When you ask the leaders of consumer brands what worries them most today, many will tell you the rising costs of acquiring customers. Customer acquisition cost, or CAC, can relate to any method of acquiring customers and, for omnichannel consumer companies, can include costs associated with stores (depreciated buildout, employee costs and rent), catalog production and mailing costs, wholesale operations expense, traditional and outdoor advertising, events, public relations, influencer marketing, etc. However, CAC’s most common usage relates to the cost of digital or social media marketing where, perhaps due to the ease of measurement, most agree that CAC is growing meaningfully in virtually all consumer categories. Hubspot researcher Michael Redbord, for example, reported that “over the last five years, overall CAC has risen almost 50%”. And leading online trends analyst Mary Meeker labeled the rise in customer acquisition costs “unsustainable” in her 2019 Internet Trends report.
The growth in CAC in 2019 is not only driven by companies’ rising demand for digital marketing, although that is surely part of it. While one might presume that the internet has infinite capacity for marketing messages, the parties that control the most effective supply (Google, Facebook, Amazon) increasingly restrict the amount of advertising made available over their channels. These restrictions are largely for benign reasons. Facebook, for example, has responded to user and regulator criticism in recent years and refined its users’ feeds to drive more relevant content from the primary sources of content on the platform: friends and family (i.e., non-commercial users). Said Hubspot’s Redbord, “Today, social media sites are walled gardens. Algorithms have been rewritten to favor onsite content created specifically for that platform.”
At the same time, low barriers to entry, the rise of globalism (at least prior to 2017) and the ability to reach mass audiences quickly through digital methods has given rise to a new wave of fast-growing consumer brands. Without the burden of legacy infrastructure or old brand connotations, these emerging brands have struck chords with consumer audiences, typically starting with Millennials or Generation Z before migrating to Gen X and Baby Boomer audiences. These brands have modernized consumer products in numerous ways from the use of recycled fabrics, to developing plant-based proteins, to following mission-driven business models. We at Consensus have had the great fortune to know many of these emerging brands as clients, friends or through the Consensus Great Brands Show platform we have hosted for 10 years.
On Cyber Monday (December 2), we look forward to helping a number of emerging brands in our network with the problem of rising CAC. For the first time, we will be sending the approximately 6,000 subscribers to The Weekly Consensus a set of unique promotional offers from many of the up-and-coming brands of our time. For those readers and friends who have not had the chance to try these brands yet, this will present a great opportunity to dive in. For the brands, access to our mailing list of well-heeled consumer industry decision-makers gives them not only an avenue for free customer acquisition – it allows them to access a powerful network of industry influencers including executives of major retailers, leading private equity professionals and the lending community. We are truly excited to introduce our friends to the brands we love.
Headlines of the Week
Old Navy spin-off in doubt after Gap’s Art Peck departs
Shares of Gap fell nearly 10 percent on Friday as the surprise departure of Chief Executive Officer Art Peck and persistent declining sales threw the apparel retailer’s planned spin-off of its Old Navy brand into question. Peck, who joined the company in 2005 and has held the top job since 2015, planned to split Old Navy into a separate public company as he strove to revitalize Gap with the addition of Athleta athleisure wear, provide more online offerings and close unprofitable stores. Old Navy’s spin-off was predicated on its outperformance of Gap’s other brands, but Peck’s departure, after recent poor sales in a flooded market, had Wall Street wondering whether the split could be delayed or abandoned altogether.
Walgreens Boots Alliance reportedly considers going private
Walgreens Boots Alliance Inc. has been exploring whether to go private following private equity interest in the U.S drug store chain, which has a market value of more than $55 billion, according to people familiar with the matter. In recent months, Walgreens has held preliminary discussions with some of the world’s largest private equity firms about putting together what would be the biggest ever leveraged buyout, the sources said. Walgreens has tasked investment bank Evercore Partners Inc with exploring whether a transaction can be put together, the sources said, cautioning that a deal is far from certain. Many private equity firms have pushed back on the idea, concerned about Walgreens’ business prospects and the challenges of financing the deal, the sources added. A leveraged buyout of Walgreens would likely require participation of several private equity firms, each writing large checks, at a time when many of them have lost their appetite for teaming together on so-called club deals. Many of those takeovers were completed during a boom preceding the 2008 financial crisis and subsequently struggled or collapsed.
