TheChek News Flow

DAX:

MDAX:

SDAX:

Under its new owners, the tennis and soccer brand will quickly ramp up its distribution in the U.S.

WHP Global may have lost out on its bid to buy Reebok, but it was able to snag another high-profile sports brand: Lotto Sport Italia.

The New York-based brand management firm, which also owns Joseph Abboud, Anne Klein and a controlling interest in Toys ‘R’ Us, today will reveal that it has purchased the intellectual property rights globally for the Trevignano, Italy-based sports brand. Terms were not disclosed.

LSI, which was founded in 1973, has been owned since the early 1990s by its current chief executive officer, Andrea Tomat. Lotto has a long history in tennis and soccer and its double diamond logo is ubiquitous on apparel, footwear and accessories that have been seen on professional athletes such as tennis Grand Slam champions Martina Navratilova and Boris Becker, as well as a variety of sports teams. It has sales of some $400 million globally, is distributed in more than 100 countries and dresses more than 40 soccer teams and 500 athletes around the world, including tennis player Matteo Berrettini, currently ranked number eight in the world. He wore Lotto during his play in the finals at Wimbledon last month.

Under the terms of the deal with WHP, Tomat will remain with the company along with its current management team to continue to operate the Lotto brand in its core markets of Italy, Western Europe, the Middle East and Africa. Its headquarters and archives in Italy will also be retained, according to Yehuda Shmidman, CEO of WHP Global.

“We bought the IP and licensed back the rights to Andrea for those countries,” Shmidman explained.

He shrugged off the fact that Authentic Brands Group was able to buy Reebok from Adidas for 2.1 billion euros and said WHP is focusing instead on its newest addition and Lotto’s opportunity for growth, particularly in the U.S.

“Lotto is a legendary Italian performance sports brand rooted in priceless heritage that athletes and fans around the world love,” Shmidman said. “We are very optimistic about the brand’s future as we work in close partnership with Mr. Andrea Tomat and the entire team at LSI.”

Together, LSI and WHP will provide design, product development, marketing and brand management services to Lotto’s existing network of more than 50 global partners across the world.

But the real opportunity for WHP, Shmidman said, is in the U.S., where the product is available on a very limited basis. “That’s the huge upside for us,” he said. “You can find it here, but the vast majority of the business is in Europe, Asia and Latin America. We’ll be investing in it big time in the future.”

Shmidman expects Lotto to quickly gain a foothold here because of its quality products and authentic Italian heritage. “Over 500 athletes today wear Lotto, including Matteo Berrettini, soccer players, teams and tennis players from around the world. It’s the real deal.”

Beyond its on-the-field and on-the-court apparel and footwear, Lotto has developed a lifestyle offering, including a women’s apparel capsule collaboration that launched at Zara last month as well as special collections with Primark and Damir Doma.

Shmidman said he expects to very quickly begin signing licensing deals in the U.S. market for performance and lifestyle apparel under the Lotto name. “We’re not going to wait,” he said. He sees the “general athletic apparel” sector as “the biggest financial opportunity” for the brand as this category has continued to gain in importance since the pandemic.

WHP will also expand Lotto into new markets and product categories and will invest in digital channels and partnerships with world-class athletes, the company said. Although Shmidman wouldn’t venture a projection on just how large the brand can be, he said sales can “be much greater” than their current $400 million.

“We believe it’s a major nine-figure opportunity in terms of growth,” he said.

“I am excited about this partnership as it is a key step to ensuring the growth of Lotto, a brand with a great reputation and well-known all over the world,” said Tomat. “With WHP Global we immediately shared the relevance of the values that Lotto brings with it: values linked to sport, innovation, well-being, lifestyle and Italian taste. These are the strengths we will invest in to ensure a growing global presence in key international markets. This partnership is an Italian success, too, because, thanks to an innovative collaboration with WHP, Lotto will be able to compete at the highest levels to become one of the most loved sportswear brands in the world.”

WHP Global was created 25 months ago as a global brand acquisition and management firm backed by equity capital from funds managed by Oaktree Capital Management LP and leverage financing provided by BlackRock. Its holdings account for $3.5 billion in annual retail sales and Shmidman said following this acquisition it is ranked as the 12th largest licenser and brand management firm in the world.

The Lotto deal represents a “great diversification for us,” he said, putting WHP in athletics in addition to fashion and hard goods.

