TheChek News Flow

The results "exceeded expectations."

Inter Parfums Inc. has reported an increase in holiday perfume sales.

The company, which makes fragrances for Jimmy Choo, Coach, Montblanc and other brands, saw a 3.5 percent lift in sales for the quarter ended Dec. 31, to $184 million.

European sales were up 8.1 percent year-over-year, to $129.6 million for the quarter, while U.S. sales were down 8.8 percent, to $44.4 million in the quarter.

Inter Parfums chairman and chief executive officer Jean Madar said sales “exceeded expectations” and that several brands did particularly well. Montblanc posted a 9.8 percent increase, Jimmy Choo posted a 13.4 percent rise, Coach saw an 18 percent increase and Anna Sui grew sales by 62.3 percent, Madar said.

“Our 2021 new product pipeline is abundant, with new entrants for our European operations that include women’s scents for the Jimmy Choo, Kate Spade, Lanvin and Rochas brands,” Madar said. In the U.S., there will be new fragrance duos from Abercrombie & Fitch and Hollister, as well as women’s scents for Anna Sui, Guess, CMC and Oscar de la Renta.

Early in the coronavirus pandemic, perfume sales were hit hard from stay-at-home orders. But they started to rebound later in 2020, and numbers from the NPD Group showed U.S. prestige sales gaining 1 percent for the third quarter, to $826.2 million.

Kering also topped the Corporate Knights’ 2021 annual Global 100 ranking in clothing and accessory retail for the fourth year in a row.

MILAN — Kering’s commitment to sustainability was recognized on Monday during the virtual World Economic Forum in Davos as the French luxury group was ranked among the top 10 most sustainable companies in the world. It was also rated first in clothing and accessory retail for the fourth year in a row.

Kering placed seventh out of 8,080 companies around the world and once again topped its own sector in the Corporate Knights’ 2021 annual Global 100 ranking, considered a benchmark for corporate sustainability. The Global 100 companies represent the top 1 percent in the world on sustainability performance.

Kering maintained its leadership position in the clothing and accessory retail category among 143 companies, assessed against 24 quantitative key performance indicators ranging from resource management, employee management and financial management to clean revenue and investment and supplier performance.

In particular, Kering ranked highest for environmental performance, clean revenue and clean investment within its industry. Further recognition was awarded under sustainability pay-link as Kering scored 100 percent for best practices related to executive remuneration linked to driving sustainability performance.

Last year, Marie Claire Daveu, Kering’s chief sustainability officer and head of international institutional affairs, underscored how sustainability is no longer an option but essential to the survival of firms, and how the health crisis conceals an opportunity to create awareness on the topic and finally push companies to act rather than just talk about it.

“After and during a crisis, people expect more and more not only from governments but also from companies. They expect them to be leaders and take their part of responsibility,” she said.

One of Kering’s goals is to reduce its environmental footprint by 40 percent by 2025.

Drafting and publishing a profit and loss account to tally the environmental cost of its activities has been key to establishing Kering as an authority on sustainability issues.

Kering chairman and chief executive officer François-Henri Pinault set up the Fashion Pact in 2019 at the request of French President Emmanuel Macron, who wanted companies and the government to work together on environmental issues. To date, more than 250 brands have signed onto the initiative and together, the collective represents more than 35 percent of the industry in terms of product volume.

Last June, the group launched its Kering for Nature Fund, committing to set aside one million hectares of land for the transition to regenerative agricultural practices, while also publicly setting science-based targets on biodiversity.

Since 2011, Kering has been quantifying nature into monetary values across its entire supply chain, using its Environmental Profit and Loss tool.

Specifically, carbon emissions, water consumption, air and water pollution, land use and waste production are captured through the EP&L along the entire supply chain. Its methodology has since been made interactive and open to the industry.

LVMH Leads Watch Week Presentations

Bulgari, Hublot and Zenith took to the screen to present novelties.

PARIS — LVMH Moët Hennessy Louis Vuitton set the pace for the luxury watch industry on Monday, kicking off the year’s events with a week of presentations from its watch labels Bulgari, Hublot and Zenith.

This is the second time LVMH labels are holding a watch week together. At the same time last year, the luxury group took to the Bulgari Resort in Dubai to test out the new presentation format after other traditional watch fairs had been pushed until later in the year.

