With the exception of the housing market, it seems we’ve lived in a relatively non-inflationary world for quite some time – until recently. There have been multiple stories in The Weekly Consensus and other news sources on the continuing supply chain delays and bottlenecks that all importers and distributors have faced in 2021, which have been a major component of inflationary pressures. In addition, there are just as many recent stories regarding the rise of other input costs for products, driven by the tight labor market and demand outstripping supply.
Strong brands are generally able to pass along cost increases to consumers via higher prices. Just this past week, in their quarterly earnings releases, two well-known consumer products companies announced that they are successfully navigating inflationary headwinds. On Tuesday, PepsiCo released its third quarter results, and in response to an analyst’s question, the CFO said that the company was able “to price through the inflation that we’re facing, whether it be in commodities inflation or other types of operating expense inflation.” Then on Wednesday, the CFO of Levi’s gave credit to its brand strength as a hedge against cost increases, saying, “We have taken pricing actions and believe we have pricing power to mitigate inflationary pressures.”
Last week also saw the release of a Gartner report on the results of a CFO survey, noting that a majority of CFOs are seeing inflationary pressures in multiple components of their costs, and that not all companies have been able to or expect to weather inflationary cost pressures as well as PepsiCo and Levi’s.
The Gartner report notes that “Survey data shows that 74% of CFOs are now concerned with the prospect of lower profitability because of margin pressures,” even though 61% of survey respondents noted that they have passed along at least some of their higher input costs to customers.
While PepsiCo and Levi’s shareholders got some positive news last week, the inflationary environment that we’re in will undoubtedly negatively impact most companies and consumers as we start and complete our holiday 2021 shopping. Multiple news sources are encouraging consumers to shop now to make sure we can complete our gift lists. While presents may be less plentiful and more expensive than last year, at least early shoppers will be able to have them wrapped and under the tree on time. Early consumer shopping behavior may give companies positive initial signs of a successful holiday season, but product shortages, higher prices and lack of domestic shipping capacity may offset at least some of those gains by the end of the year. Looking a little longer term, many economists believe the U.S. economy will work itself out of the current cycle by the middle to the end of 2022. But making it until then is just one more thing for us all to weather.
Headlines of the Week
Fashion rental company Rent the Runway made public its paperwork for an IPO. In its filing with the U.S. Securities and Exchange Commission, the Brooklyn-based company disclosed a near 39% drop in revenue for the fiscal year 2020. The company reported 2020 revenue of $157.5 million, down from $256.9 million a year earlier. Its net loss widened to $171.1 million in the same period, from $153.9 million a year earlier. Rent the Runway, which was founded in 2009, lets users rent clothes and shop second-hand merchandise from over 750 designer brands.
US-based beauty retailer Coty has agreed to divest a stake of around 9% in professional and retail hair business Wella to its majority owner KKR. As part of the agreement, Coty will redeem the equivalent of around 47 million shares of its common stock for $426.5m.
The transaction will reduce Coty’s share in Wella to around 30.6%, which has an implied value of around $1.38bn. It comes after the company sold a majority stake in Wella, which consists of Wella, Clairol, OPI and ghd brands (Wella), to KKR for around $2.5bn last December. Coty and KKR initially signed an agreement for the deal in May. The transaction is expected to close in the second quarter of the coming fiscal year.
Apparel & Footwear
Gap Inc. is continuing its focus on technology investments. The specialty retailer has acquired Context-Based 4 Casting Ltd. (CB4), a New York- and Tel Aviv-based retail artificial intelligence and machine learning platform. The start-up provides technology that is intended to increase sales and improve customer experience through predictive analytics and demand sensing. The deal was brokered by Gap strategic growth office, which seeks out opportunities to fuel growth and accelerate new capabilities across its portfolio of brands. Funded by investors including Sequoia Capital, CB4’s technology has been implemented by retailers including Levi’s, Urban Outfitters, Lidl, and Kum & Go. Since moving to the cloud in October 2020, Gap Inc. has increased investments in leading-edge technology. This includes investing over $100 million in supply chain infrastructure, including best-in-class fulfillment technology and automation. In August 2021, Gap acquired Drapr, a startup that enables customers to create 3D avatars and virtually try on clothing.
