B&G Foods said Thursday it would drop an image of a black chef from the packaging of its Cream of Wheat cereal mix, the latest company to make changes to branding widely considered as racially insensitive. Companies including Mars and PepsiCo are changing names and branding of some of their products that are rooted in racist imagery amid a wider national debate over racial inequality in the United States. “For years, the image of an African-American chef appeared on our Cream of Wheat packaging. While research indicates the image may be based upon an actual Chicago chef named Frank White, it reminds some consumers of earlier depictions they find offensive,” B&G Foods said in a statement. The condiments and sauce maker is expected to roll out new packaging in the first quarter of 2021, it said. On Wednesday, Mars said it was changing the name and branding of its Uncle Ben’s rice products, while PepsiCo said in June that it would rename and change the brand image of its Aunt Jemima pancake mix and syrup.
“ROCK AND roller cola wars, I can’t take it any more!” cried Billy Joel in his chart-topping song from 1989, “We didn’t start the fire”. He had had enough of the intense marketing battle between America’s fizzy-drinks behemoths. As the underdog, PepsiCo had stunned its bigger rival, Coca-Cola, by signing Michael Jackson, the era’s biggest musical star, to promote its brand in a record-setting $5m deal. The cola wars became a cultural phenomenon. Credit for that goes to Donald Kendall, PepsiCo’s legendary former boss, who died on September 19th aged 99. A gifted salesman, he rose quickly through the ranks from his start on the bottling line to become the firm’s top sales and marketing executive at the tender age of 35. Seven years later he was named CEO. In 1974 he injected a dose of fizzy capitalism into the Soviet Union, which allowed Pepsi to become the first Western product to be legally sold behind the iron curtain. By the time he stepped down as boss in 1986, PepsiCo’s sales had shot up nearly 40-fold, to $7.6bn. His legacy continues to shape the industry. Mr Kendall offered a mix of strategic vision, principled leadership and marketing flair. Two
Bankrupt off-price retailer Century 21 plans to lay off hundreds of workers when its 13 stores close for good in the coming weeks, records show. The beloved chain, which carried high-end brands at bargain prices, will shut its New York, Pennsylvania and Florida stores by Nov. 22 after the coronavirus pandemic forced it into bankruptcy earlier this month, according to notices filed with state labor officials. The closures will eventually put 855 employees in those three states out of work, including 599 at five Big Apple stores and the corporate headquarters on Cortlandt Street, records show. The notices indicate that some staffers were cut on Sept. 11, the day after Century 21’s bankruptcy filing. The chain’s Lincoln Square location at Broadway and West 66th Street will close to the public on or about Oct. 5, more than a month before the rest of the city’s stores, and its workers will be axed roughly four days later, one notice says. It’s unclear how many workers will be affected when Century 21’s New Jersey stores are shuttered. Labor agencies in those states had not published any layoff notices from the company as of Thursday afternoon. Century 21 did not immediately respond to a request for comment. Century 21 has started going-out-of-business sales at its shops, which are popular among fashion-conscious shoppers seeking cut-price designer clothes, shoes and accessories. The company blamed its bankruptcy on insurance companies’ failure to pay up as COVID-19 forced its stores to close. Century 21 has about 1,215 retail and distribution workers and some 175 corporate staff, it said in a court filing. The pandemic-induced store closures forced the company to furlough nearly all the retail employees and half the corporate staff, though many workers have returned to their jobs as stores reopened, according to the filing.