“And we’re still in the early innings,” he said. “We continue to deliver on our mission to invest in great global brands that offer the best opportunities for growth. Our growth so far has been incredible and we have huge aspirations to acquire more brands.”

“If you jump forward 40 years — we’re after the same thing. That sense of freedom and comfort when you’re dealt with nicely," says Schrager in an upcoming podcast, part of the Amex Shaping Insights series.

Ian Schrager doesn’t know for sure what his hotel guests want — but he’s going to give it to them anyway. He’s never done data, focus groups, marketing surveys or interviews. He just trusts his entrepreneur’s instincts and, so far, they haven’t let him down, according to a new podcast, part of the Amex Shaping Insights series with figures in luxury, travel and tech.

Schrager, the cofounder of Studio 54 and a clutch of unconventional boutique hotels, tells the journalist Fiona McCarthy that he’s eliminated the welcome ritual at his new Public hotel in Manhattan, so that guests can make a beeline to their rooms via contactless technology.

He believes the guests at Public “don’t want to go to a hotel, sit down, have a glass of Champagne and make small talk at the front desk. You want to get your key, and get up there. The check-in and check-out are invisible. Nonexistent. That’s what people want today.”

And while technology can make the day-to-day mechanics of operating a hotel cheaper and easier, there’s still ample room for personal interactions with staff. “The guest will get it in many more important places than making small talk at the front desk,” he says.

Indeed, creating that “emotional connection with the guest is absolutely essential. How do you get that? I don’t know. You hope that at the end of the day, the alchemy happens.” That alchemy, he believes, comes from fostering diversity, creating an environment that makes guests feel comfortable and free — and through a ferocious attention to detail.

“Not everybody sees the detail,” but that doesn’t matter, because he and his team have such a laser focus. He uses the chairs in the lobby as an example. “You’re talking about the stitching, the nails, the legs, the bottom of the legs. It all comes together when the totality is more than the sum of the parts — that’s the magic.”

Diversity is another big contributor to that magic. “The secret to having a very successful public space is diversity. You want to get that spice of life, the energy, the combustibility. When you have that diversity, you get a kind of feeling of freedom.”

That pursuit of freedom — and his own well-documented history with Studio 54 — continues to inform Schrager’s work. “The new luxury is a spiritual luxury, not a material one,” says Schrager, arguing not much has changed over the past four decades since the glitter ball ceased spinning at the 54th Street club.

“If you jump forward 40 years — we’re after the same thing. That sense of freedom and comfort when you’re dealt with nicely, when you feel looked after and protected and nothing you do will hurt you — but without the mayhem, and everything that went on in the nightclub.”

The future, he says, will be about democratizing luxury further, and breaking down more barriers in hospitality.

He foresees “a merger” between business and leisure travel, noting that it’s already happening with people going to their golf club “to play and to do business.” He also likes the idea of all-inclusive city hotels, “where people pay one price — and have access to everything.”

Asian stocks were steady Wednesday and U.S. equity futures wavered as investors assessed risks to the economic recovery from the resurgent coronavirus. The dollar held an advance. MSCI Inc.’s gauge of Asia-Pacific shares edged up, with Japan, China and Hong Kong posting modest gains. Overnight, U.S.-listed Chinese equities tumbled again on Beijing’s regulatory crackdown. U.S. equity contracts fluctuated in the wake of the S&P 500’s largest decline in a month. Treasuries were little changed ahead of the release of the latest Federal Reserve minutes amid a highly uncertain outlook for yields. Traders are evaluating the spread of the delta virus variant, the prospect of reduced stimulus support and whether elevated inflation will prove transitory. Investors are evaluating the outlook for global stocks after a 90% advance from last year’s pandemic lows, as the fast-spreading delta strain impedes reopening and fans worries that economic growth is peaking. Meanwhile, the Jackson Hole symposium next week -- the Fed’s most-prominent annual conference -- may offer clues about when and how the central bank will taper bond purchases. 

