Story of the Week
Kroger, Albertsons merger is delayed
Do not expect the $24.6 billion Kroger, Albertsons merger to happen anytime soon. The two grocers, along with C&S Wholesale Grocers, came out and said they expect the deal to become official during the first half of 2024 instead of early 2024, reports Reuters. Kroger and Albertsons said they will sell 413 stores to C&S as part of the merger deal. This comes after a report from Axios last week indicated the Federal Trade Commission (FTC) would not be ready to decide on the merger until February. “In light of our continuing dialogue with the regulators, we are updating our anticipated closure timeline,” the grocers said in a statement. In December, Kroger and Albertsons informed the FTC they had met all the antitrust requirements for the merger, and it was then up to the agency to make a decision by Dec. 15. The FTC, however, missed the deadline. Kroger and Albertsons said they knew there was a possibility merger approval could be delayed, and both remain committed to closing the transaction and providing “meaningful and measurable benefits that we promised when we originally announced the transaction.”
Apparel & Footwear
German sandal maker Birkenstock forecasts major sales growth
German sandal maker Birkenstock is once again expecting a significant increase in sales for the current financial year, forecasting sales through September to rise by 17% to 18%. The forecast was included on Thursday in Birkenstock’s first quarterly financial report since the company went public on the New York Stock Exchange in October. Birkenstock shares in October began trading at below the issue price of $46 and took seven weeks to reach that value again. The company’s shares have generally traded above that mark since then. The figures presented on Thursday are for the company’s financial year ending September 2023 and cover the period leading up to Birkenstock’s initial public offering. In the final quarter through the end of September 2023, the company saw turnover increase by 16% to €374.5 million ($408 million), but posted a bottom-line loss of €28.3 million. The company attributed the losses to the cost of expanding its plant in the north-east German town of Pasewalk. In the financial year as a whole, Birkenstock sales rose by a fifth to €1.49 billion while profits fell from €187 million to €75 million. The growth in turnover was due to a 6% increase in sales and a 14% rise in the average selling price.
The Athlete’s Foot Owner Arklyz Group Acquires Lloyd Shoes
Arklyz Group has added another shoe name to its growing roster of global brands. The owner of The Athlete’s Foot, Asphaltgold, Intersocks and global licenses and distribution deals has acquired German shoe store manufacturer Lloyd Shoes from Ara AG, a family-owned German shoe company. The terms of the deal, which is expected to close in the first half of 2024, were not disclosed. Lloyd Shoes has manufactured upscale footwear in German-speaking and Scandinavian countries since 1888. The Sulingen, Germany-based brand sells its products in 48 countries at close to 2,800 points of sale, operates 35 stores across Germany as well as in Copenhagen, Lima, Vienna, and Beijing and sells internationally through its website. Throughout the years, the label has added a leisure segment and accessories to its dress shoes and has grown its retail fleet. The deal marks the latest shoe acquisition for Arklyz, which in 2022 acquired Shoe City, a Baltimore-based sneaker and streetwear retailer. Arklyz also owns global licenses or wholesale distribution deals for brands such as Salomon, Head, Crocs, Nordica, Adidas and Hey Dude.
Uniqlo Hits Shein With Lawsuit Over Alleged Dupe of Viral Shoulder Bag
Two weeks into the new year, and Shein is facing its first big lawsuit of 2024. According to a statement put out by its parent company, Fast Retailing, Uniqlo filed documents in the Tokyo District Court in Japan on Dec. 28. accusing the Chinese retailer of copying its popular Round Mini Shoulder Bag. It requested that Shein’s operators cease production of the “imitation products” immediately and compensate Uniqlo for damages. Shoppers may recognize Uniqlo’s Round Mini Shoulder Bag — which retails for $19.90 online in the U.S. — thanks to its viral success on TikTok. The nylon, crescent-shaped accessory is beloved for its genderless look and practicality, and was featured on Lyst’s Year of Fashion report in 2023. When the style began reaching global popularity, Fast Retailing released a statement warning shoppers of counterfeit and similar products being sold, urging customers to “be very careful” and saying: “We are considering legal action against the companies that manufacture and sell the products.” Shein, of course, is no stranger to accusations of copying. In August 2023, Chrome Hearts sued the fast-fashion retailer, alleging trademark infringement and unfair competition based on one of the luxury brand’s cross designs. It also faced a lawsuit from fellow fast-fashion brand Temu last year.
