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The company last month posted a nearly sixfold surge in first-quarter net profit

Samsung Electronics’ 005930 1.61%increase; green up pointing triangle talks with its labor union failed to reach an agreement over how the company’s massive profits are distributed, raising the likelihood of a strike next week.

The world’s largest memory-chip maker said its union declared negotiations had collapsed early Wednesday, after days of intensive talks supported by the South Korean government.

Unionized Samsung workers in South Korea are planning to strike from May 21 to June 7.

Samsung said it regretted the union’s action, which it said causes concern and anxiety not only to the company but also to shareholders and the public.

“The company will continue its efforts to prevent the worst-case scenario through sincere dialogue until the very end,” Samsung said.

Union leaders said they would seek to remove legal obstacles to a strike, referring to management’s attempt to halt the industrial action in a local court.

Samsung’s management and its union are at odds over how Samsung’s booming profits are shared. Samsung’s earnings have recently surged on strong demand for memory used in artificial intelligence applications. The company last month posted a nearly sixfold surge in first-quarter net profit while reporting record quarterly revenue and operating profit.

The union wants the company to allocate 15% of its annual operating profit to employee bonuses.

Management has rejected the union’s demand, as it would exceed the company’s bonus cap, currently set at 50% of annual salary. The union wants this cap removed.

In 2024, unionized Samsung workers went on strike for the first time to press for higher wages and better working conditions but the action didn’t disrupt operations at the company’s heavily automated chip-making facilities in South Korea.

Quick-moving domestic athletic brands are now able to match American quality and cachet in the hypercompetitive and increasingly nationalistic market

Nearly a half-century ago, Nike co-founder Phil Knight traveled through China on slow train, with passengers stripped to their underwear in the summer heat, and dreamed of selling sneakers.

He laid out an ambitious vision—“One billion people, two billion feet”—that called for an aggressive push into the country. By 2010, China was among Nike’s most lucrative markets, offering a blueprint for U.S. companies seeking to cash in on China’s rise.

Today, Nike’s China business is flailing—a cautionary tale of an American giant caught in the tar pit of China’s hypercompetitive and increasingly nationalistic consumer market.

Nike’s China revenue over the past three quarters was 28% lower than in the same period five years ago, even as the country’s sportswear market boomed. Nike has dumped its longtime China leadership, jettisoned other top employees and acknowledged “structural” challenges in the country, which is now the worst-performing part of its global operations.

Executives recently told investors that revenue in China and Taiwan could fall by about 20% year-over-year in the quarter ending May 31—a forecast that pushed Nike’s stock price to its lowest levels in more than a decade. The company subsequently said it would reduce its workforce by some 1,400 workers, or about 2%.

Nike is just one of many U.S. brands ailing in China. Weakness in China’s economy has weighed on spending, and many shoppers are losing interest in American products as tensions between the two countries rise. Many U.S. companies are struggling to compete in a country once considered essential to their futures.

Starbucks, credited with spreading coffee culture in China, sold a majority stake in its China operations in April, after years of tough competition from local coffee vendor Luckin. American automobile brands have been hammered by Chinese electric-vehicle companies. California clothing-brand Guess, which once had more than 150 stores in China, closed all its stores in March as it plots a new course in the country.

Former employees said in interviews that many of Nike’s issues boiled down to a central problem: It was too slow to recognize that China’s competitive landscape had changed, with the rise of quick-moving domestic brands increasingly able to match American quality and brand cachet. U.S. products just aren’t as cool anymore.

Chinese brands such as Anta and Li-Ning have been offering high-end running shoes and other gear at lower prices, with fast product development cycles. Anta collaborated with Chinese scientists to develop a type of foam cushion made with nitrogen that provides extra bounciness—all but demolishing Nike’s competitive moat.

Reviewers who conducted side-by-side performance tests placed a top Li-Ning running shoe, the Elite, on par with Nike’s high-end Vaporfly. NBA stars such as Kyrie Irving and Klay Thompson wear Anta on the court, and top East African runners have taken the podiums in them.

Nike has been promoting a “China-for-China” initiative to get back in the game. It said it is working hard to revive the China business, including writing off unsold inventory and revamping stores. Executives said in March that foot traffic and comparable sales were improving as a result, with sales of running products growing in the double digits in the recent quarter.