The group prefers setting the agenda at the start of the year, and before 2020 had been known to hold events in Geneva in January, tapping into the traffic flows to the former SIHH fair, which was dominated by rival brands belonging to Compagnie Financière Richemont.

But everything has been changed by the coronavirus crisis, which upended traditional watch fairs — finishing off struggling Baselworld altogether and sending labels on the search for new, effective ways of reaching their clients.

“Due to the sanitary situation we all have to stay a bit far one from the other so we are trying from our manufacturer to your place to bring you all the fantastic novelties made by every maison,” said Stéphane Bianchi, chief executive officer of LVMH’s watches and jewelry division, welcoming viewers to the online presentation.

A series of presentations ensued, with Hublot CEO Ricardo Guadalupe presenting new models like the orange sapphire Big Bang Tourbillon watch, from the factory floor, with high-tech machines serving as a backdrop. Zenith CEO Julien Tornare introduced the brand’s new ambassador, National Football League quarterback Aaron Rodgers, who also spoke briefly in a prerecorded address, as well as the brand’s new Chronomaster Sport, which measures one-tenth of a second.

New models from Bulgari included the tightly wound Serpenti Spiga and the flashy Octo Finissimo.

Under the direction of Bianchi, who oversees Tag Heuer, Hublot and Zenith as well as jewelry labels Chaumet and Fred, the brands have been increasingly pooling resources in areas like real estate — gaining leverage when negotiating leases in a mall, for example — as well as bulking up an innovation center in Chaux-de-Fonds that serves the various houses.

“So this is a kind of division we wanted to create and then try to make all the brands work together, more together,” said Bianchi, speaking in an interview with WWD ahead of the presentation.

Last February, he recruited Edouard Mignon to head the innovation center, bringing on an executive who had managed product development at Cartier, before taking over Richemont’s research and innovation activity.

Bianchi noted that pooling resources does not extend to products — front office operations remain very separated.

“It’s more on the, ‘how do we do things?’ Do we want to see journalists separate or together? Do we want to launch our own fair? Do we work on sustainability together? All these kinds of things where the more you are the better you are,” noted Bianchi.

“It’s a real network which is building up, step-by-step,” he said, noting executives at the different labels call each other without his involvement.

Bianchi started out in the division heading Tag Heuer operations himself, while overseeing Hublot and Zenith, each run by their current CEOs. When he passed the reins of Tag Heuer to Frédéric Arnault last year, Chaumet and Fred were added to the division, because the innovation center can serve jewelry houses as well.

“We’re working on gold, we’re working on materials, and even our factories can make some watches of course, but they can make jewelry as well,” he explained.

Other brands can use the innovation center as well, he added, even if they’re not in his division — the one restraint is that each area of innovation must be brand-specific.

“if you want to take the same innovation, we’ll have to twist it to make it for another brand,” he explained.

“The carbon hairspring, for example, is something which could be used by different watchmakers, but then maybe some hairsprings will be big, some small, some with a different shape — the materials could be the same carbon, but then the use and the shape and all this would be specific to each brand,” he said.

The center has been particularly useful for Tag Heuer recently but other brands are increasingly making use of it, he noted.

Asked about the challenges facing the industry, he stressed the importance of innovation.

Exports of Swiss watches, a key industry indicator, declined 23.5 percent over the first 11 months of last year, with growth in demand from mainland China helping improve the performance in recent months.

“I think innovation is key, you have to innovate,” said Bianchi.

“On the product side, it’s innovation, on the brand side it’s desirability, and the one is linked to the other, and you’ve got to work on both of them and this is key,” he said.

When it comes to navigating the current crisis, LVMH watch executives noted they had postponed a number of launches, and worked to be agile — curtailing marketing investments when a country shuts down, and then ramping them back up again when places reopen.

Babin said he is “reasonably optimistic” about the coming year, even if the first half will likely continue to be complicated. Bulgari is better prepared, now, for the ongoing disruptions. “We’re more agile, we’re faster, there’s a lot of delegating things locally — practically we can’t go and see other countries,” he noted.

Tornare was similarly optimistic.

“COVID took a bit of steam out of our momentum, but it is only a postponement,” he said, noting three big launches that had planned for last year that will take place this year.

Guadalupe also sounded a positive note.