Columbia Sportswear shares slumped lower Tuesday after Bank of America downgraded the outdoor apparel company and cut their price target to over concerns about the global supply chain and other issues. Bank of America analyst Alexander Perry cut his price target on the group by $29, to $137 per share, and lowered his rating on the group by one notch, to neutral, citing risks in wholesale shipments in the first half of 2022. Perry said global supply chain constraints, such as continued shipping delays and the impact of Vietnam factory closures, which he thinks could have an outsized impact on the company’s footwear business. Factories have been closing in Vietnam due to a second wave of COVID-19. “We believe Vietnam represents a fairly significant portion of COLM’s contract manufacturing and while we see some potential disruption to Holiday,” he said, “we believe factory closures are more likely to impact 1H22 shipments as 70% of Holiday product was already in transit or distribution centers (although late season reorders could be impacted).”
Levi Strauss & Co. on Wednesday reported fiscal third-quarter earnings and sales that topped analysts’ expectations, as consumer demand picked up during the back-to-school season and shoppers looked to stock up on the latest denim trends. Although many apparel companies have been hit by global supply chain bottlenecks, Levi has fared well comparatively due to its diversified manufacturing. Less than 4% of its global volume comes from Vietnam, the company said. Production facilities there have been hard hit by periodic shutdowns during the pandemic. “Our supply chain really is a source of competitive advantage,” Chief Executive Chip Bergh told CNBC. “We can move product around with a lot of agility. … We’ve been running the business against different scenarios for the last 18 months.” Bergh said Levi took a roughly $10 million hit to its revenue due to supply chain issues.
French Connection, the provocative UK fashion brand known for its “FCUK” branding, said on Monday it has agreed to sell itself for 29 million pounds ($39.3 million) after years of losses only made worse during the coronavirus pandemic. The buyer group comprises UK-based apparel industry entrepreneurs Apinder Singh Ghura and Amarjit Singh Grewal, as well as holding company KJR Brothers Ltd. Stephen Marks, who founded the company nearly 50 years ago and remains its top shareholder, will retire from his role as chairman once the sale is complete, French Connection said. Ghura, a longtime supplier to the apparel industry and more recently an investor, owns 25.4% of the company, while Marks owns a 41.5% stake, according to Refinitiv Eikon. The offer of 30 pence per French Connection share represents a 30% premium to the stock price before the company revealed the bid last month. The deal comes after French Connection began seeking new suitors earlier this year after investment firms Spotlight Brands and Gordon Brothers pulled out of early talks to buy the company.
Athletic & Sporting Goods
Life Time Group Holdings Inc., the Chanhassen, Minnesota-based chain of fitness clubs and coworking centers, will reenter the stock markets as a public company after pricing its initial public offering in a deal that raised $702 million. The IPO priced at $18 per share, the lower end of Life Time’s planned range, and the company cut the number of shares in the offering to 39 million, down from the 46.2 million shares it planned to sell. (Underwriters can still purchase another 5.85 million shares over the next 30 days, Life Time said in a statement.) That’s below the $4 billion Life Time was valued when the company was taken private in a 2015 leveraged buyout by CEO Bahram Akradi and private equity firms Leonard Green & Partners, TPG and LNK Partners. Since then, Life Time grew its revenue from $1.3 billion in 2014 to $1.9 billion in 2019, though that figure nosedived in 2020 due to the Covid-19 pandemic.
Surging shopper demand coupled with shipping container shortages and bottlenecks at ports have already triggered tighter supply of products, from cars to shoes. In particular, some of America’s biggest sellers of clothing and shoes cite one catalyst that has compounded the pressure: factory closures in Vietnam stemming from a second wave of the coronavirus outbreak there. That’s led brands from PacSun to Nike to warn about the effects on their supply. In late September, Nike cut its full-year sales outlook due to supply chain issues, despite its CEO noting strong consumer demand. Nike makes about three-quarters of its shoes in Southeast Asia, with 51% and 24% of manufacturing in Vietnam and Indonesia respectively.