Beloved designer brand retailer files for Chapter 11 bankruptcy
Anne Fontaine USA, the U.S. affiliate of the Paris-based luxury boutique chain, on Jan. 16 filed for Chapter 11 Subchapter V bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, asserting that the company has not been able to recover from financial distress caused by the Covid-19 pandemic, Law360 reported. The New York-based affiliate in its Chapter 11 petition listed about $11.4 million in assets and $6.44 million in liabilities. Anne Fontaine operates 17 luxury boutique locations in the U.S., but globally, the parent company also has 19 in Europe, three in the Middle East and three in Asia, according to its website . The retailer also has an e-commerce presence on its website, offering its Parisian-inspired luxury fashion apparel, shoes, handbags and other accessories. The Covid-19 pandemic significantly reduced the affiliate’s gross revenue in 2020, as it reported $9.1 million in gross revenue that year compared to $18.1 million in 2021 and $20.3 million in 2022, according to the company’s petition. The company did not list revenue figures from 2019 or 2023.
Athletic & Sporting Goods
Hyperice Casts Wider Net Defending Massage Gun Patent, Files 16 More Suits
Hyperice, the manufacturer of percussion, dynamic air compression, thermal, vibration, and contrast therapy technology, filed 16 additional lawsuits in Federal Court against Sharper Image, HoMedics, Ekrin Athletics, and over a dozen others including retailers CVS, Costco, Walgreens, and Kohl’s related to the sale of percussive massage guns, alleging infringement of Hyperice’s patented percussion massage technology. Hyperice filed a lawsuit against Therebody, asserting its recently-issued U.S. Patent No. 11,857,482, which claims technology dating back to 2013. The company said then it planned to file more lawsuits. In this latest round, which targets massage gun direct sellers and retailers, Hyperice asserts its recently-issued patent identified in the Therabody suit, which claims technology dating back to 2013 is in use in nearly all massage guns sold today.
TZP Group Leads Majority Recapitalization of Head Rush Technologies
TZP Group, a multi-strategy private equity firm, announced today that it has led the majority recapitalization of Head Rush Technologies , a global provider of adventure safety equipment and support services, in partnership with management and existing shareholders. Founded in 2012 and headquartered in Louisville, CO, Head Rush is the market leader in the adventure safety industry offering products utilized in climbing, zip lining, and free fall applications, including TRUBLUE™, the most widely used and reputable auto belay device in the world. HRT products leverage a patented magnetic braking system which provides for increased safety, lower cost of ownership, and enhanced user experience compared to competing braking systems. The Company sells devices in more than 70 countries and provides service support and replacement parts to ensure continuous, reliable operation of equipment.
Cosmetics & Pharmacy
The Honey Pot Eyes Ambitious Growth Following $380 Million Acquisition
Trailblazing Atlanta-based feminine care company The Honey Pot is entering into a major deal in the hopes of expanding its customer base. The company, which makes a diverse set of plant-based products including skin care, lubricants, and feminine hygiene products, announced a $380 million partnership with Compass Diversified, a Westport, Connecticut-based publicly traded investment and holding company. Beatrice Dixon will continue as the CEO and chief innovation officer alongside the company’s original 15-person leadership team and existing owners, who will still hold a substantial minority stake in the company. Dixon officially launched The Honey Pot in 2014 but began experimenting with herbal remedies in 2011, after experiencing a yearlong bout of bacterial vaginosis. For years, she sold her products to friends and family, and landed a deal with Target in 2017. The Honey Pot also secured support from Richelieu Dennis’s New Voices Fund, a $100 million fund directed toward businesses owned or managed by women of color.