“What we’ve done is a start, but it’s not happening at the level or pace we need to drive wider change,” Nike Chief Executive Elliott Hill told investors in December.

Some former employees, though, said the company has struggled to come up with memorable products for the China market. One basketball shoe called the S.T. Flare, designed for the nation’s concrete outdoor courts, was widely viewed as solid. But some Chinese reviewers said it was too expensive at $130, with many equally good Chinese models available for less.

Nike also kept pushing the Jordan brand, which includes Air Jordan shoes, even though it didn’t resonate with younger Chinese, many of them born after Michael Jordan retired. One former Nike employee in China said his cousin there was surprised to learn that Jordan was still alive.

Nike’s designs nowadays feel “flat,” said Zong Haolin, a 27-year-old basketball enthusiast in Shanghai. He spent his teenage years saving up to buy Nikes, but in college fell in love with Li-Ning’s “Way of Wade” shoes, endorsed by former NBA star Dwyane Wade. “Domestic Chinese brands naturally stepped in to fill the void,” he said.

Nike has more China-specific products on the way. It just released a black ballet flat with floral detailing, called Shox Z Calistra. It was created in collaboration with a trendy Chinese fashion incubator called Labelhood.

“Over the years, we established our premium position and market share there because the Chinese consumer believes in our ability to innovate and inspire them through sport,” said Hill, the CEO, in December. “I’m confident we’ll get back to fulfilling that promise.”

Nike is also trying to rebound in the U.S., where big bets on athleisure and streetwear during the pandemic left it vulnerable to upstarts such as On and Hoka. Hill, who took over in October 2024, has pledged to focus on innovation over athleisure, an effort that is starting to gain traction in the U.S. with improved sales there.

In China, according to former employees and analysts who track that market, Nike was slow to adopt some locally popular sales tactics, and it didn’t set up a flagship store on Douyin, China’s version of TikTok, until 2024, a couple of years later than Chinese rivals. A Nike spokeswoman said Douyin is an important platform for the company.

Matching domestic producers on price has been difficult. Many of Nike’s shoes are now made elsewhere and imported into China, adding costs, though a Nike spokeswoman said that “China-for-China manufacturing remains a core and growing strategy.”

Its top running shoes, including the Alphafly, are too expensive for ordinary Chinese customers, so the company at times pushed more basic offerings such as the Winflo, a low-cost alternative with fewer premium features. It struggled to compete with top-quality Chinese-branded sneakers that sold at similar price points, said current and former employees.

Before its recent stumbles, Nike’s expansion in China was seen as a master class in how to sell an American product in the world’s second-largest economy. It signed up popular Chinese athletes as sponsors, designed China-specific products and capitalized on the brand’s reputation as a premium shoe that couldn’t easily be matched.

In 2019, Nike reported its 20th consecutive quarter of double-digit growth in China, and brought in billions of dollars in earnings from the country.

Trouble hit in 2021, during the Covid-19 pandemic. Chinese online nationalists went after Nike for saying it wouldn’t source products from Xinjiang, a remote western province where human-rights groups allege forced labor is rife. People posted videos of themselves burning Nikes, and celebrities cut ties with the brand, including mega pop star Wang Yibo, who signed with Anta the next month.

Nike’s then-CEO, John Donahoe, tried to calm the waters, evoking the company’s long history in China. Although some Chinese athletes stuck with the brand, sales slumped.

With the pandemic limiting travel into China for three years, executives at Nike headquarters in Beaverton, Ore., increasingly relied on reports from Angela Dong, the company’s longtime China general manager. Dong typically painted a rosy picture, which was relayed to the top via Chief Commercial Officer Craig Williams, according to two people familiar with the situation. Williams declined to comment, and Dong didn’t respond to requests for comment. Both have since left Nike.

The reality was that China was undergoing a major shift toward more exercise and healthy lifestyle activities, not long after Nike had changed its sales approach.

By 2021, Nike had reorganized its China team so that many employees no longer specialized in individual sports, instead focusing on broad categories such as men, women and children. It was part of a global restructuring, since reversed, that is widely seen to have taken Nike away from its focus on delivering highly competitive sports offerings.