Apparel & Footwear
Vince Acquires Rebecca Taylor and Parker
Vince just went from a single brand to a portfolio of three. On Tuesday afternoon, the California-based contemporary label announced that it has acquired two brands: Rebecca Taylor, the well-known eponymous New York designer label that used to show at NYFW; and Parker, which is more of a commercial brand with a similarly feminine aesthetic and contemporary price point. Both brands were owned by Sun Capital, which also owns 75% of Vince. Both are distributed largely through wholesale channels like department stores in addition to their own e-commerce sites, while Rebecca Taylor also operates six brick-and-mortar locations. According to Vince, combined net sales for Rebecca Taylor and Parker totaled approximately $84 million last year.
David’s Bridal receives cash lifeline
David’s Bridal Inc. has reached a deal with its lenders that takes a big chunk out of its debt. The bridal and special occasion dress retailer announced that it has received commitments for $55 million of new capital from existing lenders to fund growth investments. In addition, its lenders have agreed to exchange $276 million of David’s debt loans for company stock, which leaves it with a significantly reduced debt outstanding of about $75 million. David’s Bridal filed for Chapter 11 bankruptcy protection in November 2018, challenged with a heavy debt load, increased competition from lower-priced competitors and changing bridal fashions. It emerged in January, after holding true to its promise that its stores and customers would not be disrupted during the process. It did not close any locations during the restructuring. With the new capital, the retailer plans to roll out improved marketing and align its e-commerce pricing with the stores, reported Bloomberg.
Coach-owner Tapestry beats earnings estimates, but Kate Spade sales are still weak
The owner of the Kate Spade and Coach handbag brands on Tuesday reported fiscal first-quarter earnings that beat analyst estimates, but sales fell short due to weakness at Kate Spade. Tapestry also gave a fresh outlook for fiscal 2020: It expects sales to rise at a low-single digit pace and flat earnings per share compared with this year. Excluding $76 million in charges related to a change in how it accounts for leases, Tapestry earned 40 cents per share, 3 cents ahead of analysts’ forecasts. Net sales fell to $1.36 billion from $1.38 billion a year ago, missing expectations for $1.37 billion. Tapestry in September replaced CEO Victor Luis with Chairman Jide Zeitlin. Zeitlin said in a statement Tuesday that Kate Spade’s decline was “in line with expectations, reflecting the product and merchandising challenges … previously identified.” During the quarter, global same-store sales at Kate Spade dropped 16%, while they were up 1% at Coach.
Anne Klein Taps One Jeanswear Group for New Denim Line
WHP Group, the parent company of Anne Klein, announced that it has signed a long-term licensing agreement with One Jeanswear Group to develop and distribute a line of Anne Klein denim, following a September announcement that the brand will be arriving in China this fall. The first collection will launch in Fall 2020 with most retail prices ranging from $69-$89. One Jeanswear Group oversees design, product development and innovation for denim brands Gloria Vanderbilt, Bandolino, Jessica Simpson, Skinnygirl Jeans, Ella Moss, Nine West Jeans, Sanctuary and more. WHP Group acquired Anne Klein in July from former Nine West parent company, Premier Brands Group. Anne Klein currently generates more than $700 million in global retail sales with product distributed by partners including Kasper Group for sportswear, Steve Madden for footwear and handbags, E. Gluck for watches, Herman Kay for outerwear, Komar for loungewear, Marchon for eyewear, and The Jewelry Group for jewelry.
Leather Accessories Company HOBO Receives Growth Capital
Firelight Capital Partners (Firelight), a private equity firm dedicated to accelerating the growth of emerging consumer and retail brands, announced it led an investment in Hobo Bags (Hobo). Firelight led this investment along with its co-investment partner, Satori Capital (Satori), a Texas-based multi-strategy investment firm committed to the principles of conscious capitalism. Based in Annapolis, Maryland, Hobo designs and produces high-quality, branded leather handbags and accessories in the affordable luxury category, offering an array of stylish and “timelessly cool” leather products at accessible price points. Hobo distributes its shoulder bags, totes, wallets, belt bags, backpacks, and small leather goods through major department stores and specialty boutique retailers around the world, as well as through e-commerce channels. InStyle magazine described Hobo’s goods as marrying “excellent quality materials with celebrity-approved style.”
