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Iranian leaders pledged to retaliate for shooting of Col. Hassan Sayyad Khodaei, senior figure In Quds Force

An Iranian Islamic Revolutionary Guard Corps officer shot and killed outside his Tehran home Sunday led the group’s efforts to assassinate opponents of Iran around the world, including recent failed plots to kill an Israeli diplomat, an American general and a French intellectual, according to people familiar with the matter.

The officer, Col. Hassan Sayyad Khodaei, planned kidnappings and killings for an arm of the IRCG known as Quds Force Unit 840, the people said. They said he recruited agents to carry out operations globally, including in Colombia and Cyprus, mostly against Israeli targets but also aimed at people from other countries viewed as hostile by Iran.

Col. Khodaei was involved in a foiled plot to kill Israeli businessmen in Cyprus in the fall of 2021, according to some of the people. Cypriot authorities arrested an Azerbaijani national in connection with the killing who was found with a pistol in his possession. The suspect has denied the allegations and is going to trial, according to the Associated Press. Iran denied any involvement in the incident.

Some of the people familiar with the matter said they didn’t know if any of the operations allegedly planned by Col. Khodaei had resulted in any targeted person’s death. No one has claimed credit for killing Col. Khodaei.

Without elaborating, Israeli Prime Minister Naftali Bennett’s office said in April that Israel’s spy agency, the Mossad, with the help of allied intelligence organizations, had foiled dozens of similar attacks over the past year, all planned by the IRGC.

The prime minister’s office said the Mossad had thwarted efforts to set up hit teams to kill the Israeli diplomat in Turkey, the U.S. general in Germany and a French writer who was identified by people familiar with the matter as Bernard-Henri Lévy.

U.S. military officials declined to comment on the alleged plan to try to kill an American general. Iran’s foreign ministry declined to comment. The Iranian delegation at the United Nations in New York didn’t respond to a request for comment.

Iranian President Ebrahim Raisi on Monday blamed the killing of Col. Khodaei on “global arrogance,” a term usually applied to the U.S., which Iran accuses of supporting hostile acts by its enemies such as Israel. “I have no doubt that revenge for the pure blood of this martyr on the hands of the criminals is inevitable,” Mr. Raisi said on state television Monday.

The Revolutionary Guard, which is responsible for Iran’s military operations abroad, called Col. Khodaei the “defender of the shrine,” a term used by Iranian media to describe soldiers fighting in Iraq and Syria.

“There is a cold war between Israel and Iran,” said an Iranian official. “It’s only a matter of time before Iran retaliates.”

Israel has said it would respond to Iranian aggression abroad inside Iran.

“The campaign to weaken Iran has begun,” said Mr. Bennett in a speech in February at the Institute for National Security Studies in Tel Aviv. “This campaign is being conducted in multiple fields: nuclear, economic, cyber, overt and covert operations, both by ourselves and in collaboration with others.”

Israel has carried out a series of attacks in recent years that have hit Iran’s nuclear and military programs, according to people familiar with the campaign. Iran accused Israel of killing one of its top nuclear scientists in 2020 and carrying out an attack on its underground nuclear program at Natanz in 2021.

The killing of Col. Khodaei comes amid a yearslong shadow war in the air, land, sea and cyber arenas between Israel and Iran, with Israel expanding its operations in Iran beyond its protracted attempts to stifle the country’s nuclear program. In turn, Iran has struck out more brazenly against what it calls Israeli targets, including a rocket attack earlier this year against alleged Israeli intelligence sites in northern Iraq.

CFO Philippe Blondiaux told BoF the division’s e-commerce sales grew 32 percent last year. The French luxury brand also opened 50 new stand-alone beauty boutiques as it reduces its historic dependence on wholesale partners.

Chanel’s beauty and fragrance business, which has historically been dominated by wholesale, could become majority direct-to-consumer within a few years as the French luxury giant invests in e-commerce and rolls out more standalone cosmetics boutiques, chief financial officer Philippe Blondiaux said.