"Inaction speaks louder than words," Morgan Stanley strategists wrote in a report. They no longer expect Congress to approve a meaningful stimulus package before the end of the year as part of its base case. But stocks recovered from their early losses after a report showed that sales of new homes accelerated last month, contrary to economists' expectations for a slight slowdown. Homebuilder shares were broadly higher. The market's gains were widespread, though technology stocks powered much of the turnaround. Trading has been erratic on Wall Street this month, resulting in a sharp pullback for stocks. Several reasons are behind the abrupt tumble, highlighted by worries that stocks simply grew too expensive following their record-setting run through the spring and summer. Among other concerns weighing on markets are the upcoming US elections, particularly after President Donald Trump's refusal Wednesday to commit to a peaceful transition of power if he lost, and rising tensions between the United States and China. Layered on top of it all is the still-raging coronavirus pandemic and the threat that worsening counts around the world could lead to more business restrictions. It’s a stark shift from late March into early this month, when
INVESTOR WEBINARS are not generally mass entertainment. But some 25,000 people tuned in this month when BP outlined plans to transform its business. Top on the British oil-and-gas giant’s to-do list is raising its wind, solar and biopower capacity from 2.5 gigawatts (GW) last year to 20GW by 2025 and 50GW by 2030, when annual investment in low-carbon energy will reach $5bn or so. BP hopes to become a new kind of energy major. It is not alone. European electric utilities have lately emerged as the world’s top developers of wind and solar projects outside China (see chart). These offer growth and, in an era of ultra-low interest rates, stable returns thanks to long-term contracts. Concern about climate change means that big, risky drilling projects must offer higher returns to lure investors. Michele Della Vigna of Goldman Sachs, a bank, estimates that the divergent cost of capital for oil and renewables investments implies a price of up to $80 a tonne of carbon dioxide, well above the global average of around $3. As share prices of oil giants such as ExxonMobil have tanked amid the pandemic slump in demand for crude, those of electricity majors, such as Spain’s Iberdrola,
The former boss of Cambridge Analytica, the political consulting firm brought down by a scandal over how it obtained Facebook users’ private data, has been banned from holding company directorships for seven years. Britain’s Insolvency Service said Thursday that Alexander Nix is banned from running companies after he permitted Cambridge Analytica’s parent firm, SCL Elections, and connected firms to “market themselves as offering potentially unethical services to prospective clients.” UK-based Cambridge Analytica was accused of playing a key role in the 2014 breach of 87 million Facebook users’ personal data. The company denied it used the data for Trump’s 2016 election campaign, but some former employees have disputed that. Facebook CEO Mark Zuckerberg has said that it was “entirely possible” the social media data ended up being used in Russian propaganda efforts. Cambridge Analytica and other connected firms under Nix’s leadership filed for bankruptcy in 2018. A statement from the Insolvency Service said Thursday that investigators’ inquiries confirmed that “SCL Elections had repeatedly offered shady political services to potential clients over a number of years.” “The unethical services offered by the companies included bribery or honey trap stings, voter disengagement campaigns, obtaining information to discredit political opponents and spreading information anonymously in political campaigns,” the statement said. “Alexander Nix’s actions did not meet the appropriate standard for a company director and his disqualification from managing limited companies for a significant amount of time is justified in the public interest,” said chief investigator Mark Bruce.
IF YOU WANT to understand the agreement between TikTok, a Chinese-owned video-sharing service, and Oracle, which sells corporate software (see article), it is useful to think of Schrödinger’s cat. Like the hypothetical feline of quantum mechanics, simultaneously alive and dead, the deal seems to be in two states at once—one hunky-dory to Beijing but fatally flawed to Washington, the other vice versa. Take the question of who owns TikTok Global, the new company to be spun out of ByteDance, TikTok’s Chinese owner, to give the data of American users a secure home in America. ByteDance insists that it will hold 80% of the new entity. The Americans say they will control a majority stake. Oracle and Walmart, a supermarket titan which has joined in, will own only 20% of TikTik Global between them. But American venture-capitalists already own 41% of ByteDance. Apply the right maths and both the Chinese parent and the Americans own more than 50% of TikTok Global, which the deal values at $60bn and which is supposed to go public within a year. What about TikTok’s technology? Beijing says that ByteDance’s eerily accurate recommendation engine is not for export. Security hawks in America want to ensure
Companies that cater to the “new normal” of working and shopping from home are rushing to go public. 2020 could turn out to be the best year for the IPO market in two decades. Newly public companies have piggybacked on the broader stock market, which made a soaring recovery in spring and summer after COVID-19 and the ensuing lockdowns derailed the longest bull run in history. As investors shifted their focus to equities, private companies searching for funding took notice. “A lot of companies sitting on the sidelines waiting to go public really used this as an opportunity,” said Lindsey Bell, chief investment strategist at Ally Invest. Through August, 143 companies went public and brought in more than $50.4 billion in proceeds, the most since 2014. Ally Invest projects up to 206 companies could go public by the end of the year, with proceeds from IPOs hitting $72 billion. Technology companies have been well represented in the IPO market this year, especially companies that are positioned to take advantage of the shift to working and shopping from home. Snowflake, a cloud-based data company, saw its stock value double from its initial price, making it worth more than $70 billion in its debut. The company is backed by Salesforce and Berkshire Hathaway. Software company Sumo Logic gained 22 percent in its debut. Internet-based insurer Lemonade also saw its stock value double in its debut in July. “The fundamentals really are there for these types of companies to do well and to do well without significant economic growth,” Bell said. Still, it’s difficult to determine which IPOs will be booms or busts, Bell said. Investors have to really think about the risks and be prepared for a long-term relationship with the company, rather than trade on its ups and downs. About half of US-based stocks that went public from 2015 to 2019 were trading below their IPO prices a year later, Bell said. Those stocks include well-known companies like Uber, Fitbit and Blue Apron. The IPO market will likely remain strong, Bell said, “as long as the market behaves.” The broader market has pulled back in September as the economic recovery slows down. Investors are facing a wide range of uncertainties, including the lingering virus pandemic and political squabbling about additional financial aid, as well as the upcoming presidential election. “Reality is sinking in for a lot of investors,” Bell said. “We’ve come so far so fast.”
