From arms to orbit: Rheinmetall’s expansion unsettles rivals
Article from 04/02/2026
Germany vows more defence tech funding after backlash over tanks
Senior officials will direct more money towards innovation following criticism of reliance on ‘legacy’ systems
Senior German defence officials have pledged to channel more money into innovation and start-ups amid mounting criticism over how the country’s vast military budget is being spent.
After years of missing its Nato spending targets, Berlin has unleashed hundreds of billions of euros on rearmament following Vladimir Putin’s full-scale invasion of Ukraine in 2022.
But much of the spending has gone on big-ticket items, including 35 US-made F-35s, Eurofighter Typhoons, Chinook helicopters and new warships and submarines. Orders for thousands of tanks and armoured vehicles are also being prepared.
The decisions have prompted some analysts and new entrants to raise concerns over Germany for ploughing too much money into conventional weapons such as tanks — mostly to the benefit of established arms makers — rather than unmanned weapons powered by AI.
Acknowledging the debate, defence minister Boris Pistorius said that the EU’s largest nation would do “more and more investment in innovation, more investment in new technologies, more co-operation with start-ups, and more co-operation between start-ups and the Bundeswehr”.
Speaking at this weekend’s Munich Security Conference, where he was challenged over whether Berlin was preparing “for the old war or for the new one”, Pistorius promised that he and officials “learn every day” from the war in Ukraine and the fast pace of innovation on the battlefield.
“If anybody had told us five years ago that drones would play such a relevant and crucial role, nobody would have believed or could have imagined that,” he said.
The head of the German army Christian Freuding said that soldiers still needed “traditional systems like battle tanks, howitzers”. But he added that the military must also “foster our innovative spirit” and think “unthinkable thoughts”.
Düsseldorf-based Rheinmetall estimates that it secured about 40 per cent of a €100bn special defence fund announced by Germany in 2022, and hopes to keep up that rate as hundreds of billions more are contracted in the years ahead.
Florian Seibel, co-founder of German surveillance drone company Quantum Systems, singled out Rheinmetall as he warned that Berlin was failing to spend enough on autonomous systems and AI.
“Spending €500bn out of Germany alone, of which €495bn would go to Rheinmetall and the like is not what is needed . . . there is enough money but we are spending it on the wrong things,” he said.
“We’re going to spend hundreds of billions in equipment that will sit in graveyards and my kids and my grandchildren will still have to work for the debt to pay back to the banks.”
Although Quantum is one of several start-ups to have won drone contracts from the Bundeswehr in recent months, the sums represent a fraction of the total spending in a nation with a total defence budget of €118bn this year.
Moritz Schularick, head of the Kiel Institute for the World Economy, estimates that “95 or 98 per cent” of German defence spending since 2022 has gone into “traditional legacy procurement”.
Schularick, who is also an adviser to Germany’s economy ministry on the defence industry, warned at the conference that the current approach was failing to make Europe ready to confront Russian aggression as well as missing out on the wider economic benefits of supporting agile and innovative young companies.
“We need to reserve a much bigger share for the procurement of innovation, knowing that some of these things are not going to work out.”
“You define the problem and you let the private sector figure out how to get there instead of having very long bureaucratic processes top down, specifying to the last screw how the problem is solved,” he added.
Cover:
-Steak and hamburgers are experiencing a surge in prices, becoming luxury items rather than everyday staples. At a recent cattle auction in Texas, prices reached $1.30 per pound, which, although lower than premium cattle, is significantly higher than prices five years ago. The auction highlights the growing demand for quality breeding stock amidst a declining U.S. cattle population, now at a 75-year low, resulting in skyrocketing steak prices—up by 55% and ground beef by 69% over five years. Despite these high prices, demand for beef remains strong, driven by marketing shifts that have repositioned protein's value in dietary guidelines. Larger restaurant chains, like Texas Roadhouse and LongHorn Steakhouse, adapt by managing costs effectively, while smaller establishments, such as San Antonio's Barn Door steakhouse, are struggling to maintain competitiveness within a value-driven market. Contributing to the increasing price are factors such as cattle supply constraints, notably due to screwworm outbreaks affecting cattle exports and reduced US herd sizes.