Chanel reported 2021 sales that surged 50 percent to $15.6 billion as high demand for its fashion, watches and jewellery drove a sharp rebound from the pandemic. Perfume and beauty sales were more muted as the category continued to suffer from the decline in travel retail, which made up as much 20 percent of the unit’s sales in 2019.

Still, the division—whose items include Chanel No. 5 perfume, Hydra Beauty cremes, and Les Beiges blush sticks—reported progress on a transition to direct channels that could see it gradually reduce its historic reliance on wholesale partners.

E-commerce sales jumped 32 percent for Chanel’s beauty and fragrance products, Blondiaux told BoF in an interview. Chanel also opened more than 50 standalone beauty boutiques last year.

“The direction is toward more of a direct-to-consumer business,” Blondiaux said. “[DTC] could represent the majority of our beauty business within a few years, though it depends on the region.”

While wholesalers like Sephora and Marrionaud remain very relevant in Europe, the share of wholesale in the US has fallen significantly, Blondiaux said. That’s could be due to the prevalence of e-commerce in the US market, as well as the decline of American department stores.

DTC models have found favour with investors in recent years as they can lead to higher margins, better client data, more frequent relationships with consumers, and—key for the luxury industry—stricter control over pricing.

While Chanel’s transition to direct-to-consumer is gathering pace, the company doesn’t see the model as an end in itself.

“What we’re aiming for is to have an omnichannel business,” Blondiaux said. “It’s about making sure that at each touchpoint, at each part of the consumer journey we can determine what clients are looking for. We want each channel to have its own identity, its own objectives, and to participate in a global omnichannel strategy.”

The French luxury giant said 2021 revenues rose 23 percent over pre-pandemic levels to $15 billion. The brand now plans to open dedicated boutiques for top-spending clients as rapid growth risks overcrowding its stores, CFO Philippe Blondiaux revealed.

KEY INSIGHTS

Chanel reported 2021 revenues that jumped 50 percent year-on-year to $15.6 billion, rising 23 percent over 2019′s pre-pandemic levels. Operating profit nearly tripled, surging 170 percent to $5.5 billion.

Fashion, watches and jewellery are driving momentum that has continued into the current year, chief financial officer Philippe Blondiaux said in an interview, while performance in fragrance and beauty has been more muted due to the continued decline in travel retail.

Despite headwinds including coronavirus lockdowns in China, Russia’s invasion of Ukraine and soaring inflation, Chanel remains “confident in being able to deliver a solid performance and healthy growth this year,” Blondiaux said.

The statement by the closely-held brand (which generates the luxury industry’s second-highest revenues after LVMH’s flagship Louis Vuitton) confirmed a rapid rebound from the pandemic. 2020 sales fell by 18 percent, a heavy hit, but bounced back quickly last year as consumers flocked to blue-chip luxury brands.

Chanel’s sales grew far faster than the wider luxury market, and roughly one-third slower than rival leather goods powerhouse Hermès, which grew to 33 percent over pre-pandemic levels.

Growth was driven by a “balanced” mix of price increases and higher volumes, Blondiaux said. Since the pandemic, Chanel has raised prices repeatedly, citing volatile exchange rates and the rising cost of materials and labour. A Maxi 2.55 flap handbag now costs $10,000, in line with Hermès’ hand-stitched Birkin and Kelly styles, versus less than $7,000 in 2019.

Chanel spent a whopping $1.8 billion on marketing in 2021, up 32 percent, underscoring how the brand’s nearly-unrivalled scale and spending power fuels its strong performance.

The company also deployed $758 million in capital investments including the acquisition of a new building for its San Francisco flagship, a boutique in Miami’s Design District, and adding as many as 50 stand-alone boutiques for its fragrance and beauty division.

Those stores, as well as online sales of cosmetics that grew 32 percent last year, could push Chanel’s historically wholesale-driven beauty division to become majority direct-to-consumer within a few years.

“The direction is toward more of a direct-to-consumer [beauty] business … though it depends on the region,” Blondiaux said. While wholesalers like Sephora and Marrionnaud remain very relevant in Europe, the share of wholesale in the US (where the pandemic accelerated the decline of department stores) has dropped significantly.