US-based sports streaming platform FloSports has acquired ice hockey streaming platform and sports data provider HockeyTech. The deal covers all of the company’s assets including its entire media rights portfolio, live and on-demand streaming platform HockeyTV, and enterprise solutions such as LeagueStat, which is used by league officials to tabulate the official statistics at games. The agreement hands FloSports more than 30,000 live ice hockey games across 75 North American elite and professional leagues, in addition to securing sports data to the Texas-based broadcaster and its media partners. Based in Ontario, Canada, HockeyTech was founded in 2012 by Stu Siegal, the former managing partner and chief executive of the National Hockey League’s (NHL) Florida Panthers.
Cosmetics & Pharmacy
NovaBay Pharmaceuticals signed an agreement to acquire DERMAdoctor in a $15 million deal. Founded in 1998 by Dr Audrey Kunin and Jeff Kunin, DERMAdoctor delivers on the promise that clinical skin therapy can be fun and easy, while still delivering significant, measurable results. The brand sells more than 30 products under ranges that include Ain’t Misbehavin’, Calm Cool + Corrected, Kakadu C, KP Duty, and Wrinkle Revenge. DERMAdoctor sells its products through major retailers such as Macy’s, QVC, and Costco, and digital beauty retailers such as SkinStore and Amazon. NovaBay Pharmaceuticals is a biopharmaceutical company focusing on high-quality, differentiated, anti-infective consumer products: Avenova, CelleRx Clinical Reset, and NeutroPhase Skin and Wound Cleanser. NovaBay’s products are formulated with its patented, pure, stable, pharmaceutical-grade hypochlorous acid that replicates the antimicrobial chemicals used by white blood cells to fight infection. The acquisition has the potential to double topline revenue in 2022 with operational synergies and diversified product portfolio expected to drive profitability.
Glow Recipe has taken its first outside investment in a deal with private equity firm North Castle Partners for a minority stake in the business. Founded in 2014 by L’Oréal alums Sarah Lee and Christine Chang, Glow Recipe began as a curated online destination for K-beauty. In 2017 the duo pivoted the business and launched their first range of skincare with fruit-inspired formulas that deliver texture, scent, and results. The funding will primarily go to product development, adding new hires, increased marketing spend, and scaling up the business internationally. WWD reported industry sources said the brand hit $60 million in retail sales last year and is beating projections for 2021. The brand reported it ranks in the top-ten skincare brands at retailers globally, including Cult Beauty, Mecca, and Sephora in Southeast Asia and the Middle East.
With the ambition of becoming India’s largest CPG company, MyGlamm has set out to build a “digital Unilever.” On the heels of closing their $71 million Series C funding round in August, the DTC brand announced a new parent entity, The Good Glamm Group, which will consolidate the MyGlamm, POPxo, and BabyChakra business under one umbrella. The new entity has a war chest of $100 million and a mandate to acquire six beauty and personal care businesses by March 2022. Founded in 2017 by Darpan Sanghvi, MyGlamm is an omnichannel beauty brand offering a range of more than 800 cruelty-free and vegan products across makeup, skincare, and personal care. While the business is digital first, MyGlamm will have 30,000 offline points of sale by year end across 70 cities in India, and opened a 3,000-sq-ft interactive flagship last year that is six times larger than the average Indian beauty store. MyGlamm acquired female-centric digital platform POPxo in September 2020, and India’s top parenting platform BabyChakra in August 2021. The business is reportedly already in talks with several potential targets and is looking for Indian brands with at least ₹50 (roughly $6 million) to ₹200 crore ($26 million) in revenue. MyGlamm’s investors include Amazon, Bessemer Venture Partners, L’Occitane, Mankekar Family Office, Tano Capital, Ascent Capital, Wipro Consumer, Trifecta Capital, Stride Ventures, and Accel, among others.
