>>> Weekend Papers Summary

Weekend Papers Summary

NEW YORK TIMES
-Allies Fail to Agree on Sending German-Made Tanks to Ukraine. Officials tried to play down the rift. But Germany is insisting it will not be the country to take the first step, for fear of incurring Moscow’s wrath.
-One Saturday in Dnipro, life in Ukraine was almost normal (or it is at times). Then, suddenly, it all changes, as it did after a missile struck an apartment complex.
-The NATO alliance is holding strong on Ukraine. But Fractures Are Emerging. The allies differ on strategy for the coming year and the more immediate question of what Ukraine needs ahead of a major offensive in the spring.
-As tech companies lay off workers en-masse, a generational divide appears. The industry’s recent job cuts have been an awakening for young workers who have never experienced a cyclical crash.
-Despite some red flags, the GOP decided to back a candidate now charged in shootings. “We could have picked apart this guy,” one GOP leader in New Mexico said of Solomon Peña, who is accused of organizing attacks on the homes of Democrats.
-The March for Life kicks off in Washington, setting the stage for new ideas. The annual anti-abortion gathering to protest Roe v. Wade was the first since the Supreme Court overturned the right to abortion.
-A Supreme Court’s inquiry into a leaked draft opinion overturning Roe included interviews with Justices. But they were not asked to sign sworn affidavits, unlike others investigated about the, the court’s marshal said.
-Actors worry after Baldwin charges. The manslaughter charges Alec Baldwin faces after a fatal on-set shooting revived questions about who’s responsible for gun safety on film sets.
-How smart are the robots getting? The Turing test used to be the gold standard for proving machine intelligence. This generation of bots is racing past it.
-The ringleader of the sex cult at Sarah Lawrence College gets 60-year sentence. Ray was convicted of extortion, sex trafficking, racketeering conspiracy and other charges.
-David Crosby, the singer and songwriter, who died this week, created music that helped define an era. On Twitter, David Crosby relished sharing opinions big and small, sparring with fans and dispelling myths.
-He Invested $625,000 With George Santos. Now He Says the Money Is Gone. A wealthy businessman has been in touch with the SEC about Mr. Santos’s dealings on behalf of a company accused in a Ponzi scheme.
-British Prime Minister Rishi Sunak has been fined for not wearing a seatbelt. The police levied the fine after Mr. Sunak, the British prime minister, posted a video on Instagram that showed him riding in a car, unbuckled.
-The Justice Department is investigating troubled infant formula plant. Abbott shut down production at the plant last year amid “shocking” sanitation lapses, touching off a disruptive infant supply formula shortage.
-Chris Hipkins appears to be poised to rplace Jacinda Ardern as New Zealand’s prime minister. Hipkins, a household name in New Zealand for his role overseeing the country’s response to the pandemic, was nominated to succeed Ms. Ardern who resigned on Thursday.
-The police and paramedics accused in Elijah McClain killing plead not guilty. The 23-year-old Black man died in 2019, days after being placed in a chokehold and injected with a powerful sedative.

