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Consumer Products and Services

Peter Thiel-tied fund fights China fire with fire

24 Jun 2022

A nonprofit fund backed by Silicon Valley bigwigs wants to invest in tech that serves national interests. It raises conflicts, security issues, and takes a page from Beijing's playbook. But given China’s market meddling, it’s not a horrible solution.

Too bad Netflix isn’t on the block

23 Jun 2022

Boss Ted Sarandos is exploring an advertising partnership to supplement the $80 bln firm’s subscription service. Yet media alliances – Netflix, Hulu, others – have turned ugly. Netflix’s valuation has fallen steeply, and it needs deep cash coffers. A better idea would be a sale.

Capital Calls: SoftBank Arm-twisting

22 Jun 2022

Concise views on global finance: The UK government may be eyeing desperate measures to keep SoftBank-owned chip group Arm's IPO in London.

China slowdown prompts healthy luxury rethink

21 Jun 2022

Brands like Gucci and Louis Vuitton have made a killing in China's $63 bln market. Yet Beijing's Covid-19 policies and rising nationalism among young shoppers show the perils of being overdependent on one consumer group. A pivot into the United States and the Gulf offers a hedge.

Battered online retailers need new fashion model

16 Jun 2022

Shares in ASOS and Zalando are in full-on retreat as cash-strapped consumers send back unwanted clothes. Scrapping free returns, as 69 bln euro Inditex has done, will cut costs but also dent sales. But with inflation squeezing disposable spending, a radical rethink is required.

Plant-based food stocks lack sustainable finance

10 Jun 2022

Shares in faux-milk maker Oatly and plant-based burger purveyor Beyond Meat have tumbled this year. Despite flimsy gross margins, both still trade at a premium to bigger food rivals. Without a plan to cut costs, they will struggle to attract buyers or survive on their own.

Coty’s revamp merits “lipstick effect” boost

10 Jun 2022

As so-called “affordable treats”, sales of top-end makeup and perfume tend to hold up in tough economic times. L’Oréal and Estée Lauder already have that luxury factor priced in. But $6 bln Coty trades at a puffy discount, leaving more to gain from its pivot to premium.

Cricket rights will bowl India Inc a new line-up

10 Jun 2022

A third of teams in the sport’s premier league fit poorly with owners like Diageo. One, Reliance, wants the broadcast rights too. CVC’s entry into the club creates more uncanny parallels to a changing corporate India. The outcome of the $6 bln TV auction may spur a clean-up.

Apple pay-later foray blurs tech-finance boundary

9 Jun 2022

The $2.4 trln iPhone maker will use its balance sheet and data on user spending to offer short-term instalment loans. Fear of regulation and humdrum returns have largely kept big U.S. tech firms out of the lending business. Banks will be watching with interest – and trepidation.

GSK castoff starts life with target on its back

9 Jun 2022

GlaxoSmithKline is floating its personal health unit, worth perhaps $53 bln. After listing, it will have two large shareholders keen to sell and lots of debt, while facing a tough consumer backdrop. A suitor would be harder to fend off than the recent botched bid by Unilever.

Boots deal will add to Reliance’s retail black box

9 Jun 2022

The Indian conglomerate submitted a binding bid for Walgreens’ UK pharmacy chain in a consortium with Apollo. It’s a big pivot for Mukesh Ambani. Opacity around his retail expansion and a determination to win at all costs are a worry. Bulking up will make things worse.

Starbucks has talked itself into a China corner

8 Jun 2022

The $91 bln coffee maker’s “second home market” routinely disappoints, and lockdowns aren’t helping. At this point, it’s not obvious a spinoff would create value. The better path would be to slow expansion and focus on profit, but it’d be a tough move after overselling growth.

Target joins the growing bad forecasters’ club

7 Jun 2022

The U.S. retailer should be an expert in what shoppers want. Instead, it’s saddled with an excess of unsold goods, as is rival Walmart. They’re not alone: Banks also misjudged customers’ behavior. But it’s better to be stuck with too much cash than unwanted TVs and toasters.

Tech giants pick odd time for ad break

1 Jun 2022

Netflix, Sony and others are mulling commercials in shows and games. Given how ad spending gets hit in a downturn, the timing looks curious unless it offsets hard-up consumers cancelling subscriptions. The big winners are the ad-tech firms like Trade Desk making it happen.

Capital Calls: Peltz bolsters Unilever’s M&A cred

31 May 2022

Concise views on global finance: The U.S. investor’s seat on the board should help CEO Alan Jope sell deals to investors.

DSM stocks up on ingredients trend with Swiss deal

31 May 2022

The $29 bln Dutch producer of food supplements is swallowing family-owned Firmenich for shares and 3.5 bln euros in cash. That boosts its appeal with consumer groups seeking to manipulate taste, smell and texture. By making concessions on governance, DSM has got a decent price.

Capital Calls: Twitter snubs investors

27 May 2022

Concise views on global finance: The social media platform refused to accept the resignation of director Egon Durban, one more check for bad corporate governance. But it’s not like investors have held the company to a high standard.

Consumers are the next transitory guessing game

27 May 2022

Central bankers and investors spent months debating whether inflation was here to stay. Now that mystery applies to the financial state of Americans, who are glum about the economy but still spending. It’s a problem for the Fed, but consumers might just have staying power.

Icahn squanders golden chance to shape McDonald’s

25 May 2022

The activist’s campaign to shake up the chain’s board with two directors over claims of the mistreatment of pregnant pigs is likely to fail. ESG issues can usher in change as Exxon can attest. But Icahn’s focus is too narrow, and McDonald’s board – and business – could use help.