Discounters & Department Stores
Macy’s shares outpaced the stock market much of Wednesday afternoon after an activist investor suggested it split its e-commerce business into a separate company the way Saks Fifth Avenue did earlier this year. Several news reports described remarks from Scott Ostfeld, partner and co-portfolio manager of Jana Strategic Investments, speaking at the 13D Monitor Active-Passive Investor Summit Wednesday, in which he reportedly said that Macy’s stock price could double if it made such a move. Macy’s e-commerce operation alone could be worth $14 billion, compared to its current $6.9 billion valuation, Reuters reported Ostfeld as also saying.
Amid the buy now, pay later boom, Target has added Sezzle and Affirm as installment payment options for shoppers, the retailer announced on Wednesday. Customers can use Affirm for purchases worth more than $100 on Target’s website, per the announcement. Shoppers must first apply with Affirm before they can use it as a payment method at Target. Shoppers can apply to use Sezzle while shopping at Target’s website or mobile app, through Sezzle’s Virtual Card at checkout. Customers can use the option through Apple Pay and Google Pay and while making drive-up orders, same-day delivery orders through Shipt and its other same-day fulfillment services, the company said.
Luxury plus-size apparel company 11 Honoré on Wednesday entered into an exclusive partnership with Nordstrom, according to a Nordstrom spokesperson. Nordstrom is the first retail partner for 11 Honoré, and the collaboration launched online and “in several doors,” according to an 11 Honoré spokesperson. The collection, created by Danielle Williams Eke, will be available in two drops. Drop one will retail for between $128 and $248 with 14 styles. Drop two is slated for late October with 14 new styles. Nordstrom was part of a group of investors that contributed to a $10 million funding round for 11 Honoré in 2019. The department store has also hosted 11 Honoré trunk shows.
Macy’s on Tuesday announced the appointment of Michaels CEO Ashley Buchanan and Zipcar President Tracey Zhen to its board of directors. Buchanan has led Michaels since early January 2020, taking the job permanently later that year. He also spent more than a decade at Walmart, most recently as its chief merchant for e-commerce. Zhen has been at Zipcar for four years, and according to Macy’s press release “oversees all facets” of the car-sharing business.
Emerging Consumer Companies
Studs, the New York-based tattoo concept, raised $20 million in new funding. The round was led by Spark Capital’s Kevin Thau with participation from Thrive Capital, the firm that led Studs’ as-yet-undisclosed Series A last year, as well as First Round Capital and Lerer Hippeau. It brings Studs’ total capital to over $30 million. In November of 2019, Studs raised a $3 million seed round led by First Round Capital’s Hayley Barna, a former CEO of makeup subscription service Birchbox. In early 2020, Harman followed up with a roughly $9 million Series A led by Thrive Capital’s Nabil Mallick.
Wardrobe, the peer-to-peer fashion rental marketplace that allows users to rent out their fashion items to aspiring fashionistas and earn, announced that it had raised $4.1 million seed round. The round was led by Slow Ventures with participation from Foundation Capital, Casper cofounder Neil Parikh, and Grammy-winning artist Leon Bridges. It brings total finding to date to $5.9 million. The company, founded in 2018, uses retail dry cleaning locations as hubs for its service where renters can pick up and drop off clothing if they are in NYC. The dry cleaners also provide storage and cleaning while earning incremental revenue. Items can also be shipped nationwide for those not near a hub. Wardrobe charges ~35% of the rental fee as a service charge.
Grocery & Restaurants
First Watch Restaurant Group Inc. went public Friday, rising about 23% from its offering pricing of $18 a share, and CEO Chris Tomasso said it serves as a positive market test for full-service restaurants. The Bradenton, Fla.-based daytime breakfast-lunch restaurant brand issued 9.5 million shares of common stock at $18 a share, raising about $170 million. Tomasso said the access to capital will help pay down and restructure debt for the company, which has 423 daytime restaurants in 28 states. The company is majority owned by Advent International. Tomasso said First Watch anticipates 10% to 12% annual unit growth, which would be 40 to 50 new restaurants a year.