“If we remain open, more or less everywhere, even if there’s not tourism, we should be able to mark an important rebound in sales this year compared to last year,” he said.

Ownership group behind football club and Boston Red Sox considers selling minority stake instead

Talks for a deal between the ownership group behind Liverpool FC and the Boston Red Sox and a blank-cheque company led by Moneyball executive Billy Beane have fallen apart, according to people briefed on the matter.

Instead, they said Fenway Sports Group, the ownership vehicle for both clubs controlled by billionaire John Henry, was in discussions to sell a minority stake to RedBird Capital, a private investment firm founded by former Goldman Sachs veteran Gerry Cardinale.

The private transaction would probably result in a lower valuation for Fenway than the $8bn floated for a potential acquisition by RedBall, a special purpose acquisition company directed by Mr Cardinale and Mr Beane, the people familiar with the discussions said.

The talks between Mr Cardinale and Mr Henry were described as continuing, and there was no guarantee they would reach a deal.

A transaction between the two companies would continue a recent trend involving private capital investment in major sport clubs and leagues around the world, particularly as the industry has been hampered by the pandemic. Private equity firms have been seeking deals from Italy’s Serie A to Germany’s Bundesliga and with New Zealand’s All Blacks rugby team.

A private deal between RedBird and Fenway would mean Mr Beane and Mr Cardinale would seek a different target for their RedBall Spac, launched in July with the purpose of raising $575m to acquire a sports franchise. 

Discussions about the potential for the private investment in Fenway were earlier reported by Axios.

Mr Beane is best known for his analytics expertise working in the front office of Major League Baseball’s Oakland Athletics, where he became the subject of the Michael Lewis best-selling book, Moneyball, which was later made into a film starring Brad Pitt.

Mr Cardinale is best known for launching the regional broadcast network of the New York Yankees, YES, and currently manages more than $4bn in assets at RedBird, which recently acquired French football club Toulouse. 

Mr Henry, a commodities trading veteran who made billions crunching numbers, translated that success into owning two sports teams and stewarding them to championship seasons. Friends, baseball industry experts and former colleagues describe him as a champion of analytics in sports — like Mr Beane.

Companies raise $400bn over three weeks in blistering start to 2021

Blitz of debt and equity fundraising comes as stimulus measures boost global markets

Companies have launched a $400bn fundraising blitz in the first three weeks of 2021 as the torrent of government and central bank stimulus to rescue global economies cascades across capital markets.

The global bond and equity fundraising spree marks one of the biggest hauls of the past two decades for the comparable period and is about $170bn above the average for this time of year, a Financial Times analysis of Refinitiv data shows.

The clamour for fresh cash underscores how unprecedented economic interventions have helped boost financial markets despite the deep economic blow from coronavirus and continued spread of new virus variants.

Corporate debt and equity markets have remained unfazed while much of Europe and the US grapples with a deadly winter wave of Covid-19, allowing company executives to use record low and stable interest rates and rallying stock prices as a chance to expand their businesses, reorganise their shareholder base or simply cash out.

“The only thing that matters to markets is global fiscal and monetary policy,” said John McClain, portfolio manager at Diamond Hill Capital Management. “Markets are priced as though coronavirus doesn’t matter any more.” 

Companies have raised $337bn in debt markets in the year to January 22 and a record $64bn through IPOs and secondary equity offerings. The pace of fundraising in equity capital markets is more than double the amount raised in the same period last year, in part due to the boom in blank-cheque companies, or Spacs, according to figures from Refinitiv. 

Israeli mobile games company Playtika holds the crown for this year's biggest listing so far, raising $2.2bn, according to Refinitiv, while Warren Buffett-backed Chinese electric vehicle company BYD’s $3.9bn share sale last week made it January’s biggest equity market transaction.

Dating app Bumble and online card retailer Moonpig are among the companies planning to go public soon, in New York and London respectively, with bankers expecting more to follow.

The easy conditions have been supported by the fiery rebound rally in equity markets since the sharp sell-off in March. The Nasdaq Composite, home to many of America’s large technology and healthcare companies, has doubled since its March nadir.

Jeff Thomas, head of western US listings and capital markets at Nasdaq, described the trillions pumped into the financial system by the US Federal Reserve as a “watershed”.