Nikkei +0.67% Hang Seng +0.90% CSI +1.04% Shanghai +0.91% Shenzen +0.56%

Eur$ 1.1719 CNH 6.4867 CNY 6.4841 JPY 109.56 GBP 1.3753 CHF 0.9139 RUB 73.6306 TRY 8.4359 WTI$ 66.62 +0.05% Gold 1,791.18 +0.27% BTC 45,000 ETH 3035 -35

S&P +0.08% Nasdaq+0.12% EuroStoxx +0.14% FTSE +0.41% Dax +0.21% SMI +0.00%

Macro :

- U.S. Will Extend Transportation Mask Mandate to Jan. 18: Rtrs

- Euro-Dollar Eyes Return Toward 1.16 Support Zone: Markets Live

Spacs :

- Sportradar Files For U.S. IPO After SPAC Merger Flops

Keep an eye on :

- ALC SW : Alcon 2Q Core EPS Beats Estimates

- CARLB DC : Carlsberg Boosts FY Organic Operating Profit Forecast

- DPW GY : Deutsche Post Buys Drinks Shipper Hillebrand for $1.8 Billion

- DTE GY : T-Mobile Customer Data Stolen Includes Personal Info

- EMMN SW : Emmi Boosts FY Sales Forecast

- GSK LN : Glaxo’s Jemperli Gets FDA Approval for dMMR Tumour Treatment

- GSF NO : Grieg Seafood 2Q Ebit Misses Estimates

- ICA SS : ICA Gruppen 2Q Adjusted Operating Profit Beats Estimates

- JOMA SS : John Mattson to Buy Additional Stakes in HEFAB, EFIB for SEK1.5b

- LUN DC : Lundbeck 2Q Core Ebit Beats Estimates; Changes Outlook

- MGGT LN : Davidson Kempner Has 5.59% Voting Rights in Meggitt

- NEL NO : Nel Gets Order for H2Station Fueling Station From Everfuel

- NEL NO : Nel Enters Development Partnership With SFC Energy

- NETC DC : Netcompany 2Q Revenue Meets Estimates

- F3C GY : Nel Enters Development Partnership With SFC Energy

- STM FP : Cree, STMicroelectronics Expand Existing Supply Pact-

- STM FP : Cree Falls as 1Q Revenue Guidance Misses Some Estimates

- TECN SW : Tecan 1H Ebitda Beats Estimates

- TEN IM : Tenaris Says CEO Rocca Acquitted by Argentine Court

- VOW3 GY : VW 'New Auto' Plan Has $94 Billion Porsche IPO Scope: BI Focus

- WCH GY : JinkoSolar Unit Signs Polysilicon Supply Pact With Wacker Chemie

- WAWI NO :Wallenius Wilhelmsen 2Q Ebitda Beats Estimates

- ROSE SW : Zur Rose 1H Sales Beat Estimates

Xi Jinping calls for wealth redistribution and clampdown on high incomes

China’s tech tycoons have been under pressure since Jack Ma’s Ant Group IPO was cancelled last year

President Xi Jinping has called for stronger “regulation of high incomes” in the latest sign that a 10-month campaign targeting China’s largest technology companies was rapidly expanding to encompass broader social goals.

State media reported that a meeting of the Chinese Communist party’s Central Financial and Economic Affairs Commission on Tuesday, chaired by Xi, had emphasised the need to “regulate excessively high incomes and encourage high-income groups and enterprises to return more to society”.

The committee added that while the party had allowed some people and regions to “get rich first” in the early decades of China’s reform and opening period, it was now prioritising “common prosperity for all”.

China’s richest entrepreneurs have been under increasing pressure since November, when the planned $37bn initial public offering of Jack Ma’s Ant Group, which would have been the largest ever, was cancelled after the internet tycoon criticised the country’s financial regulators.

More recently, ride-hailing company Didi Chuxing was chastised by officials after it ignored their warnings to postpone a $4.4bn listing in the US. Strict new regulations targeting China’s booming tutoring industry, which Xi has repeatedly criticised, also sparked a sharp sell-off in New York-listed Chinese companies.

The financial and economic affairs committee, which usually focuses on macroeconomic and financial policies, alluded to the education crackdown, saying that China must create “more inclusive and fair conditions for people to improve their education levels”.

It was the first meeting publicly chaired by Xi since late July. Party leaders traditionally retreat to the seaside resort of Beidaihe in early August for policy deliberations, although there has been no official confirmation of the annual retreat in recent weeks.

“Stagnant consumption data has made clear that it’s urgent to increase people’s incomes and focus more on distribution fairness,” said Wang Jun at the China Center for International Economic Exchanges, a Beijing think-tank.