Athletic & Sporting Goods
Peloton spent $47.4 million on a company that makes its bikes, tackling one of its biggest risks
Peloton filed its first quarterly results after becoming a publicly listed company earlier this year. In an accompanying letter to shareholders, the company outlined some of its biggest announcements during the quarter, including a $47.4 million acquisition of one of its bike manufacturing partners in Taiwan. Tonic, which has partnered with Peloton since 2013, is one of Peloton’s two big manufacturing partners. Therefore, this is an important step toward reducing some of the risks associated with being at the mercy of its third-party manufacturing companies.
Sports and entertainment investment firm Bruin Sports Capital has announced a strategic partnership with private equity firms CVC Capital Partners and The Jordan Company. The two firms will contribute a combined $600 million initial investment to Bruin as part of the partnership. Bruin Sports Capital was founded in 2015 by former NASCAR and IMG executive George Pyne. Cleveland Cavaliers owner Dan Gilbert is a partner in Bruin Sports Capital, which acquired sports streaming services provider Deltatre in 2016. Deltatre powers the streaming infrastructure for the NFL’s Game Pass OTT service and its content management system currently supports Major League Baseball’s digital properties.
Cosmetics & Pharmacy
Coty Professional Business Said Attracting Buyer Interest
Coty’s Professional beauty business seems to be attracting buyer interest. “We have launched a strategic preview, and it’s very early days because it was only two weeks ago, but we have received, so far, multiple and strong marks of interest,” Pierre Andre Terisse told WWD in an early-morning interview on Wednesday, after the company released its financial results for the first fiscal quarter. “These assets are extremely valuable and attractive and therefore we’ve seen a lot of interest from different people — I will not comment further,” Terisse said. “This business has been managed well and we have been able to protect and to develop the business.” Coty hired Credit Suisse in October to explore alternatives for the Professional division, with the intention to focus on fragrance and cosmetics. Broadly, for the quarter, Coty’s net sales declined, but earnings were up.
CVS Health’s solid Q3 leads to raised, narrowed guidance
CVS Health’s third quarter delivered solid results that led the company to raise and narrow its earnings guidance for the year. Total revenue for the quarter was $64.8 billion, an increase of 36.5% over the prior-year period, with earnings per share from continuing operations of $1.17. The company attributed the revenue growth primarily to the impact of the Aetna acquisition, alongside increased volume and brand price inflation in its retail/long-term care pharmacy and pharmacy services segments. The quarter also saw operating income increase 13.8% from the prior year, with net income increasing 10% during the quarter, which ended Sept. 30.
Discounters & Department Stores
Kohl’s lets Snapchatters virtually window shop through AR portal
Department store chain Kohl’s is promoting exclusive holiday merchandise in its first augmented reality (AR) window-shopping experience on Snapchat. Kohl’s “New Gifts at Every Turn” mobile experience gives the illusion of stepping through a computer-generated portal into a virtual store, where users can buy real products, per an announcement shared with sister publication Mobile Marketer. The virtual store can be found in Snapchat’s carousel of AR Lenses, which lets users decorate selfies and pictures with digital images before sharing them with friends. The virtual doorway and store use Snapchat’s AR Portal Lens technology to provide a more immersive experience for mobile shoppers.
Walmart overtaking Amazon? Not so fast
Purchase frequency and even Prime membership at Amazon is declining, while Walmart is on the rise, according to a consumer study from retail analytics firm First Insight emailed to Retail Dive. In 2017, 80% of consumers shopped Amazon six or more times each month, but that has declined, to 49% last year and 40% this year, according to the report. Meanwhile, those shopping at Amazon twice a month or less has risen from 11% in 2017 to 33% last year and 39% this year. Walmart is on the opposite trajectory, with the percentage of those making more than four trips there each month edging up from 58% in 2018 to 63% in 2019. And the study suggests that Walmart (stores, website or both) has become a preference over Amazon for a majority of U.S. shoppers.
Kohl’s, Macy’s turn to pop-up shops and Instagram-worthy displays to try to win the holidays
This weekend you can visit Kohl’s first pop-up shop in New York and snap a virtual photo with fashion designer Vera Wang on the runway. Or you can pop into Macy’s at Herald Square and stroll through Story – a space the department store chain has transformed to make shoppers feel like they’re in some sort of mashup between a winter wonderland and cozy ski lodge. Both retailers know the 2019 holiday season won’t be an easy one to win. Especially given there are six fewer days in between Thanksgiving and Christmas this year compared with 2018.
Dillard’s Is Struggling — So Why Does It Keep Opening New Stores?