“When you put all that capital into the system, it’s got to go somewhere,” he said. Rapidly rising stock market valuations have enticed companies to pivot from private to public markets much sooner, he added. “We saw a lot of companies saying ‘look, let’s take advantage of the valuations in the public markets to go raise capital there.’”

In Asia, Chinese technology and healthcare companies are leading the fundraising frenzy. “This has been happening for a couple quarters now because China was first out of the gates from a Covid recovery perspective,” said Udhay Furtado, co-head of Asia equity capital markets at Citigroup.

“There are clearly investment tailwinds for growth companies who have been proven resilient through Covid,” said Alex Watkins, co-head of Emea equity capital markets at JPMorgan. “If you can trade well through this period you can trade well through most reasonable periods.”

The frenzied listing of Spacs has also continued in 2021, despite some warning that their surging popularity is unsustainable. Globally, 61 blank cheque companies have listed so far this year, raising $16.9bn and dwarfing the number of Spacs to debut across any other comparable period.

Central bank actions have also propelled companies to raise debt at cheap borrowing costs to help shore up balance sheets and get through prolonged periods of closure. Record-low interest rates have pushed investors to search for income in even the riskiest parts of the market. Global high-yield bond issuance for the first three weeks of January hit a historic high for the period of $49.8bn. 

Meanwhile, the yield on ICE BofA’s US index of triple-C rated bonds, tracking some of the riskiest debt trading on the public market, sank to 7.6 pent on Friday, nearing an all-time low, as investors continued to pile in to the debt.

“Investors cannot fight the global, co-ordinated monetary policy. It’s almost disheartening,” said Mr McClain, adding that “the only place in the world that pays any kind of real yield is US fixed income”.

Some companies are capitalising on frothy markets to raise debt and pay chunky dividends to their owners in a further sign of the thirst among investors for deals offering relatively juicy returns.

Junk-rated building material company US LBM issued a $400m bond to fund a payout to its private equity owner Bain Capital, people familiar with the matter said. Bain declined to comment.

In Europe, Swedish alarms company Verisure raised €2.5bn worth of high-yield bonds and paid a €1.6bn dividend to its buyout owner Hellman & Friedman, as well as other shareholders.

One UK-based fund manager said investors are buying low-rated companies for returns despite the bleak pandemic backdrop.

“The sense and feeling is just sheer nervousness that surrounds the market at these levels.”

Retail investors rush to find the next stock market unicorn

Traditional valuation benchmarks such as profits have been overlooked as speculation intensifies

For a sign of the current mood of stock markets and retail investors, one index put together by Goldman Sachs provides a telling insight.

The investment bank has compiled an index of technology sector shares that do not produce profits, traditionally a main driver of stock market valuations. Since mid-March, the index is up nearly 400 per cent.

Why have such stocks gone up in value so quickly? One argument is many of these companies are high margin, high-growth businesses that reinvest profits back into the business to achieve scale. They are less concerned with earnings and more concerned with growing at a rapid pace.

This could very well be valid. But this was not this the case from September 2014, when the Goldman Sachs Non-Profitable Tech Stock Index was launched, until March 2020. The companies in the index in essence traded sideways during these years, even as the broader market advanced. If the markets viewed them as having high growth potential, should not they have been outperforming the same way even a year or two ago? What changed?

We would argue this index’s unusual pattern is the result of an important shift in investor preferences that took hold last spring. Many individual investors long ago abandoned actively managed vehicles such as open-ended mutual funds. Some are also beginning to sour on passively managed vehicles including exchange traded funds tied to indices. Instead, retail investors are chasing individual names.

There is no one definitive measure to show this shift, but the signs are unmistakable. Trading in individual stock options has been booming to new records, according to data from the Options Clearing Corporation. This has been led by purchases of options to buy stocks in lots of 10 contracts or fewer. Nearly 15 per cent of all trades are for one contract.

Penny stocks have recently caught the fancy of investors. In December 2020, they traded 1tn shares, according to data firm SentimenTrader. That easily exceeded the previous monthly record.

Such trading does not happen if the public’s money is caught in a battle between a professional money manager in Boston or a passively managed ETF. Neither of these two groups traffic in these areas.

