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| Welcome to Thursday's edition of Inside Business. We break down Shein's rise over the past few years, the departure of TikTok's COO, and the largest loan ever given by the U.S. Department of Energy. Have thoughts about the newsletter? We want to hear them! Christopher
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| 1 | | A joint venture between Ford and South Korean battery marker SK On is set to receive a record $9.2B loan from the U.S. Department of Energy to finance battery plants for electric vehicles. The plants are set to be built in Tennessee and Kentucky, and the loan is the largest in the 20-year history of the governmental department. More: - The Energy Department's Loan Programs Office has been given more power ever since the Biden administration passed the Inflation Reduction Act.
- The Inflation Reduction Act is focused on critical infrastructure projects to help U.S. energy manufacturing.
- Ford and SK On finalized an $11.2B venture in 2022 and is called BlueOval SK.
- A large number of battery and electric-vehicle manufacturing factories have been planned or built in recent months, thanks in large part to EV tax credits and climate law.
- The push is to create more electric vehicles outside of China, which currently has the tightest grip on the supply chain.
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What the data says: Shein, the fast fashion retailer, has seen its revenue skyrocket over the past three years. It saw profits soar during the COVID-19 pandemic, as people couldn't go shopping in person and wanted cheap options for clothing and other goods. Revenue jumped from $3.15B in 2019 to $9.81 in 2020. Last year, it reached $30B, a jump of nearly double from 2021's $15.7B. Relevance: Shein, the Chinese fashion retailer that surpassed Amazon in May 2021 as America's top shopping app on iOS and Android, is aiming to reshape its public image. Known for impossibly cheap deals, the company has been much derided for alleged copyright infringement, textile waste, and questionable labor practices. Western lawmakers have pressed Shein to reveal whether its cotton comes from China's Xinjiang region, where the U.S. has accused Chinese authorities of committing genocide against Muslim Uyghurs. Shein, which has most of its operations in China but relies heavily on U.S. sales, is attempting to walk a fine line of geopolitical issues between the two nations. More info: Allegations haven't stopped shoppers from using the app. The amount of downloads globally has grown from 48 million in 2018 to 200 million in 2022. | | | |
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| 3 | | TikTok COO V. Pappas resigned, according to a memo they posted to Twitter. They said that they believe the "time is right to move on and refocus." More: - Pappas will remain at TikTok in an advisory role.
- The news of Pappas' departure comes a month after TikTok's head of trust and safety in the U.S., Eric Han, announced he was leaving the company.
- This all is happening as Chinese company ByteDance, TikTok's parent company, is facing scrutiny from U.S. government officials.
- TikTok's current chief of staff, Adam Presser, will become TikTok's new head of operations. Zenia Mucha, previously at Disney for the past two decades, will join the company as the chief brand and communications officer.
- Pappas was seen as the U.S. face of the company, frequently making announcements and speaking about the company's strategic plans.
- TikTok CEO Shou Zi Chew emailed employees about the staffing changes.
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| 4 | | Vice Media, the once-highly valued media company, is set to be acquired out of bankruptcy by three investment companies for $225M. The three creditors, Fortress Investment Group, Soros Fund Management, and Monroe Capital, are set to take control after Vice announced in a legal filing there were no other satisfactory bids. More: - Vice needs to ask a bankruptcy court to approve the deal on Friday.
- "Under new ownership," co-chief executives Bruce Dixon and Hozefa Lokhandwala told staff members, "we look forward to a new chapter in VMG's history, with a renewed focus and commitment to creating world-class content for our audiences and partners."
- Vice Media was once valued at more than $5B but failed to live up to expectations amid poor business decisions and a revolving door of executives coming and going.
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| 5 | | Overstock.com won an auction for failed home goods supplier Bed Bath & Beyond's intellectual property and digital assets, meaning that the company's stores will officially close for good. Overstock.com will buy the company's brand name, business data, and digital assets for $21.5M, according to court documents. More: - Shares of Overstock.com jumped roughly 8% following the news.
- The deal does not include keeping Bed Bath & Beyond stores open.
- The sale price was the same as Overstock's stalking horse bid, meaning there were no other bids higher than this one.
- The sale still needs to be approved in a hearing on Tuesday.
- Jowa Brands was selected as a backup bidder for Bed Bath's Wamsutta brand of sheets and towels.
- Ten Twenty Four was selected as a backup bidder for the asset of Beyond.com, and if a deal falls through with Overstock, it could take the domain name.
- The auction of Buy Buy Baby, Bed Bath & Beyond's baby asset, is slated for next Wednesday.
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| 6 | | Darden Restaurants, Inc., the parent company for restaurants like Olive Garden, Ruth's Chris Steak House, and Longhorn Steak House, posted a better-than-expected fourth-quarter profit on Thursday. However, the company saw its stock fall 3% as guidance was slightly short of expectations. More: - The company posted a net income of $315.1M, or $2.58 a share, which beat the FactSet consensus of $2.54. It also earned a revenue of $2.77B, which was better than the $2.6B of last quarter.
- DRI acquired Ruth's Chris Steak House on June 14 for $715M.
- What troubled buyers was the note by Darden president and CEO Rick Cardenas during the earnings conference call that fine diners spent less on alcohol this year than they did last year.
- It is expected that the euphoria of coming out of the COVID-19 pandemic is wearing off for the more extravagant purchases of alcohol.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Editor | | Christopher Hachey is a freelance writer and editor based in the New York City area. He has spent most of the past 15 years in newsrooms covering all kinds of topics like sports, tech, business, finance, and commerce. He's now returning to his broadcast journalism roots by diving into podcasting news. Reach out to him at chris@inside.com | | This newsletter was edited by Aaron Crutchfield | |
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