It didn’t help that Chinese young people were moving beyond a decadeslong fascination with basketball and the NBA, a traditional Nike strength, toward newer sports such as yoga and hiking, where the brand was less established.

Anta, one of Nike’s chief competitors in China, was determined to serve those niches. It formed joint ventures with international franchises that had strong positions in individual sports, such as Japanese ski apparel brand Descente. It also became the largest shareholder in Amer Sports, which owns premium brands such as Arc’teryx, known for outdoor apparel, and Wilson, for tennis gear.

Anta Chairman Ding Shizhong boasted in a 2024 speech that he now had 15 brands to meet consumers’ different needs. He didn’t want to become the “Nike of China,” he said, but the “Anta of the world.”

Meeting young Chinese people’s diverse interests is “the new game that all the brands are playing, and I would say Anta is actually playing that really, really well,” said Wei Kan, who worked in marketing for Nike and Nike-owned Converse for 14 years until 2024, and now runs an independent consulting firm.

A Nike spokeswoman said that more diverse interests in China plays to Nike’s strengths as a company that innovates across sporting categories.

In early 2024, upticks in China sales had Nike’s then-CEO Donahoe suggesting to investors that the worst had passed.

A few months later, though, the brand stumbled again, when an ad timed for that year’s Paris Olympics featured an Asian female ping-pong player licking her paddle. Some viewers saw it as a gesture that insulted Chinese athletes. The incident was heavily covered by state media at a time when Chinese nationalism was on the rise.

The company pushed a more assertive “China-for-China” strategy, and announced that its first “Icon” studio for advertising and content creation outside of the U.S. would be built in Shanghai.

Former Nike employees said in interviews that they didn’t notice any serious acceleration in new product development, and that design decisions still largely came through the U.S. headquarters. A Nike spokeswoman disputed that, saying Nike established a Sport Research Lab in Shanghai to ensure product innovation is tailored to Chinese consumers.

Former employees said Chinese rivals were adopting more punishing work schedules to help push products out more quickly. A former Nike manager in China complained that staffers could sometimes be hard to locate in person because of the company’s hybrid work policies, which were dialed back in 2024.

A persistent challenge has been Chinese consumers’ increasing tendency to embrace local designs rather than foreign products, a trend of cultural pride known as guochao.

Archrival Adidas, which experienced its own Xinjiang-related problems in 2021, released viral hits in China, such as a “Tang” jacket that integrated the brand’s classic striped pattern with traditional Chinese tailoring. Other Western brands such as apparel company Lululemon and On thrived with identities built on yoga and running, respectively.

After Hill took over as CEO, Williams, the chief commercial officer, left Nike, and in March, Dong, the general manager in China, was replaced by Cathy Sparks, who had previously led Nike’s Asia business outside of China. Hill changed the company’s org chart so that Nike’s regional heads report directly to him.

Some former employees said there is a path for Nike to reclaim its appeal in China if it releases more competitive products targeted at niche audiences. They cited some recent successes, including a Nike Chinese New Year advertising campaign, developed by a local creative agency, that showed family members using sports to bypass tough discussions about money and career that happen during holiday gatherings.

Others worry that overcoming the new competition from niche brands and waning interest in U.S. names will continue to be an enormous challenge.

Nike “needs the China business, but the Chinese business is completely the opposite of what it was,” said analyst Laurent Vasilescu, who tracks Nike for BNP Paribas. “There is no China engine anymore to drive the growth.”

Hill insists the company won’t give up on China. “It will take time,” he said in March, “but we remain confident that serving 1.4 billion potential athletes in China is one of the most powerful opportunities in sport.”

Inside Marty Makary’s Downfall at the FDA

Senior administration officials concluded the commissioner was out of step with President Trump’s priorities

In the end, Dr. Marty Makary had just about run out of allies.

The chorus calling for the Food and Drug Administration commissioner to be ousted—from inside and outside the administration—grew so loud that White House chief of staff Susie Wiles went to President Trump last week to discuss the concerns about his leadership, according to people familiar with the matter. She had previously defended him and liked the former Johns Hopkins surgeon.

Earlier in the week, Wiles discussed with Chris Klomp, the No. 2 official at the Department of Health and Human Services, which houses the FDA, the reasons Makary had become a net liability for the administration, the people said.