Instead, three things have dramatically changed the public’s investor preferences. First was the cutting of brokerage commissions to zero in 2019. Then, widespread adoption of fractional purchases added further fuel to the fire. Finally, the massive increase in savings from government assistance payments led to increased trading. This started with the Cares Act last March and continued through the $900bn stimulus package passed last month. The Biden administration is promising more of the same.

Armed with new money in their bank account and a fear about the economy that kept them from spending, this retail crowd turned to trading. Their investing is not focused on the proverbial “safe” names that would be found in the S&P 500 index. If it were, they would continue to buy passive ETFs and call it a day. Instead, they are looking for the next “unicorn”.

A Silicon Valley investor once asked, “What do you call a person who bought 10 speculative tech stocks, nine of which went to zero and the tenth that was a unicorn?” The answer is, “fabulously wealthy.”

With this dotcom boom-like mindset, the search for the next has led individual investors to the tech names that have yet to make money. They are piling into the fuel cell manufacturer Plug Power (12 per cent of the index), which has soared from $7 to $70 the last six months. Or they are dabbling in the Chinese electric vehicle maker Nio (8 per cent of the index) that has rallied from $10 to $60 since last summer.

What ends this mentality? Our guess is a return to normal. Once vaccines take hold, infection counts go down and the economy reopens, investors will look to improve their standard of living. Whether this takes the form of a new car or remodelling a kitchen, less money will be spent chasing unicorns.

The economist Herb Stein once quipped: “If something cannot go on forever, it will stop”. At some point the prospect for profits must translate into actual profits. So far, this new retail crowd’s resolve has yet to be tested with any serious pullback. An investment objective of owning companies that are not making money will fail in the long run. Until this reality slaps everyone in the face, traders will continue to pile into these high-flyers on the hopes of future profitability.

Governments must implement tough reforms, says Germany’s former finance minister

Europe risks failing in its mission to boost its growth prospects via the €750bn coronavirus recovery fund, Germany’s former finance minister has warned, as he questioned whether member states had the capacity to implement tough economic reforms.

“There is a lack of real progress, a lack of efficiency in the execution of [reform programmes] in the member states,” Wolfgang Schäuble told the Financial Times. “These difficulties worry me.”

Mr Schäuble, who is president of the Bundestag, said the EU had spent too much time arguing about the size of the fund and how the money should be distributed, and not enough “thinking about what to spend it on”.

“We should long ago have defined what areas the member states should be investing these funds in — artificial intelligence, digitisation, policies for tackling climate change,” he said. “I hope we can do this more quickly.”

His remarks chime with those of other European officials who worry that member states are dragging their feet over submitting detailed proposals for how they intend to spend the money from the fund.

While German finance minister, between 2009 and 2017, Mr Schäuble came to symbolise the fiscally hawkish policies pursued by the eurozone in the aftermath of the global financial and sovereign debt crises. He was famously in favour of suspending Greece from the single currency in 2015.

But since the pandemic broke out he has jettisoned his more conservative views on fiscal policy and embraced the extraordinary efforts taken by the EU to rescue the bloc from economic collapse. 

The centrepiece of those efforts is the recovery fund, which will see the European Commission issue unprecedented levels of debt and distribute it in the form of €390bn in grants to member states. Mr Schäuble said it was the “right response” to the coronavirus crisis.

But the commission has tied the release of recovery fund cash to economic reforms designed to deliver lasting improvements to the growth prospects of recipient countries, and, in particular, to boost innovation, digitisation and facilitate the shift to a green economy.

EU countries have been asked to submit detailed reform plans to Brussels by April, setting out how they plan to use the fund’s loans and grants. The commission will then scrutinise the reforms with the aim of beginning disbursements from the second half of 2021.

Valdis Dombrovskis, commission vice-president, said last week that disbursements would be subject to the achievement of “specific and measurable milestones” and that there remained “a lot of work ahead”. Some member states, he said, needed to be more precise in setting out exactly what events would trigger payments.

Mr Schäuble said he was concerned about how money from the recovery fund would be spent, adding that the commission had only “limited competence” to check how member states invested their allocation. “But when you ask what’s actually happening with the money, it can even lead to government crises, as we’re seeing in Italy.”

Earlier this month Matteo Renzi’s Italia Viva party withdrew from the Italian coalition government of Giuseppe Conte after complaining that it was bungling plans to spend the almost €200bn that Italy is due to receive from the recovery fund.