California grocer Raley’s plans to acquire Arizona grocer Bashas’, creating a supermarket company with more than 200 stores in four Western states stretching from Northern California to New Mexico. Under the deal, Bashas’ will operate as a Raley’s subsidiary company and maintain its Chandler, Ariz., corporate headquarters as well as its distribution center in Arizona and store banners. Overall, the Bashas’ Family of Stores operates more than 100 grocery stores under the Bashas’, Bashas’ Diné, Food City, AJ’s Fine Foods and Eddie’s Country Store banners. Two of the retailer’s stores are in New Mexico and the rest are in Arizona. West Sacramento, Calif.-based Raley’s operates 124 supermarkets in northern California and Nevada under the Raley’s, Bel Air, Nob Hill Foods and Raley’s O-N-E Market banners.
Clayton, Dubilier & Rice (CD&R) has won the auction for Morrisons with a 7 billion pound ($9.5 billion) bid, paving the way for the U.S. private equity firm to take control of Britain’s fourth-biggest supermarket group. The Takeover Panel, which governs M&A deals in the UK and arranged the auction, said on Saturday CD&R had offered 287 pence a share, while a consortium led by the Softbank owned Fortress Investment Group offered 286 pence. If shareholders approve the offer, CD&R could complete its takeover of Morrisons by the end of the month, the second UK supermarket chain in a year to be acquired by private equity after a buyout of no.3 player Asda completed in February. The battle for Morrisons, which has been running since May, is the most high-profile of a raft of bids for British companies this year, reflecting private equity’s appetite for cash-generating UK assets. Bradford, northern England, based Morrisons started out as an egg and butter merchant in 1899. It listed its shares in 1967 and is Britain’s fourth-largest grocer after Tesco, Sainsbury’s and Asda.
Home & Road
The Home Depot is the first retail client for Walmart’s new delivery-as-a-service business, the companies announced Wednesday, giving Walmart a customer with billions of dollars’ worth of online sales to fill its delivery vans out of the gate. Home Depot will offer same-day and next-day delivery via Walmart GoLocal in select stores in Texas, New Mexico, and Northwest Arkansas in the coming weeks, with plans for further expansion by the end of the year, according to a Home Depot spokesperson. Eligible Home Depot items for GoLocal delivery are smaller supplies that can fit easily in a car, like tools, fasteners and paint, the companies said in a news release. Qualified products will have a scheduled delivery option enabled at online checkout.
Helen of Troy reported sales in its Housewares segment increased 6.6 percent in the second quarter due to strong sales at brick and mortar stores for OXO and Hydro Flask brands. The Housewares segment is now expected to deliver growth of 9 to 11 percent for the year, up from 7 to 9 percent previously. OXO and Hydro Flask saw strong demand and favorable comparative impacts from COVID-19 related store closures, reduced store traffic and a soft back-to-school season in the prior-year period. These factors were partially offset by a decrease in online sales primarily due to the unfavorable comparative impact of a shift towards online shopping in the prior-year period due to COVID-19 related store closures, as well as a decline in club channel sales.
Jewelry & Luxury
Pre-owned timepiece site WatchBox plans to open five U.S. stores over the next year, as well as three more international locations. The site is looking to open new stores in New York City, Los Angeles, Miami, Houston, and Dallas by the end of 2022. Next year it will also open stores in Zurich; Riyadh, Saudi Arabia; and Tokyo. The stores are now “a tried-and-tested formula for us,” says WatchBox global CEO Justin Reis. “We can activate these local watch collector communities, catalyze them, and bring them closer to us.” The stores hold informational events and try to foster a sense of inclusiveness and community, he says.
LINE Thailand reveals that luxury brands are adjusting and increasingly placing importance on their online channels amid the ongoing Covid pandemic as customers shop more online. One of the important behaviors that cannot be overlooked, a charming way Thais tend to shop, is to do their shopping through “chat”. Currently, global brand names such as Burberry, Chanel, Cartier, Dior, Gucci, Lacoste, Louis Vuitton, Swarovski, and Tiffany & Co. have all approached the online market through the usage of chat commerce in order to reach Thai consumers.
