FT : Sustainable fashion: closing the circle

Sustainable fashion: closing the circle
Renting, repairing and reselling goods is in vogue but second-hand trade cannibalises primary sales

The fashion industry has long struggled with ethics and sustainability. Fast fashion is wasteful at best, exploitative at worst. Luxury is not always a great deal better: recall Burberry’s bonfire of out-of-season clothing to avoid it turning up on the backs of budget shoppers.

Selfridges wants to right the balance. The UK department store follows in the footsteps of Hong Kong peer Lane Crawford, online luxury merchant Farfetch and French fashion house Chanel, an early mover in ditching crocodile-skin bags. 

What Selfridges offers is vague. It mostly amounts to certification for materials in its products, spanning feathers to cotton, by 2025. The retailer will also embrace “circularity”, the new buzzword for goods that are rented, repaired or resold rather than dumped.

Reselling is the easiest to carry off. Online merchants like Vestiaire and peer-to-peer reseller Depop have made entire businesses out of it. Others have embraced extra business, such as Farfetch, which reckons the luxury resale market is worth more than $24bn and growing four times as fast as primary sales. Second-hand goods appeal to bargain seekers and eco-warriors alike. Making a new pair of jeans and T-shirt can use up to 20,000 litres of water, according to UK NGO Waterwise, enough to grow 70kg of potatoes. 

By providing resale sites, manufacturers and retailers are able to take a cut of revenues and gain access to fresh troves of data. Still, second-hand trade cannibalises primary sales and data gleaned is harder to act on. Spotting a rerun of the craze for Fendi’s baguette may encourage high street stores to sell lookalikes, but those after originals will probably stick to vintage bags. 

Investors appear to like the circularity model. Vestiaire raised $64m in April. Zalando’s share price is up by more than two-thirds since it unveiled plans to enter the second-hand market in late February. But investor fashions are fickle too. The pandemic’s lockdowns have scythed retail sales: Selfridges itself has slashed 450 jobs. Resales squeeze margins. Circular fashion does not mean circularity of profits.

FT : Tencent takes minority stake in French mobile games maker Voodoo

Tencent takes minority stake in French mobile games maker Voodoo
Chinese internet group is looking to step up its pace of investments in Europe

Tencent has taken a stake in French mobile games company Voodoo, as the Chinese internet group looks to step up its pace of investments in Europe.

The minority investment gives Voodoo an enterprise value of $1.4bn, making it the first “unicorn” company in the fast-growing “hyper casual” gaming market. The deal follows Zynga’s $168m acquisition of another hyper-casual outfit, Rollic Games, this month.

Voodoo’s portfolio of games such as Helix Jump, Crowd City and Paper.io — which look simple and quick to play but are often very difficult to complete — has attracted more than 1bn players around the world, including many in China.

The Paris-based company hopes to use its new alliance with Tencent to move into casual games, taking it into more direct competition with the likes of King’s Candy Crush Saga and Playrix’s Gardenscapes.

“What we like about Tencent is they have so much experience in more complex games with more depth,” said Alexandre Yazdi, Voodoo’s chief executive. “We really believe that we can add a fresh wave of new casual products that come from our hyper-casual innovations.”

Tencent’s stake in Voodoo will sit alongside several other gaming investments outside China, including Epic Games, the maker of Fortnite, Clash of Clans developer Supercell and Riot Games, which created League of Legends.

“Yet again, Tencent prove to me that they are probably the most skilled investor in the gaming space globally,” said Per Roman, co-founder and managing partner of GP Bullhound, a tech adviser. “They pay up for quality, which is more rare in Europe than in Silicon Valley.”

Chinese tech companies are finding themselves increasingly constrained in their dealmaking in the US by political tensions between the two countries.

This month, the Trump administration unexpectedly targeted Tencent’s hit social media app WeChat, giving US companies 45 days to stop doing business with the app. Tencent has argued the action will not apply to WeChat in mainland China, where the bulk of its 1.2bn users are.

“For any Chinese company now, it is very attractive to buy outside China,” said Mr Roman. “Right now the US is challenging. That creates a positive net effect for Europe.”