Mr Schäuble said he was worried the programmes presented by individual countries would not be ambitious enough. “We know very well what urgent steps each country must take to make Europe’s economy stronger, more innovative, dynamic and better able to compete globally,” he said.

But it is not just southern European countries that have been criticised for the reform plans they’ve submitted to Brussels. According to officials in Berlin, the commission is also dissatisfied with Germany’s own initial proposals, and, in particular, the lack of enthusiasm it has shown for reforming its pension system.

Mr Schäuble also addressed the EU’s decision to make it easier for member states to deal with the economic effects of the pandemic by setting aside the bloc’s budget rules until the end of 2021. The commission used a so-called escape clause to suspend the enforcement of the Stability and Growth Pact, which caps debt levels at 60 per cent of gross domestic product.

In the past, Mr Schäuble has always opposed attempts to soften the rules of the SGP but is now more open to the idea. He said he sympathised with those who say the pact should be reformed before it is reintroduced. “After the pandemic a lot of things will be completely different to the way they were before,” he said. “Whether they’ll be better depends on us.”

The recovery fund has proved controversial in parts of Mr Schäuble’s Christian Democratic Union: many hawks in the party only agreed to it on the premise that the commission’s issuance of debt is a one-off that will never be repeated. Olaf Scholz, Germany’s Social Democrat finance minister, has, in contrast, hailed it as a “Hamiltonian moment”, invoking the first US Treasury secretary who helped to create American fiscal union by taking on the debts of the states in 1790.

Mr Schäuble said such an analogy was inappropriate. “I just hope no one really knows what the Hamilton effect was,” he said. Such rhetoric “just strengthens the resistance of those who fear their national identity will be lost in European integration — which no one really wants anyway”.

Mr Schäuble said those pursuing closer co-operation in the EU and the eurozone needed to tread carefully. “For what you want to achieve in Europe you need to organise majorities,” he said. “You can’t build Europe against the will of the people.”

But he indicated that he himself did not see the recovery fund as a one-off. He said he had never completely excluded the idea of common EU bonds, “because I know very well that an economic and currency union needs to have them”.

Proceedings to highlight Republicans’ split over former president’s actions, party’s future

WASHINGTON—The House sent over the article of impeachment of former President Donald Trump to the Senate Monday evening, officially starting the countdown to a trial expected to highlight the rifts within the GOP over Mr. Trump’s legacy and his future influence over the party.

The House impeachment managers, who will act as the prosecutors in Mr. Trump’s second impeachment trial, walked through the Capitol to deliver the article, which alleges he incited a mob that stormed the U.S. Capitol on Jan. 6.

The proceedings leading up to the trial in the Senate, where a two-thirds supermajority will be needed to convict Mr. Trump, coincide with a moment of intense internal wrestling within the Republican Party. Some GOP lawmakers have criticized Mr. Trump’s rhetoric and actions and called on the party to change direction, while loyalists to Mr. Trump have sought to keep Republicans in line behind the former president, who is popular with the party’s base.

“There is only one question at stake, only one question, that senators of both parties will have to answer before God and their own conscience,” said Majority Leader Chuck Schumer (D., N.Y) on the floor of the Senate. “Is former President Trump guilty of inciting an insurrection against the United States?”

Spokespeople for Mr. Trump didn’t immediately respond to requests for comment.

Although most Senate Republicans have yet to officially take a position on Mr. Trump’s impeachment, many GOP aides were skeptical that 17 GOP senators would join with all Democrats and vote to convict him. While Mr. Trump is already out of office, a conviction would allow for a second vote to bar him from holding office again.

Some Senate Republicans have criticized Mr. Trump’s behavior and comments leading up to the Jan. 6 riot but expressed reservations about convicting him after his term has ended.

“He exhibited poor leadership. I think we all agree with that,” Sen. Joni Ernst (R., Iowa) said Monday, adding, “It was these people who came into the Capitol—they did it knowingly, so they bear the responsibility.”

Sen. Mitt Romney of Utah was the only Republican who voted to convict Mr. Trump in his first impeachment trial in February 2020. This time around, other GOP lawmakers seen as possible votes to convict Mr. Trump include Sens. Susan Collins of Maine, Lisa Murkowski of Alaska, Ben Sasse of Nebraska and Pat Toomey of Pennsylvania. They have expressed concerns about Mr. Trump’s conduct but not said how they will vote.