Office & Leisure
Magnolia Pictures, the film distributor owned by Mark Cuban and Todd Wagner, has hired an investment bank to run a sale of the company, DealBook hears. The move reflects the rising value of film libraries as streaming services amass content. (See: Amazon’s $8.45 billion acquisition of MGM in May.) Cuban and Eamonn Bowles, Magnolia’s president, did not respond to requests for comment. Magnolia has managed to survive in a tough corner of Hollywood. Its business model involves buying rights to finished films at festivals like Cannes and Sundance and attracting an audience through grass-roots marketing and awards buzz. While mass-appeal movies have started to rebound at the box office, art-house films haven’t followed suit, in part because their audience tends to be older and therefore more concerned about the coronavirus. Magnolia has about 500 films in its library. The company, founded in 2001, is known for documentaries like “Blackfish,” “I Am Not Your Negro” and “Capturing the Friedmans.” It generated around $30 million in sales last year and expects to bring in about $40 million this year.
Shares in Danish hearing aid and headset maker GN Store Nord rose 3% on Wednesday after it said it would buy gaming gear company Steelseries from Nordic private equity company Axcel in a deal worth 8 billion Danish crowns ($1.25 billion). “We have for some time searched for the right way for GN to enter the very interesting gaming market, being keenly interested in the ‘high-end’ segment,” said René Svendsen-Tune, chief executive of GN Audio, the company’s headset unit. Steelseries, which had revenue of 2.2 billion crowns last year, employs about 350 people in offices in Denmark, France, the United States, China and Taiwan. “We are primarily doing it because it’s a growth case. It ensures that GN continues to be a growth company,” Chief Financial Officer Peter Gormsen told Reuters. With immediate effect, GN would pause its current share buyback programme, which was launched in May, the firm said. The cash deal is subject to regulatory approvals and is expected to close early next year.
Travel retailer Hudson has unveiled the next-generation store experience for Brookstone. Hudson acquired the assets related to the operation of Brookstone stores in U.S. airports and also obtained the right to be the exclusive airport retailer to operate Brookstone stores in fall 2019. (Brookstone filed for bankruptcy in 2018 and went on to close its mall stores.) The company has reimagined the Brookstone store experience with a new design that includes sleek, ultra-modern interior, an expanded product assortment and immersive digital elements. Elements of the reimagined Brookstone have been incorporated into locations at Nashville International Airport, Norman Y. Mineta San Jose International Airport, Seattle-Tacoma International Airport (SEA) and the Virgin Hotels Las Vegas. Hudson plans to open new stores featuring the full redesign in the coming months. Hudson currently operates more than 30 standalone Brookstone stores in airports. It also continues to expand the brand into new non-traditional formats, including automated retail and Evolve by Hudson, a new specialty brand experience features shop-in-shops.
Even from the porch of his home in Malibu, toy executive Isaac Larian can’t escape this holiday season’s biggest business challenge. He can see a long line of container ships idle at the Port of Los Angeles, about 70 miles away. Larian, CEO of MGA Entertainment, said the congested port has been a persistent view off the California coast since at least May. As he tries to relax and watch the sunset, it’s a constant reminder of the many toys that have yet to arrive. The delay in unloading the ships could jeopardize whether parents can buy the toys in time to wrap up and tuck under the Christmas tree. If they miss the opportunity, toys could linger on shelves with clearance stickers deep into the winter. He said the company, the maker of LOL Surprise, Rainbow High and Little Tikes, currently has enough inventory to meet around 65% of its outstanding orders. He said MGA Entertainment had anticipated 50% sales growth this year but now expects to grow by 18% to 20%.