THE FINANCIAL TIMES
-Germany dashed its allies’ hopes that it would approve the dispatch of battle tanks to Ukraine on Friday when a high-profile defense ministers meeting failed to reach an agreement. Many western countries argue that the German-made Leopard 2 battle tanks would greatly help Kyiv mount a counteroffensive against Russia, but Berlin has yet to agree, despite weeks of intense pressure from its allies.
-The annual gathering of business, economic and political elites in Davos divides opinions. But it is an ideal place to take the global temperature on economic sentiment — and the consensus view seemed to be that conditions had bottomed out and were becoming more positive. Many had expected 2023 would bring a lasting hangover from Russia’s war in Ukraine, continued Chinese economic weakness and the devastating effects of high energy and food prices on living standards across the world.
Instead, delegates came to the mountains to cheer three new developments that improve the outlook.
-Since OpenAI launched the ChatGPT language-generation model before Christmas, New York’s public schools have banned pupils from using it. In Australia, universities are planning a return to supervised pen and paper examinations to evade the chatbot fakes. Teachers are rightly concerned that they won’t be able to help pupils who are falling behind if they can’t spot faked assignments. But one reason these bots pose such a threat is that so much of our education remains fixated on being able to elegantly regurgitate information.
-When FTX imploded, nervous investors rushed to pull their money from Genesis. The broker was unable to meet clients’ $827M worth of withdrawal requests, forcing it to suspend withdrawals from its lending business. On Friday, Genesis’ lending unit filed for bankruptcy.
-Lawyers for FTX have accused Sam Bankman-Fried of trying to disrupt the bankruptcy process of his crypto empire through an “assault by Twitter”. In recent weeks, Bankman-Fried has in numerous tweets and blog posts accused Sullivan & Cromwell, the law firm representing FTX in its Chapter 11 proceedings, of putting him under pressure to rush the companies into bankruptcy, including the US arm of FTX, which the former billionaire claims was solvent. The firm has denied those claims.
-Elon Musk disputed that his frequent Twitter posts necessarily moved Tesla’s stock price, as he began testifying on Friday in a trial over whether his 2018 “funding secured” tweet illegally manipulated the electric-car maker’s value.
Wearing a dark suit and tie, Musk was called to the witness stand late on Friday, the third day of a closely watched trial in a federal court in San Francisco scrutinizing the impact of Musk’s 2018 tweets saying he had the necessary funding to take Tesla private. No deal ever materialized, prompting shareholders to sue Musk, Tesla and the company’s board of directors at the time.
-Rentokil, the world’s biggest pest control group, is planning to annihilate the pesky rodents by using facial recognition to track their habits. Rentokil said its surveillance service, which live streams video of the vermin to its “central command center” for real-time analysis using artificial intelligence, can help decide where and how to hunt the fast-breeding undesirables. The UK-based group acquired the technology in a spree of hundreds of deals that has boosted its pest control capabilities.
-A governor on the board of the Federal Reserve has backed the US central bank further slowing the pace of its interest rate increases to a quarter of a percentage point at its upcoming policy meeting, even as he warned of further monetary tightening ahead.
-Chris Hipkins, the country’s education minister, had been regarded as a likely successor to Ardern, who announced this week she would step down as prime minister by February, ending her five-year term as leader. The 44-year-old was named in a Labour party statement on Saturday morning, local time, after his bid for the leadership of the party was unchallenged.
-President Emmanuel Macron promised to boost French defense spending to the end of 2030 to reinforce the country’s capabilities in response to new global threats after Russia’s invasion of Ukraine. “The new conflicts of our century will not be of our choosing,” Macron said in a new year speech on Friday at the Mont-de-Marsan air force base in south-west France. “There is no more peace dividend because of the aggression of Russia against Ukraine.”
-Steven Cohen’s Point72 has finally won approval to operate directly in the UK, a decade after the US trader’s previous firm pleaded guilty to insider trading and paid a record $1.8B in fines. Point72, a former family office that opened to outside investors in 2018 and which manages $26.7B in assets, succeeded in its years-long attempt to receive regulatory authorization last week, according to the Financial Conduct Authority’s website.
-Drinks group Diageo’s $1B deal for George Clooney’s Casamigos tequila brand brought plenty of Hollywood glamour but was also met with skepticism. “The stars must line up perfectly for this deal to create value,” one analyst cautioned when the acquisition was announced in 2017. More than five years later, it is clear they have.

NY POST
-Ivana Trump, who passed away last July after falling down the staircase of her Manhattan home, carefully divvied up her estate before her death. Probate records reviewed by Insider show that the 73-year-old left most of her estate to her three children — Donald Trump Jr., Ivanka and Eric — a $1M Miami Beach, Florida apartment to her former nanny, and zilch for her ex-husband, the former president.
-A box labeled “Important Doc’s + Photos” was left unsealed on a table ahead of a child’s birthday party in the Delaware home where the 80-year-old president has been discovered to have stashed sensitive government records, a photo from his son’s laptop, discovered by The Post Friday reveals.
Another image on the infamous laptop reveals that Hunter Biden apparently made more than 160 trips to the sprawling, lakeside house in just 52 days during the same time he was involved in controversial business dealings with a Chinese energy conglomerate — and while the home contained the discovered classified documents.
-Security guards at the theft-plagued pharmacy chain Walgreens have been instructed not to confront the shoplifters when they walk out without paying, according to a company executive. Walgreens, which operates 240 stores in the Big Apple, including Duane Reade, has been riddled by robberies to the point where the stores have had to put items like toothpaste behind lock and key. The chain hired unarmed guards and off-duty cops — but they haven’t been much of a deterrent. “[Security guards] are not there to protect the product,” said Joseph Stein, director of asset protection solutions for Walgreen, “They are there to de-escalate [a situation] and to protect the customer and the employees,” he added.