Tencent is in the process of completing its purchase of Norwegian game developer Funcom, valued at $160m. In February, it put money into Yager Development, the Berlin-based studio behind Spec Ops: The Line.

Earlier this year, Tencent led a $45m funding round for Lydia, a French mobile payments company. Its investment in Universal Music Group, with the Chinese group leading a consortium that paid $3.3bn for a 10 per cent stake, closed in March.

Voodoo’s Mr Yazdi said that the company planned to expand further in Asia Pacific, as well as adding multiplayer features to more of its games.

“Android [app] stores in [Asia Pacific] are very fragmented, so it’s very important to have a strong partner to distribute our games,” he said.

Voodoo was co-founded in 2013 by Mr Yazdi, who will remain its largest shareholder following the deal, and Laurent Ritter.

Revenues, which are driven primarily by in-game advertising, grew by 10 per cent in 2019 compared with the year before to €360m. With just 250 staff behind a portfolio of games that have been downloaded more than 3.7bn times to date, Voodoo is profitable. It expects continued growth this year, as mobile gaming has boomed during coronavirus lockdowns, and it plans to hire dozens more staff at its 11 offices, as well as opening its first location in China.

Detailed terms of the Voodoo deal, including the total amount Tencent invested, were not disclosed.

Reuters - SoftBank builds $1.2 billion Amazon stake; invests in Netflix, Tesla

SoftBank builds $1.2 billion Amazon stake; invests in Netflix, Tesla

TOKYO (Reuters) - SoftBank Group Corp (9984.T) has built a stake worth around $1.2 billion in e-commerce firm Amazon (AMZN.O), regulatory filings showed on Monday, as the tech conglomerate expands its investing activities beyond its recent focus on unlisted startups.

Chief Executive Masayoshi Son last week announced a new investment management subsidiary that would park excess cash from a massive asset sale programme in liquid stocks. SoftBank has spent around $10 billion buying shares.

In addition to Amazon, the group has built stakes in Netflix Inc (NFLX.O), Tesla Inc (TSLA.O), Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O), filings showed.

Graphic - SoftBank's newly disclosed listed holdings here

SoftBank also disclosed a stake in chip supplier Nvidia Corp (NVDA.O) worth around $220 million based on Friday’s closing price. It exited its stake in the firm last year. SoftBank is currently in talks with Nvidia over a possible sale of chip designer Arm, media have reported.

The group is pivoting towards investing outside the $100 billion Vision Fund with its focus on unlisted, late stage startups. The fund has buffeted the group’s earnings as the value of its holdings have fallen below acquisition price.

The value of many of the listed shares is rising, driven by a tech stock rally, with Tesla’s shares up more than 60% since the end of June. Son has dropped operating profit as a measure of his group’s performance, saying the value of the assets is a better yardstick.

SoftBank also disclosed stakes in Chinese video sites Bilibili Inc (BILI.O) and iQIYI Inc (IQ.O). iQIYI is currently being probed by the U.S. Securities and Exchange Commission.

>>> US Gapping down

Gapping down

Other news:

  • NVT -3.6% (Trian Fund reports decreased position in 13F filing)
  • CFRX -3.4% (files for $150 mln mixed securities shelf offering)
  • HZNP -1.7% (Paulson & Co reports decreased position in 13F filing)
  • WFC -1.4% (Berkshire Hathaway reports decreased position in 13F filing)
  • VXX -1.2% (trading lower with US futures edging higher)
  • PSN -1.2% (intends to offer $300.0 million aggregate principal amount of convertible senior notes due 2025 in a private placement)
  • JPM -0.8% (Berkshire Hathaway reports decreased position in 13F filing)
  • ATUS -0.8% (Greenlight Capital reports closed position in 13F filing)
  • BLMN -0.5% (Jana Partners reports decreased position in 13F filing)

Analyst comments:

  • YETI -0.8% (downgraded to Hold from Buy at Berenberg)
  • SRE -0.5% (downgraded to Equal Weight from Overweight at Wells Fargo)

>>> US Gapping up

Gapping up 

In reaction to strong earnings/guidance:

  • JD +3.5%, NAT +3.1%

M&A news:

  • PRNB +9.4% (to be acquired by Sanofi (SNY) for $100 per share in cash); SNY +1.3%

