The real pink ladies


May 24, 2019

Today, Nascar’s first family spins its wheels, while The Boring Company finally lands a deal, but first…
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Editor’s Note: It’s Memorial Day weekend so we’ll be sending our regular Sunday feature on Monday. See you back here then — and big shout-out to all the veterans!

Nobody’s home: Storied D2D cosmetics company, Avon, sells to Natura Cosmeticos

Natura Cosmeticos, a Brazilian beauty conglomerate, purchased Avon, the iconic London-based company known for its vast network of Pink Cadillac-driving, door-to-door-knockin’, ‘Avon calling!’ saleswomen.

But lately, it’s been more like “Avon struggling” as Avon and other old guard (generally male-run) cosmetics companies struggle to compete in the Glossier era.

On to the next chapter…

Since 1886, Avon (formerly the California Perfume Company) has used a direct-marketing system that, when launched, was one of the few models that offered women a chance to work outside the home.

Today, Avon is still the 5th-largest beauty company in the world, generating $5.5B globally in 2018 with a sales team of 6.4m reps worldwide.

Still, D2D can’t contend with D2C

But, like many legacy companies, Avon fell behind on keeping up with consumer behavior as beauty startups like Glossier (which is now worth $1B) slid into people’s dm’s.

And while Avon’s stance of removing animal testing on its products in the ’80s was far ahead of the curve, startups these days, like Beautycounter (which creates products free of over 1.3k known toxins or questionable ingredients), are taking the “do no harm” ethos a step further.

Natura could help Avon ladies get back in the saddle

With the sale to Natura, owner of high-end retail shops like Aesop and The Body Shop, the pink Cadillac could be going the way of the, well, pink Cadillac, as Natura plans to use its vast distribution channels of 3.2k stores to sell Avon products throughout Latin America, Europe, and Asia.

But Natura salespeople pound the pavement as well, and as social and economic trends in Brazil continue to protect the direct sales model from the threat of online retail, this could be the pink light at the end of the tunnel for ol’ Avon.

Avon rallying
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Is NASCAR’s first family just spinning its wheels by ‘buying’ International Speedway?

Yesterday, NASCAR agreed to buy International Speedway Corp. (ISC) — which operates many of its racetracks — for $2B.

The merger gives NASCAR control of 12 important racetracks. 

But both companies were already owned by the France family — NASCAR’s famous founders — and now they’re consolidating control over their driving dynasty.

Recently, the race-car royals are on a rough ride 

Bill France founded NASCAR in 1948 and passed the company to his son Bill France Jr. (in 1972) and then his grandson Brian France (in 2002). 

But when CEO Brian France was arrested for drunken driving and drug possession last year, the driving dynasty nearly spun out. 

Now, Brian’s uncle, Jim, is behind the wheel of the effort to save NASCAR’s decelerating dynasty, whose revenue declined 54% between 2007 and 2017.

J-France, take the wheel

The fact that the Frances — who are worth ~$5.7B — also own and run International Speedway (formerly “Bill France Racing Inc.”) has raised several antitrust eyebrows over the years. 

But, merging the public (ISC) and its private (NASCAR) companies will give the Frances more chances to boost revenues behind closed doors, putting rumors of NASCAR’s sale to rest.

» Pardon my France

Now that Game of Thrones is over, the streaming struggle starts

Once viewers’ favorite shows end, they are 30% more likely to cancel their streaming subscriptions, a new Axios report reveals.

This is a big bummer for streaming services, which are trying — and struggling — to keep consumers engaged in an attention economy where viewers have oodles of options.

The threat of Thrones

After Game of Thrones ended, 16% of HBO subscribers planned to cancel their streaming subscriptions.

HBO isn’t alone: With so many streaming services, many consumers only sign up for a few months to binge and then bounce — beating subscription companies that lure customers in with free trials at their own game.

Can streaming companies conquer constant cancellation?

To prevent customers from constantly cancelling, subscription services are getting creative. 

Hulu is offering cross-subscriptions with Spotify Premium to sweeten the stream, and Amazon, HBO and Netflix are heavily promoting their prime-time shows to keep people around.

But no one is sure whether streaming services can consistently manufacture the magic of shows like Game of Thrones and Stranger Things — and finding out will be an expensive experiment.

» Throw me a Throne here

Finally not so boring: Elon Musk’s hole company lands its first commercial contract

The Boring Company has landed a $48.7m project to shuttle people around the Las Vegas Convention Center in an underground Loop system.

After 2 years of waffling on its business model and aimless cash grab promotions, this is TBC’s first official commercial contract.

But the city of sin is certainly hedging its bets

The Campus Wide People Mover (CWPM) consists of the company’s new Tesla-powered tunnel system that will span about 200 acres if completed — and with Elon Musk’s track record of missing deadlines, that’s a big “if.”

But the contract is jammed with fine print to keep TBC on track — withholding over ⅔ of payments until completion and imposing penalties ($300k each) should the system fail to accommodate enough passengers.

Musk’s reputation’s digging holes for sure

It would be an understatement to say that trust in Mr. Musk has waned as a (w)hole — and, in Boring’s case, it could cost them.

Fortunately the CWPM is less than a mile, which seems doable… right?

Uhh… last month, a 505-page report revealed Boring’s DC-area tunnel to be riddled with safety issues including missing emergency exits, improper engineering practices, and, according to TechCrunch, passenger escape ladders that a fire safety professor called “the definition of insanity.” 

Soo…

» Less than a mile should be fine… right?
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