Those conversations followed a decision made privately by Health and Human Services Secretary Robert F. Kennedy Jr., who around the end of April concluded he would need to replace Makary, the people said. Kennedy directed Klomp to lead the effort to find a replacement.

Makary’s downfall was cemented Tuesday when Trump announced Makary was leaving his role, capping a tumultuous 13-month run leading an agency that regulates about one-fifth of U.S. consumer spending. He had upset advocates for vaping and rare-disease patients, antiabortion groups, and some drug-industry leaders—as well as other officials in the administration.

Senior officials told Makary on Monday that they believed he needed to go, according to people familiar with the discussion. On Tuesday, the president posted on his Truth Social platform a screenshot of a text message that included Makary’s resignation. “It’s been the honor of a lifetime to serve as your FDA Commissioner,” Makary said. “I am forever grateful.”

White House spokesman Kush Desai said: “President Trump pledged to accelerate innovation in the United States, lower drug prices, and Make America Healthy Again. The FDA will continue to build on Commissioner Makary’s historic work delivering on these presidential priorities.”

Senior leaders in the White House increasingly concluded Makary was out of step with the president’s priorities on vaping and other policy issues, people familiar with the matter said. Pharmaceutical-industry insiders were coming to the White House with complaints, as executives from Massachusetts-based Replimune Group did last week, and some were calling for Makary’s removal. Even some of the people he had elevated to senior roles at his agency no longer trusted him, according to people familiar with the dynamics.

White House officials said they would repeatedly have to tell Makary what the president wanted done—and at times, the president would say it himself, “which wasn’t a good sign for him,” a senior administration official said.

One final battle emerged over the FDA’s handling of flavored vapes, which advisers told Trump were essential to retaining young MAGA voters. But Makary had overruled scientific staff at the FDA to stall authorization of blueberry- and mango-flavored vapes from an American manufacturer, concerned about public-health risks.

Executives from Reynolds American recently met with Trump at his Jupiter, Fla., golf course and complained about the FDA’s not approving vaping flavors, and Trump said it was a campaign promise he had made. On the campaign trail, Trump had called the Reynolds executives “my tobacco guys,” and they had attended a number of his fundraisers.

Over a lunch of cheeseburgers, Trump listened as the executives complained about Chinese vaping pens flowing into the country, and the FDA’s not approving flavored vapes, according to people familiar with the matter.

Trump said he had heard significant complaints from others in the administration and industry leaders about Makary, and complained that Makary hadn’t done enough to carry out his “Right to Try” legislation aimed at getting experimental therapies to terminally ill patients, the people said. Trump repeatedly brought up a cancer drug he said Makary wouldn’t approve, the people said.

He expressed frustration with his FDA commissioner and told the assembled group that he would handle the vaping issue. Phone calls were made to Kennedy, senior White House staff and Makary, who didn’t answer during the Jupiter meeting.

Trump later called Makary and pressured him to change course, which the agency did last week. Makary’s resignation came Tuesday, according to people familiar with his thinking, because he didn’t want to defend flavored vapes at a scheduled Senate hearing.

Makary was surprised by news reports last week that Trump intended to fire him, people familiar with his thinking said. He spent the weekend trying to determine his status, those people said. Allies came to his aid on social media. “Replacing Makary with a pharma puppet would move us backward, not forward,” MAHA influencer Alex Clark posted on X.

Makary’s nomination to lead the FDA in November 2024 was greeted with a sigh of relief from many agency employees, who were worried they would get a more-vocal vaccine skeptic in the vein of Kennedy.

Ahead of Trump’s second election to the White House, Makary had allied himself with the MAHA movement, criticizing Covid-19 vaccine mandates, the influence of “Big Pharma” and the failures of the modern medical establishment. But as a Johns Hopkins surgeon with traditional medical credentials, he has vaccine views that are generally more conventional than those of some others in the MAHA movement. Makary has recommended that eligible children get the measles vaccine, and he sailed through the Senate confirmation process.

Makary quickly became one of MAHA’s most-visible champions. In podcast interviews, TV appearances and on social media, he touted MAHA principles and his efforts to speed up drug reviews, incorporate artificial intelligence into the FDA’s work and approve natural food dyes.