Nikola’s stock price plummeted Thursday after its potential fuel partners reportedly hit the brakes on negotiations with the beleaguered electric-truck startup. Shares in Phoenix-based Nikola tumbled as much as 23.6 percent following a Wall Street Journal report that its talks with BP and other firms had stalled after investment firm Hindenburg Research accused the company of fraud. The hiccup in Nikola’s efforts to build hydrogen refueling stations for its vehicles marked the first concrete sign that the allegations against founder Trevor Milton were hindering the company’s ability to build its business, the paper reported Wednesday. Thursday’s plunge also came after Wedbush Securities analyst Daniel Ives gave Nikola an “underperform” rating and predicted the share price would fall to $15. Ives argued the fraud claims “will be a dark cloud over the stock until answered” and that Milton’s sudden exit this week will make it harder for Nikola to fulfill its long-term ambitions. “Despite the controversy and noise surrounding Milton, he was the visionary, architect and internal/external force driving Nikola for the coming years and we believe he leaves a huge void that is hard to replace,” Ives wrote in a Wednesday evening note. Nikola has been on a wild ride over the last two weeks. The fledgling automaker rolled out a $2 billion partnership with General Motors on Sept. 8 that sent its share price up more than 40 percent in a single day. But Hindenburg released a report two days later accusing Milton of lying about Nikola’s technology. Milton abruptly resigned from the company’s board Monday with a separation deal that left him with 91.6 million shares worth about $1.9 billion at Wednesday’s closing price. He also mysteriously deleted his Twitter account. Nikola has denied the fraud claims and called Hindenburg’s report “a hit job for short sale profit-driven by greed.” Chief financial officer Kim Brady on Wednesday said Nikola’s corporate partners “have been 100 percent supportive and behind us.”
TO UNDERSTAND WHY it was a shock last month when Berkshire Hathaway invested $6.5bn in five Japanese trading houses that have been around for far longer even than its 90-year-old chairman, go back to a talk Warren Buffett gave to business students in Florida in 1998. As a sprightly sexagenarian with his sleeves rolled up, the Sage of Omaha was at his witty—and wicked—best. The first question he fielded was about investing in Japan. He replied that the country’s 1% interest rates made it look attractive. Nonetheless, he considered Japanese firms poor bets because of their lousy returns. Low-profit businesses could be worth buying based on what he called the “cigar-butt” approach. “You walk down the street and you look around for a cigar butt someplace. Finally you see one and it is soggy and kind of repulsive, but there is one puff left in it. So you pick it up and the puff is free.” But not even this theory would draw him to Japan Inc, the pride of the country’s post-war revival, he explained. It is hard to think of an analogy more distasteful in a spick-and-span country like Japan. Some 22 years of rock-bottom interest rates
THREE YEARS after Twitter launched in 2006, Chinese techies created a similar microblogging service in China. Weibo (literally “microblog” in Chinese) boasted an average of 241m daily active users in March, more than Twitter. Like its American cousin, Weibo allows users to follow other users, tweet, retweet and browse a real-time list of trending topics (though it steers clear of politics, out of bounds in its communist homeland). And like Twitter, it relies heavily on advertising revenue. So as coronavirus-induced uncertainty led advertisers to slash budgets, Weibo saw advertising revenue, which accounts for nearly 90% of sales, plunge. In the first quarter it fell by a fifth year on year, to $275m. Operating profit plummeted by more than half, to $58m. Delayed second-quarter results, due on September 28th, may be less terrible. China was the first to be hit by covid-19 but began to recover just as the West went into lockdown. But Weibo also confronts a longer-term challenge. Yujun Shao of Westwin, a Shanghai-based digital-marketing firm, notes that for much of the past decade two firms—Weibo and Tencent (which owns WeChat, a messaging service)—sucked in the vast majority of advertising spending on Chinese social media. Today the “big
IN 1996 CIVIL war erupted in what was then Zaire and is now the conflict-ravaged Democratic Republic of Congo (DRC). Karasira Mboniga managed to escape, eventually settling in the Kiziba refugee camp in Rwanda, and working as a secondary-school teacher. But he says that his life changed for ever when he started his own business in 2008, selling food and performing money transfers. That business came under threat when the pandemic hit earlier this year. But Mr Mboniga was one of many refugees to be helped by the African Entrepreneur Collective (AEC), a charity which started to disburse grants from a special covid-19 relief fund in June. AEC, which started in Rwanda in 2012, has had a focus on job creation from the start. Eventually it realised that helping refugees would serve that aim, as jobs would also be created in the host community. Until the pandemic, it focused on making loans, rather than grants, to small businesses. Its new covid-19 fund was established with help from the MasterCard Foundation, the payment processor’s charitable arm. It has already helped almost 4,000 entrepreneurs; 91% of the businesses that were closed have since reopened. On average, the ventures have managed to