Eurazeo Completes Minority Investment in Ex Nihilo
Eurazeo has completed its minority investment of approximately €25 million in Ex Nihilo, alongside co-founders Sylvie Loday, Olivier Royère and Benoît Verdier. Ex Nihilo has earned global recognition for its widely successful Fleur Narcotique perfume. The brand leverages technology through its Osmologue machine—a high-precision fragrance blending system— to offer new-age personalization services to customers allowing them to customize existing fragrances.
CVC Agrees to €800 Million Deal for Sunday Natural
CVC Capital Partners agreed to buy vitamin and supplement maker Sunday Natural, adding to the buyout firm’s portfolio of investments in Germany. Sunday Natural founder Jörg Schweikart will remain “significantly invested in the company” and will play an ongoing role in its strategic development, CVC said in a statement. Terms of the deal weren’t disclosed, though people with knowledge of the matter said the deal values Sunday Natural at about €800 million ($875 million).
L’Oréal Invests in Swiss Longevity Biotech Company, Timeline
L’Oréal’s strategic venture capital fund, BOLD, has acquired a minority stake in Timeline, a Swiss longevity biotech company. Timeline was founded in 2007 by Chris Rinsch (Co-Founder and President) and Patrick Aebischer (Co-Founder and Chairman) to develop innovative solutions for longevity in the food, beauty and health sectors. Timeline has developed a proprietary molecule, Mitopure, that recycles and rejuvenates aging mitochondria, the powerhouses of cells. This breakthrough technology is backed by more than a decade of research by scientists, multiple gold standard clinical studies, and a strong intellectual property portfolio. The investment will enable Timeline to further develop its unique technology and expand operations, while enabling future collaboration with L’Oréal.
Discounters & Department Stores
Macy’s to cut 3.5% of its workforce, close 5 mall anchors
Macy’s is reducing its workforce by 3.5%, a company spokesperson confirmed by email on Thursday. The company also plans to close five Macy’s full-line stores. “As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company,” a spokesperson said in an emailed statement. Macy’s last month was reportedly fielding an offer from activist investors interested in monetizing its property, with incoming CEO Tony Spring poised to take over early in the new year.
Target names Michael Fiddelke chief operating officer
Target announced Thursday that Michael Fiddelke is the retailer’s new chief operating officer. Fiddelke will start the position on Feb. 4. Target also announced new merchandising team leadership to account for the “size, scale and complexity” of its operations, according to a company press release. Fiddelke joined Target in 2003 as an intern. During his tenure, Fiddelke has served in various leadership roles at the company in merchandising, operations and human resources. He has served as chief financial officer since late 2019 and will hold both roles until a replacement CFO is hired. On the merchandising side, Rick Gomez, the company’s chief food and beverage officer, will expand his purview to include Target’s frequency categories as chief food, essentials and beauty officer. Chief Merchandising Officer Jill Sando will oversee discretionary categories as chief merchandising officer of apparel and accessories, home and hardlines.
Walmart to give US store managers a raise
Walmart announced Thursday that its U.S. store managers will get a raise in February, increasing the average hourly wage at the superstore to more than $18. Beginning on Feb. 1, the current average salary for store managers of $117,000 will be raised to $128,000, the retail giant said. Additionally, the annual bonus could be as high as 200% of base salary, if managers meet certain targets and profit metrics. Last year, Walmart said “the investments in front-line hourly associates and upcoming annual increases” will result in average hourly pay rising from $17.50 to more than $18. The company has since redesigned its store manager bonus program, calculating sales and store profits to give managers an annual bonus of up to 200%.
Emerging Consumer Companies
Nutrabolt invests in Bloom Nutrition, expanding health and wellness portfolio
Nutrabolt, the owner of brands such as C4, has made a significant minority investment in Bloom Nutrition, a company that offers high-quality health supplements. Nutrabolt now holds an ownership stake of approximately 20% in Bloom, making it the largest investor. The investment is part of a larger $90 million financing round that includes Clayton Christopher and Amberstone. Bloom Nutrition, founded in 2019, aims to make healthier living accessible to all by reimagining supplements with flavor and function. Nutrabolt’s Chairman and CEO, Doss Cunningham, expressed excitement about partnering with Bloom and praised the founders’ passion and authenticity. The investment will provide strategic growth capital to support Bloom’s demand-generation activities, product innovation, and internal capabilities. Bloom, known for its Greens and Superfoods powder, has become the number one Greens brand in the U.S. and one of the fastest-growing supplement brands.
