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| Here's your daily business briefing. - 🍦 Ben & Jerry's, Magnum: $8B venture
- 🔍 Deep Dive: AI fuels rich's wealth surge
- 🏠 Kohl's expands home goods by 40%
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Unilever (ULVR.L) intends to enhance sales and profitability by spinning off its ice cream division, resulting in a workforce reduction of approximately 6%. The newly established ice cream company will hold five of the world's top-selling ice cream brands, generating a combined revenue of $8.6B in the previous year. More: - Hein Schumacher, CEO of Unilever, emphasized the unique features of the ice cream industry, like demand that varies with the seasons and a customized supply chain.
- Unilever's ice cream history began when Thomas Wall started selling ice cream in London in 1913.
- Due to its diminishing market share and profitability, Unilever's ice cream sales faced difficulties in 2023 despite its dominance in the global market.
- By the end of 2025, Unilever intends to float the new ice cream company on the stock market; however, it is still exploring other options to optimize shareholder value.
- After the spinoff, Unilever will have four divisions: nutrition, home care, personal care, and beauty & wellbeing.
Zoom Out: - Nestlé, like other consumer-goods firms, has encountered ice cream industry hurdles, selling its U.S. ice cream business, which included Häagen-Dazs and Dreyer's, to a joint venture with a private-equity firm, akin to its prior European divestment.
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What the numbers say: The rally in AI-related stocks has significantly enriched the world's wealthiest individuals, with companies tracked by the Bloomberg Global Artificial Intelligence Index contributing to a combined $124B increase in net worth for 30 of the 500 wealthiest people. This surge in AI-related wealth represents 96% of the total wealth gained on the Bloomberg Billionaires Index this year, with notable beneficiaries including Nvidia co-founder Jensen Huang and Advanced Micro Devices Inc. CEO Lisa Su, whose fortunes surged alongside their respective companies' success in the AI sector. Relevance: The prominence of AI-related stocks in wealth accumulation emphasizes the profound influence of the artificial intelligence sector on the world economy and financial spheres. The ascent of new billionaires like Lisa Su and Charles Liang underscores the potential within AI-related industries, including chip manufacturing and AI-driven software, although concerns persist about the sustainability of the stock surge, drawing parallels to past speculative bubbles. More data: The surge in AI-related stock values raises concerns about the sustainability of the current market conditions, especially in the tech sector. Prominent figures like Mark Zuckerberg, Steve Ballmer, Michael Dell, Charles Liang, and Alex Karp have all seen substantial wealth increases owing to their ties to AI-related firms. | | | |
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| 3 | | Kohl's ($KSS) is increasing its home offerings by 40%, unveiling new in-store and online goods and decor as part of its ongoing assortment expansion efforts. This move follows positive customer feedback and includes marketing initiatives such as a New York City pop-up and collaborations with home design professionals amidst declining furniture and home goods sales attributed to rising interest rates and inflation. More: - For the 12th consecutive quarter, sales of furniture and home items decreased in February by 6.3% compared to the same month the previous year.
- But from January to February, there's been a slight improvement in wallet share and growth in furnishings, suggesting that the slump may be waning.
- Kohl's seeks to recapture lost market share from competitors such as off-price retailers and Target by providing trendy and budget-friendly choices.
- The expansion encompasses various home decor items, from wall art to lighting, positioning Kohl's as a go-to destination for everyday needs and seasonal celebrations.
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| 4 | | Chipotle Mexican Grill Inc. ($CMG) intends to propose a 50-to-1 stock split at its upcoming annual meeting on June 6, which would be the first split in its three-decade history. The decision comes as Chipotle's stock, which closed at $2,797.56 in New York trading on Tuesday, has surged by 74% over the past year. More: - The goal of the proposed split is to increase employee and investor accessibility to the equity.
- Strong financial performance, including record sales, profitability, and growth, is credited by Chipotle for its all-time high stock price.
- If approved, shareholders would receive 49 additional shares for each share held, with the split shares commencing trading on June 26.
- In recent years, there has been a decline in the number of stock splits; Chipotle is one of the few S&P 500 businesses that have pursued a split since 2022.
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| 5 | | In 2023, average wedding expenses surpassed $30,000 due to post-pandemic inflation, yet a projected 17% decline in wedding expenses for 2024 contrasts with the surge seen in 2022. The contraction is attributed to postponed weddings in 2020 and 2021, along with shifts in generational attitudes toward marriage. More: - The largest group, millennials, are aging, and younger generations choose smaller weddings or cohabitation above marriage.
- Due to growing wedding expenses, some couples choose more modest, less expensive weddings instead of grandiose ones.
- Small wedding-related businesses like bakers and event planners are expanding their product lines in response to shifting consumer demands.
- For example, some companies are looking at other sources of income, such as selling baked goods in bulk or offering their services to other sectors of the economy.
- While some couples are reducing nonessential wedding costs, many still prioritize traditional services such as photography and makeup artists to ensure a memorable celebration.
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| 6 | | MrBeast, or Jimmy Donaldson, revealed a new reality competition show called "Beast Games," developed in partnership with Amazon ($AMZN) MGM Studios. The series, dubbed the "biggest reality competition series ever," will see 1,000 contestants vying for a $5M cash prize, with MrBeast being one of the most prominent creators on both YouTube and TikTok. More: - MrBeast's YouTube videos, known for their lavish productions and sizable prizes, reportedly cost between $4M and $5M each, with the new show having an even larger budget.
- According to Puck, the projected value of the agreement between Donaldson and Amazon for "Beast Games" is $100M.
- "Beast Games" follows in the footsteps of other producers who have collaborated with Netflix and Hulu by branching out their work outside social media platforms to increase their revenue streams.
- Collaborating with Amazon Prime Video enables Donaldson to escape the constraints of YouTube algorithms and pursue fresh creative directions.
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| 7 | | Quick Hits: *This is a sponsored listing. | | | |
| Upcoming Events | | MAR
27 | | Join DTC industry leaders and CEOs at the pivotal virtual roundtable event 'Shaping the Future of DTC in 2024.' | | | | | | | MAR
27 | | Buy-ology: How Today's Consumers Buy Online w/Mike Felix of Act-On | | | | | | | SEP
1 | | Join the $1M prize AI Challenge: Unleash your creativity and push AI Agents beyond today's limits. | | | | | | * This is a sponsored event | | | |
 | 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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