QUOTE OF THE DAY
Today Apple is going to reinvent the phone." ––Steve Jobs, introducing the first iPhone. This week marks the 10th anniversary of the iPhone’s first sale. Well played, Steve.
MARKET CORNER
Market Snapshot
- The S&P rose slightly as investors pumped money back into energy.
- The Nasdaq finished higher, led by a strong tech rally.
- The dollar posted its biggest one-day loss in three weeks.
- Gold hit a weekly high, driven by the weak dollar.
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Born to be Wild
Eddie Bauer, the outdoor retailer that’s been fueling your adventurous side since 1920, might be waving the white flag.
The company has hired investment banks to assist with debt relief on a $225 million term loan (due in 2019) and a $200 million revolving credit line (due in 2020)—and possibly a sale.
For the Washington-based 370-store brand, liquidity has remained a question since raising the money at the beginning of 2014.
Bauer’s no stranger to shake-ups
The retail clothing brand has been passed around more times than a bottle of Cuervo on Cinco de Mayo.
In 1968, Bauer first sold the retail brand to William Niemi and son for $1.5 million—Niemi expanded operations into San Francisco, but quickly parted ways.
Niemi then sold the brand to General Mills (-0.11%), which shifted the brand’s focus towards casual clothing and boosted sales to $250 million by 1988.
By then, American direct marketing company Spiegel Catalog wanted a shot at the action. It purchased Bauer for $260 million.
Take a deep breath, we’re almost through this.
Come 2003, in an announcement that came as a complete shock to absolutely no one, the catalog business failed, Spiegel filed for bankruptcy and Eddie Bauer was once again up for sale.
In 2009, Bauer filed for chapter 11 (remember: that’s a fancy term for court-backed bankruptcy protection).
Don’t worry though, Golden Gate Capital saved the day for a clean $286 million.
AND FINALLY we make it to 2017
...where once again, Bauer might put itself on the auction block. Eddie Bauer has no intention of restructuring its massive pileup of IOUs.
So here’s the gameplan: figure out a way to shave off some of this debt or start dusting off the "For Sale" signs.
E-commerce: ∞
Retail industry: 0
Thanks for playing.
Just Put It On the CC
Elon Musk has never had an issue swiping the company card—don’t expect that to end any time soon.
Tesla (+0.22%) just boosted its credit line by $800 million, bringing total credit agreements (to date) to $3.825 billion. It’s the second time in six months Tesla has pumped up its balance sheet ahead of Model 3 production.
And now, Musk is hoping 400,000 in preorders and a brand spankin’ new line of credit will be just what Tesla needs to jumpstart its new economy class sedan.
But here’s some food for thought: Tesla has been around since 2003, has a market cap of $64 billion and still isn’t profitable.
Let’s see if the Model 3 can do the trick.
Five-Star Cruisin’
The Ritz-Carlton is making its first major brand extension into seafaring.
The five-star hotel brand is now building out a line of three ultra-luxury cruise ships that will cost about $200 million each.
Ritz-Carlton’s captain, Herve Humler, cited a cruise sector expansion of 8.5% each year as one reason for the new venture.
Another? The Ritz revealed that at least 400,000 hotel guests are cruisers as well. Shocking.
Deal or No Deal
The talks that began between Europe and Japan in 2013 are coming to a close in one of the largest trade deals ever. It’s gonna be "uge."
The agreement would include two bodies that combine for $20 trillion in economic output, which would rival NAFTA as one of the world’s largest free trading blocs.
And while Japan’s main pressure point is lowering the export tariff on things like automobiles, Europe is looking to cut taxes on goods like chocolate (10%), canned tomatoes (9%) and cheese (30%).
Gotta get that gouda.
What Else Is Happening…
- GM (+0.03%) paid $2.5 billion in fines from a class action lawsuit dealing with faulty ignition switches.
- Coinbase is reimbursing some customers for losses endured during Ethereum’s "flash crash" on its GDAX exchange.
- Interior design startup Houzz just raised $400 million at a $4 billion valuation.
- Health insurance provider Anthem (-1.65%) is paying $115 million in fines related to its 2015 data breach.
Economic Calendar
- Friday (June 23rd): BlackBerry (+), Finish Line (+/-) Earnings; New Home Sales (+)
- Monday: No events today
- Tuesday: Consumer Confidence
- Wednesday: General Mills Earnings; Crude Inventories
- Thursday: McCormick and Company, Nike, Walgreens Earnings; GDP
- Friday: Michigan Consumer Sentiment; Personal Income
WATER COOLER
From the Crew
Welcome back to From the Crew. This is your chance to connect with our team while loading up some of the very best digital diamonds in the rough.
And don’t forget: whether you love it, you hate it or you’re downright confused by it, click on the Crewmember’s name of your choosing and get the convo going!
From Michael: Charlie’s Day
Here’s a little inspiration comin’ at you this Monday morning. Not from me, no, certainly not. But from actor, producer and screenwriter Charlie Day (well-known for his role in It’s Always Sunny in Philadelphia). He gave an absolutely insightful and hilarious commencement address to his alma mater, Merrimack College, back in 2014. Don’t worry, I won’t spoil any more for you.
From Austin: An Uber Sad Ending
Get an inside look into Travis Kalanick’s final hours as CEO of Uber. Sparknotes: Kalanick went to Chicago to interview a potential COO only to receive a surprise visit from two of Uber’s lead investors with a list of demands…including his resignation.
From Alex: It’s Warby Time
The journey of learning about a product is as cool as using the product itself. Between listening to the story of Warby Parker on How I Built This, testing five sunglass styles for free and visiting Warby’s store on Greene St., I felt truly connected to the company by the time I pulled the trigger.
From Will: Strategy + Tech = Stratechery
This week I subscribed to Stratechery, an online blog written by Ben Thompson (you might recall I recommended his podcast, Exponent, a few weeks back). No, I am not on Ben Thompson’s payroll. Yes, I do believe that he writes amazing articles that mimic his own thought process as he digests recent business and tech news. The latest one I read details Thompson’s stance on the Amazon/Whole Foods acquisition.
THE BREAKROOM
Interview Question of the Day
Time to challenge a friend, family member or coworker.
In three minutes, name as many alternative uses for a pencil as you possibly can.
Go!
Who Am I?
- I’m 93 years old.
- My net worth is $1.47 billion.
- A book was written about me called "Poor Charlie’s Almanac."
- I gave the USC commencement address in 2007.
Stat of the Day
42%
That’s how many Amazon Echo owners own two or more devices. Last year there were 1.18 Amazon Echo devices per household that owned one. This year there are about 1.60.