GolfForever secures $10 million in funding, partners with PGA Tour
GolfForever, a company that provides an at-home training system for golfers through an app, has raised $10 million in a Series A funding round. The funding was led by consumer growth equity fund Clerisy, with professional golfers Scottie Scheffler and Tom Kim also joining as equity investors and ambassadors for the brand. Founded in 2019 by Dr. Jeremy James, GolfForever has also entered into a multi-year partnership with the PGA Tour, becoming the Official Golf Fitness System and Official Golf Strength and Flexibility System of the Tour until 2027.
Showfields closes all stores as bankruptcy proceedings continue
Showfields, a company that showcased direct-to-consumer (DTC) brands, is closing all of its stores as it files for bankruptcy. The remaining locations in Brooklyn, New York; Washington, D.C.; and Los Angeles will be shuttered by the end of Saturday. Showfields had already closed its stores in Miami and Manhattan last year. The company informed its vendors that it had no update on its bankruptcy and advised them to file claims as creditors. Showfields also stated that it is unable to pay for return-to-vendor shipping. When Showfields first launched in 2019, it positioned itself as a department store for DTC brands, allowing customers to experience the merchandise in person. However, the business model has proven challenging, and the company has faced difficulties with its debtor-in-possession financing. Showfields’ closure follows the recent shuttering of locations by Neighborhood Goods, another company that works with DTC brands.
Food & Beverage
Sprecher Brewing Acquires Juvee, Adding Energy Category to its Roster of Craft Beverages
Sprecher Brewing Company CEO Sharad Chadha announced its expansion into the energy drink category with the purchase of Juvee from global gaming and lifestyle brand, 100 Thieves. Short for rejuvenation, the brand was launched in 2022 by 100 Thieves CEO Matthew “Nadeshot” Haag and co-founder Sam Keene, after being expertly formulated to boost energy, elevate mood, increase focus and improve overall well-being. Over the past year, Juvee has grown revenues by 400%, driven mostly by the dedicated community they’ve built online. As part of the acquisition, Juvee’s production, bottling, and warehousing will be moved to Sprecher’s headquarters in Greater Milwaukee.
Kroger venture capital partnership acquires nutpods
Nutpods has been acquired by MPearlRock, a partnership between The Kroger Co.’s venture capital arm PearlRock Partners and MidOcean Partners, a private equity firm. Terms of the acquisition were not announced. Nutpods is a manufacturer and marketer of plant-based creamers that was founded in 2013 by Madeleine Haydon. Today, the brand may be found in 15,000 retail stores, nationwide, according to the company. Nutpods received a strategic investment from VMG Partners in 2019 and, over the course of the four-year partnership, the business more than tripled its net sales, the company said.
Grocery & Restaurants
Burger King owner Restaurant Brands buys Carrols, largest U.S. franchisee
Restaurant Brands International is buying Carrols Restaurant Group, the largest Burger King franchisee in the U.S., for about $1 billion in cash. Restaurant Brands will pay $9.55 per share to acquire Carrols, which operates more than 1,000 Burger King restaurants and 60 Popeyes locations. Carrols’ stock closed at $8.42 on Friday, giving it a market value of $459 million. The acquisition, announced Tuesday, is a shift in strategy for Burger King. Its restaurants have been almost entirely franchised for the last decade, and the company currently only has 75 corporate-owned locations. It comes more than a year after Restaurant Brands unveiled a $400 million plan to revive Burger King’s U.S. business. Burger King sales had been lagging behind the competition, and Wendy’s overtook it as the second-largest burger chain by U.S. sales. The comeback strategy focuses on investing in restaurant remodels and advertising to drive demand and boost franchisee profits.