He was sometimes a more-restrained voice on MAHA policy initiatives. After a viral press conference in September in which Trump urged pregnant women to avoid Tylenol, Makary penned a letter to doctors that offered a gentler warning, saying the painkiller in some studies had been associated with autism but hadn’t been proven to cause the condition.

Makary might have first begun irking Kennedy and the White House last summer. To mark his first 100 days in office, he debuted a FDA home page listing his accomplishments, accompanied by a large picture of himself. That irritated some in the administration, who viewed Makary as not giving enough credit to his bosses, people familiar with the matter said. Makary didn’t come up with the presentation for the webpage, according to a person familiar with his thinking.

Makary’s team would frequently bypass health department officials in making plans, with Makary telling subordinates not to communicate with HHS, people familiar with the matter said. He issued that order because he believed the health department was leaking information, people familiar with his thinking said.

Two of Makary’s early hires turned out to be gigantic headaches for him. Dr. Vinay Prasad, brought on by Makary to be vaccines chief at the FDA, was fired by the White House over the summer, only to be reinstated days later. His second departure this spring came after decisions opposed by some drugmakers working on rare diseases.

George Tidmarsh, Makary’s drugs chief, resigned after a former business associate accused him in a lawsuit of soliciting a bribe. He has denied any wrongdoing. His replacement lasted a few weeks.

Kennedy late last year became privately concerned about Makary’s ability to manage an agency of some 16,000 employees and considered making him a figurehead by installing someone else to run it. The secretary decided to give Makary a chance to turn it around.

Biotech companies in recent months voiced concern that Makary’s FDA was veering away from more-flexible standards for rare-disease drugs, which can be hard to test on limited numbers of patients.

“I don’t know how biotech works with the goalposts shifting,” said Replimune Chief Executive Sushil Patel in an April interview, who said his company’s melanoma drug received mixed messages from the FDA. Makary has said he went along with scientific staff’s conclusions on the company’s treatment.

Replimune representatives met last week with members of the White House Domestic Policy Council and argued that Makary was working against the Trump administration’s vision for drug policy, people familiar with the matter said.

Makary’s departure was effective Tuesday, and Trump said that Kyle Diamantas, the deputy commissioner for food, would take over leading the agency in an acting capacity. Makary left a day before he was slated to testify before the Senate.

The takeover that’s the talk of London

The £10.6bn showdown between EQT and Intertek is pitting top UK rainmakers against each other

Top UK rainmakers battle over EQT and Intertek

The £10.6bn showdown between buyout group EQT and FTSE 100 testing company Intertek is pitting some of the UK’s top rainmakers against each other.

Anthony Zammit and Hugh Moran are among the Morgan Stanley bankers advising EQT on its full-court press to break the board’s resistance.

On the other side of the table, Intertek has corralled some of the city’s top defence advisers including Goldman Sachs’ Anthony Gutman and Khamran Ali, alongside JPMorgan Chase veteran Dwayne Lysaght.

Many of these bankers have faced off on contentious UK take-privates before.

Morgan Stanley and JPMorgan competed with separate buyout vehicles in the high-profile £4.1bn bidding war for Spectris last year. Defence advisers Goldman and Rothschild helped the British maker of high-tech instruments fetch an astounding premium of more than 100 per cent.

Zammit has steered EQT through deals before, securing the takeover of UK animal health provider Dechra Pharmaceuticals in 2024 even after cutting its offer price.

In the current face-off, EQT has successfully ratcheted up shareholder pressure by declaring its fourth offer of £60 per share as final, meaning that the deal lives or dies at £10.6bn including debt.

Investors including Palliser Capital and Matt Peltz, son of activist investor Nelson Peltz, are pushing Intertek’s board to reach a deal.

And several shareholders have gone to Intertek chair Andrew Martin to plead their case for a takeover, bypassing CEO André Lacroix, who has led the company for more than a decade and dug his heels in.

Investor PrimeStone Capital called on Lacroix and the board to deliver an “attractive windfall for shareholders, cementing a positive legacy”. If Intertek succumbs in the end, the London Stock Exchange will see another UK plc disappear from the market after disappointing share performance made it vulnerable to a buyout.

Airelles Palladio has arrived on Giudecca. Can it conquer Venice?