Interview:
-No update
Tech Trader:
-As large technology companies prepare for fourth-quarter earnings, attention has shifted from sales growth to the significant capital expenditures (capex) on artificial intelligence (AI) data centers. In 2025, Amazon, Microsoft, Alphabet, and Meta Platforms collectively spent over $400 B, approximately equivalent to Pakistan's GDP. Projections indicate that this expenditure will rise sharply in 2026, with Amazon forecasting $200 B in capex, followed by $180 B for Alphabet and $125 B for Meta. Microsoft, on a different fiscal calendar, reported $72 B in the first half of 2026, suggesting a total capex of about $650 B for these four companies—comparable to Argentina's economy. This level of spending is expected to significantly impact the companies' financial statements. Capital expenditures are reflected in income statements through depreciation costs, which are spread over several years.
The Trader:
-Hasbro and Mattel, both reporting earnings on February 10, exhibited contrasting results. Hasbro's fourth-quarter earnings exceeded forecasts, resulting in a nearly 25% stock increase in 2026 and reaching a multiyear high. In contrast, Mattel's sales missed analyst expectations, leading to a 25% drop in its stock. Following Hasbro's earnings report, six Wall Street analysts raised their price targets, with ROTH's Eric Handler setting a target of $120, which is 17% higher than the current share price. He emphasized the growing popularity of role-playing games, noting an 86% sales surge in Hasbro's Wizards of the Coast and digital gaming sectors, which includes franchises like Magic and D&D. Hasbro's success extends to traditional toys, bolstered by its partnership with Disney, with key releases such as Toy Story 5 and Marvel movies expected to drive sales. Additionally, Hasbro announced licensing deals with HBO for Harry Potter toys and action figures for a live-action Voltron movie, set to stream on Prime Video later this year.
--As fourth-quarter Big Tech earnings reports emerged, the focus shifted from traditional sales growth and profits to the significant capital expenditures (capex) in artificial intelligence (AI) data centers. In 2025, Amazon, Microsoft, Alphabet, and Meta Platforms collectively spent over $400B, akin to Pakistan's GDP. Projections indicate this will escalate to approximately $650B in 2026, with Amazon forecasting $200B, followed by Alphabet and Meta at $180B and $125B, respectively. Microsoft, with a fiscal year ending in June, spent $72B in the first half of 2026. Such expansive spending is poised to alter the financial landscapes of these tech giants. On income statements, capex is reflected through depreciation over several years. For instance, Alphabet’s AI data center expenditures will allocate about $108B to servers, leading to annual depreciation costs of approximately $18B, which could double Alphabet's 2025 depreciation expense to nearly $42B by 2026, impacting gross margins.
Features:
-Stellantis experienced a significant decline of 24% in stock value following a management update on February 6, which revealed substantial one-time charges totaling EUR 22B (approximately $25.9B) due to electric-vehicle asset write-downs and warranty-related expenses. The forecast for operating profit for the second half of 2025 has also been revised to fall below previous guidance, along with the announcement of no dividends in 2026 and the sale of €5B in convertible debt intended to strengthen the balance sheet. Analysts, including Oxcap Analytics' Stuart Pearson, expressed concerns regarding the poor operational performance and ongoing cash generation issues, suggesting this could lead to a value trap characterized by continuous cash burn, dividend cuts, and the necessity for capital raises. Nevertheless, the fundamentals of the car business remain intact, and analysts predict that with improved product offerings and distribution, Stellantis could see its stock price rise by 50% from current lows. Notably, there appears to be a significant effort by new CEO Antonio Filosa, appointed in May after Carlos Tavares' departure, to address and rectify the company's financial challenges and set realistic expectations moving forward.
-Energy stocks have significantly outperformed the broader market in 2023, surging 20% while the S&P 500 has only climbed 1.4%. Key factors driving this rise include geopolitical tensions, with US military interventions in Venezuela and potential actions in Iran, creating a favorable environment for energy investments. Additionally, as tech stocks face volatility and declines due to concerns over artificial intelligence impacting market shares, investors have sought refuge in energy, which remains largely insulated from such disruptions. This sector exhibits a low correlation to the overall market, as noted by Nicholas Colas of DataTrek. Furthermore, the resurgence of sectors that underperformed in the previous year, such as consumer staples (up approximately 13%), suggests a broader investor strategy dubbed a "dash for trash," where poorly performing assets recover. Analysts highlight that the shift towards hard assets, including commodities, has contributed to rising oil prices, with benchmarks currently increasing by about $9 to reach $69 per barrel.
