Business

Lululemon slashes price of Mirror by 50% as it nears October 5 launch of fitness studio

October 3, 2022

Starting October 5, fitness gear company Lululemon will temporarily cut the price of its Mirror home-fitness device by roughly 50%—taking the price down to $795 as it works to build interest in a new studio membership platform, the company announced on Wednesday, September 28, reports Business Insider.

The company first unveiled the plan for a membership program linked to Mirror at an analyst day in April. On Wednesday, it offered new details about the platform, which it’s calling Lululemon Studio, including a launch date that coincides with the Mirror sale: October 5.

According to Business Insider, for $39 a month, members will have access to more than 10,000 online classes. They’ll also get a 10% discount on Lululemon merchandise and discounts on in-person classes at studio partners including Pure Barre, Rumble, and YogaSix.

Membership requires the purchase of a Mirror device, and current Mirror owners will automatically become members of the program for 12 months.

Lululemon also will launch a free membership program on October 5 that will offer shopping rewards, free access to select Lululemon Studio classes, and early access to product drops.

Lululemon executives said the platform will help the company to serve its customers more flexibly.

“Our guests’ fitness needs have evolved and Lululemon Studio is solving for them by providing members with access to fitness content from our world-class trainers and studio partners at home, on the go and live in studios around North America,” said Chief Brand Officer Nikki Neuburger in a news release.

Analysts weren’t immediately sold on the plan given the struggles of other connected-fitness companies.

“Increasingly, it seems publicly traded companies are making the pivot to content over equipment,” said Simeon Siegel, a BMO Capital Markets managing director, in an email to Business Insider. But he questions whether companies can do both content and hardware at the same time.

“Like all companies, connected-fitness operators should focus on what makes them special. If it’s the equipment, great. If it’s the content, fantastic,” Siegal said. “If it’s both, make sure to value and price both accordingly. But that is rare. And being true to who they are is difficult, but key.”

Lululemon acquired Mirror in July 2020 for $453 million. At the time, company insiders were skeptical about the technology, calling it “buggy” and wondering how it fits into Lululemon’s long-term growth strategy.

At the April investor day, Michael Aragon, Lululemon Digital Fitness CEO, said Mirror is a natural fit for the company’s business plan.

“Our goal is to build a platform that connects Lululemon guests, who want to live healthier lives,” he said. “The goal is simple: Be the go-to platform for fitness and wellness.”

Research contact: @BusinessInsider

LeBron James is buying a professional pickleball team

September 30, 2022

Even NBA superstar LeBron James is getting caught up in the pickleball craze. James and his business partner, Maverick Carter, have joined a group of investors that includes NBA players Draymond Green and Kevin Love to purchase a Major League Pickleball expansion team, the league said on Wednesday, September 28, according to a report by The Wall Street Journal.

Othr investors include investment firm SC HoldingsPaul Rivera, chief marketing officer for the SpringHill Company; and Relevent Sports Group co-owner and CEO Daniel Sillman.

Each member of the new ownership group plays pickleball, the league said.

Anne Worcester, MLP’s strategic adviser, said the team, which has yet to be named, is valued in the seven figures.

“This new ownership group brings extensive experience across sports, media, branding, entertainment,” Worcester told the Journal. “We are excited to work with them to expand and to bring pickleball to new audiences.” 

A spokeswoman for LRMR Ventures, the family office of James and Carter, said both were unavailable to comment.

The new pickleball team marks the latest expansion into sports ownership for James and Carter. Both are partners with Fenway Sports Group, the owners of the Boston Red Sox and Liverpool F.C., the English Premier League soccer team.

James, a newly minted billionaire, also co-founded SpringHill with Carter, who is a childhood friend of the basketball star. The company helped produce “Space Jam: A New Legacy,” which starred James and was released in 2021, and the 2019 HBO documentary “What’s My Name: Muhammad Ali.”

Pickleball, a hybrid of tennis, ping pong and badminton that dates back to 1960s, has taken off in the United States in recent years. There were about 4.8 million players nationwide in 2021, a 39% increase from 2019, according to the Sports & Fitness Industry Association. Pickleball was officially announced as the fastest-growing sport in America for the second year in a row, the group said.

Other pickleball team owners include former professional football player Drew Brees; Marc Lasry, co-owner of the Milwaukee Bucks; and former professional tennis player James Blake.

The league is in the process of choosing new ownership groups for the final three expansion teams. The league is currently weighing about 20 bids for teams from over 60 groups, Worcester said. MLP expects to choose the final three ownership groups in the next month, she said.

“We are reviewing the rest of the bids internally,” Worcester said. “It’s looking at the resources each group would bring to Major League Pickleball to help us grow the sport at the pro level as well as the grassroots level.”

