Coach tries LVMH model on for size with shoe buy 6 Jan 2015 The U.S. leather-goods purveyor is paying $574 mln for Stuart Weitzman, the first acquisition since its 1941 founding. While this looks like an admission its core brand has maxed out, Coach is betting it can use its know-how to expand other marques like LVMH and Kering have.
Guest view: Banks need to lead on cultural change 6 Jan 2015 While lenders have boosted capital, reduced leverage and added liquidity, they have not shown the same commitment to adjusting their core behaviors, including their risk cultures, argues former Citigroup executive and author William Rhodes.
Animal spirits and crisis ghosts will shape 2015 5 Jan 2015 Breakingviews’ annual compendium of financial and economic predictions for the year ahead is out. From the UK election to IBM via the global economy and geopolitics, our columnists offer insightful, entertaining, provocative and – we hope – profitable ideas for the year ahead.
Detroit’s Vegas bet signals wider industry shift 5 Jan 2015 A record 10 carmakers are at the Consumer Electronics Show as gadgetry from connectivity to self-driving shifts into high gear. Regular car shindigs like Detroit’s are bigger. But the stakes in Vegas are higher as tech giants like Google threaten to upend the automotive future.
A double-speak guide to modern markets 5 Jan 2015 As the market perpetually shifts, so do the rhetorical stylings its players use to talk their way out of problems. The past year saw above-average creativity when it came to saying one thing and meaning another. Breakingviews offers up 10 euphemisms we’d like to see disappear.
Water woes could open taps on corporate risk 5 Jan 2015 Two-thirds of the world’s biggest companies are worried about access to water. But few are well prepared for problems. That should change as ways to track and address concerns grow. And if bosses don’t take the initiative, activist investors may force them to.
Euro carries buy-the-fact upside 5 Jan 2015 The single currency keeps weakening and the dollar keeps strengthening. The market’s thinking is monetary: America tightens while others loosen, and trade or cheap oil don’t matter. But when euro QE turns from talk to reality, the euro/dollar divergence could unwind.
Crude slump will stoke European oil and gas M&A 2 Jan 2015 The sharp drop in the price of Brent might make it harder to get deals done in the short term. But if the downturn persists, financial distress will put some small players in play. Larger, more defensive mergers, designed to create value by sharing costs, are also possible.
Oil glut cracks foundation of U.S. export ban 2 Jan 2015 Cheap gasoline could make lawmakers consider loosening the 40-year-old prohibition on crude exports. Plentiful oil may also force a rethink of ethanol and natural gas policies. Help for domestic producers smarting from low prices could even bring a rare show of Washington unity.
Review: Two centuries of trust, frauds and finance 2 Jan 2015 Ian Klaus’ entertaining account of 19th century financial deceptions carries a serious lesson. As financial markets became more sophisticated, trust had to be built on stronger and more objective supports. The implication: honesty can always win out, but not without hard work.
IBM turnaround requires atypical activist fix 31 Dec 2014 Big Blue’s strategy of cost cuts and debt-fueled buybacks is no longer working – but the tech giant keeps trying. A tarnished balance sheet, lean staffing and a history of disposals rule out typical activist wheezes. Prodding the company to invest in its business could pay off.
Vienna offers a model for stable foreign policy 31 Dec 2014 The 1815 Congress of Vienna ended the Napoleonic Wars, and its participants worked together over the next decade to prevent destabilizing regime change. This principle could have reversed many bad intervention decisions over the last 40 years. Its lessons are worth studying.
Goldman/Espirito Santo mess raises valid question 31 Dec 2014 The U.S. bank may take a hit after a loan to failed lender Espirito Santo was moved by Portugal’s regulator into BES’ bad bank. Goldman has fallen foul of Portuguese law, and its own complex business. The fiasco highlights the need for greater clarity over bank resolution.
Banks will make asset managers pay for regulation 31 Dec 2014 Persistently low returns are spurring investment banks to re-price products like repo financing and prime broking. In 2015, expect firms to get serious about passing on the pain of capital and liquidity rules. Higher costs could in turn force some money managers to consolidate.
What we wrote – and you read – in 2014 31 Dec 2014 Some of the most-read views covered the Harvard endowment, the pope’s economics and China’s hunger for property. Corporate topics included Morgan Stanley, Espirito Santo, Alibaba and Facebook. First prize, though, went to a piece on how Breakingviews picked a World Cup winner.
Shake Shack IPO disappoints in taste test 30 Dec 2014 Celebrity restaurateur Danny Meyer’s global chain of burger joints is serving up some of the uncommon fixings found in new tech stocks. Two classes of shares and creative financial metrics are unappetizing. At least the bottom line offers a sweet refreshment to wash it all down.
Accounting fraud is ripe for fresh scrutiny 30 Dec 2014 Dodgy numbers will replace insider trading as U.S. watchdogs’ preferred prey in 2015. New auditing and analytics arms give the SEC a head start, even if SarbOx reforms make cases harder to track down. With the likes of SAC chastened, it makes sense to refocus on the next Enron.
Bad ideas catching up with Latin America in 2015 29 Dec 2014 For four years, the region has mostly lagged world economic growth. The IMF predicts another year of the same. While Pacific-oriented countries will shine, Brazil, Argentina and Venezuela will suffer. With a couple of exceptions, misguided policies are coming home to roost.
M&A spin doctors could get swept up in the action 29 Dec 2014 Financial PR specialists have been buoyed by the boom in mergers and activist investing. History suggests independent outfits like Joele Frank or Brunswick may be tempted to find an investor or bigger owner. They should at least have enough deal nous to know when to sell.
U.S. housing demand is building 26 Dec 2014 The post-crisis rebound boosted home prices 25 pct even as sales and construction lagged. Increasing household formation, job creation and easing credit look set to give the market another leg up, despite rising interest rates and the headwind of sliding affordability.