Technology & Internet
Thrasio, the top U.S. aggregator of Amazon third-party sellers, was racing to the public markets to fuel its rapid expansion. But the company has delayed its plan to go public through a SPAC amid complications with its financial audits, according to people with knowledge of the matter. Thrasio had eyed completing a reverse merger with a special purpose acquisition company by the end of the year, before changing course over the summer, said the people, who asked not to be named because the plans haven’t been discussed publicly. The company could still pursue a SPAC, but is also considering other financing options, including a traditional IPO, the people said. Bloomberg reported in June that Thrasio was in talks to go public through a merger with a SPAC led by former Citigroup executive Michael Klein at a valuation that could top as much as $10 billion. The auditing process proved more difficult than for a typical e-commerce or tech company, because Thrasio now oversees more than 200 Amazon brands, creating a complex balance sheet, the source said. Daniel Boockvar, Thrasio’s president, confirmed to CNBC on Friday that the company has decided not to pursue a SPAC for the time being, though he said, “We never announced firm plans to go public via SPAC.” “Ultimately, our leadership team and our board looked at the market, which is no surprise, and decided that going public via SPAC is not the right choice at this time,” Boockvar said in an interview. “We’re growing our business amazingly well privately and that’s exactly what we’re going to continue to do.”
The question of whether this round of scandal would do immediate, direct damage to Facebook seemed settled soon after the Senate adjourned its Tuesday hearing. Facebook’s two most important stakeholders — investors and advertisers — didn’t run away after whistleblower Frances Haugen testified that it harms teen girls’ mental health and profits from outrage. They already knew the drill. “This is gonna effectively be a storm that comes through,” Jeffries analyst Brent Thill told CNBC Wednesday morning. “And in past storms, this has been a great buying opportunity.” Facebook scandals tend to run hot and cool down quickly. About once a year, something startling comes out about the social network: A campaign illicitly uses its data to psychologically profile voters; the company lies to advertisers and publishers about crucial metrics; its own researchers find it’s dividing a society it hopes to bring together. Then, after a round of outrage from U.S. lawmakers, everything returns mostly to normal. The scandal moves on like a passing storm.
Facebook has apologized for the mass outage that left billions of users unable to access Facebook, Instagram, WhatsApp and Messenger for several hours last Monday. “To all the people and businesses around the world who depend on us, we are sorry for the inconvenience caused by today’s outage across our platforms,” said Santosh Janardhan, Facebook’s VP of infrastructure, in a blogpost late Monday. The outage, which prevented users from refreshing their feeds or sending messages, was caused by “configuration changes on the backbone routers,” Janardhan said, without specifying exactly what the changes were. The changes caused “issues” that interrupted the flow of traffic between routers in Facebook’s data centers around the world, he added. “This disruption to network traffic had a cascading effect on the way our data centers communicate, bringing our services to a halt,” Janardhan said. Facebook, Instagram and WhatsApp stopped working shortly before noon ET on Monday, when the websites and apps for Facebook’s services were responding with server errors. Just after 7 p.m. ET, around six hours after the platforms went offline, Facebook CEO Mark Zuckerberg wrote on his Facebook page: “Facebook, Instagram, WhatsApp and Messenger are coming back online now.”
Finance & Economy
Over the past couple of months, Allison, a wife and mother of a toddler and teenager in Chicago, says she’s been spending about $50 more each week on groceries to feed her family — and that’s at a discount supermarket chain, Aldi’s. Like millions of Americans whose income has not kept pace with inflation — up 5.3 percent in August compared with a year ago — Allison and her family are feeling the pinch of the rising cost of living and giving up some things just to make ends meet. Spurred by supply shortages and massive government spending, inflation has become an added tax on middle-class Americans coming out of the COVID lockdowns. For households earning the US median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing, according to Mark Zandi, chief economist at Moody’s Analytics.
Companies shook off worries over the Covid delta variant and hired at a faster-than-expected pace in September, according to a report from payroll processing firm ADP. The data comes amid concerns about how fast hiring would grow considering ongoing fears over the delta spread and signs that the brisk economic growth of 2021 was beginning to slow heading into autumn, particularly due to supply chain bottlenecks that have driven inflation sharply higher. The critical leisure and hospitality sector led job creation with 226,000 hires. The category was hit hardest during the pandemic and has struggled to regain traction as it is the most sensitive to the economic reopening.