Casting a politically difficult vote to convict Mr. Trump could be easier for the Republicans who are retiring next year, including Sen. Rob Portman of Ohio, who announced his decision to not seek re-election on Monday. Mr. Toomey and Sen. Richard Burr (R., N.C.) are also leaving the Senate after next year and are expected to be joined by other GOP senators, aides said. But other Republicans, including Sens. Marco Rubio of Florida and Ted Cruz of Texas, have dismissed the trial as political payback.

One wild card remains Senate Minority Leader Mitch McConnell (R., Ky.) who has said he hasn’t made a final decision on how he will vote. Some think a vote by him to convict Mr. Trump could provide political cover for a flurry of other Republicans to join him. Others remained doubtful that even in that scenario more than a few Republicans would follow suit on a vote certain to spark political backlash and anger from their base.

In one development Monday, Sen. Patrick Leahy (D., Vt.), the new president pro tempore of the Senate, said he would preside over the trial, which begins the week of Feb. 8. Mr. Leahy, who intends to vote as well, cited historical precedent for impeachment trials of individuals who aren’t president. The Constitution directs the chief justice of the U.S. to preside when the president is tried before the Senate, but is silent regarding former presidents. Chief Justice John Roberts presided over Mr. Trump’s first trial, which occurred when he was president. The chief justice declined to comment Monday.

In an interview on MSNBC, Mr. Schumer said the decision was up to the chief justice and he didn’t want to preside over the second trial.

Republicans questioned whether Mr. Leahy could play a neutral role presiding over the trial and cast a vote.

“How does a Senator preside, like a judge, and serve as juror too?” asked Sen. John Cornyn (R., Texas) on Twitter. Mr. Leahy said in a statement that he would “not waver from my constitutional and sworn obligations to administer the trial with fairness.”

Mr. Trump’s second impeachment trial could slow Democrats’ efforts to work on President Biden’s legislative agenda and confirm his nominees.

“I think it has to happen,” Mr. Biden said of the impeachment on CNN Monday night, adding there would be “a worse effect if it didn’t happen.” He predicted there wouldn’t be 17 GOP votes to convict Mr. Trump.

Some Senate Republicans have objected to moving forward with a trial now that Mr. Trump is out of office, even as some criticized his actions.

“I think the ex-president’s rhetoric on the day was inflammatory. I think it was irresponsible. I think it was wrong,” Sen. Josh Hawley (R., Mo.) told reporters Monday. “But I think that this impeachment effort is, I mean, I think it’s blatantly unconstitutional. It’s a really, really, really dangerous precedent.”

Mr. Schumer said Monday that Republicans were trying to undermine the trial on procedural grounds to avoid having to cast a judgment on Mr. Trump.

“There seems to be a desire on the political right to avoid passing judgment one way or the other,” Mr. Schumer said on the Senate floor Monday. “This is not going to fly. The trial is going to happen.”

There is no precedent for a president being tried in an impeachment trial after leaving office. Congress did proceed once with impeachment and trial for a resigned cabinet official, War Secretary William Belknap in the Ulysses S. Grant administration. Mr. Belknap was acquitted. The presiding officer in that trial was the Senate president pro tempore, Thomas W. Ferry, a Michigan Republican.

A report from the Congressional Research Service, the public-policy research arm of Congress, concludes that while the matter is open to debate, the weight of scholarly authority agrees that former officials may be impeached and tried.

The trial comes as Mr. Trump’s election loss and subsequent impeachment have roiled the GOP. Reflecting the divisions on Capitol Hill, a debate has broken out within the Republican National Committee over whether it should declare that Mr. Trump’s impeachment by the House was “illegal and unconstitutional.”

RNC Chairwoman Ronna McDaniel, a close ally of Mr. Trump and who was re-elected earlier this month to a two-year term, now faces the question of whether she should allow the committee to formally challenge the impeachment proceedings.

Demetra DeMonte, an RNC member from Illinois, proposed over the weekend that the committee formally pass a resolution that argues the House impeachment on Jan. 13 in response to a riot at the Capitol by supporters of Mr. Trump wasn’t legitimate. The proposed resolution also calls for all Republican senators to announce that they will oppose the trial proceeding.