Other news:

  • ABEO +13.5% (Abeona Therapeutics and Taysha Gene Therapies entered into license and inventory purchase agreements for ABO-202, an adeno-associated virus (AAV) gene therapy for CLN1 disease)
  • PSTI +8.7% (Pluristem Therapeutics and Abu Dhabi Stem Cells Center sign MOU to collaborate in the development of cell therapies and regenerative medicines for the treatment of severe diseases including COVID-19)
  • GOLD +7.7% (Berkshire Hathaway reports new position in 13F filing)
  • GTHX +7.3% (announces acceptance and priority review of NDA for trilaciclib for patients with small cell lung cancer)
  • AXLA +7.2% (announced the publication of results from the company's AXA1665-001 clinical study in Clinical and Translational Gastroenterology)
  • PDD +5.2% (to join the NASDAQ-100 Index on August 24)
  • DVA +4.1% (commenced a modified "Dutch auction" offer for shares of its common stock for up to $1.0 bln at a price per share of not less than $77.00 and not more than $88.00)
  • STOR +3.9% (Berkshire Hathaway reports increased position in 13F filing)
  • SU +3.1% (Berkshire Hathaway reports increased position in 13F filing)
  • QGEN +2.6% (Paulson & Co reports new position in 13F filing)
  • PRSP +2.4% (Jana Partners reports new position in 13F filing)
  • NVAX +2.4% (initiates Phase 2b clinical trial for COVID-19 vaccine in South Africa)
  • KR +2.1% (Berkshire Hathaway reports increased position in 13F filing)
  • NVDA +1.9% (close to deal to acquire Arm by the end of the year, according to Evening Standard)
  • TECK +1.7% (Greenlight Capital reports new position in 13F filing)
  • LOW +1.6% (Pershing Square reports increased position in 13F filing)
  • HD +1.2% (daily foot traffic is 35% higher than the same period of last year, according to WSJ)
  • SLQT +1.1% (Soros Fund reports new position in 13F filing)
  • DKNG +0.9% (Soros Fund reports new position in 13F filing)

Analyst comments:

  • LIFE +6.6% (upgraded to Buy from Neutral at H.C. Wainwright)
  • IMRA +4.8% (upgraded to Buy from Neutral at Citigroup)
  • INFN +4.6% (upgraded to Buy from Hold at Stifel)
  • TDOC +3.4% (upgraded to Outperform from Neutral at Credit Suisse)
  • JCOM +2.6% (upgraded to Buy from Neutral at Citigroup)
  • EAT +1.9% (upgraded to Buy from Hold at Deutsche Bank)
  • ROST +1.3% (upgraded to Outperform from Market Perform at Telsey Advisory Group)
  • MGIC +1% (upgraded to Buy from Neutral at H.C. Wainwright)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • PRNB +10%, GOLD +8.2%, PSTI +7.9%, GTHX +5.7%, SU +4.9%, STOR +4.5%, DVA +4.1%, PDD +3.9%, NAT +3.6%, NVAX +3%, QGEN +2.8%, PRSP +2.4%, KR +2.3%, TECK +1.7%, DKNG +1.4%, LOW +1.2%, SLQT +1.1%, SNY +1%, LMT +0.7%
  • Gapping down:
    • NVT -3.6%, CFRX -3.4%, HZNP -1.7%, VXX -1.3%, WFC -1.2%, JPM -0.9%, ATUS -0.8%, BLMN -0.5%

BFM : Poker menteur entre Arnaud Lagardère, Vincent Bolloré et Bernard Arnault

L’avenir du groupe Lagardère se joue entre son patron, son nouvel associé le PDG de LVMH et son premier actionnaire Vivendi. Le fonds Amber, le Qatar et Nicolas Sarkozy joueront les arbitres d’une partie où tout le monde ment mais personne n’est dupe.
"Ce sont quatre voyous qui n’ont qu’une envie : faire main-basse sur l’empire d’Arnaud Lagardère". Cette punchline d’un pilier du capitalisme français décrit l’offensive, à peine couvert de bons sentiments, sur Lagardère de Vincent Bolloré, Bernard Arnault, Marc Ladreit de Lacharrière et Joseph Oughourlian. Il les connaît tous et n’a pas de doute sur leurs véritables intentions. "Tous disent aider Arnaud Lagardère en mémoire de son père Jean-Luc mais personne n’est dupe de leur jeu", ajoute ce grand patron.