Europe:
-Exor is a European investment company controlled by the Agnelli family of Italy, holding significant stakes in notable public and private firms, including approximately 20% of Ferrari and interests in Stellantis, CNH Industrial, and Philips. However, Exor has experienced a challenging period, with shares declining over 20% in the past year, paralleled by a 25% drop in Ferrari stock and struggles within Stellantis following a substantial write-down of its electric-vehicle business. Currently, Exor shares are priced at 72 euros ($85.75) on the Euronext exchange and about $86 for its American depositary receipts, reflecting a more than 50% discount to its estimated net asset value (NAV) of $190 based on its public and private holdings. CEO John Elkann, who has been at the helm since 2009, has demonstrated a robust track record with a nearly 18% growth in NAV, surpassing the MSCI World Index's 11%. Market analysts, like Ross Glotzbach from Southeastern Asset Management, express confidence that this significant discount is not sustainable and that Exor's portfolio companies could recover, potentially turning Exor into a favorable investment.
Emerging Markets:
-No update
Commodities:
-Signet Jewelers is positioned for growth with Valentine's Day spending anticipated to reach a record $29.1B, including a significant $7B allocated to jewelry. As the leading specialty jewelry retailer in the US, Signet operates approximately 2,600 stores under various brands such as Kay Jewelers and Zales. According to the National Retail Federation, jewelry is expected to comprise the largest share of Valentine's Day expenditures, with 25% of consumers planning to gift jewelry this year. This marks an increase from 22% in the previous year, translating to around $6.5B in jewelry purchases. Despite challenges in the jewelry industry, including declining demand for diamond jewelry and competition from lab-grown diamonds, Signet's stock has risen by 7.8% year-to-date and 69.5% over the past year. Meanwhile, Anglo American faces difficulties with its De Beers mining business, including significant write-downs.
Streetwise:
-In the context of the recent decline in software stocks, two significant points can be highlighted. Firstly, catchy phrases like “SaaSpocalypse” are prevalent, indicating a dramatic downturn for software-as-a-service firms. Other creative names did not fit as well, showing the pervasiveness of the sentiment. Secondly, while the software market crash appears to be over, analysts suggest there may still be further declines ahead. BTIG notes that capitulation was observed, but if stocks fall below recent lows, a deeper downturn might ensue. UBS also mentions that uncertainty hangs over the sector, primarily driven by fears of artificial intelligence potentially disrupting the market. This recognition suggests AI's capacity for profitability could benefit software at various operational levels. Deutsche Bank, while not as definitive, has a target list of undervalued software stocks to consider in light of this selloff. The author illustrates this landscape through a personal anecdote involving a podcast collaborator's shift to an industrial composting startup that incorporates software tools for waste management, showcasing the evolving applications within the sector.
Tesla (TSLA) US sales estimated to have dropped 17% in January
Tesla’s US sales fell an estimated 17% year-over-year in January 2026, according to registration data from Motor Intelligence.
The automaker moved an estimated 40,100 vehicles during the month, down from 48,500 in January 2025. Tesla doesn’t report monthly US sales figures, so third-party registration estimates are the best available proxy — and they point to a fourth consecutive month of declining domestic demand.
A domestic market in retreat
The January estimates continue a trend that has now defined the better part of two years for Tesla’s US business. Based on Motor Intelligence data, domestic registrations have declined year-over-year in nine of the past twelve months, with only the July-September 2025 window posting gains, a burst driven almost entirely by consumers rushing to buy before the $7,500 federal EV tax credit expired on September 30. Once that artificial demand pull-forward ended, the bottom fell out.
Motor Intelligence estimates that full-year 2025 US registrations totaled 568,454 units, down 10% from 2024’s 625,712. That tracks closely with Tesla’s global story: the company delivered 1.636 million vehicles worldwide in 2025, an 8.6% decline and the second consecutive year of falling deliveries.