WWD : Barreling Toward $1 Billion With Inter Parfums’ Jean Madar

Barreling Toward $1 Billion With Inter Parfums’ Jean Madar
The fragrance company is capitalizing on the post-pandemic, fragrance-obsessed consumer landscape with a portfolio of brands that spans geographies and price points.

For Jean Madar, the road to $1 billion is paved in perfume.

The chairman, chief executive officer and cofounder of Inter Parfums Inc. has led the company to significant growth over the past two years, capitalizing on the boom in fragrance with licenses including Montblanc, Coach and Jimmy Choo, and snapping up a handful of new brands in the process.

In 2020, the company hit $539 million in net sales; 2021 saw a jump to $879.5 million, zooming past pre-pandemic levels. Inter Parfums raised guidance for the year to $1.08 billion following a larger-than-expected swell during the holiday season, and anticipates $1.15 billion in sales for 2023.

The company is helping fuel a renaissance in the fragrance business, thanks to an approach that prizes creativity and olfactive originality in terms of product development, and a global distribution infrastructure that encompasses key channels around the world.

The strategy is working. In 2021, Montblanc, Coach, Jimmy Choo and Guess, the company’s four largest brands, grew 46 percent, 45 percent, 61 percent and 83 percent, respectively, a performance reflected in Inter Parfums’ share price, up 13 percent in the past year to $110.68 at press time.

Inter Parfum’s growth outpaces the competition in a category that is soaring. For the third quarter of 2022, U.S. prestige scent sales increased 11 percent to $1.3 billion, according to the NPD Group, largely driven by brick-and-mortar revenues. Since the pandemic, designer fragrances and higher-priced collection fragrances have also been engines of growth.

“The fragrance segment has seen extraordinary growth, bigger than skin care and makeup. The past 18 to 24 months have been the time for fragrance, and this is going to continue,” said Madar, during a wide-ranging interview in his midtown Manhattan office. “Fragrance used to be the slowest of those three, with skin care booming in China and makeup booming in Europe.”

That is no longer the case.

“It has never been at this level,” continued Madar, who founded Inter Parfums in 1982 and took it public in 1988. “It’s the first time we’ve reached such a level — not just our business, but the segment of the industry. It’s worldwide, certainly in the U.S. and in Europe, and now it’s in China.

“If we didn’t have lockdowns there, that business would be booming,” said the executive. “Every year, we have 100 million new customers in China, discovering the world of fragrance, and we have fantastic brands for them, like Ferragamo and Anna Sui.”

Geographically, Inter Parfums is well diversified thanks to a portfolio of 24 brands that enables it to appeal to wide swathes of consumers around the world. In 2021, North America accounted for $354.1 million of sales; Europe, $202 million; and Asia, $128 million.
Inter Parfums’ core business comprises four key brands, each with $150 million to $200 million in net sales annually — Montblanc, Jimmy Choo, Coach and Guess.