Sûrement pas Arnaud Lagardère qui sait bien que ces requins convoitent son empire. Pourtant, c’est bien lui qui a fait le tour du tout-Paris pour chercher des investisseurs prêts à l’aider à résister aux assauts du fonds Amber Capital qui réclamait sa tête en perspective de l’assemblée générale du 5 mai. Pendant deux mois, il se démène pour faire entrer au capital de Lagardère, à ses côtés, des amis: la famille Pinault est approchée, Martin Bouygues aussi dont le père Francis Bouygues était très proche de celui d’Arnaud, Jean-Luc Lagardère. Même Xavier Niel, le patron de Free, dit-on. Mais tous déclinent. Seul le patron de Fimalac, Marc Ladreit de Lacharrière, accepte de prendre seulement 3%, pour "aider à passer l’assemblée générale", expliquait un proche. C’est le seul à avoir tenu sa promesse…

Lagardère choisit Bolloré faute de mieux
Faute de solution, Arnaud Lagardère est alors contraint de se tourner vers Vincent Bolloré. Il connait pourtant son CV de "raider" depuis trente ans quand il a attaqué la banque Rivaud, Bouygues, Lazard, Havas, Vivendi et Ubisoft. Pourquoi faire entrer le loup dans la bergerie? ll sait bien que Bolloré rêve de le croquer. "En 2015, il avait déjà approché Lagardère pour 'faire des choses ensemble'", se rappelle un ancien dirigeant du groupe. "Mais Arnaud avait refusé car il se méfiait de lui". Il peut aussi compter sur l’expérience d’Yves Guillemot, le patron d’Ubisoft qui siège à son conseil et a subi l’offensive de Vincent Bolloré il y a quatre ans.

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Mais son ami Nicolas Sarkozy, devenu administrateur de Lagardère, se porte garant de la loyauté de Vincent Bolloré. Banco, le propriétaire de Vivendi rachète 10% du capital de Lagardère et l’aide à rejeter l’offensive d’Amber. La première bataille est gagnée mais Arnaud Lagardère sait bien que Vincent Bolloré est son nouvel ennemi. "Il ne devait prendre que 3%, comme Fimalac", assure aujourd’hui un proche de l’héritier. "Ça aurait suffi pour gagner à l’assemblée générale, alors quand il a racheté 10% d’un coup, on a compris".

Bernard Arnault pour doubler Vincent Bolloré
Trois semaines passent. Etonnamment calmes pour que cela dure. Et la deuxième bataille reprend de plus belle. Le 25 mai, Arnaud Lagardère annonce son association avec Bernard Arnault. Le PDG de LVMH va prendre 25% de la société personnelle de l’héritier, qui contrôle son empire familial grâce à sa commandite. Un statut juridique rare et complexe qui lui confère les pleins pouvoir du groupe Lagardère avec seulement 7,3% de son capital. Le communiqué de Bernard Arnault n’est pas flatteur pour Arnaud Lagardère qui est depuis plusieurs années l’objet de railleries de toute sorte dans le milieu des affaires. "J’ai reçu favorablement la proposition d’Arnaud Lagardère de nous associer à lui. Mon amitié avec Jean-Luc Lagardère a lié nos familles" écrit-il. Bernard Arnault devient le nouvel homme fort du groupe Lagardère, sans qui rien ne sera possible. Il prend l’avantage.

En face, Vincent Bolloré n’avait pas vu venir le coup. "Il nous avait promis de faire évoluer la gouvernance de Lagardère et de supprimer la commandite en échange de notre soutien" justifie un proche de Vivendi. "Et on découvre qu’il a négocié avec Bernard dans notre dos". Vincent Bolloré, serait-il devenu brusquement naïf? Chacun réécrit l’histoire à sa sauce. Mais personne n’est dupe: chacun joue son va-tout en essayant de manipuler les autres.