It’s no secret that department stores have been struggling to adapt to falling mall traffic and growing competition from off-price and pure e-commerce competitors. Two major department store operators filed for bankruptcy last year: Bon-Ton and Sears Holdings. Several others have closed lots of stores over the past few years. Dillard’s certainly hasn’t been immune to the recent pressure on the department store sector. Nevertheless, the regional chain has continued to open new stores at a slow but steady pace.
Emerging Consumer Companies
Eight Sleep raises $40 million
Eight Sleep, the New York based “sleep fitness company” founded in 2014, announced a $40 million investment round. The round was led by Founders Fund, with participation from Khosla Ventures, Y Combinator, Craft Ventures, and 8VC, and brings the company’s total funding to $65 million. Eight Sleep makes technology-enhanced mattresses and sleep products to turn sleep time into recovery periods.
Senreve, the San Francisco-based handbag and accessories business, announced that it raised $16.75 million in Series A funding, bringing the total capital raised to more than $23 million in three years. The investment round was led by Norwest Partners. Senreve products are made in Florence, Italy, and are shipped to more than 200 countries. The capital will be used to fund brand awareness, partnerships, and brick and mortal retail.
Mirror, the New York-based brand behind the interactive workout mirror, announced that it had raised $34 million in a new round of funding led by the hedge fund Point72, with participation from Lululemon, Karlie Kloss, and earlier investors Spark Capital and Lerer Hippeau. The company also announced that it would be partnering with Lululemon to offer new Mirror X Lululemon classes on the platform.
Grocery & Restaurants
Outback parent Bloomin’ considers sale
Bloomin’ Brands Inc is considering “strategic alternatives” including a possible sale, the Company said in a release announcing its third-quarter earnings. “We believe the current stock price does not reflect the value of the Company. That is why the time is right to explore strategic alternatives that have the potential to maximize value for our shareholders. Our Board of Directors is committed to fully evaluating appropriate strategic alternatives while simultaneously supporting the Company’s ongoing progress against our business plan.”
Brentwood buys majority stake in Chicken Salad Chick parent
The Brentwood Associates private-equity firm has acquired a majority interest in SSRG Holdings LLC, owner of the Chicken Salad Chick brand, the companies said. Los Angeles-based Brentwood and Atlanta-based Eagle Merchant Partners said terms of the deal were confidential. Fast-casual Chicken Salad Chick has 137 locations in 16 states, mostly in the Southeast. Eagle Merchant Partners made an investment in the company in 2015. Brentwood holds investments in such foodservice brands as Blaze Pizza, Lazy Dog Restaurant & Bar, Pacific Catch Westcoast Fish House and Veggie Grill.
The story behind Coca-Cola’s ‘first new major brand’ in 10 years
In 2020, The Coca-Cola Co. is slated to launch what the company calls its “first new major brand” in a decade. Coca-Cola North America is introducing AHA, a new sparkling water brand that comes in eight flavor fusions and is both calorie- and sodium-free. The development process that brought AHA from concept to prototype in six months was formed by extensive research and consumer insights, Coca-Cola said.
ICV Partners to buy Diversified Restaurant Holdings
Private equity firm ICV Partners has agreed to buy Diversified Restaurant Holdings, which operates 64 Buffalo Wild Wings restaurants across five states, DRH said Wednesday. ICV Partners LLC and its affiliates are purchasing the franchisee in an all-cash transaction valued at approximately $130 million. This is ICV’s first investment in a restaurant, according to its web site, although in the past it has invested in food and ingredient companies. With 64 restaurants in Fla., Ill, Ind., Mo., and Mich., DRH operates more than 10% of Buffalo Wild Wings’ roughly 590 franchised units. It’s owned by Inspire Brands, which is majority owned by affiliates of Atlanta-based Roark Capital.
Home & Road
Ethan Allen sales off 7.4% in fiscal Q1
A drop in net sales during its fiscal 2020 first quarter didn’t keep Ethan Allen from recording a big jump at the bottom line. The vertically integrated home furnishings retailer and manufacturer reported net sales of $173.9 million for its first quarter ended Sept. 30, a 7.4% decrease compared with last year’s first fiscal quarter. Sales were impacted by a $4.7 million decrease in consolidated international net sales, primarily from lower sales to China and in Canada related to trade disputes and a challenging global economy. Despite the sales dip, Ethan Allen chalked up a 59.6% increase in net income to $14.1 million of fiscal 2020 first quarter, 53 cents per diluted share. The gain on the sale of the company’s Passaic, N.J., property partially offset with other fiscal 2020 restructuring activities and corporate actions increased diluted EPS by 18 cents. Adjusted diluted EPS of 35 cents in the current year first quarter represents 6.1% of growth over the prior year first quarter and was driven by improved gross margin and cost containment efforts.