Research contact: @WSJ

Christie’s launches ‘Department X’ as collectible sneakers and street-wear boom

September 29, 2022

Famed auction house Christie’s is launching a new department to capitalize on the booming market for collectible sneakers, streetwear, and sports history, reports CNBC.

On Monday, September 26, Christie’s announced the launch of its Department X—which will give Air Jordans and Supreme Skateboard Decks their own category, alongside Impressionist & Modern Art and Old Masters. The move is the latest sign that a wave of younger collectors is redefining the collectibles world.

“When looking at the auction world and the way collectors are evolving and the new collectors coming into the marketplace, we felt this is a strong a robust marketplace,” said Caitlin Donovan, Christie’s head of Handbags, Streetwear and Sneakers, who will head Department X. “It’s only going to get stronger and that’s why we felt it was time to dive headfirst into this new market.”

Department X will sell rare collectibles across music, fashion, art, and sports history—but sneakers and streetwear will be among its biggest categories. It will hold online auctions, with live previews in New York, and private selling exhibitions throughout the year.

Sneakers and sports collectibles have exploded in popularity and value in recent years. In June, Christie’s held a “Six Rings − Legacy of the GOAT” sale dedicated to basketball legend Michael Jordan’s career, with sales nearing $1.5 million.

And top competitor Sotheby’s Auction House this month sold Jordan’s “Last Dance” jersey—from his 1998 NBA Finals Game 1—for $10.1 million, setting a new record for sports memorabilia.

A collection of 200 pairs of Louis Vuitton and Nike Air Force 1 sneakers designed by the late designer Virgil Abloh sold at Sotheby’s earlier this year for $25 million. That was more than eight times the estimate—with one pair selling for $350,000.

According to CNBC, Sotheby’s launched its streetwear category in December, with most of the buyers between 20 and 40 years old and 80% of bidders new to the auction house.

As part of its Department X launch, Christie’s will hold a private-sale exhibit titled “Ye Walks,” celebrating two pairs of Kanye West’s sneaker designs. The Nike Air Yeezy 1 prototype was the first West designed with Nike. The Nike Donda West Air Jordan VI was created in memory of West’s mother.

Hats, shirts, skate decks and even pinball machines from Supreme also have continued to soar in price. In 2020, Christie’s offered a collection of 253 Supreme t-shirts for $2 million.

Donovan says that younger collectors gravitate to the images and culture they grew up with. Street wear, rare sneakers, and memorabilia tied to sports icons are likely to grow in value as younger collectors gain wealth.

“We go for what tugs at our own past experiences and heart strings,” she said. “So for these collectors in their 30s and 40s, it’s a celebration of their culture.”

Some collectors say six-figure sneakers and t-shirts are a product of a speculative bubble, but Donovan said the rise of so-called “hype-wear” is likely to endure despite falling stocks and recession fears.

Research contact: @CNBC

Hertz, BP partner on electric-vehicle charging stations

September 28, 2022

Car-rental company Hertz and energy firm BP have signed a deal to develop and manage a network of electric-vehicle charging stations across North America, reports The Wall Street Journal.

BP Pulse, which is BP’s EV charging business, would power and manage Hertz’s charging infrastructure under the memorandum of understanding, the companies said. The charging infrastructure will be open to taxi and ride-sharing drivers, as well as the general public, the companies said.

Hertz—which has agreed to buy cars from Tesla, Polestar, and General Motors—said it has tens of thousands of EVs available at 500 locations across 38 states. Its goal is for one-quarter of its fleet to be electric by the end of 2024, Hertz said.

The car-rental company last week said it had signed on to buy 175,000 EVs from GM over a five-year period.

Hertz said it already has invested in thousands of EV charging stations across its locations. The deal with BP will help expand its charging footprint.

Car-rental companies have been adding electric cars to their fleets in order to bulk up their premium offers and to help burnish their environmental credentials with investors.

Demand for electric cars has surged in recent years, but charging infrastructure across the United States has failed to keep pace—prompting some complaints of challenges in using electric cars, particularly on long, interstate trips.

Research contact: @WSJ

Amazon schedules a second Prime Day sale for October 11-12

September 27, 2022

Amazon is hosting another Prime Day-like deal bonanza next month—marking the first time it will hold two such events in the same year, reports NBC News.

The company announced on Monday, September 26, that the event, which it’s calling the Prime Early Access Sale, will take place October 11-12. The event is only open to members of Amazon’s Prime subscription program and will feature “hundreds of thousands” of holiday deals, said Jamil Ghani, vice president of Prime, in an interview.

CNBC previously reported that Amazon began contacting sellers about the event in June.

Prime Day, which started in 2015, is typically held once a year during the summer. But Amazon tweaked the timing of the event in 2020 and 2021, as the COVID-19 pandemic strained its operations. The company also has experimented with other discount events, such as an apparel sale, a pet-focused event and a fall beauty event.