One Chinese entrepreneur said the renewed emphasis on inequality and other social problems, coupled with the recent crackdowns on Didi and education companies, had sent a clear signal to the private sector.

“It sends a very strong message to every company,” said the entrepreneur, who asked not to be identified. “The party wants to have a stronger say in your business and they want you to be more obedient.”

In late April, three state entities took a 1 per cent stake and board seat at a Beijing-based subsidiary of ByteDance, the group that controls TikTok and other popular short video apps.

The stake, first reported by The Information, has raised speculation that the Chinese government might push for “golden shares” and board representation at other tech companies, especially at the parent level.

The head of a large private charity said that pressure on the private sector had led to “a big jump in corporate donations”.

“It is high time the authorities address the income gap,” the charity executive said. “But most donations go to government-backed charity groups with little oversight.”

Transmission revamp will reshape the financial world

The business of transacting is barrelling down a path of unstoppable change

Markets never stand still. In the past year, we’ve seen an explosion in options trading by retail investors, the Spac boom and the rise of digital tokens, used by everyone from Damien Hirst to central bankers.

Most of the world may have been on intermittent pause since March 2020, but the business of transacting is barrelling down a path of unstoppable change.

As with many innovation-fuelled booms, some of these evolutions may fade or change over time. But the common theme of using technology to cut out the middleman and gain direct access to end users started long before the pandemic and is now picking up speed.

Changes like these in the financial world have the potential to reshape the transmission mechanisms that connect it to the real economy.

The remarkable rise of central bank digital currencies (CBDCs) is just such an innovation, with widespread implications. In a recent blog post, American economists Stephen Cecchetti and Kermit Schoenholtz described CBDCs as “an epic battle for the soul of the financial system” fearing they have the potential to “trigger destabilising financial shifts, weaken the supply of credit and undermine privacy”.

There are lots of different ways of doing a public digital currency. For example, one that focuses on financial inclusion might give every citizen a wallet on the central bank balance sheet. But this may create some unintended consequences — namely removing the deposit-taking function from the hands of the traditional banking sector, and altering its role in the monetary transmission mechanism.

A commercial bank that doesn’t take deposits will need to collect all its funding from the wholesale markets, or directly from the central bank, which is a different — and unproven — model to the one we have at the moment. Most money is private and already digital. As noted by Cecchetti and Schoenholtz, digital entries on the ledgers of banks account for 97 per cent of the total money in circulation in the UK.

The asset management industry is also a transmission mechanism, albeit one that works on a longer timescale, gathering the savings of individuals into larger funds, planting them into asset markets for harvesting years or decades down the line. In this way, it channels savings into and wealth out of public capital markets.

About two-thirds of Britons have a stake in the stock market through their pensions, whether they know it or not. Furthermore, an increasing share of value creation is happening outside of the public markets in the arena of private investment.

While some savers have access to private opportunities via defined benefit pension schemes, those who are at the beginning of their career tend to save into defined contribution pensions and are much less likely to (unless they have access to a large fund with the right heft and expertise).

Listed stocks and bonds are divided into individual shares and easily tradeable through exchanges, which means they can be accessible to those with small pots as well as large ones. Private assets are less liquid and less easily divisible, but this is another area where technological innovation may provide a solution.

Distributed ledger technology, for example, can be harnessed to record fractional asset ownership through tokenisation, creating the ability to trade fractional ownership between a wider network of investors.

Eventually, as the technology becomes more sophisticated, it could help democratise parts of the market, bringing ownership of private assets to a broader section of investors, reducing the minimum level of savings needed to invest, as well as reducing trading costs and increasing liquidity.

The Swiss playwright Max Frisch called technology “the knack of so arranging the world that we need not experience it”. Experiences that technology has so far cut from the financial chain have mostly been those of waiting.

Online banking has replaced queueing up at a bank branch; innovations in payments and transfer technology have ended waiting for many days for an international travellers’ cheque to clear. Digital services are more accessible, cheaper and quicker and innovation will continue to remove friction in the financial system, connecting consumers of financial services to their goals with fewer intervening steps.

As a result, market trends may move faster, previously inaccessible asset classes may open up to retail consumers and monetary transmission mechanisms may be further compressed. The legacy business models that still depend on that friction must adapt or die.