Vincent Bolloré "l'arroseur arrosé"
"C’est l’arroseur arrosé" moque le clan Lagardère dans les dîners parisiens. La réaction de Vincent Bolloré ne se fait pas attendre. Ce fameux 25 mai, il monte à 16% du capital, puis 21% en rachetant la part de Fimalac qui a fait 50% de plus-value en deux mois. Il en détient aujourd’hui 23,5%. Mardi il a jeté un pavé dans la marre en s’alliant avec le fonds Amber Capital de Joseph Oughourlian qu’il avait pourtant combattu deux mois avant. A eux deux, ils détiennent 43,5% du capital et 33% des droits de vote grâce auxquels ils veulent s’imposer au conseil de surveillance de Lagardère pour destituer son patron Arnaud début 2021. "Bolloré a eu peur que Bernard Arnault ne rachète la participation d’Amber donc il l’a préemptée", décrypte un connaisseur du dossier.

Coup de bluff à tous les étages. Au lendemain de l’assemblée générale du 5 mai, beaucoup pariait déjà sur une alliance entre Vivendi et Amber. Les deux se connaissent de longue date et se font la courte échelle. Ils ont bataillé l’un contre l’autre pour le contrôle du spécialiste des jeux sur mobile Gameloft, avant de s’allier. Chez le géant français des jeux Ubisoft aussi où la résistance d’Amber au raid de Vivendi a finalement fait gagner beaucoup d’argent à Vincent Bolloré.

Bernard Arnault reste silencieux
Le rôle de Bernard Arnault sera déterminant. Soucieux de lisser son image d’homme d’affaires agressif, après ses batailles (perdues) contre Gucci et surtout Hermès, il ne rejoindra pas le clan des "activistes" Vivendi-Amber. Il reste silencieux sur ses véritables intentions. Mais une guerre contre Vincent Bolloré n’est pas dans son intérêt. Forcera-t-il Arnaud Lagardère à négocier avec Vivendi? Se servira-t-il de l’agressivité de Bolloré pour évincer Arnaud Lagardère et prendre le pouvoir? Chaque camp renvoie la faute sur Arnaud Lagardère qui tente de monter Bernard Arnault et Vincent Bolloré l’un contre l’autre. "On n’est pas dupe", assure un cadre de l’un des deux camps. "Personne n’a intérêt à une bataille entre les deux hommes…sauf Arnaud Lagardère".

Dans cet entrelacs d’intox, de coups tordus et de bluff, deux autres protagonistes auront leur mot à dire. Le Qatar est actionnaire de Lagardère (13%) depuis 2006! Il est toujours resté discret et en soutien d’Arnaud Lagardère. Mais il se murmure qu’il trouve le temps long et souhaite vendre sa participation. Les qataris connaissent bien Vincent Bolloré avec qui ils ont signé un accord pour les chaines Canal+ et BeIn Sport.

Le rôle ambigu de Nicolas Sarkozy
Les deux actionnaires sont surtout très proches de Nicolas Sarkozy, le dernier acteur au centre du jeu. "Ami" d’Arnaud Lagardère, il a cautionné l’arrivée de Vincent Bolloré pour gagner la bataille contre Amber à l’assemblée générale du mois de mai. Une initiative que lui reproche le clan d'Arnaud Lagardère aujourd’hui alors que Vincent Bolloré vient de lancer son raid contre lui.

L’ancien président de la République n’aurait pas apprécié non plus la volte-face d’Arnaud Lagardère qui lui a caché son alliance avec Bernard Arnault. "Arnaud Lagardère a menti à tout le monde, même à un ancien président", hallucine encore un opposant. "Tout le monde est contre lui, il perdra la guerre".

NYP : Death Valley reaches 130 degrees, potentially Earth’s highest temperature

Death Valley reaches 130 degrees, potentially Earth’s highest temperature

Death Valley more than lived up to its name Sunday, when the mercury at the aptly named village of Furnace Creek soared to a scorching 130 degrees – possibly the highest recorded temperature on Earth, according to a report.

The sizzling reading was reached at 3:41 p.m. amid a historic heat wave in the West, according to the National Weather Service. If verified, it would break Death Valley’s previous August record by three degrees, the Washington Post reported.

