TheChek News Flow

Built beneath Paris’ famed shopping street, the nine-story facility frees up prime storefronts, accelerates deliveries and cuts emissions.

PARIS — Five stories below the Avenue des Champs-Élysées, AI-controlled robots are already at work.

They are testing the systems for Atelier Logistique, a 172,200-square-foot stock storage and logistics space being built by Swiss Life Asset Managers and Mont Thabor to support the retail infrastructure of the nearby shopping areas.

The partners converted a disused nine-story underground parking garage, which reaches well below the level of the Seine river, and was originally intended to be refurbished. But with Paris Mayor Anne Hidalgo’s ambitious plan to reduce car use, with schemes like revamping the famed shopping street with fewer traffic lanes, the project was reconsidered and transformed into a remote storage solution for retail.

With only a 3 percent vacancy rate on the Champs-Élysées, brands are fighting for space but using valuable square footage on storing stock. Swiss Life’s research put that number at between 8 percent and 14 percent of space that could instead be used for retail. The median price per square meter on the Champs-Élysées and surrounding luxury streets rings up at 15,000 euros, the group said, making that loss of shopping space costly.

“In the luxury market, we know that some of the retailers may want to boost the retail experience,” said Swiss Life Asset Managers head of research and innovation Béatrice Guedj.

That retail experience is two-fold, she said: first, to upscale space and shopping services in-store; second, to hold more product to support omnichannel supply for online ordering, in-store pick-up and returns.

“This is the vision we have, and luxury brands also have, in mind. That’s why we assume that there is a winning play for them to rethink their retail supply chain,” she said.

This should also reinforce the luxury goods market in Paris, as it risks losing sales to other fashion capitals such as Milan.

Brands will be able to store their goods in Atelier Logistique and have them delivered by bike, on foot or pick them up in person within minutes. The center can also serve the nearby Avenue Montaigne within five minutes, Rue Saint-Honoré within 10 minutes, the Saint-Germain district within 15 minutes and the Marais within 20 minutes by bike or small electric vehicle.

“With the performance of the avenue, they will need extensions, and we are like a mutualization of storage for them. The cost of logistics and also the centralization here could be something that makes it easier on [the retailers] on a day-to-day basis,” said Swiss Life Asset Managers head of asset management Waiseng Ma.

The Atelier Logistique project was developed with the support of the city, as well as the Developed with the Comité Champs-Élysées retail organization. The transformation of the parking lot was led by architect Damien Antoni.

Of the space, 108,000 square feet will be dedicated to storage alone, while the rest will be devoted to customer service. An above-ground entrance will host a space for employees to pick up stock on foot, while other spaces will be dedicated to prepping and packaging stock for personal or hotel delivery after an in-store order, for example. In this case, brands may place their own employees or those trained in their packaging style inside the Atelier, which will also hold the correct shopping or garment bags with branding. Other spaces will be lounges for employees.

The center will also provide reverse logistics quality control, in order to have any returned items inspected and back on the sales floor without the need to transport them hundreds of miles.

“We want to bring services to retail, and be seen as an extension of retail and not just pure logistics,” said Swiss Life Asset Managers head of retail Fabrice Lombardo.

Executives did not disclose the cost per square foot but said that leasing space within the Atelier will be “clearly competitive for them [and] far less expensive than a pure retail area.”

The Tech Specs

While the developers expect to create about 100 jobs with the Atelier, much of the space will be managed by AI and autonomous robots which accept deliveries, move the merchandise and monitor stocks.

With an entrance on the Champs-Élysées, there are two delivery docks on Rue de Ponthieu and Rue de La Boétie, with incoming deliveries taking place at the former and pickups or external deliveries leaving through the latter. Small 12-ton trucks will be able to deliver at night, offloading all their goods within 20 minutes, with the merchandise stored or delivered to the retailers as needed. The center will be in operation 24 hours a day.

The robots were developed by Swiss Life in conjunction with a French defense contractor that cannot be disclosed, to operate specifically within the building’s parameters. The robots, which accept, deliver and move goods within the warehouse levels, will never cross the pickup area or bike lane to avoid bottlenecks.