Apart from entry-level luxuries like beauty, fragrances and eyewear, Chanel famously remains the fashion industry’s last e-commerce holdout, refusing to sell its core fashion and handbags online. But it’s nonetheless invested in digital initiatives to “support customer experience,“ the company said, including rolling out tools for booking appointments, virtual try-on and after-sales service.

“We are not, and will not, sell fashion or watches online,” Blondiaux said. Still, the company sees digital “as playing a key role in customer interaction. We are making a lot of investments in digital tools to connect with consumers and offer services online.”

Overall, Chanel has earmarked an additional $1 billion in capital expenditures for 2022.

As sales continue to surge, the company remains committed to maintaining a tight store network — it presently has only 250 fashion boutiques, compared with roughly twice as many locations for Louis Vuitton or Gucci.

Blondiaux concedes that the combination has at times led to congestion and long waits in stores. The company plans to boost customer service by hiring more than 3,500 new employees, including many sales associates, he said.

Chanel also plans to open separate, private boutiques dedicated to serving top-spending clients, starting with locations in key Asian cities by early 2023.

While it’s unclear how that move will go over with first-time and occasional buyers who are ready to fork over $10,000 for a bag, Chanel won’t be the first player to open special stores for high-spenders as luxury brands race to cater to their VICs (very important customers). Brunello Cucinelli also opened a dedicated store for private clients in New York last December.

“Our biggest preoccupation is to protect our customers and in particular our pre-existing customers,” Blondiaux said. “We’re going to invest in very protected boutiques to service clients in a very exclusive way.”

Chanel’s statement marked just the fifth time the company has released its annual revenues and profit publicly, after regrouping its financial and legal operations in London. The shake-up, which the company said was aimed at reinforcing governance and transparency, as well as the move to appoint a new chief executive, Leena Nair, last December, have sparked speculation that the company is gearing up for a sale or IPO.

It’s a plot the company continues to deny: “It’s a firm ‘No’,” Blondiaux said. “Our model is so strong that why would we change our path?”

Across the industry, brands are experimenting in the metaverse by launching NFTs, digital storefronts and virtual products for avatars in worlds like Decentraland and Roblox.

Beauty’s next wave of tech innovation is happening in the metaverse.

Much attention has been dedicated to fashion’s activity in the space, from luxury brands like Gucci and Balenciaga launching experiences in online virtual worlds to labels like Etro and Dolce & Gabbana presenting collections at Metaverse Fashion Week. But beauty has also been active: over the past two years, a number of brands, including Dior, Gucci, Clinique, Givenchy Parfums, Charlotte Tilbury, Nars and Guerlain have begun to embrace — or at least try out — the metaverse and web3, creating products for avatars and NFTs as well as virtual storefronts, experiences and games. In 2022 alone, L’Oréal filed 17 trademarks for virtual cosmetics and Estée Lauder partnered with Decentraland’s Metaverse Fashion Week.

Beauty and the metaverse share a number of qualities. Both are driven by a sense of fun and experimentation, said Audrey Depraeter-Montacel, managing director and beauty lead at Accenture. As well, the structure of communities in beauty, which are usually led by creators and the conversation they start with followers on social media, can easily translate to web3 spaces, where online discussion drives discourse. The beauty industry also has a history of being quick to adopt new technologies, such as augmented reality for virtual try-ons, and beauty consumers are used to seeing this sort of innovation from brands. Added to that, beauty purchases are hyper-personal, tied to identity and self-esteem and happen across a mix of physical and virtual channels that mimics the metaverse, says Depraeter-Montacel.

“Beauty is very much about creating worlds and an environment,” said Melissa Kelly, chief operating officer of creative agency M+A Group. “It ... lends itself to this kind of metaverse-and-NFT model.”

The potential for new revenue streams and methods for consumer engagement is there. But the metaverse is still underdeveloped. Brands, creatives, consumers and developers alike remain mostly in the dark about what exactly it will look like in the next few years — or even the next several weeks. Still, beauty brands recognise that it’s better to test it out than be left behind.