The January drop also follows an ugly close to 2025. In November, Tesla’s US sales fell to under 40,000 units, the lowest monthly total since January 2022. December brought a modest sequential recovery to 48,300 units, but that number was still below year-ago levels.
Tax credit hangover meets brand erosion
Two forces are converging against Tesla’s US demand. The first is structural: the expiration of the $7,500 federal EV tax credit effectively raised the cost of every Tesla by that amount overnight. According to Cox Automotive, the average EV transaction price rose 18.1% year-over-year to $51,981 in January 2026.
The impact on the broader EV market has been severe. EV market share in the US collapsed to just 6.6% of retail sales, down from 9.5% a year earlier. Kelley Blue Book estimates that total US EV sales in January 2026 fell nearly 30% year-over-year. Tesla is far from the only automaker hurting, but its estimated 17% decline is notable because the company had already been losing ground before the credit disappeared.
The second force is Tesla-specific. The brand damage from Elon Musk’s political activities, and now his links to Epstein, which is a story that doesn’t appear to go away, continues to compound.
Tesla’s brand value crashed 36% in 2025, falling to $27.6 billion — less than half its $66.2 billion peak in 2023, according to Brand Finance.
In California, Tesla’s most important US market, Experian data shows market share fell from 11.6% of all vehicle registrations in 2024 to 9.9% in 2025. Tesla’s California sales have been dropping by double digits while the rest of the state’s EV market grew. That is a devastating signal for a brand that built its identity in the Bay Area.
Tesla launched the lower-priced Model Y Standard ($39,990) and Model 3 Standard ($36,990) in Q4 2025 to address affordability concerns. But as Electrek reported earlier this week, price cuts alone aren’t pulling buyers back in. The problem is no longer just price, it is the brand itself.
Competitors closing the gap
Tesla still holds 46% of the US EV market, down from 49% in 2024 and 75% in early 2022. The automaker that gained the most ground is GM, whose EV sales surged 48% in 2025 to nearly 170,000 units, lifting its US EV share from 8.8% to 13.2%. The Chevrolet Equinox EV alone sold nearly 58,000 units, making it the third best-selling EV in America behind only the Model Y and Model 3.
While GM is gaining, the overall US EV market contracted for the first time in years. Total 2025 EV sales landed at roughly 1.28 million units, down about 2% from 2024, according to Cox Automotive. Ford’s EV business slipped further, with sales dropping 14% to about 84,000 units. Hyundai-Kia also retreated, falling from 124,000 to fewer than 104,000 EV sales.
A global problem, not just a US one
The picture is far worse internationally. BYD overtook Tesla as the world’s largest EV seller in 2025, moving 2.26 million battery-electric vehicles compared to Tesla’s 1.64 million. That gap is widening, not closing.
In Europe, where Tesla’s sales collapsed 27.8% for the full year, 2026 has started even worse. Registrations across five major markets are down 44% year-over-year in January, with the UK plunging 57% and Norway cratering 88%. In the UK alone, BYD nearly doubled Tesla’s volume last month, selling 1,326 battery-electric vehicles versus Tesla’s 647.
Tesla’s response to this multi-market collapse has been to pivot away from traditional auto sales entirely. On its Q4 2025 earnings call, the company announced the discontinuation of the Model S and Model X, and Tesla executives told investors to focus on “transportation as a service” through robotaxis and Optimus robots rather than vehicle deliveries. The company plans to more than double capital expenditures to $20 billion in 2026, directed almost entirely at AI and autonomous driving infrastructure, not new car models.
Anduril Discusses New Funding at $60 Billion-Plus Valuation
The Takeaway
- Defense tech startup Anduril in talks for funding at $60 billion-plus valuation.
- Funding will support a new weapons factory and autonomous fighter jet development.
- Anduril’s revenue was expected to double to $2 billion last year amid high cash burn.
Defense tech startup Anduril is in talks to raise billions in new funding at a valuation of at least $60 billion including the new investment, according to a person with knowledge of the plans. The valuation would be roughly double the figure from its last private funding round in June.