Swiss Life developed the small electric vehicle delivery trucks with Renault for the project, and Kleusters for the cargo bikes, and will oversee the transport operations as well.

Brands and hotels will be directly connected to the Atelier’s AI warehouse management system. Clients can then directly request goods, which can be delivered or picked up within 15 to 30 minutes.

The use of robots will help the Atelier stay in line with new emissions and traffic rules, which will ultimately ban large trucks and day deliveries in many retail areas around Paris.

The delivery restrictions will not only affect the luxury brands, but the mass market retailers such as Zara, which opened an omnichannel-focused flagship on the Champs-Élysées in 2023 and is set to soon double its size, which will need to restructure its’ daily deliveries of goods, for example.

“With the [low traffic zone] it’s a math exercise against the potential turnover they can generate by [storing and sorting stock] here. When you do a simulation, it’s a winning game that’s twofold,” Guedj said.

“We are able with this asset to be able to cope with the low emissions regulations. It’s really compliant with the municipality’s anticipated regulations from 2030,” Ma said. Some of the low traffic zone rules are already in effect and will continue to roll out over the next five years.

The use of small electric vehicles, bike or foot delivery is estimated to save 476 tons of carbon annually, cutting delivery emissions for the associated brands by 32 percent per year.

The Atelier Logistique will begin functionality later this year and be fully operational by mid-2026. The developers are currently seeking an operating partner that is specialized in logistics to manage the space, though options from a single brand contracting exclusivity to acquisition remain on the table.

The Paris facility is a pilot project and Swiss Life hopes to develop the concept in other cities to reduce carbon emissions and make “last-mile” delivery more efficient for brands.

Wedbush Securities analyst Dan Ives slashed his price targets for Apple and Tesla over the weekend as President Trump’s tariffs threaten to disrupt both businesses.

“The tariff economic Armageddon unleashed by Trump is a complete disaster for Apple given its massive China production exposure,” Ives said in a warning note over the weekend. “In our view, no U.S. tech company is more negatively impacted by these tariffs than Apple with 90% of iPhones produced and assembled in China.”

Wedbush cut its price target for Apple stock by $75, down to $250 per share. Apple’s shares are down this afternoon by 4.3% and trading at $180.

Ives also cut his price target for Tesla to $315 from $550, which is still well above Tesla’s current share price of $233.94 as of 2:10 pm ET.

Ives said the affect of tariffs isn’t the only reason for the price cut. He also cited CEO Elon Musk’s politics, which has created a brand crisis for the automaker. Musk’s association with Trump and his tariffs policies are affecting sales in the U.S. and Europe and also threaten Tesla’s popularity in China, “further driv[ing] Chinese consumers to buy domestic such as BYD,” said Ives.

“Tesla has essentially become a political symbol globally,” he wrote. “It is time for Musk to step up, read the room, and be a leader in this time of uncertainty.

Tesla shares were down nearly 10% compared to Friday’s closing price, but have rebounded somewhat as of Monday afternoon.

Levies on Chinese goods have created worst three-day rout for iPhone maker in about 25 years

Apple AAPL -4.54%decrease; red down pointing triangle plans to send more iPhones to the U.S. from India to offset the high cost of China tariffs, people familiar with the matter said.

The adjustments are a short-term stopgap while Apple attempts to win an exemption from President Trump’s tariffs—which Chief Executive Tim Cook obtained during the first Trump administration. The company sees the situation as too uncertain to upend long-term investments in its supply chain, the people said.

Trump’s tariff package raises levies on Chinese goods to at least 54% while imposing a 26% rate on Indian goods. On Monday, Trump threatened to add to China tariffs if the country doesn’t remove the retaliatory duties they announced after U.S. tariff plans were revealed on April 2.

The iPhone is Apple’s signature product and makes up about 50% of its revenue. The company’s heavy reliance on China for manufacturing has spooked investors concerned about its exposure to tariffs, leading to a 20% decline in its shares, their worst three-day performance in nearly 25 years.