Wendy’s taps Kirk Tanner to succeed Todd Penegor as CEO, president
The Wendy’s Co. has named Kirk Tanner, a former PepsiCo Inc. division CEO, as president and CEO to succeed Todd Penegor in that role, the company said Thursday. The positions are effective Feb. 5. The Dublin, Ohio-based burger brand said Tanner also had been elected to serve on the company’s board. Penegor, who had served at Wendy’s for more than a decade, will step down, the company said. Tanner most recently served as CEO of North American beverages at PepsiCo Inc. The company said he had more than 30 years of experience across beverages, snacks and foodservice. “We are thrilled to welcome an executive of Kirk’s caliber to the Wendy’s team,” said Nelson Peltz, chairman of the Wendy’s board, in a statement. “Kirk is a proven operational leader whose customer-centric mindset and broad experience positioning and growing some of the most well-known global brands make him the ideal candidate to lead Wendy’s into its next phase of growth and expansion.”
Home & Road
Season’s beatings: DOC says furniture sales continue slump in December
Furniture and home furnishings sales in December were off the year-over-year pace by nearly five points according to the U.S. Department of Commerce’s advance monthly estimates. In the month, the category accumulated $10.783 billion in adjusted sales, down 4.7% compared with $11.313 billion in December 2022. The monthly figure was also down 1.0% vs. November 2023’s adjusted $10.897 billion. For the year, furniture and home furnishings stores sold an estimated $133.597 billion in goods and services, down 5.4% against 2022’s totals. Overall, retail and food services totaled an adjusted $709.890 billion in December sales, up 5.6% from December 2022’s $672.336 billion and an increase of 0.6% when lined up against November 2023’s $705.981 billion. Taking the entire year into account, the entire U.S. retail universe totaled $8.333 trillion in sales, up 3.2% vs. 2022.
Ikea U.S. expanding new format in 2024 on heels of record year
Ikea U.S. is growing its newest store format across the United States. The home furnishings and décor retailer announced the locations for four new “Plan & order point” stores (with pick-up) that will open in 2024. The stores are planned for the Domain Shopping Center in Austin, Tex., the Atlanta metropolitan area, and two in greater Los Angeles. Additional locations are scheduled to open in Annapolis and Gaithersburg (Maryland), and Katy, Texas, with more to come. The “Plan & order point” format is much smaller than traditional Ikea stores and offers personalized design consultations as well as serving as customer pickup points. No items are stocked in the store for take home. “These new format stores across the U.S. will increase accessibility for customers without compromising on quality or design, and customers can receive support from IKEA experts to plan and order home furnishing solutions such as kitchens, bedrooms and bathrooms,” the company stated in a release.
Leggett & Platt to shutter up to 15 factories under restructuring plan
Diversified supplier Leggett & Platt plans to shave up to 15 facilities from its bedding operations production and distribution footprint and is looking to restructure its products strategy. In addition to the bedding facilities, the company said it will consolidate a “small number of production facilities in home furniture and flooring products to better align capacity with regional demand and drive operating efficiencies.” The company did not specify factory locations or the number of employees that would be impacted by the plan. Leggett said it expects the restructuring to reduce annual sales by about $100 million and to generate between $40 million and $50 million earnings before interest and taxes on an annualized basis. The company said it also expects to receive between $60 million and $80 million in cash proceeds from the sale of facilities, with transactions largely complete by the end of 2025.
Flexsteel continues to improve in preliminary Q2 as it builds cash, pays off debt
Residential furniture supplier Flexsteel reported $100.1 million in preliminary second quarter net sales, a 7.5% increase over last year and a $5.5 million increase from last quarter. Gross margin rose to 21.9% for the quarter from last year’s 17%. Last quarter, gross margin also climbed, rising 3.5%. The company’s cash flow from operations hit $18.9 million for the quarter, which it attributed to higher profits and a $15.6 million reduction in inventories. Last quarter, the company ended with $3 million in cash. The company also paid off $15.1 million in debt, a 46% reduction in borrowings under its line of credit. “I am extremely pleased with our second quarter results,” said Jerry Dittmer, CEO. “We are competing well, growing and gaining share, improving profitability, and generating cash to reduce debt and further strengthen our balance sheet.