The funding would give the company more leeway to fund its first major weapons manufacturing facility and the development of an autonomous fighter jet. It expected to double its revenue last year, to roughly $2 billion, from contracts with the Department of Defense and U.S. allies, but it is also burning cash.
The eight-year-old startup, founded by former Palantir employees as well as virtual reality entrepreneur Palmer Luckey, has already raised billions of dollars over the years to develop or buy more modern software, drones and submarines that can win over government buyers.
The company could further benefit from a shift in tone from the Trump administration toward more tech-leaning defense contractors, while it urges Anduril’s older, bigger rivals to curb stock buybacks and deliver weapons more quickly. Some of Anduril’s major backers have also been some of the Trump administration’s largest supporters in tech. Those include Peter Thiel’s Founders Fund, which has poured $2 billion into the company over the years, as well as Andreessen Horowitz and Joe Lonsdale’s 8VC.
Anduril CEO Brian Schimpf told The Information in October that it would double revenue last year. It also doubled revenue the year prior. Its latest slate of expansion is particularly expensive, as it builds out a major factory in Columbus, Ohio. The startup told investors last year it expected to burn between $800 million and $900 million last year.
SpaceX IPO Could Tap Hordes of Individual Investors
The Takeaway
- The SpaceX IPO could raise $50 billion, a watershed for individual investors
- Musk companies like Tesla have benefited from these investors
- But investment banks tend to prefer mutual funds that hang on to the shares
A potential record-setting SpaceX initial public offering has sent Wall Street into overdrive. Main Street wants a cut of the action.
Bankers and institutional investors who talk to SpaceX executives have been debating how much the company should set aside for individual investors to buy at the IPO price—through brokerages including Robinhood, SoFi and Morgan Stanley’s E-Trade—as well as for wealthy clients who can buy directly through the banks.
That’s in part because they are expecting a surge of interest from the kind of individual investors who stampeded into Tesla, drawn by the outsize internet presence of Elon Musk, CEO of the electric car maker and SpaceX. What’s more, retail brokerages that could benefit from a surge of excitement around the IPO are hoping to get a significant share of the sales.
The investment banks that handle IPOs, on the other hand, tend to prefer offering shares in mutual funds over offering them to individual traders, because they say the mutual funds are more likely to hold on to the stock after the first months of trading.
Nonetheless, the portion reserved for individual investors in SpaceX is likely to be higher than the customary 10% to 15% of IPO shares, say bankers.
The size of the SpaceX IPO may require their buy-in. SpaceX executives have told investors they plan to raise about $50 billion, which would roughly double the largest IPO in history. Many of the largest institutional investors and mutual funds in the world already bought shares while SpaceX was private, potentially limiting their appetite for more.
“For the upcoming megacap IPOs, there’s going to be a need for wider distribution,” said Gregor Feige, co-head of Americas equity capital markets at UBS.
“The trend we’re seeing is much more openness from companies [going public] to allocate globally whether it’s to sovereign wealth funds, family offices, ultra-high-net-worth individuals, and retail investors,” he said.
The extent to which individual investors can participate hangs over what is already set to be a complicated IPO. SpaceX is no longer just a rocket and satellite internet company, thanks to a recent merger with Musk’s xAI, which is trying to catch up with OpenAI, Anthropic and Google in the expensive race to develop AI. XAI’s costs could dampen investor enthusiasm.
Meanwhile, two other major AI competitors, OpenAI and Anthropic, are also taking steps toward huge IPOs that could compete for investors’ attention and dollars.
SpaceX’s ability to raise money directly from individual investors, as well as index funds, is a strong inducement to breaking a nearly quarter-century-long streak of staying private.
Musk has spoken publicly about capital-intensive projects the company plans to take on, like building factories on the moon and launching data centers into space to address potential power and land shortages on Earth.
The public markets “obviously [have] a lot more capital” than the private markets, Musk said on the “Cheeky Pints” podcast last week. “It might not be 100 times more capital, but it’s at least way more than 10 times.”
There’s a long history of consumer companies making sure their long-time users get a chance to buy into an IPO before the first day of trading, when enthusiasm can double or triple the price of the stock. These companies can set aside stock through what’s known as directed share programs.