Aaron’s posted a 1.1% increase in third quarter revenues and a 9% drop in net earnings as growth in its Progressive Leasing business continued to fuel results. The rent-to-own giant missed analysts’ revenues and adjusted earnings-per-share estimates. It adjusted down its guidance for the full year. The stock was trading off more than 15% Tuesday morning, or down more than $11 to about $62.51 per share. Consolidated revenues for the period ended Sept. 30, were $963.8 million, up from $953.1 million for the same period a year ago. Calculated based on a lease accounting rule adopted this year, revenue increased $75 million, or 8.4%, from the year-ago quarter, the company said. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were up 5.6% to $87.1 million from $82.5 million for the same period in 2018. Adjusted earnings per share were 73 cents compared with 69 cents a year ago.
Purple Innovation posts 66% revenue increase in Q3
Purple Innovation, a comfort technology company in the bedding industry, posted a fiscal net revenue gain of $117.4 million for third quarter ending on Sept. 30, which is a 65.8% increase over the $70.8 million revenue gain in the prior-year third quarter. The company reported gross profit of $52.9 million compared with $28.1 million in the third quarter of 2018. Purple’s operating income was $11 million for the current quarter compared with an operating loss of $3.4 million for the prior-year third quarter. Adjusted operating income was $14.4 million compared with an adjusted operating loss of $3.3 million in the third quarter of 2018. Because of its strong third-quarter growth, Purple has adjusted its expected revenue for the year to be near the high end of the range of $400 million to $425 million.
Berkshire Hathaway’s furniture business flat in Q3
Berkshire Hathaway’s retailing business segment posted a 5.3% gain in third quarter revenues and a 2.2% increase in pre-tax earnings, but sales in its home furnishing segment were flat for the quarter, and pre-tax profit in the industry segment decreased in the first nine months. Retailing group revenues increased to $4.04 billion in the quarter ended Sept. 30, from $3.83 billion for the same period a year ago. Pre-tax earnings for the segment increased to $188 million from $184 million. The Omaha, Neb.-based conglomerate’s retailing business includes results from the four companies included in Furniture Today’s Top 100 as Berkshire Hathaway furniture division — Nebraska Furniture Mart (including the Homemakers operation), R.C. Willey, Star Furniture and Jordan’s.
Jewelry & Luxury
Tiffany Wants LVMH to Up Its Offer, Says Report
Tiffany & Co. has told luxury conglomerate LVMH that it will need to boost its $14.5 billion acquisition offer if it wants the famed retailer to become the latest jewel in its crown, Reuters reported on November 7th. Despite past Tiffany executives’ resistance to takeovers, Tiffany’s board of directors is apparently ready to make a deal, provided the price is right, said the report, which quoted anonymous sources. “Tiffany informed LVMH it could open its books and provide confidential due diligence if the French luxury group sweetens its offer,” said the report.
Bailey Banks & Biddle Files for Bankruptcy
On Nov. 6, BBB Group, the parent company of Bailey Banks & Biddle—one of the industry’s oldest and most revered names—filed for Chapter 11 in U.S. bankruptcy court in the Southern District of Texas. At press time, the company has filed only a bankruptcy petition, which estimates assets and liabilities as less than $50,000. The store’s website currently lists one Bailey store still operating, in Houston’s Town & Country Village.
Pandora Sees Comeback, Even as Its Sales Still Fall
Pandora is saying that it has turned the corner—though some may find that hard to believe from its third-quarter financial results. Revenue for the quarter fell 11% to DKK 4.42 billion (about $654 million), with the company posting a DKK 119 million ($17.6 million) net loss. U.S. sales for the period declined 18% in dollar terms, with concept-store comps tumbling 9%. Pandora attributed this to fewer promotions.
