| Hello Insiders, Today's issue covers: - Boston's program to convert office space into housing
- Gap's new business model for Banana Republic
- Closing of Buy Buy Baby stores after failed bankruptcy deal
Please keep reading and check out the Knowledge Hub and Quick Hits! If you find this newsletter helpful, please share it with your friends and colleagues. Thank you. Shriram
p/Shriram | |
| 1 | | Boston is incentivizing the conversion of empty office buildings into residential housing to revitalize its downtown business district. The city is offering a 25% reduction in property taxes to developers who convert their office buildings into housing and seeks to attract new residents and businesses to the area. More: - The program is expected to cost the city $10M over the next five years.
- The city will require developers to set aside at least 10% of the units in each converted building as affordable housing.
- According to real estate firm CBRE, vacancy rates at downtown office buildings nationwide have increased by 5.6 percentage points since the fourth quarter of 2019, reaching 17.8% in the first quarter of 2023.
- Other cities that are pursuing office-to-housing conversions include Pittsburgh, Seattle, and Washington, D.C.
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| 2 | | 
What the numbers say: Banana Republic, a subsidiary of Gap Inc., saw a 47% decline in net sales during the initial months of the pandemic. Although it rebounded with a 24% increase in the first quarter of 2022, Banana Republic experienced a 10% drop in net sales this year, leading to company-wide layoffs to save $300M and a 19% decrease in Gap Inc.'s stock. Relevance: Banana Republic is broadening its product offering by introducing home products, such as throw blankets, rugs, and bed frames, to appeal to a more extensive client base and stabilize the business. This action reflects consumers' changing shopping habits, as they are making more informed decisions when buying clothing. Banana Republic strives to motivate people to acquire a range of goods from their brand by adhering to the industry trend of becoming "lifestyle brands." More data: Banana Republic is experiencing sales issues, forcing store closures (566 in 2019 to 400 in January 2023). The retailer will create a smaller flagship store with home items and art, grow into athleisure and baby/toddler clothing, and investigate new opportunities in hospitality and restaurants to reinvent its business. | | | |
| 3 | | Bed Bath & Beyond, the struggling home goods retailer, announced that it would close all of its Buy Buy Baby stores. The closures will affect 120 stores and 3,000 employees. The company is also planning to close 360 Bed Bath & Beyond stores. More: - The closures are part of Bed Bath & Beyond's ongoing bankruptcy liquidation.
- Bed Bath & Beyond purchased Buy Buy Baby for $67M in 2007.
- Bed Bath & Beyond's annual revenue in 2022 was $6.21B, and the company's estimated revenue for 2023 is $5.25B.
- The company's stock price has fallen by more than 90% in the past five years and last closed at about $0.30 per share.
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| 4 | | Chipotle has collaborated with robotics startup Vebu Labs to develop an Autocado robot that can efficiently cut, core, and peel avocados for their guacamole. This innovative technology is expected to reduce guacamole preparation time by half, from about 50 minutes to a significantly shorter duration. More: - The $50M venture arm of Chipotle, Cultivate Next, also disclosed on Wednesday that it had invested in Vebu.
- Due to a labor crisis in the restaurant business, interest in robots and automation has surged.
- The Autocado can process up to 25 pounds of avocados by slicing, coring, and peeling them, allowing employees to hand mash and mix them with other guacamole ingredients easily.
- Chipotle will test the Autocado at its restaurants later this year to cut food waste, labor costs, and waiting times.
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| 5 | | Lucid's delivery of 1,404 Air luxury sedans in Q2 fell below analyst predictions of around 2,000 vehicles, indicating weaker demand for the model than anticipated. Despite having more than 28,000 reservations, Lucid Motors shocked investors in February by stating intentions to only construct 10,000 to 14,000 Airs in 2023, suggesting potential problems translating reservations into actual sales. More: - The company's stock has decreased by approximately 58% over the past year in light of the unpredictability surrounding the market for its Air luxury sedan.
- The number of Airs produced by Lucid declined from 2,314 in Q1 to 2,173 in Q2, and in late March, the firm reduced its employment by about 18% (or roughly 1,300 personnel).
- Lucid announced a partnership with Aston Martin, where they will provide electric-vehicle powertrains and technology in exchange for $232M and a 3.7% stake in Aston Martin.
- The company expects to produce more than 10,000 cars in 2023 after obtaining an additional $3B in May, and its finances are safe through at least Q2 of 2024.
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| 6 | | Anchor Brewing Company, the oldest craft brewery in the United States, announced on Wednesday that it is ceasing operations and liquidating the business due to "a combination of challenging economic factors and declining sales since 2016." The company employs 61 people and was revived by Fritz Maytag in 1965 when he purchased the brewery and saved it from closure. More: - The brewery was founded 127 years ago, in 1896, by Ernst F. J. Ulmer, Otto Schinkel, and Gustave Pabst.
- Anchor Brewing's annual sales declined by 20% from $80M in 2016 to $64M in 2022.
- Anchor Brewing was acquired by Sapporo Holdings in 2017 for $85M.
- The company's beer will still be sold through the end of July.
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| 7 | | Quick Hits: - Combine traditional project management with your docs, knowledge base, and AI.*
- Elon Musk introduced xAI, his latest AI venture, as tech firms compete to create ChatGPT alternatives.
- Bob Iger will remain CEO of Disney until the end of 2026 after a unanimous decision by the board of directors to extend his term by two years.
- Viasat's stock fell by up to 21% after the company reported a malfunction in its recently launched satellite.
- After failed negotiations with studios, Hollywood actor union negotiators unanimously recommend a strike, which may result in actors joining writers on picket lines and causing disruptions to many series and films as early as Thursday.
- Sharpen your mind in minutes a day with Brilliant. From AI to math and data science, their interactive lessons help you level up. Try it free today*
*This is a sponsored post. | | | |
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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