That move was quickly challenged by Bill Palatucci, an RNC member from New Jersey, who wrote in an email to Ms. McDaniel and fellow members that Mr. Trump had with his words and actions “caused great harm to our party, our democracy and America’s standing around the world.”

In the House, a group of Republicans are trying to oust House Republican Conference Chairwoman Liz Cheney of Wyoming from her leadership position after she was one of 10 Republicans in the chamber to vote to impeach Mr. Trump.

“It’s not a good role for somebody who has a leadership position,” said Rep. Jeff Van Drew (R., N.J.), who supports efforts to demote Ms. Cheney. “You’re throwing your colleagues, people who gave you their vote, who looked to you for help, advice and strength—and you throw them under the bus.”

A Monmouth University Poll released Monday showed 56% of Americans support Mr. Trump’s second impeachment by the House, while 52% want the Senate to convict him. Approval for the impeachment stands at 92% among Democrats, 52% among independents and 13% among Republicans.

California wants to do it, and Biden wants to help—even though it will violate the law and cost us all.

President Biden can’t mandate that we all drive electric cars, but he’s opening the gates to an electric Trojan horse. In a day-one executive order, Mr. Biden began the process of rescinding a Trump administration rule, the first step toward greenlighting California’s electric car agenda. California and like-minded states plan to impose electric cars through production quotas—whether drivers want the cars or not.

California regulators call it a “zero-emissions vehicle” standard, but green propaganda shouldn’t obscure what’s really going on. Start with federal law. It requires the transportation secretary to set national average fuel-economy performance standards for car makers at the “maximum feasible” level without restricting consumer choice. Instead of mandating a given technology, federal fuel-economy standards allow car makers the freedom to decide how best to improve fuel economy at the lowest cost.

To promote efficiency, federal law broadly forbids state regulations “related to fuel economy standards.” Courts have held that this law forbids electric car quotas and similarly meddlesome command-and-control policies that seek to dictate how car makers should meet federal performance standards. The Golden State argues that a special exception made for California regulations in the Clean Air Act should also be read into the federal fuel-economy law. But that law’s text says no. It forbids fuel-economy regulation by any state—no exceptions.

Next, the policy. Congress pre-empted state laws in 1975 because sprinkling policies like state electric car quotas on top of federal fuel-economy standards makes no sense. An electric car quota in California would force car makers to meet national fuel-economy standards using one of the most expensive fuel-efficiency technologies, undermining consumer choice and increasing costs. One study from 2019 estimates that state electric car quotas will cost an extra $400 for every new car nationwide by 2025.

Those costs won’t be distributed equally. The zero-emission vehicle standard is in effect a hidden regressive tax paid by ordinary car buyers to subsidize luxury cars for the wealthy. It takes $400 from the wallets of low- and moderate-income car buyers and hands it over primarily to six-figure-income electric car buyers, who enjoy many other subsidies, too.

Less directly, the electric car quota fuels African child labor, conscripted to mine the minerals used in electric car batteries. And because China dominates those battery supply chains, state quotas will speed up the exodus of blue-collar manufacturing jobs in Michigan, Indiana and Ohio to coal-powered Chinese plants, undermining the environmental rationale for the quotas.

California’s central planners cast electric car quotas as a step toward a carbon-free utopia, but they do nothing quantifiable to reduce carbon emissions. Federal fuel-economy law already sets stringent average standards for national fleets. The key word is average. Car makers can offset every “clean” electric vehicle produced to meet a state quota with a “dirtier” car. In other words, for every mandated electric car, car makers can and will sell an equal and opposite gas-guzzler and still meet the federal fuel-economy standard.

Meanwhile, by making new cars more expensive, electric car quotas encourage drivers to keep older and dirtier cars on the road, increasing pollution. California politicians assume away these inconvenient truths. They also assume an electric grid that works—a lot to ask of California these days.

California’s costly and regressive car quota isn’t laudable state experimentation. It is a Madisonian nightmare, a state-sponsored regulatory cartel meant to advance the interests of California’s dominant factions at great national expense. Why balkanize the car market into petty sovereignties governed from Sacramento? As America’s chief executive, Mr. Biden should faithfully protect the supremacy of the nation’s federal fuel-economy law.