“It’s not going away, but how we use it is going to evolve,” said Kelly.

There are infinite possibilities for how beauty brands can show up in virtual spaces as identity and experience are stretched, said Alex Box, beauty futurist. Translating beauty into the metaverse isn’t as simple as creating digital counterparts for products. But that disconnect leaves more room for exploration, allowing brands to create digital products that tell a larger story about the brand or the product itself, she said.

For example, Box worked with Estée Lauder to build an NFT based on the company’s Advanced Night Repair product, tied to its March partnership with Metaverse Fashion Week. To create the piece, she thought about the product in its entirety — its history, ingredients and how the brand wants users to feel when they use the product, rather than just what it does. The resulting NFT wasn’t just a digital copy of the product’s packaging but acted as a filter that coated owners’ avatars in a glowing radiant effect.

“Instead of it being binary in its depiction, you could enter into the essence of what it is,” said Box. “You’ve got this 360, immersive communication tool that you didn’t have before.”

In getting started, brands should consider building their own virtual storefronts, which can be built on the blockchain or off, said Jordan Robinson, MA + Group’s director of metaverse. (MA + Group helped build virtual storefronts for Kylie Cosmetics and Armani Beauty.) This can also help brands avoid betting on one nascent platform.

Another potential first step is launching NFTs linked to loyalty schemes — which Kelly said have huge potential for building community in beauty specifically. Clinique did just that in 2021, giving winners of a contest a molecule-shaped NFT based on its Moisture Surge moisturiser and Black Honey Lipstick products. Along with the NFT, the new token owners received an assortment of physical products every year for a decade. Clinique saw a 60 percent rise in search traffic and 20 percent increase in social engagement following the debut, WWD reported in February.

The tactic has potential in indie beauty, too. Margarita Arriagada, founder of lipstick brand Valdé, saw NFTs as a way to find people who were loyal to and understood her luxury brand, whose lipstick starts at $199. Those who purchased a $1,200 special edition quartz-encased lipstick received a corresponding NFT and invitation to an online community, Valdé NFT Collective, which unlocks access to perks like a one-year supply of one lip shade, membership in Discord channels and special events.

Brands can also take what they learn in the metaverse and apply it to product development, said Gabe Miller, president of brand consultancy Landor & Fitch North America. British perfume brand Rook’s NFTs, for example, gave 30 customers access to a DAO (a decentralised autonomous organisation, which is a collective where members share ownership and participate through blockchain-based tokens) that, over the course of six months collaborated on the development of a new fragrance called “The Scent of the Metaverse,” now sold on Rook’s site; DAO members receive a portion of sales.

“You can use how people are expressing themselves in this world to see a trend that might be popping up,” said Miller.

Brands can also use NFTs and the metaverse to widen a consumer’s experience with the brand itself. Nars, for instance, launched an Animal Crossing partnership in January 2021, then an NFT based on its Orgasm Blush product that July and a project with avatar-based game Zepeto in September that tied the debut of a collection of virtual goods, including virtual makeup looks, shirts and roller skates, to the launch of its blush. The roller skates ended up being one of the best-selling items in the experience.

At the time, Nars just wanted to build brand awareness in the gaming world. Now it sees a real opportunity in making tools to enrich digital identities and foster creativity outside the bounds of reality. The brand is launching its first-ever fully immersive metaverse experience at the end of June. That has offline implications too.

“What happens in that metaverse app environment doesn’t necessarily stay there,” said Dina Fierro, Nars vice president of digital strategy and social engagement, who foresees a world in which brands have their own locations on every metaverse platform, just as they do on social media.

“We’re really at the beginning of an entirely new age of digital experience,” she added. “We see this as an opportunity to push the boundaries of consumer engagement.”

As brands grapple with how to use the “newest arrow in [their] quiver,” as Miller calls it, he suggests they start by considering their own goals and objectives as a guide to why and how they should appear in metaverse spaces.

“It’s an important time for every brand to rethink what their purpose for being is,” said Miller. “What are they really trying to do? It’s an opportunity to reset and really crystalise what’s important to them.”