It also would be among the top-three highest temps ever measured on Earth at any time — and may, in fact, be the highest, according to the newspaper.

“Everything I’ve seen so far indicates that is a legitimate observation,” Randy Cerveny, who leads the World Meteorological Organization’s weather and climate extremes team, told the Washington Post in an email.

“I am recommending that the World Meteorological Organization preliminarily accept the observation. In the upcoming weeks, we will, of course, be examining it in detail, along with the U.S. National Climate Extremes Committee, using one of our international evaluation teams,” Cerven added.

Caroline Rohe, a park ranger at the Death Valley National Park, posted a photo of the stratospheric reading on a thermometer at the visitor center.

“Could be a world record temperature! We hit 130 degrees today at Death Valley. (The visitor center thermometer runs 3-4 degrees warmer.),” she wrote.

The desert in Eastern California holds the record for the hottest temperature ever recorded on the planet — 134 degrees, which the US Weather Bureau recorded on July 10, 1913, at Furnace Creek.

However, that measurement remains in hot dispute.

In 2016, Christopher Burt, an expert on extreme weather data, concluded that it was “essentially not possible from a meteorological perspective,” the news outlet reported.

Some experts believed that the 129 degrees recorded in Death Valley on June 30, 2013, and in Kuwait and Pakistan in 2016 and 2017, respectively, are the highest ever reliably measured on Earth.

If the 130 degrees recorded Sunday is confirmed, it would be the highest temperature officially recorded on the planet since 1931, and the third-highest since 1873, according to the Washington Post.

The only two higher one include the 1913 reading in Death Valley and a 131-degree mark from Kebili, Tunisia, from July 7, 1931, which also has “serious credibility issues,” Burt told the paper.

Furnace Creek, which sits at 190 feet below sea level in the Mojave Desert, is notorious for its searing heat.

In July 2018, its average temperature of 108.1 degrees made it the hottest month ever measured on Earth. During that month, it hit at least 120 degrees for three weeks.

FT : Geely slashes sales target as profits plunge

Geely slashes sales target as profits plunge
Ambitious Chinese owner of Volvo Cars hit by slow pace of pandemic recovery in home market

Geely profits sank by 43 per cent in the first half as the pandemic pushed the ambitious Chinese carmaking group to slash its sales target for the year.

The company — which owns Volvo Cars, is a near 10 per cent shareholder in Daimler and has aspirations to be China’s first truly global carmaker — weathered the early months of coronavirus better than many of its domestic competitors. 

But the slow pace of recovery in the world’s largest car market is now putting pressure on sales. 

Profits in the first half of 2020 slid to Rmb2.3bn ($331m) from Rmb4bn during the same period last year. Revenues fell by 23 per cent to Rmb36.8bn.

The Geely brand, which mostly sells mass-market models, has already had to contend with a two-year sales decline in China, which the China Association of Automobile Manufacturers expects to persist into a third year because of the pandemic.

The group had previously maintained it was still on track to meet an annual sales target of 1.41m vehicles but has now lowered that goal to 1.36m.

From January to June, the group shipped 530,446 vehicles, down nearly a fifth compared with the same period last year.

John Zeng, a Shanghai-based analyst at consultancy LMC Automotive, noted that the 19 per cent drop was still marginally above the market average, adding that the group’s outlook for the second half of 2020 was good, given new product launches.

The group, which has a market capitalisation of about Rmb21bn, said the sales drop was partly the result of disruption to its supply chain. It also noted that, despite the overall decline, the group’s market share in China had risen to 6.5 per cent from 6.1 per cent.

“The current headwind is expected to persist in the remainder of the year, making 2020 amongst the most difficult in the group’s history,” Geely said in its Hong Kong stock exchange filing.

A planned merger between Geely’s Chinese brand and Volvo Cars was put on hold in June while the group sought a second listing in the mainland Chinese market.

The postponement might also be informed by Volvo’s weak sales during the pandemic and the worsening trade relationship between China and the US, which made it harder to export China-made cars abroad, according to Mr Zeng of LMC Automotive. “It’s not the best time for Geely to merge with Volvo,” he said.