Office & Leisure
Party City has become its own party pooper: the stock slumped 67% on Thursday to its all-time low of $2 a share after the largest U.S. specialty party-supplies chain posted an unexpected third-quarter loss and cut its annual outlook. The Elmsford, New York-based company reported a 2.3% drop in sales to $540.2 million, hurt by “headwinds from the helium shortage” that dented its balloons sales. Party City, which in September said it was adding about 25,000 temporary employees for its critical Halloween business, also blamed the costumes business shortfall at its stores. Party City has about 900 stores in North America under its namesake label and Halloween City. The company has said it plans to shut 45 stores this year, triple its typical annual target. While it’s easy to blame helium shortage, cost inflation or industrywide slowdown in Halloween sales, Party City’s woes go way beyond those or the U.S.-China tariffs war. At the crux of it, it’s struggling, like many traditional specialty brick-and-mortar retailers, to prove its stores are relevant at a time when consumers have more choices than ever, online and elsewhere.
Papyrus considers store closures as it negotiates with landlords
Stationery retailer Papyrus is working to win rent concessions from landlords and could close some stores. The retailer’s owner, Schurman Retail Group, did not immediately respond to comment. The retailer, which last said on its website it had more than 260 stores, has hired A&G Realty as it looks to negotiate with its landlords. Led by Dominique Schurman, Schurman Retail positions itself as a leading retailer of gift and “personal expression” products, with a heavy emphasis on good, old-fashioned paper. The company acquired the American Greetings and Carlton retail banners from American Greetings Corporation for $6 million plus equity in 2009, which was part of a deal that also entailed Schurman to sell its wholesale business to American Greetings. American Greetings Corporation — which last year was acquired by private equity firm Clayton, Dubilier & Rice — today makes Papyrus and the other brands that fill Schurman’s retail stores.
Office Depot to close 90 stores
Boca Raton-based Office Depot announced this week it would close 90 more stores as it shifts its focus to business-to-business transactions. In its latest earnings announcement covering the third quarter of 2019, the office supplies retailer also said it had closed an additional 55 stores in the past 12 months. The locations of the new store closures were not announced. Representatives for the company did not immediately respond to additional request for comment. Office Depot also owns Office Max, which was acquired in 2013. Office Max outlets will be included among the closures, the company said. The average store footprint is about 22,000 square feet. Current nationwide store count stands at more than 1,300. After hitting a high of nearly $44 in 2006, Office Depot’s share price has sunk to about $2.50. The company remains worth more than $1 billion based on number of shares floated.
Technology & Internet
Alibaba buys a $3.3 billion stake in logistics giant Cainiao
Alibaba Group Holding Ltd. will spend $3.3 billion to raise its stake in Cainiao, in an effort to exert more control over the logistics subsidiary that underpins its sprawling ecommerce empire. The Hangzhou-based company will lift its stake in Cainiao to 63% from 51% by subscribing for newly issued shares in its latest financing round and buying existing stock from another holder, the company said on Friday. Six-year-old Cainiao is the rapidly growing business that sits at the heart of Alibaba’s expansion—both in China and abroad. It oversees a coterie of at least a dozen shipping partners, orchestrating deliveries carried out by millions of people across the country. The increased stake could help Alibaba expand deeper into the business of setting up and controlling its own infrastructure, much like Amazon.com.
Online personalization vendor Coveo gets $227 million
Coveo Solutions Inc. is out to set itself apart as a provider of technology embedded with artificial intelligence designed to better match what buyers intend to purchase with the best offerings from online sellers. Coveo, chief marketing officer Mark Floisand said in an interview today, takes a three-pronged approach to accomplish that: making a seller’s product catalog better organized and discoverable by customers searching for particular products; understanding the purchasing intent of buyers; and using artificial intelligence and machine-learning technology to better match buyer intent with what a seller has to offer. Founded in 2011, Coveo has won the backing of investors, with its most recent funding coming in at $227 million for a 15.5% stake in the company. The funding announced today, from OMERS Growth Equity and other investors, including Evergreen Coast Capital, FSTQ and IQ, brings Coveo’s funding to date to $339.8 million.
Finance & Economy
China says it has agreed with U.S. to cancel tariffs in phases
China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war, the Chinese commerce ministry said, without specifying a timetable. An interim U.S.-China trade deal is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys. Tariff cancellation was an important condition for any agreement, ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other’s goods to reach a “phase one” trade deal.
US productivity drops by most since the fourth quarter of 2015
American workers were unexpectedly less productive during the third quarter, with growth in their output failing to keep up with hours worked. The Labor Department said nonfarm productivity, which measures hourly output per worker, fell at a 0.3% annualized rate between July and September, the biggest decline in almost four years. The last drop that was sharper was in the fourth quarter of 2015. The decline might set back the prospects of a pick-up expected by some economists in the trend growth rate for productivity following 2017 tax law changes partially aimed at fostering investment.