Then, in developing their strategy, brands need to hire people who understand both the long and short-term possibilities and limitations of different platforms, said Box.

“You don’t have to just do a digital double of a real-world product. We are actually moving into a space where you have the chance to rewrite the script,” she said. “It’s about having somebody on the team that understands the semantics.”

Development of the metaverse is early days, but waiting around means missing out on learning opportunities and relationship building. Brands shouldn’t just enter the metaverse because it’s an interesting prospect, but rather, because that’s where consumers already are and conversations are already happening.

“Beauty brands need this audience,” said Depraeter-Montacel. “This is their target.”

Chief financial officer Philippe Blondiaux said the luxury house expects "healthy" growth in 2022, after a record 2021.

PARIS — Chanel maintained double-digit growth in the first five months of the year as a strong performance in the rest of the world compensated for the closure of stores in Russia and China, the company said Tuesday.

The French luxury house reported that revenues totaled a record $15.6 billion in 2021, up 22.9 percent at comparable rates versus 2019, fueled by strong demand across all product lines from its local client base. Meanwhile, its operating profit jumped 57.5 percent to $5.46 billion.

Philippe Blondiaux, chief financial officer of Chanel, said the company maintained a double-digit growth rate in 2022 so far, despite the war in Ukraine, which has prompted the company to suspend its operations in Russia, and renewed lockdowns in China designed to curb the spread of COVID-19.

The executive noted that Russia accounts for less than 1.5 percent of Chanel’s revenues. In mainland China, 31 percent of Chanel employees remain under lockdown. Five of its 16 boutiques there are closed, while 35 fragrance and beauty stores — roughly equivalent to a third of its network — are also shuttered.

“Obviously the situation in China is impacting us. But just to illustrate the confidence we have in our outlook for 2022, in spite of these difficulties, for the sole month of April at Chanel, we had a double-digit negative growth in China, but in spite of this, we had a double-digit positive growth for Chanel, consolidated,” Blondiaux told WWD.

He said this reflected strong business in Asia outside of China, citing Singapore, Taiwan, Malaysia and South Korea as standouts. “And the performance is very strong as well outside of Asia, in the U.S., in Europe, where we start to see the return of an international tourist business, in the U.K. as well,” Blondiaux added.

“In spite of the headwinds and uncertainties we are facing, we’ve maintained our momentum so far. We remain confident in delivering another year of solid performance and healthy growth for the Chanel brand and for the Chanel business, building off this obviously exceptional year 2021, and on our strong fundamentals,” he said.

In 2021, Chanel outperformed competitors such as Kering, which reported a 13 percent rise in organic sales versus 2019.

Luxury conglomerate LVMH Moët Hennessy Louis Vuitton saw overall revenues increase 14 percent at constant exchange rates, though its key fashion and leather goods division was up by 42 percent. Meanwhile, overall sales at Hermès International were up by a sector-leading 33.4 percent in comparable terms.

In terms of profitability, Chanel, which is privately owned and run by the Wertheimer family, saw a sharp improvement. It logged an operating profit margin of 34.9 percent, up from 20.3 percent in 2020.

Blondiaux said the results confirmed Chanel’s strategic pillars of harmonizing its prices across geographical regions, and refusing to sell ready-to-wear or leather goods online.

Chanel revealed in March it was hiking the cost of its four core handbag styles and spring rtw collection in several regions worldwide. Its classic 11.12 bag, for instance, now retails for 8,250 euros, compared with 7,800 euros previously.

This marked the sixth time that Chanel increased its prices since the start of the coronavirus pandemic and the second time in the space of six months, following an adjustment last November

Blondiaux said Chanel would continue to tweak its prices to take into account currency fluctuations and inflation, both of which have increased recently. “We usually revise our prices twice a year. That’s what we’ve always done and will continue to do,” he said. Nonetheless, he does not anticipate any blowback from Chanel customers.