While those names anchor its business, a slew of emerging brands diversifies its portfolio across price points and geographies, including Abercrombie & Fitch, Boucheron, Dunhill, Emanuel Ungaro, Graff, Hollister, Karl Lagerfeld, Kate Spade, Lanvin, MCM, Moncler, Oscar de la Renta, Rochas, S. T. Dupont and Van Cleef and Arpels.
In October 2021, the company acquired the Salvatore Ferragamo fragrance license, and Madar said that brand has already grown 45 percent in its first year under his purview. Most recently, Inter Parfums acquired the license for Donna Karan and DKNY fragrances after the Estée Lauder Cos. wound down its designer fragrance division, and picked up Lacoste after that brand was spun off by Coty Inc. That deal included an 80 million euro entry fee.
Madar anticipates that DKNY will develop into a fifth pillar for the company, estimating that it will reach $150 million in sales in the next 12 to 24 months. “We have big ambitions for DKNY,” he said.
Similarly, the Ferragamo acquisition hasn’t just added sales. It also led to Inter Parfums opening its first offices in Florence, Italy, with a headcount of around 50 employees. “We hired more people, and we think we can have more Italian brands because we now have that presence and production in Italy,” said Madar.
Analysts agree that Madar’s diversification strategy has been a winning one. “In addition to the market environment, the company has been successful in adding different brands to their portfolio. That’s helped them grow at a faster rate,” said Hamed Khorsand, analyst and founder of BWS Financial. “They’ve shown their ability to focus directly on the actual brand, market it well, distribute it well, and create new scents the customer likes. They’ve also shown their ability to get the sales of a brand to improve.”
Retailers laud Inter Parfums’ focus on storytelling. “Inter Parfums continues to capitalize on its position as a mid-sized beauty company. This position gives them agility in our partnership for both product innovation and new marketing tactics and this is all driven by consumer insights and data,” said Jennifer Capuano, vice president of fragrances at Macy’s Inc. “Anchored by the pillar brands, Coach and Jimmy Choo, the Inter Parfums team has focused on storytelling and animation in our stores.”

Madar applies a hands-on approach to product development, no matter the size of the business. “Our job is to customize each creation. We can’t take one bottle and say it’ll work for everyone,” he said. “Everything is customized, we don’t recycle ideas. If we don’t like a development, we’ll throw it in the garbage and start again. If we’re not ready, we delay a launch.”
The company focuses on four key tenets for a successful launch, although, as the CEO laughs, “it also takes a little bit of luck.”
“What works across the portfolio is the perfect equation between the brand, the packaging, the juice and the advertising,” Madar said. “Sometimes the brand is of very high interest, and sometimes less. It’s our job to make it happen.”
Licensors applaud that approach. “[Madar] is deeply involved in all things that go on in our business; it feels very much like a small company, despite the fact it’s not at all a small company,” said Alex Bolen, chief executive officer of Oscar de la Renta, of his relationship with Inter Parfums. “Jean is in almost all of the meetings I attend, both as a creative matter and a business matter. He brings a very unique approach that is both artistic and commercial, and he has a very strong opinion on the development of fragrances.”
The reasoning behind that style of collaboration, Madar said, is simple. “Think of us like a kitchen: we let the fashion houses into the kitchen to work with us. This makes the difference between us and the very large international companies,” he continued. “We work together, and we welcome [the brands in], because who knows better than them who they are? Our size allows us to do that.”
Inter Parfum’s size also enables it to be agile and responsive. “They’re beating our internal plans for sales, and it’s really, really early stage,” said Morris Goldfarb, chairman and CEO of G-III. “They’ve got aggressive changes planned for this coming year with Karl Lagerfeld, with the Met Gala being in his honor, and a film planned for the following year.
“Inter Parfums is committed to as aggressive of marketing as we are,” said Goldfarb.

The marketing piece is key, given that G-III’s fragrance business also gives its brands global reach. “From an economic point of view, it’s our largest license, but it’s a broad range of venues that make a brand relevant,” he said. “We’re much more global because of the interface with fragrance in consumers’ minds and visual contact, whether it’s duty-free stores or elsewhere in the world.”
Spinning brands into its global flywheel of distribution is also key to its growth over the last two years.
“They understand what it means for distribution of fragrance across the world, and that there’s differences in Europe versus department stores in the U.S. Our China and Asia markets for fragrance are just blowing up,” said Todd Kahn, CEO and brand president of Coach. “Every single one of our fragrances has been successful. They have really grown our business for beauty and for us, it’s an extension of the lifestyle that Coach is… you don’t feel any distinction between the licensor and licensee, they’re part of the family, and they’re incredibly knowledgeable about the beauty business globally.”
Indeed, Madar’s radar is finely tuned when it comes to picking up new licenses. “What we look for first of all is name recognition, but that alone is not enough,” he said. “Coca Cola is maybe the most recognized name, but does it mean people would like a fragrance from them? There also has to be desirability.”
While Madar is optimistic that the fragrance category will maintain its momentum in the year ahead, he’s also treading carefully in terms of new licenses. “The cost of launching a new fragrance today is astronomical — tens of millions [of dollars]. We have to be careful,” he said. “You need to study and learn that the product you’re coming with is right vis-à-vis the distribution, the brand.”
And despite seeing e-commerce sales multiply tenfold during the pandemic, he’s most bullish on brick-and-mortar. “I believe in brick-and-mortar because it’s an experience, and we’ve put so much effort into creating this theater,” he said. “Even when you have great digital assets for e-commerce, the physical contact in store is very important. It’s back and it’s back strong, and we won’t increase the amount of doors.”