Jewelry & Luxury
JBT: 650 Jewelry Businesses Closed Last Year
The Jewelers Board of Trade (JBT) recorded 650 jewelry business discontinuances in 2023—a 41% increase from 2022’s total of 461. Of the 650 discontinuances, 528 were retailers, 73 wholesalers, and 49 manufacturers. Twenty-two were in Canada, while the rest were in the United States. JBT defines a discontinuance as a company ceasing operations, filing for bankruptcy, or merging or getting acquired. While the group’s annual stats showed continued industry consolidation, they did include some good news: JBT recorded 416 new North American jewelry businesses in 2023—an impressive number, if down 21% from the 525 it logged in 2022. Last year’s new businesses comprised 314 retailers, 73 wholesalers, and 29 manufacturers. All but 14 of them were in the United States.
Quality Gold Acquires Swiss Crown USA
Jewelry manufacturer Quality Gold has acquired Swiss Crown USA, a wholesale watch company specializing in independently certified pre-owned Rolex watches. The acquisition is expected to be completed by the end of January. No terms were disclosed. Based in Chicago, Swiss Crown USA was founded in 2013 by two industry veterans, Daniel Marks and Scott Freberg. It provides retailers with a turnkey solution for selling pre-owned luxury timepieces. “This acquisition accelerates our growth, particularly within the pre-owned Rolex watch segment,” said Jason Langhammer, chief operating officer of Quality Gold, in a statement. “It is a smart and strong addition for us.”
Much of the luxury industry has been starved for good news that could bring it a glimmer of hope about what 2024 will hold. Reports over the last few months of 2023 pointed to a slowdown in consumer spending and, more specifically, in sales of luxury goods. A big reason? China’s lackluster economic recovery following the peak of the COVID-19 pandemic, caused in part by of a property market crisis that roiled the country—which is a key source of customers for luxury labels.
Office & Leisure
L Catterton Makes Strategic Investment in Sploot Veterinary Care
L Catterton, a leading global consumer-focused investment firm, today announced that it has made a strategic investment in Sploot Veterinary Care (“Sploot”), an innovative, technology-driven, and comprehensive veterinary care platform providing an elevated experience to pets, pet parents, and veterinary professionals. Sploot currently operates seven clinics across Denver and Chicago, with an additional clinic expected to open this month. This investment will support Sploot’s long-term growth and strategic objectives, enabling the company to accelerate the expansion of its differentiated approach and execute on its mission of improving the lives of pets, pet parents, and veterinary professionals. L Catterton has significant experience investing in and building brands within the pet care space globally, including Alliance Animal Health, Butternut Box, Canidae, Drools, Harringtons, Instinct®, JustFoodForDogs, Lily’s Kitchen, Old Mother Hubbard®, Partner Pet, Petlove, PetVet Care Centers, Pure & Natural, Rachael Ray® Nutrish®, and Withmal. L Catterton will join existing investor Skydeck Capital.
Pop Mart grows U.S. footprint with Santa Clara location
An Asian toy and collectibles brand has expanded into California’s Bay Area with its second U.S. store. Pop Mart has opened at Westfield Valley Fair Mall in Santa Clara, Calif. The new store follows the opening of the company’s first permanent U.S. location, which opened in September at American Dream, the massive three million sq.-ft.-plus entertainment and retail center in East Rutherford, N.J., and positive feedback from fans on two long term pop-up locations in New York City’s World Trade Center and Costa Mesa, Calif.’s South Coast Plaza. Looking ahead, additional Pop Mart stores are set to open in the coming months, including locations in Las Vegas, and Glendale, Ariz. The company also plans to open a permanent store in Bellevue, Wash. to replace the pop-up in Bellevue Square. Headquartered in Beijing, Pop Mart operates more than 400 stores, 2,000 Robo Shops, and a vast network of distributors across 84 countries and regions.