“The pricing of everything we sell is based, we believe, on the exceptional creativity we demonstrate, on the exceptional creativity of our materials, exceptional savoir-faire, and I believe our customers understand that, as illustrated by the fantastic momentum we had in 2021 and, even more importantly, continue to enjoy in 2022 as well,” Blondiaux noted.

In a research note, Jefferies analysts Flavio Cereda and Kathryn Parker noted that Chanel raised prices of the small 11.12, also known as the Classic Flap bag, by an average 21 percent in 2020 and a further 30 percent in 2021, concluding that most of the sales uplift last year was driven by pricing rather than volume.

However, Blondiaux said the split was roughly equal. “Our growth in 2021 was fairly balanced, I would say, between volume growth and pricing and that’s true for more or less all our product lines,” he said.

Europe remained the region hardest-hit by the fallout from the coronavirus pandemic last year. Compared with 2019, sales were down 10.9 percent to $4.04 billion, while revenues in the Americas were up 52.6 percent to $3.53 billion, and Asia Pacific jumped 48.7 percent to $8.07 billion.

Fashion sales were up by double digits in all product lines, driven by leather goods and rtw. Revenues in the watches and jewelry division grew in the double digits across all regions, with precious jewelry posting “outstanding” results thanks to the continued strong performance of the Coco Crush line.

The performance of the fragrance and beauty division, which accounts for a larger than average proportion of revenues at Chanel, was more muted as travel retail remained impacted by restrictions.

Blondiaux said the segment recorded a positive top-line evolution in spite of a 66 percent drop in revenues in its duty-free business, and the negative impact of mask-wearing on makeup sales, thanks to strong demand from local clients, both in stores and online.

The group invested $758 million in 2021, down from $1.07 billion in 2000. The difference was due mainly to the purchase of Chanel’s New Bond Street flagship in London in October 2020 for more than $400 million, Blondiaux said, officially putting a figure on the acquisition for the first time.

He added that Chanel spent $293 million in 2021 on its boutique network, with openings including stores in Miami’s Design District; in terminal one of Seoul’s Incheon airport in South Korea, and in the Peninsula hotel in Hong Kong.

More than $200 million went into its new leather goods workshop in Verneuil-en-Halatte and the renovation of its offices on Rue Cambon in Paris. In addition, Chanel devoted $115 million to IT and digital investments, having expanded its arsenal of digital tools to help its sales staff stay in touch with clients during the pandemic, when its boutiques were closed.

Blondiaux said Chanel plans to invest more than $1 billion and hire more than 3,500 people net in 2022, while continuing to devote funds to its climate and sustainability commitments.

The company said it reduced its Scope 1 and Scope 2 greenhouse gas emissions by 5 percent and 58 percent, respectively, in 2021. However, its Scope 3, or indirect, gas emissions increased year-over-year as the company fine-tuned its data collection in order to develop a more comprehensive overview of its carbon footprint.

Chanel added that it sourced 92 percent of its electricity from renewable resources, versus 70 percent in 2020, as it works to shift to 100 percent renewable electricity on a worldwide basis by 2025.

But Blondiaux declined to comment on what further strategic initiatives might be announced by Leena Nair, the former Unilever executive who in January took over as chief executive officer, assuming a title previously held by Chanel co-owner Alain Wertheimer.

“It’s too early to say in which direction she will take the company, but for sure you will know more from her in the coming months or the beginning of next year,” Blondiaux said. “We’ve done already a lot in terms of diversity and inclusion, but that’s something where we need to be humble and continue to educate our team throughout the company.”

Chanel ended 2021 with a net cash pile of $560 million, down from $1.07 billion the previous year, reflecting a number of factors including cash flow, investment and the resumption of dividend payments to its parent company, the Cayman Islands-based Litor Ltd., which were suspended in 2020 in light of the exceptional trading conditions.

The company signaled there would be no change to its M&A strategy, which prioritizes vertically integrating suppliers and developing eco-friendly materials. Chanel Ltd. owns or has minority participations in 46 entities for fashion, including manufacturing sites and specialty workshops like embroiderer Lesage and shoemaker Massaro.