Price points have also increased. “For fragrances a couple of years ago, it was difficult to go above $100. Now, for a larger size, under $100 would be an exception,” Madar said. “It’s not only because of inflation, it’s because of positioning, and we have to be careful not to lose customers, so we add smaller sizes with democratic prices. For Graff, $50 wouldn’t make a difference to the consumer, but for Guess, $10 would make a big difference.”
As with other categories in beauty, customers are more knowledgeable than ever. “I was at Macy’s, checking on the new launch of Oscar de la Renta, and a customer asked me where the lavender in the juice came from,” said Madar, noting the same dynamic exists in the Middle East and Europe. “These are questions that we’ve never had before.”
Despite changing market dynamics, success still boils down to the basics that have enabled the company to thrive: olfactive originality. “Philippe [Benacin], my partner, and I agreed we won’t do worldwide testing on our fragrances. We don’t want to create by committee,” said Madar.
“People want the difference — they want to be different. We’re going to pick the fragrance that has more character, more signature, that maybe is more difficult,” he continued. “Maybe some people are like, ‘Oh my God, I hate it!’, but that’s a good sign. The stakes are higher, and it’s very dangerous to stay in the comfort zone.”
All-Star Lineup

For the nine months ending Sept. 30, 2022, Inter-Parfums’ four top brands comprised 63 percent of overall business. Here, a breakdown of each one.

Montblanc
Montblanc Legend Eau de Toilette
Percentage of overall business: 19%
2022 Jan.-Sept. sales (est.): $147.4 million
2021 Annual Net Sales: $168.2 million
Top performing pillar: Legend Eau de Toilette
On Deck for 2023: Montblanc Explorer extension
Jimmy Choo
Jimmy Choo I Want Choo Eau de Parfum
Percentage of overall business: 18%
2022 Jan.-Sept. sales (est.): $139.7 million
2021 Annual Net Sales: $154.9 million
Top performing pillar: I Want Choo Eau de Parfum, Man Aqua
On Deck for 2023: Jimmy Choo Signature extension
Coach
Coach Floral Eau de Parfum
Percentage of overall business: 15%
2022 Jan.-Sept. sales (est.): $116.4 million
2021 Annual Net Sales: $136.8 million
Top Performing Pillars: Coach Floral Eau de Parfum, Coach for Men Eau de Toilette
On Deck for 2023: Coach Man extension

Guess
Guess Uomo Eau de Toilette
PHOTO COURTESY OF INTER PARFUMS, INC.
Percentage of overall business: 11%
2022 Jan.-Sept. sales (est.): $85.4 million
2021 Annual Net Sales: $101.9 million
Top Performing Pillar: Bella Vita Eau de Parfum, Uomo Eau de Toilette
On Deck for 2023: Uomo extension

WWD : Chanel Unveils Jewelry Watches Inspired by Pincushions and Couture

Chanel Unveils Jewelry Watches Inspired by Pincushions and Couture
The five limited-edition Mademoiselle Privé Pique-Aiguilles designs feature dials inspired by a house signature and couture crafts.

The dome shape of the Mademoiselle Privé Pique-Aiguilles watches nod to the pincushion worn by seamstresses.

For seamstresses, especially those working in couture, the essential tools are a pair of scissors and a pincushion, always at hand.
Since it often sits on the wrist, the latter became the basis for Chanel’s latest high-end jewelry watch designs launching on Friday, named “Mademoiselle Privé Pique-Aiguilles” after the object’s name in French.
Arnaud Chastaingt, director of Chanel’s watchmaking creation studio, “liked the image of this functional piece of jewelry that adorns the wrists of seamstresses,” he said in a statement announcing the launch of these new timepieces.