Apple will make about 25 million iPhones in India this year, around 10 million of which would normally supply the local Indian market, said Bank of America analyst Wamsi Mohan. If Apple were to redirect all India-made iPhones to the U.S., it could meet about 50% of American demand for the device this year, he said.

The tariff on Chinese goods could add about $300 to the current $550 hardware cost to Apple of an iPhone 16 Pro that currently retails for $1,100, according to TechInsights. Apple could limit the damage by importing phones from India where the tariff is about half as high.

While Trump has called for a manufacturing renaissance in the U.S., analysts and suppliers said moving iPhone production to Apple’s home country was a nonstarter because the cost would be far beyond the cost of paying the tariff.

“If consumers want a $3,500 iPhone we should make them in New Jersey or Texas or another state,” research firm Wedbush said in a recent note.

Apple makes many iPhone components in China but in recent years has assembled more of the devices in India. That allows the company to stamp India as the country of origin for those devices because they undergo “substantial transformation” there—from a pile of parts to a functioning smartphone.

Since 2017, Apple has worked with partners to assemble iPhones in India, starting with older models and gradually expanding to include the latest ones. The policy both addresses China risk and avoids import tariffs when selling in India, one of the world’s fastest-growing smartphone markets. Apple plans to increase iPhone production in India.

Yet the company’s production is still centered in China. Its manufacturing partners such as Foxconn operate huge facilities there, taking advantage of the country’s deep network of suppliers, skilled labor and government support.

Apple is investing in making other products in the U.S., including the servers needed for artificial intelligence such as the Apple Intelligence service.

In February, Apple said it planned to spend more than $500 billion over the next four years in U.S. manufacturing—an announcement touted by Trump as evidence his policies were working. The money includes committing to buy more advanced chips made by Taiwan Semiconductor Manufacturing in Arizona.

Vietnam, which has become a hub for making AirPods, the Apple Watch and iPads, received a tariff of 46% under Trump’s plan, nearly as high as China’s. But Trump suggested in a social-media post Friday after speaking to Vietnam’s leader that he might offer a better deal.

Putting together an iPhone is still a labor-intensive process, demanding a large workforce capable of performing intricate tasks with precision and speed. While the U.S. has a skilled workforce in many high-tech areas, the sheer number of workers needed for mass-market consumer electronics assembly is more readily available in Asia, and at lower cost.

Gapping down
( note - Due to the futures trading down 2-3%, many stocks are trading lower. The following represents stocks gapping down on known catalysts)
In reaction to earnings/guidance:

Select Index ETFs showing early weakness:

Other news:

Gapping up
In reaction to earnings/guidance:

Other news:

OpenAI Has Discussed Buying Jony Ive and Sam Altman’s AI Device Startup

OpenAI in recent weeks discussed acquiring a startup its CEO Sam Altman has been working on with ex-Apple designer Jony Ive’s studio to develop an artificial intelligence-powered personal device, according to two people with direct knowledge of the deal talks.

They are also discussing partnership options beyond a full acquisition, one of the people said.

Ive and Altman began discussions more than a year ago on a device that could bring to life Altman’s dreams of creating voice-enabled AI assistants reminiscent of those in sci-fi films such as “Her.”

OpenAI executives at one point considered an acquisition price of at least $500 million, one of the people said. An acquisition would include a team of engineers that have worked on the device, one of these people said.

Designs for the AI device are still early and haven’t been finalized, the people said. Potential designs include a “phone” without a screen and AI-enabled household devices, they said. Others close to the project are adamant that it is “not a phone.”

The AI hardware venture—known as io Products—has raised an undisclosed amount of funding from Laurene Powell Jobs’s Emerson Collective and other firms. Altman has been working closely on the product, but is not a co-founder, one of the people close to the talks said. Whether he has an economic stake in the hardware project is unclear.

The device project would add to OpenAI’s fast-growing portfolio of products in development as it tries to get its AI into the hands of millions of consumers. Those products include AI that uses web browsers, and teams designing AI server chips and humanoid robots. OpenAI explored numerous options for the server chips, which aim to reduce its reliance on Nvidia, but eventually decided to pursue the effort in-house.