Ghani declined to say whether Amazon plans to host more than one sales event for Prime members moving forward. By setting a deal event for October, Amazon is playing into a trend that’s gained momentum in recent years. Major retailers have started announcing promotions well ahead of Black Friday and Cyber Monday, in large part because more sales are moving online.

The new sales event could help jumpstart holiday shopping for Amazon as the company stares down slowing e-commerce sales and a host of economic challenges—including a potential recession, soaring inflation, rising interest rates and the excess expansion it undertook during the pandemic.

Holiday sales are expected to grow from last year, but much of the increase will likely be driven by higher prices, according to a Bain & Co. forecast. Shoppers will likely be on the hunt for discounts more than usual as their wallets feel the strain.

“These days, it’s not lost on you or me that folks are trying to make their dollar stretch,” Ghani said.

Research contact: @NBCNews

Pepsi out, Apple Music in as sponsor of 2023 Super Bowl Halftime Show

September 26, 2022

Apple Music will replace Pepsi as the sponsor of the Super Bowl Halftime Show starting in 2023, reports Fortune Magazine.

The tech giant and the NFL made the announcement on Friday, September 23, and—while they didn’t announce the talent that would perform—they did hint that sneak peeks would be dropped via Apple’s social media channels.

“Music and sports hold a special place in our hearts, so we’re very excited Apple Music will be part of music and football’s biggest stage,” Oliver Schusser, Apple’s vice president of Apple Music and Beats said in a statement. “We’re looking forward to even more epic performances next year and beyond.”

No price on the deal was given, but the NFL had reportedly been shopping the sponsorship for roughly $50 million.

The announcement comes amid growing rumors that Apple is in talks to stream Sunday NFL games on Apple TV+, which would be a big blow to current Sunday Ticket provider DirecTV. (The NFL is reportedly seeking $2.5 billion for the rights, which is $1 billion more than the current price.)

The NFL is a proven way to lure viewers to a streaming service. Last week’s premier of Thursday Night Football on Amazon Prime attracted 13.2 million viewers and resulted in more new Amazon Prime memberships in a three-hour period than at any other time, including Prime Day and Cyber Monday.

(Amazon paid $13 billion to carry those games for the next 11 years.)

Earlier this year, of course, Apple kicked off its live sports coverage with the debut of Major League Baseball on Apple TV+. This season, the streamer will carry 24 games over 12 weeks—and the company has struck a seven-year deal with the league, paying $85 million for the rights to Friday night games. Apple has also secured the streaming rights in a historic deal for Major League Soccer.

Being front and center in the Super Bowl Halftime Show also will help Apple in its ongoing battle with Spotify for music streaming. The Halftime Show is the biggest musical event of the year by most standards, giving Apple Music a chance to raise its profile and offer incentives to attract subscribers.

Research contact: @FortuneMagazine

Starbucks unveils ‘reinvention plan’

September 22, 2022

Starbucks outlined a reinvention plan on Tuesday, September 20, that includes expanding its loyalty program and speeding up operations at its cafes, in part with new coffee-making equipment and automation, reports CNBC.

On the call with analysts, outgoing Starbucks CEO Howard Schultz said the coffee giant is projecting double-digit growth for revenue and earnings per share as it implements the new strategy.

The company is planning to build roughly 2,000 new U.S. stores between fiscal 2023 and 2025, accelerating its development strategy. By the end of fiscal 2025, it plans to have 45,000 locations worldwide.

The changes are intended to address how Starbucks’ business has transformed in recent years. Its menu has expanded, and cold coffee drinks that often include add-ons now account for 60% of orders year-round. Rather than going to the counter, more customers are going through the drive-thru or using its mobile app.

As business continues to morph and increase, in its fiscal 2023, Starbucks plans to invest roughly $450 million to upgrade its cafes with new equipment that will simplify operations and speed up service.

With its new cold beverage system, for example, baristas will no longer have to scoop ice, pour milk from a gallon jug, or bend down for whipped cream when making drinks. The new system uses dispensers and cuts down the time to create a Mocha Frappuccino from 86 seconds to 35 seconds. It’s been tested in a store, and a second test is planned for January after making improvements based on feedback.

Starbucks also is streamlining its process for making cold brew coffee, which is now a $1.2 billion business for the company. The current process requires more than 20 hours of brewing, with more than 20 steps. The new process automatically grinds and presses the coffee beans and reduces waste by 15%.

And instead of having baristas batch brew hot coffee every half hour, a machine that grinds and brews a single cup in 30 seconds will roll out next year. Even as cold drinks take over, the company sees 15 million customers every month who order brewed coffee.

Food preparation is also changing. Items like Starbucks’ premade sandwiches and egg bites will now be batch cooked and placed in packaging that retains humidity.

