partner to travel to space with him. It doesn’t end there: He also plans to find this lucky lady by hosting a Bachelor-style reality TV competition. Rich people are weird, man…
✈️ Steph Korey wasn’t away for very long. Last month, The Verge pulled back the curtain on what employees of the luxe luggage brand Away called a toxic work environment. Just days after the investigation was published, Away replaced its CEO, Steph Korey. But now The New York Times reports that Korey isn’t actually leaving — she’s returning as co-chief instead.
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| Brad “Yung Royalties” Wolverton
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|Eileen Wynn Dee
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