Io Products employed engineers to build the device while OpenAI provided it with AI and Ive’s studio LoveFrom provided design help, the person said.

It wasn’t immediately clear whether Tang Tan and Evans Hankey, who previously worked with Ive on the iPhone and recently worked on the AI device startup, would join OpenAI as part of the deal.

Spokespeople for OpenAI and Ive declined to comment.

Building a personalized AI device could put OpenAI in more direct competition with Apple, with which it has an existing partnership. Last June, OpenAI and Apple said the iPhone maker’s Siri assistant would tap ChatGPT to handle some queries and use OpenAI’s models to help customers with writing and image generation tasks.

Though the partnership generated splashy headlines, it’s not clear if the deal has helped it acquire new ChatGPT customers, and Apple didn’t pay OpenAI to use its models.

AI voice assistants are becoming a heated battleground. OpenAI as well as rivals Meta Platforms, Google, Anthropic and xAI have released or are developing AI voice capabilities for their text chatbots. Last year, OpenAI launched a voice mode to ChatGPT, allowing customers to speak with the chatbot.

Around the same time, Meta began exploring AI-powered earphones with cameras, which the company hoped could be used to identify objects and translate foreign languages. It’s also working on a voice assistant people can use while wearing Meta’s Rayban smart glasses.

Consultants are helping clients lower the customs value of imports to cut the cost of new levies

Companies are hunting for creative ways to cut the customs value of their imports to the US in an effort to blunt the financial impact of President Donald Trump’s punitive tariffs.

Advisers say there are methods to lower the reported value of imports by a fifth or more in some cases, but they come with risks and could complicate the intricate tax planning strategies that multinational companies have built up over decades.

With Wednesday’s announcement of new tariffs on imports from almost every country and across most product categories, conversations about so-called valuation strategies have taken on new urgency, consultants say.

“Can you lower the base through various customs planning techniques, so a good that is otherwise sourced at $100 and paying a 25 per cent tariff, can you make that good $90 paying a 25 per cent tariff?” said Mark Ludwig, head of national trade advisory services at RSM, the largest US accounting firm outside the Big Four.

“Magnify that across your universe of goods and over time those moves can add up and make you more competitive.”

Two valuation strategies in particular have increased in popularity, consultants said, as Trump has targeted industries that typically had low or no tariffs. The first involves arranging contracts with suppliers so that an importer can legally report an earlier sale price, before mark-ups by intermediaries. The second involves splitting payments to suppliers into two amounts, only one of which would attract duties.

An example could be a spirits importer whose supplier not only sold them the drink, but also provided advertising and promotional help, said Mathew Mermigousis, BDO’s customs practice leader.

“Under customs rules, generally advertising and promotion is not a dutiable cost,” he said. “If you’re able to extract that and create a separate service payment for it, you lower the dutiable value to help mitigate the impact” of tariffs.

In a webinar for clients on Friday, EY pitched a more intricate version that involved splitting out a royalty for using the intellectual property underlying a product. The royalty should “preferably” be paid to a separate company from the product supplier, it advised.

Within multinationals, which move goods around in a network of global subsidiaries, such strategies can run counter to long-standing tax avoidance plans that typically involve paying high prices to foreign subsidiaries. Those payments are often designed to lower the profits made in the US and increase them in foreign jurisdictions where taxes are lower.

“Historically, many companies have done tax planning first and customs and duty planning second, or 100th,” said Kristin Bohl, a customs adviser at PwC.

The two disciplines can be at “loggerheads”, she said, given that lowering tariffs might increase your income tax bill.

“If you pull one lever and trip up another, then you’re no better off than when you started. But the magnitude of the tariff impact has triggered companies to be more thoughtful about balancing between the two.”

Andrew Siciliano, trade and customs practice leader at KPMG, said he expected multinationals to examine the policies underlying their tax strategy — known as transfer pricing arrangements because they govern the prices charged between subsidiaries in different jurisdictions — and could find they have room to lower prices for US subsidiaries following the tariff rises.

But he cautioned that there are risks to valuation strategies, given they may be questioned by customs authorities.

“It’s complex and risky if not done right,” he said.