Airbnb, for instance, reserved up to 7% of its 2020 IPO for U.S. residents who rented their homes on the platform, according to its securities filings. In 2024, Reddit allocated 8% of its shares to users and moderators of its online forums in the U.S.
Executives at retail brokerages have pushed to have more access to the SpaceX IPO before shares start trading. The brokerages argue that these individual investors can benefit the company’s stock performance.
Robinhood CEO Vlad Tenev, for instance, has pointed to the premium valuation companies with heavy individual shareholder bases, like Palantir and Robinhood itself, have seen in recent years of trading.
Individual investors who get shares in the IPO can get burned, however. Crypto exchanges Gemini and Bullish gave individual investors a higher allocation than usual, up to 30% and 20% respectively, last year. But both companies, which surged on their first day of trading, have now dropped more than 50% from their IPO price.
Musk’s Tesla, valued at $1.3 trillion, has leaned on individual investors to keep the stock rising in recent years even as its vehicle sales have declined. The general public owns about 40% of Tesla’s stock available for trading, compared to about 30% for other tech stocks such as Apple, Alphabet and Nvidia, according to S&P Global Market Intelligence.
Musk said in a 2024 interview: “I love retail investors. They have decided to support the company, which is very much appreciated.”
WeightWatchers’ CEO on diet drugs: ‘The key is re-owning weight’
Tara Comonte is putting fat jabs at centre of a plan to steer company through bankruptcy protection
It is time for WeightWatchers to reclaim weight loss. “Over the years, [we’ve said] we’re a wellness company. The key is re-owning weight,” says chief executive Tara Comonte.
Appetite-suppressing drugs such as Wegovy and Mounjaro are helping to remove the stigma of shedding pounds after a shortlived cultural shift towards body positivity. But the diet company whose approach has historically focused on food diaries and group meetings in church halls and community centres, is having to retool, and fast.
Comonte says the so-called GLP-1 drugs are a boon rather than “competition” for WeightWatchers, and are at the centre of her plan to rebuild the company into a primarily digital subscription business that can survive the medical revolution.
She is keen to spread the message that WeightWatchers is back, after “a lot of noise” and “wildly inaccurate” headlines proclaimed the death of the company when it filed for US bankruptcy protection last spring. If there was one positive to take from the press interest, she says, it was that WeightWatchers is “a leading global brand that drives a very high level of interest”.
Comonte was appointed interim chief executive in September 2024, after WeightWatchers’ share price crashed 97 per cent in three years, and her role was made permanent last February. On a recent trip to London, the 52-year-old who grew up in Scotland and has lived in the US for 18 years, is personable and chatty, talking about family (she has three children and so does her long-term partner).
She acknowledges the company lost its way in recent years, as dieting became a dirty word during the body positivity movement, which encouraged people to be healthy at any size. WeightWatchers changed its name to WW in 2018, intending to evoke wellness, but instead stirred confusion.
It then suffered from a wave of new competition — first from online apps that made its in-person meetings look outdated and then from the sudden rise of drugs that upended the weight-loss market.
Comonte has steered WeightWatchers through the Chapter 11 process, modernising its brand, improving digital products and integrating GLP-1 drugs into its business. “It was very obvious what needed to be done [regarding] the balance sheet. This company had accumulated $1.6bn worth of debt [and its] free cash flow all went to interest on the debt . . . It was imperative to be able to free up capital for innovation.”
The question now is whether growth from its clinical arm can offset declines in the core dieting division, according to Nathan Feather, an analyst at Morgan Stanley.
About 12 per cent of Americans have used GLP-1 drugs for weight loss, according to research group Rand, and Comonte insists the company is now in a position for rising demand to drive — not threaten — its growth. In 2023, it bought Sequence, a telehealth business it has renamed WeightWatchers Clinic, which can prescribe drugs such as Ozempic and Wegovy, including the new pills, to members in the US.
Revenues from the clinical subscription business, which provides the drugs, were 35 per cent higher in the three months to September 2025 than the same period the year before. That compares favourably with group sales, which declined by almost 11 per cent to $172mn — but only represents about 15 per cent of total revenues. At the end of the third quarter, WeightWatchers had 124,000 clinical subscribers — 60 per cent more than a year earlier. But the number of members on behavioural subscriptions dropped by 20 per cent to 2.9mn.