Private equity co-chief offers resignation after investors issue rare rebuke amid Elon Musk takeover saga

Silver Lake co-chief executive Egon Durban tendered his resignation from the board of Twitter after the social media company’s shareholders on Wednesday issued a rare rebuke at a tense investor meeting.

The vote against Durban’s re-election to the board came after the two biggest shareholder advisers, Institutional Shareholder Services and Glass Lewis, this month cited concerns that he is on too many other boards. Durban serves on seven public boards, up from six last year, ISS said.

A Twitter spokesperson said that Durban had offered his resignation to the board in accordance with its corporate governance rules. The spokesperson added that its corporate governance committee would consider whether to accept his resignation, given the vote was not binding. Investors typically rubber stamp board member nominations. But BlackRock, Vanguard and other big asset managers tend to vote against board members when they serve at more than four companies.

Just nine other companies in the S&P 500 have one or more directors who serve on more than five public company boards, according to an analysis of securities filings by ISS Corporate Solutions. Silver Lake declined to comment.

Durban has been on Twitter’s board since March 2020, when Silver Lake invested $1bn in the company to help fund a $2bn share repurchase programme. His appointment was secured as part of a co-operation agreement between Twitter and activist investor Elliott Management, which had at the time been agitating for then-chief executive Jack Dorsey to be removed over concerns over the company’s sluggish growth.

Wednesday’s shareholder meeting comes amid a drama over Twitter’s future, after Elon Musk agreed a $44bn deal with the board to buy the social media company and take it private. Musk worked closely with Durban when trying to arrange a potential buyout of Tesla.

Musk, who wants to loosen content moderation rules on the platform, said this month that the deal was “temporarily on hold” as he sought information on fake accounts. Twitter executives have said they intend to close the transaction.

During the shareholder meeting on Wednesday, Twitter chief executive Parag Agrawal declined to address questions about the deal, but faced a deluge of queries from investors on content moderation issues, misinformation and political bias.

Shareholders endorsed the $30mn pay package for Agrawal, who took over from Dorsey in November, despite both proxy advisers opposing the plan over concerns of a “misalignment between CEO pay and company performance”.

Musk’s name was frequently invoked around free speech and content moderation issues during the meeting. One shareholder complained of “wokeness” inside Twitter, citing Musk and claiming the company’s diversity policies were discriminatory against men and white people, while another lambasted Musk’s approach to speech while proposing that a human rights and civil rights leader join as a director.

Shareholders voted in favour of a proposal put forward by New York state’s pension fund requiring the company to publish an electoral spending report on any contributions to politicians or causes.

Shareholder proposals demanding companies publish more information about political spending and lobbying have been some of the most successful in recent years. Nine lobbying or political spending proposals passed in 2021, up from six in 2020, according to law firm Sullivan & Cromwell.

Separately on Wednesday, Twitter agreed to pay a $150mn fine over allegations from US regulators that it breached privacy rules by improperly using users’ phone numbers and email addresses.

In 2019, Twitter admitted that it had “inadvertently” used the personal information provided by more than 140mn users for “safety and security practices” to better target advertising between 2014 and 2019.

According to court documents, this violated a 2011 order over previous charges from the Federal Trade Commission that the company had put users’ privacy at risk.

The latest fine — together with compliance measures levied on Twitter, including limiting employee access to users’ personal data — “will help prevent further misleading tactics that threaten users’ privacy”, associate attorney-general Vanita Gupta said. The proposed settlement must be approved by a federal judge.

Identifying conditions can prevent inappropriate drug use, but there are barriers to progress in poorer regions

Fear that antibiotics will gradually lose their effectiveness, blunting one of the 20th century’s most extraordinary medical breakthroughs, preoccupies policymakers worldwide.

But far less attention has been paid to the need for better diagnostic tools to ensure the drugs are used appropriately — or not at all. Overuse of existing antibiotics and a lack of new medicines is fuelling drug resistance that is estimated to have caused 1.3mn deaths in 2019.