Automated ordering will roll out as well in U.S. stores in the next few years, according to Culver. The company said the shift toward automation is meant to give employees more time to interact with customers and relieve them of the more mundane parts of the job.

A quarter of Starbucks transactions now come from mobile app orders, driven by the company’s loyalty program. The U.S. version of by Starbucks Rewards had 27.4 million active members as of July 3, and they accounted for more than half of the company’s orders.

To keep growing its base of loyal customers, Starbucks has extended its loyalty program technology to licensed cafes, which include locations in airports and retailers like Barnes & Noble. Roughly 20% of its roughly 7,000 U.S. licensed stores are using the technology already.

Additionally, Starbucks will link its rewards program to outside loyalty programs, like those for airlines and retailers. Consumers will be able to earn “stars” by shopping elsewhere or turn their rewards points into airline miles.

Chief Marketing Officer Brady Brewer said the company will announce the first U.S.-based partnership in October.

This autumn also marks the start date for incoming CEO Laxman Narasimhan. He’ll join the company in October and learn more about its operations before officially taking the reins from Schultz in April.

Narasimhan made a brief, surprise appearance during the investor day, speaking about his upbringing, his love for writing poetry and what drew him to Starbucks. He told investors that he uses the name “Laks” when ordering coffee from Starbucks to avoid misspellings.

In addition to store operations, the changes are being calculated to “de-stress” harried baristas. Starbucks Chief Technology Officer Deb Hall Lefevre said the company is working on an app for baristas that will let them manage their schedules and pay, as well as foster two-way communication with the company and help with career growth.

The upcoming changes for U.S. baristas is just “phase one” of a multiyear plan, according to Starbucks management. The company also is looking to improve the experiences of baristas overseas—as well as for the employees who harvest its coffee beans, work in its supply chain, and provide customer support.

Research contact: @CNBC

Walt Disney World ‘enthusiasts’ say theme park has ‘lost its magic’

September 20, 2022

A majority of “self-described Disney World enthusiasts” say the Florida theme park has “lost its magic” due to skyrocketing costs, according to findings of a recent study, reports Fox Business.

A study from gambling website Time2play surveyed 1,927 “Disney World enthusiasts”—and, of those, 68.3% reported that the price hikes make them feel like the theme park has “lost its magic.” A whopping 92.6% reported that they believe the high costs for the park has made a vacation for the average family “out of reach.”

A ticket for Disney World’s Magic Kingdom in 1971 was a total of $3.50, according to the study. When adjusting for inflation, that would mean tickets would be about $25.60 today. Instead, tickets for one Disney World park range from $109 to $159 per day, according to the findings.

Nearly 50% of respondents reported postponing a trip due to the price hikes.

All in, Disney World veterans can expect to pay 35.7% more for their next trip compared to their last one, Time2play established.

A chart posted to social media last year by a researcher at SJ Data Visualizations, a U.K.-based firm, shows that prices for Disney World have risen by at least 3,871% since 1971—with prices rising at a more drastic rate in the early 1980s compared to its first decade.

Families spoke out about the prices earlier this year, as traveling picked back up following coronavirus lockdowns, and they expressed shock at the price hikes. One dad of two estimated he would be on the hook for a $4,000 to $5,000 bill, even with one of his kids qualifying for free admission.

“I understand inflation and all of those things. I understand cost increases,” Kentucky father Matt Day told The Washington Post earlier this year on the high prices. “I always had the impression that Disney was a family vacation destination, and that impression is why I was surprised to see how expensive it truly was—and how out of reach it is for most American families.”

“It’s really unprecedented,” said Len Testa, president of theme-park trip-planning site Touring Plans told the Post earlier this year. “We haven’t seen this sort of anger about price hikes in—we can’t remember the last time something like this caused this much anger from Disney fans.”

Walt Disney World’s communications team did not immediately respond to Fox’s request for comment on the study.

Research contact: @FoxBusiness

South Carolina to become home to Europastry production facility

September 19, 2022

Europastry plans to invest $23 million to establish a facility in Laurens County in South Carolina that will produce an assortment of brioche bread products, reports Food Business News.

Brioche is a bread of French origin whose high egg and butter content gives it a rich and tender crumb.

Europastry operations in South Carolina are expected to begin by the end of November. The Coordinating Council for Economic Development in South Carolina has approved a $150,000 rural infrastructure fund grant to Laurens County to assist with the costs of building improvements in the Hunter Industrial Park.

“Laurens has become a strategic location, allowing the company to expand its footprint in the United States,” Europastry said. “The new plant will start up operations soon, and more details will be provided in the following weeks.”

Europastry has other U.S. production plants in Ronkonkoma and Bayport, New York; and in New Brunswick, New Jersey. The company is based in Barcelona, Spain, and is active in 80 countries.

Research contact: @FoodBizNews