“[The clinical business] is still a relatively small proportion of our membership today, but it’s a fast-growing part of the business. I expect more and more people to be on these medications over time . . . [particularly as the] price comes down.”
Interest in the drugs programme is clearly high. More than 1,000 people logged on to a recent online “GLP-1 Curious” session even though “we did no marketing”, says Comonte. It is a big shift for the company that in 2024 parted ways with its brand ambassador and shareholder Oprah Winfrey after she credited her smaller size to jabs.
The risk is that by going down the GLP-1 route, WeightWatchers becomes just another provider, losing its community spirit and focus on its core behavioural business.
For WeightWatchers to sell itself as supporting weight-loss drugs through lifestyle changes, it needs to work on its messaging, says Neil Saunders, managing director of retail at consultancy Global Data, so the consumer sees it as “more than . . . just weight loss — it doesn’t yet fully occupy that ground”.
Comonte hopes to encourage members who sign up to take drugs to also participate in a programme that advises on managing side effects, diet and exercise. A three-month trial by the company found those taking medication lost 54 per cent more weight if they also did its behavioural programme, compared with those who just took drugs.
The chief executive, who is slender, sees herself as the “perfect example of someone who wants to maintain my weight”. Like many members, she is using the WeightWatchers programme to restrict her calorie intake after the Christmas festivities. “It’s a particularly busy time.”
She hopes to launch an AI body scanner so users can monitor and maintain muscle mass while losing weight, and says coaches at the company have experience of being on weight-loss drugs so members can access “people who have walked in your shoes”.
Unlike online pharmacies, which “really just write your prescription and wish you luck . . . we support you the whole way through that journey”.
Sticking to the programme to maintain weight after achieving the goal may help people who are fearful of piling the pounds back on. This could allay dieters’ anxiety after recent clinical research on weight-loss drugs found that users returned to their original weight within two years of stopping.
Beth McGroarty at the non-profit Global Wellness Institute says: “The weight-loss drug market is just so crowded and complex, constantly changing with new regulations . . . If they can pull it all together in a meaningful, deep programme, it seems like a new model that could work.”
Covid-19 forced the closure of many weight-loss meetings, which frustrated WeightWatchers members who enjoyed the conviviality and support of their peers. Some countries, including France, now only offer virtual sessions. Comonte insists in-person meetings will continue. “We’ve got 60-plus years of being in the behavioural business.” But digital meetings will continue to grow, including some tailored to dieters at different life stages, such as the recent launch of a programme for menopausal women with rapper Queen Latifah as brand ambassador. “The proportion of virtual to real life will definitely increase because that’s what people are looking for.”
With the toughest part of the financial restructuring behind her, Comonte reflects on the challenge of being unable to publicly counter premature reports of the company’s demise. “It can be really scary to read headlines.”
To buoy morale internally, she says she briefed employees regularly. “I gave a lot of context . . . I did it often and I didn’t ever do it scripted. I did it live, I took a lot of Q&As. If we locked ourselves in a room and put our heads down and hoped for [the best], not only would that have been naive, it would have been pretty selfish.”
The child of a doctor, Comonte “saw first-hand how much [my mother’s] patients trusted and valued her. She was loving but also strong and decisive, and because of that I never really questioned women in leadership. Losing my mother relatively young reinforced for me that you rarely know what someone else is carrying, and how important it is to lead with empathy.” Her father, a businessman turned Conservative MP, taught her the importance of “preparation and care”.
Her job at WeightWatchers has similarities to her stint as chief financial officer at Shake Shack, the fast-food chain, which taught her “the power of a strong culture, particularly when a company is going through significant change”.
Attempts by previous WeightWatchers chief executives to reinvigorate the business have had little effect. What makes this time different? “WeightWatchers has been around for more than six decades,” she says. “This is an iconic global brand . . . it, of course, has evolved and [been] reinvented. This is the most exciting chapter in WeightWatchers’ history, and that is not just because I happen to be part of it.”