The latest luxury outpost from the French hospitality group has opened. HTSI gets the first look

“It’s amazing here because you get the postcard vision of Venice without all the hecticness,” says Étienne Petitpez, general manager of the Airelles Palladio. “And the sunsets across the water are spectacular.” 

Days before the opening of Airelles Palladio, the hotel is a flurry of activity. Pictures are being straightened on walls, sculptures arranged in the courtyard, a small army of gardeners is hard at work across the grounds, planting, pruning and training roses around a wooden pergola. But, like all good hotel managers, Petitpez remains a picture of calm. This is, after all, not the first time he’s done this. In 2015, he was front-of-house manager for the grand reopening of the Ritz Paris (the hotel where he began his career as a bellboy). He then became manager of a hotel and chalet in Val-d’Isère owned by French hospitality group Airelles. His appointment in Venice, overseeing the group’s first property outside France, sees him trading life in the mountains for a new home on Giudecca, close to the hotel. 

He’s right about the view, which is indeed Canaletto-calibre: a sweeping panorama across to the elegant dome of the Basilica Santa Maria della Salute, the elaborate gothic façade of the Doge’s Palace and the towering campanile of Saint Mark’s Basilica, which sits almost directly opposite the property. 

Giudecca has always been the calm antidote to the ferocity of the centre. Venetian nobility began building palaces on the island in the 15th century. Then, as now, the long stretch of land was seen as a place of retreat, and artists and intellectuals (including Michelangelo) sought refuge there. It also became a favoured site for monasteries, convents and churches – partly because of the space it offered and partly because its relative seclusion suited contemplative life. A wave of ecclesiastical buildings sprang up during the Renaissance, among them the church of Santa Maria della Presentazione, the design of which is attributed to Andrea Palladio, Italy’s pioneering classical architect. Attached was an institute known as Le Zitelle, where young women without dowries were taught the art of lacemaking; its site now forms the heart of Airelles Palladio.

By the 19th century, Giudecca’s monasteries and gardens gave way to factories and shipyards. When industry began to move out of the centre after the second world war, however, the island reverted to being a quieter, residential area; even the 1958 opening of the glamorous Hotel Cipriani didn’t much alter its off-the‑beaten-track appeal.

It is Santa Maria della Presentazione’s splendid front – a soaring composition of pale Istrian stone – that greets guests when they arrive at the hotel by water taxi. In its previous incarnation the site was the Bauer Palladio hotel, a sister to the Bauer on the Grand Canal (now temporarily closed). It was purchased by Airelles in 2018 and has been totally renovated over the past five years. Alongside the former Zitelle, rooms and suites are split between two neighbouring buildings: the Conventino, formerly a refuge for Venetian widows, and the 17th-century Villa Frollo, once an academy for young aristocrats. It is here that the Presidential Suite will be located. At 450sq m, it is the largest of its kind in the city, the hotel claims.

“When we decided to open in Venice we didn’t know the city particularly well, so we were looking for a property in San Marco,” says Airelles CEO Anne-Laure Ollagnon. “But then this opportunity appeared, and it all seemed to make sense.” The physical remove, she explains, is of particular value for guests who put a premium on privacy, “but at the same time we’re only a few minutes by boat from Saint Mark’s Square”. And when they come back, “they can really unwind. It’s a sanctuary.”

In less than two decades, Airelles has become one of the key players in France’s luxury hospitality market. Since taking over its first property in Courchevel in 2007, its collection has expanded to seven hotels and two private villas in Provence: the portfolio includes a 17th-century villa that is the only hotel on the grounds of the Palace of Versailles, and the 19th-century Château de La Messardière near St Tropez. The latter, it was revealed earlier this year, will be the setting of the new series of HBO’s The White Lotus. “It was quite a surprise because we never put ourselves forward – they just asked us,” says Ollagnon. “But of course we said yes.”