“Investment in developing affordable, accessible and accurate diagnostics is a big missing piece in our aim to fight the continued emergence of antimicrobial resistance,” says Dr Hanan Balkhy, assistant director-general of the World Health Organization’s antimicrobial resistance division. In many cases, the tool for correctly diagnosing a patient’s illness either does not exist or “if it does exist, it’s very costly”.

Sexually transmitted infections are a “huge area of need” for diagnostics, according to Daniel Bausch, director of emerging threats and global health security at global diagnostics initiative Find.

This is particularly the case, he says, for differentiating gonorrhoea and chlamydia. “[These] are two of the most common sexually transmitted infections,” he notes. “Right now, [they] are often treated with an empirical approach [lacking a clear diagnosis] of giving you antibiotics that can cover both but . . . don’t cover everything that can cause that syndrome.”

It is an approach that has dangerous consequences. “We don’t really know if we’re treating the gonorrhoea or treating the chlamydia, which means we risk producing growth of antibiotic-resistant organisms,” Bausch warns.

Sepsis, where the body has a life-threatening reaction to an infection, is another area in need of improved diagnostics, says François Franceschi, serious bacterial infections project leader at the Global Antibiotic Research and Development Partnership. This would enable doctors to prescribe the right antibiotic rather than using “broad-spectrum” drugs that target a wide range of bacteria.

However, while the need for better diagnostics is agreed upon, many barriers stand in the way of their development.

These are partly technical. Antibiotic resistance is “not like Covid, where it’s one virus, even with its variants,” says Bausch. Instead, the profile, or pattern, of drug resistance varies between countries. “Zambia, for example, might not be the same resistance profile as in the UK, which isn’t the same resistance profile in Senegal or Switzerland or wherever you want to look, because it’s all changing in response to what antibiotics are used.”

Balkhy says the WHO is convening global networks of laboratories, using standardised processes, in order to consolidate expertise. The aim is partly to foster innovation “so that we do have point-of-care diagnostics and they are as accurate as we need them to be”. 

In these efforts, the WHO is collaborating with many partner organisations including Find, the Global Fund to Fight Aids, Tuberculosis and Malaria, and the Centers for Disease Control in the US. “None of us can do this alone, and I think that’s extremely important to acknowledge,” Balkhy adds.

But, even where appropriate diagnostic tests do exist, they are not routinely available in poorer regions of the world, Bausch points out. “It doesn’t matter if you have the best shiny new tool unless people can actually get to use that tool, in terms of it being affordable and that they have access to care.”

Franceschi notes that the development of diagnostic tools that can function in poorer regions of the world is made particularly challenging by high temperatures and the intermittent availability of electricity. The need to ensure that innovations are “translatable to low- and middle-income countries” is paramount, he says.

But “the obvious return on investment is still lacking,” Balkhy says. “And we’re trying to work really hard on that.”

Bausch suggests that, in order to persuade companies to research and develop diagnostics, it is vital to show the industry what the market wants, and will pay for, through “target product profiles”.

Prepared by experts and often published in medical journals and shared with the industry, these profiles would “guide [companies] and say: here’s what we need”.

However, while the importance of this kind of active “market shaping” is clear, it is not straightforward, Bausch says. The enthusiasm of companies might wane on being told that a diagnostic test must cost no more than $2 or $3. “That’s where industry may say either ‘we could do it, but not at that price’, or ‘why would we do it at that price because there’s nothing really to be gained for us?’”

Subsidies may be needed, at least initially, he suggests.

Ultimately, though, it is incumbent on campaigners for improved healthcare in poorer countries to make the case that a market can be created, Bausch believes. “Of course, you can’t instantly turn it on,” he acknowledges. “And it’s not a decision that comes from us. Each sovereign nation and ministry of health is going to decide how they invest.”

It is, he says, part of a broader “perennial challenge in public health” to make the argument to those who control funding that an investment in diagnosis and prevention can result in savings many times that initial outlay.

Franceschi, meanwhile, sees a glimmer of hope in a recent decision by the WHO to publish a list of essential diagnostics alongside its longstanding list of essential medicines. “I think this is a very positive development,” he says. “Finally, it has been recognised that diagnostics are part of global health.”