Duty-free group Avolta bets on Michelin-starred chefs and magic tricks
World’s biggest operator of airport retail and food outlets is trying out different ways of coaxing travellers to spend more
At Avolta, the world’s biggest operator of airport duty-free and convenience stores and food outlets, some employees are as likely to do magic tricks or balloon modelling as they are to sell perfume and spirits.
What sounds like a gimmick is central to an overhaul that has helped propel the Swiss-listed group’s shares to four-year highs, although they remain far from pre-pandemic levels.
Avolta — a franchisee and operator for groups including Burger King, Costa Coffee and Starbucks — is betting that blending entertainment with shopping and dining will coax travellers to spend more and boost profitability.
For decades, the travel retail model depended largely on selling high-margin luxury goods to captive passengers. But although airport passenger numbers are recovering since the pandemic, travel retail companies remain under pressure.
Airport operators, many still repairing Covid-era balance sheets, have pushed up concession fees on retailers while online shopping and domestic duty-free markets are changing consumer behaviour, prompting Avolta to reinvent itself.
Chief executive Xavier Rossinyol, who returned to Basel-headquartered Avolta in 2022 from airline catering and retail company Gategroup, said the pandemic had exposed the limits of the old model.
“The strategy had been the same for almost 20 years — it wasn’t working anymore,” he said in an interview with the FT. After Covid, “everything was about savings. We needed a model that could grow faster than passenger numbers”.
As part of a strategy known internally as Destination 2027, Avolta — formerly known as Dufry — is switching up store formats, expanding dining options and providing entertainment.
The group, which operates over 5,100 outlets in more than 70 countries, has brought in Michelin-starred chefs such as Dabiz Muñoz into airports in Spain and introduced dining areas inside duty-free stores to encourage shoppers to stay there longer. It has also launched hybrid outlets such as coffee shops selling gifts in Europe, the Middle East and Latin America, with the format being rolled out across its whole portfolio.
Avolta was formed from the $7bn merger of Dufry with Italian airport and motorway caterer Autogrill in 2023. Roughly 2.5bn people now pass through airports where it is present, yet only 700mn of them make a purchase. Raising that roughly 25 per cent penetration rate is part of Rossinyol’s strategy.
“We needed to have every different thing a passenger might value,” Rossinyol said.
Entertainment is the most eye-catching element of the shift. In 2023 Rossinyol appointed Jonathan Shotton, a former magician and design developer for Legoland, as head of entertainment.
Avolta has since launched an in-house entertainment academy, training staff in origami, magic and face painting, drawing prospective customers into stores and giving them a more interesting experience while they are there. It has installed flight simulators in Toronto, Formula One simulators in Bangalore and Madrid and opened a gaming lounge at New York’s JFK airport.
For the Africa Cup of Nations earlier this year, the group built a football-themed interactive installation inside duty-free stores in Casablanca. The installations can be moved between airports and sponsored by brands, creating additional revenue streams.
There are signs the turnaround is bearing fruit. In the first nine months of 2025, Avolta reported 5.4 per cent organic sales growth with turnover of SFr10.6bn, outpacing underlying passenger growth and at a time when some competitors have reported slower growth.
After heavy cash outflows during the pandemic, the group generated SFr503mn of equity free cash flow over the period, up from SFr425mn in 2024.
Shares have climbed to about SFr48 — levels last seen during the post-Covid travel boom in early 2022.
These gains come against a mixed backdrop for rivals. China Tourism Group Duty Free has been hit by weaker domestic travel, while DFS, owned by luxury group LVMH, has been exposed to uneven tourist flows. LVMH last month agreed to sell its underperforming DFS business in Hong Kong and Macau to China’s CTG.
Analysts caution that Avolta’s turnaround is still in its early stages.
“Travel retail is still a highly cyclical business,” said Fehmi Ben Naamane at Oddo, adding that Avolta’s growth remained closely tied to recovering passenger traffic, including the gradual return of higher-spending Chinese travellers.
However, he added, the Autogrill merger had made Avolta more resilient and less exposed to emerging markets than a decade ago, while its larger size and global presence gave it “stronger negotiating power with airports over increasingly expensive concessions”.