Technology & Internet
Apple to avoid ban by selling latest watches without blood oxygen feature
Apple will remove the blood oxygen feature from its latest Apple Watches, a move that will allow the company to continue importing and selling the devices in the U.S. as it battles with Masimo in court. Modified versions of the Apple Watch Series 9 and Ultra 2 will go on sale Thursday, Apple said in a statement. Both devices were introduced in September. When a user taps on the blood oxygen icon on a modified watch, the display will show an alert directing the user to an explanation on Apple’s website, the company said. For months, Apple has been engaged in an intellectual property dispute with Masimo, a medical device company. In October, the International Trade Commission found that Apple’s watch sensors for blood oxygen had infringed on Masimo’s patents. The affected watches were briefly banned in December before Apple got a temporary reprieve. But on Wednesday, an appeals court lifted an injunction that had blocked the ban from taking effect. The court did not overturn the ITC decision, which is currently under appeal.
Elon Musk wants more control of Tesla, seeks 25% voting power
Tesla and SpaceX CEO Elon Musk, who also owns the social network X (formerly known as Twitter), said Monday that he wants about 25% of voting control over his electric vehicle business. Musk already owns around 13% of Tesla, or approximately 411 million shares of the company’s 3.19 billion shares in common stock outstanding, as reported in the company’s last financial filing for the third quarter of 2023. That’s a large stake, especially considering that Musk sold tens of billions of dollars worth of his shares in Tesla in 2022, largely to finance a $44 billion leveraged buyout of Twitter. Now, Musk is angling for even more control over Tesla. Specifically, Musk wrote on Monday, “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.” “Unless that is the case, I would prefer to build products outside of Tesla,” the billionaire executive said on X. “You don’t seem to understand that Tesla is not one startup, but a dozen. Simply look at the delta between what Tesla does and GM. As for stock ownership itself being enough motivation, Fidelity and other own similar stakes to me. Why don’t they show up for work?”
Uber shuts down Drizly alcohol delivery service after three years
Uber is closing down alcohol delivery service Drizly, which it acquired three years ago for $1.1 billion. The plan was to integrate Drizly into Uber Eats, but that never happened. The Drizly brand will be discontinued by March 2024. Uber’s decision to close Drizly comes as it focuses on its core Uber Eats strategy. Pierre-Dimitri Gore-Coty, SVP of Delivery at Uber, expressed gratitude to the Drizly team for their contributions to the growth of the beverage alcohol delivery category. In 2020, Drizly experienced a data breach affecting 2.5 million customers, leading to an order from the Federal Trade Commission (FTC) to delete unnecessary personal data and implement a robust security program. Uber will now concentrate on alcohol delivery through Uber Eats, where it claims to have doubled the business globally. Currently, Uber operates alcohol delivery through Uber Eats in 35 U.S. states and 25 countries worldwide.
Finance & Economy
Weekly jobless claims post lowest reading since September 2022
The labor market continued to show surprising resiliency in the early days of 2024, with initial jobless claims posting an unexpected drop last week. Initial filings for unemployment insurance totaled 187,000 for the week ended Jan. 13, the lowest level since Sept. 24, 2022, the Labor Department reported. The total marked a 16,000 decline from the previous week and came in below the Dow Jones estimate of 208,000. Labor strength has persisted despite attempts by the Federal Reserve to slow the economy, and the jobs market in particular, through a series of interest rate hikes. Central bank policymakers have linked the supply-demand mismatch between companies and the available labor pool as an ingredient that had sent inflation to its highest level in more than 40 years.
Consumer sentiment surges while inflation outlook dips, University of Michigan survey shows
Consumers have grown more confident about the direction of the economy and inflation at onset of 2024, despite persistent worries about a looming slowdown, a survey released Friday showed. The University of Michigan’s Consumer Survey of Consumers showed a reading of 78.8 for January, its highest level since July 2021 and up 21.4% from a year ago. That followed a big jump in December and comes despite public opinion surveys showing concern about the nation’s direction. Consumer sentiment has improved amid a drop in gasoline prices and solid stock market gains. The price at the pump for a gallon of regular gas is about 30 cents lower than it was a year ago, according to AAA, and the S&P 500 is near a record high.