Expressing his fascination for “the design of objects whose architecture is the product of a practical need,” he added that he loved the “random design of needles” stuck into a pincushion and the way pinheads created a decorative effect that evolved as seamstresses work.

Five Mademoiselle Privé Pique-Aiguilles have been created, each in a limited run of 20 pieces, retailing between 175,000 and 250,000 euros. Shared by all is the domed watch glass as well as the black matte grosgrain bracelet and gem-set buckle.
The design of these high-end timepieces is meant to emulate the professional version, often a voluminous velvet dome sitting atop a metal cuff, worn by seamstresses.
A lacework of camellias, a little black jacket at the pattern stage, Chanel’s famous handbags, jewels on black tweed and sequins inspired this chapter of the Mademoiselle Privé collection.


Clocking in at 55 mm in diameter, the Pique-Aiguilles watches are significantly larger than the 34 to 40mm range preferred for women’s watches.
“In terms of style, the pincushion commands authority on the wrist, with presence and impact. Its outsize format does not detract from its comfort in any way, and it adapts to all wrists,” he continued.
The larger size also gave him plenty of space for the couture-inspired tableaux he imagined for the Mademoiselle Privé Pique-Aiguilles chapter.
The name Chanel no doubt brings to mind long necklaces, recognizable chains and Byzantine brooches layered over tweed, and that’s what is encapsulated in the Pearls motif version.
A thimble, scissors and tape measure take pride of place on the “Tweed Motif” model, where the elements of a tweed jacket are laid out, right down to the label and chain that finish it.
Snow-set diamonds dotted on a black-coated white gold dial nod to sequins embroidered on black fabric in the “Embroidery Motif” watch.
On the Lace version, hand engraving, “Grand Feu” enameling and decal techniques have been used to replicate an embellished camellia lace design. A scattering of minute gold beads and diamonds finishes off the effect of this dial produced by Les Cadraniers de Genève, a subsidiary of the watchmaker F.P. Journe in whom Chanel invested in 2019.
Black mother-of-pearl, assembled using marquetry techniques, was used to express the instantly recognizable surface of the house’s flagship handbags for the “Quilted Motif” design.
Previous chapters in the Mademoiselle Privé high-end watch collection have included the “Bouton” cuff design nodding to the bejeweled buttons of the house as well as the “Coromandel” and “Aubazine,” which explored various architectural motifs from places where Gabrielle Chanel lived.

>>> US Gapping down

Gapping down

In reaction to earnings/guidance:

  • JWN -7.3% (FY22 guidance), CNXC -4.9%, ERIC -4.2%, SWIM -3.1% (FY22 guidance), FFIN -1.6%

Other news:

  • BBBY -7.9% (receives notice from NASDAQ regarding delayed quarterly report)
  • AUTL -5.3% (announces two changes to the company's Board of Directors)
  • KSS -4% (entered into a $1.5 bln credit agreement)
  • TMUS -1.9% (continuing investigation on data breach)
  • LLY -1.8% (receives Complete Response Letter for accelerated approval of Donanemab)
  • OPNT -1.5% (announces FDA acceptance of NDA for OPNT003)
  • AKTS -1.4% (prices offering of 10909091 shares of common stock at $2.75 per share)
  • LXU -1.2% (provides update on its Cherokee AL facility)
  • SPT -1.1% (acquires Respustate)

Analyst comments:

  • DOMO -2.9% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
  • BIGC -2.5% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)
  • CRM -1.3% (downgraded to Market Perform from Outperform at Cowen)
  • PINS -1.2% (downgraded to Neutral from Buy at MKM Partners)

>>> US Gapping up


Gapping up
In reaction to earnings/guidance:

  • ATRO +7.5% (Q4 guidance), NFLX +6.4%, PPG +2.6%, RF +1.9%, HBAN +1.6%, SLB +1.5%, SIVB +1.2%

Other news:

  • W +6.1% (update to cost efficiency plan - to reduce workforce by ~10%; expected to accelerate the timeline for adj EBITDA breakeven to earlier in 2023)
  • CMPX +5.3% (announces Phase 2 data of CTX-009 to be presented)
  • SGML +4.4% (files NI 43-101 Technical Report for production expansion supporting the previously announced 60% increase in mineral reserves and $ 15.3 billion NPV)
  • GOOG +3.6% (decided to reduce its workforce by approximately 12000 roles)
  • EXEL +3.3% (provides update on patent litigation with MSN Laboratories)
  • EOSE +2.9% (investors pour $13.75 mln into convertible senior notes)
  • MGNI +2.3% (reducing workforce by 6%)
  • FTK +2.2% (appoints interim CEO and Chairman upon current CEO and Chairman's departure)
  • ABCL +1.4% (announces that the U.S. Patent Trial and Appeal Board upholds microfluidic cell culture patent)
  • COST +0.9% (reauthorizes repurchase program)

Analyst comments:

  • PVH +1.3% (upgraded to Overweight from Equal Weight at Barclays)
  • QSR +1.1% (upgraded to Outperform from Market Perform at BMO Capital Markets)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • ATRO +6.4%, NFLX +5.8%, PPG +5.1%, SGML +4.5%, ABCL +3.4%, EXEL +3.3%, EOSE +2.9%, GOOG +2.7%, MGNI +2.3%, FTK +2.2%, BGNE +2%, CMPX +1.3%, ARCC +1.3%, COST +1%, ABB +0.9%, SAVE +0.8%, TXN +0.6%
  • Gapping down:
    • BBBY -8.4%, JWN -5.7%, CNXC -4.9%, ERIC -4.6%, TWO -3.7%, SWIM -3.1%, KSS -2.9%, LLY -1.8%, AKTS -1.7%, FFIN -1.6%, TMUS -1.3%, SPT -1.1%

FT : Hedge fund Oasis takes 5% stake in The Restaurant Group

Hedge fund Oasis takes 5% stake in The Restaurant Group
Hong Kong-based fund could shake up owner of Wagamama and Frankie & Benny’s chains

Hong Kong-based activist hedge fund Oasis Management has taken a 5 per cent stake in Wagamama-owner The Restaurant Group in a move that could lead to an overhaul of the casual dining and pub operator.

Oasis came to prominence in the UK after it bought up nearly a fifth of the shares of British manufacturer Premier Foods and led an activist rebellion to remove the Mr Kipling-cakemaker’s longtime chief executive.

Oasis bought its stake in The Restaurant Group, which owns 423 venues across the UK including the Chiquito and Frankie & Benny’s chains, in late November last year, according to a company filing.

The Restaurant Group has bounced back from the lows of the coronavirus pandemic, when it was forced to shut 125 of its worst-performing venues. The group reported sales in the six months to July last year of £423mn, almost double the group’s half-year sales in 2021.

But, as with much of the hospitality industry, the group has been weighed down by soaring energy, labour and food and drink costs, alongside exposure to rising interest rates.

Investors also fear that the cost of living crisis could precipitate a downturn in the hospitality sector. The London-listed group’s share price has fallen about 65 per cent over the past year, to 35p. In December, The Restaurant Group’s lenders agreed a £340mn funding package for the business.

Chief executive, who previously led HBOS through its near-collapse during the 2008 financial crisis, said the company was making “good progress” and “decisive management actions”, including hedging energy costs, had limited cost pressures.

The Restaurant Group declined to comment. A representative for Oasis did not immediately respond to a request for comment.

Founded in 2002 by Seth Fischer, a former portfolio manager in Asia for JPMorgan Chase’s Highbridge Capital, Oasis makes the majority of its investments in Asia.

In 2017, the Hong Kong-based hedge fund was invited on to the board of Premier Foods after becoming its second-biggest investor.

At the annual meeting the following year, Oasis alongside US hedge fund Paulson & Co, pushed for the group’s CEO Gavin Darby to be removed after five years in the job, accusing him of “persistent value destruction”.

Despite fending off the activists, Darby stepped down shortly afterwards. In July last year, Daniel Wosner of Oasis left the Premier board after the fund reduced its position.