Airelles’ owner, Stéphane Courbit, is no stranger to the world of television. The French entrepreneur began his career in the early ’90s as a producer, rising to prominence at Endemol France, where he helped bring global reality formats to French audiences. In 2008 he founded Banijay Group, which has since grown into one of the world’s largest independent producers and distributors, behind hit television shows including Survivor and MasterChef. That instinct for spectacle and storytelling has carried over into his hospitality ventures, with properties brought to life through the work of interior designer Christophe Tollemer. For Airelles Palladio, Tollemer has filled the rooms with an eclectic array of pieces from the 18th and 19th centuries: engraved glass mirrors, lacquered chests, gilded sconces, glass chandeliers. His favourite is the San Marco Signature Suite, a split-level space with walls upholstered in rich yellow silk and hung with oil paintings chosen to evoke the colours of the Venetian skyline. His team sourced almost 3,000 works for the hotel (it took 20 workers to unload it all from the delivery boat).

But before any of the decorating could begin, the hotel had to be remodelled. Under its previous ownership, there were 90 rooms – a number which has been halved by Airelles, doubling them in size and allowing for much larger bathrooms. There’s a sizeable kids’ club (Airelles prides itself on being particularly family-friendly), and what they say is Venice’s largest spa, offering treatments by Guerlain. Yet what probably really sets Airelles Palladio apart from the competition – with the exception of the Cipriani, a few doors down – are its extensive private gardens, which cover nearly a hectare and are home to a new swimming pool (the inclusion of which involved years of negotiations with the local authorities). 

“The arrival of Airelles will be a boon” for those willing to contend with its rates, says Emily FitzRoy, founder of UK-based Bellini Travel. “Despite popular belief, Venice is a great city for children,” she says. Airelles is a welcome addition “not just for the gardens, kids’ club and pool but also the fact that Giudecca is still relatively quiet. You can walk or run its entire length.”

Rather than attempting to replicate what could already be found elsewhere in Venice, Airelles has pivoted to global experiences – and names. Nobu Matsuhisa was called in to open an outpost of Matsuhisa, his Japanese-Peruvian fine-dining restaurant; Jean-Georges Vongerichten has just inaugurated an all-day eatery, ABC Kitchens (with desserts courtesy of French master pâtissier Cédric Grolet); and three-Michelin-star Tyrolean chef Norbert Niederkofler – who has a few years of form with Aman in Italy – is in the process of creating a new intimate restaurant within Villa Frollo.

In the evenings, guests can enjoy drinks in the wood-panelled Palladio bar (which features a hidden door to the adjoining church); late-night entertainment will be hosted in the soon-to-open Elton’s Club, a plush bar conceived in collaboration with Giudecca’s most famous resident, Sir Elton John. It will stay open until 2am – “because it’s really hard to find anywhere that’s open past midnight in Venice”, says Ollagnon. The hotel has also put together an array of tours, workshops and tastings by a team of Venetian staff. The aim is to reveal a side of the city that few get to see.

But all of this, says Petitpez, counts for little without exceptional service. He and his team have scoured the country in search of room managers, groundskeepers, waiters, bartenders and housekeeping. With 275 employees for a 45-key property, the staff-to-guest ratio is another promising start for this Venice debut. “People make places,” says Petitpez. “And, as they say, Italians are just French people in a good mood.” 

Hormuz closure stalls construction projects as material costs soar

Building schemes around the world are being held up by shortages of products derived from oil

Construction projects are stalling around the world as the closure of the Strait of Hormuz disrupts the supply of crucial materials and drives up prices for oil-derived products like paint and insulation.

The construction industry is a cornerstone of economic growth, contributing about 13 per cent of global GDP, but builders say restricted oil supply out of the Middle East is now holding up projects.

Masatomi Maeda, chair of Hiroshima-based Maeda Housing, said about a quarter of its projects have been delayed within the past month as suppliers could not confirm delivery dates for goods including PVC piping, insulation materials and prefabricated bathrooms.

Builders say the absence of a single part, adhesive or material is enough to hold up an entire project.

“We have around 20 contracted projects that we can’t start work on smoothly,” said Maeda. “We already expect completion payments to be delayed by two or three months. If two months of sales disappear, I think there will be companies who won’t have enough working capital.”

Builders make extensive use of oil-derived materials that have been restricted by the closure of the Strait of Hormuz — through which about a fifth of the world’s oil is ordinarily shipped.

The affected products — which include asphalt, insulation, lighting, heating and ventilating equipment, plastics and paints — have already risen sharply in price. Meanwhile higher industrial energy prices are also driving up the cost of steel, concrete, cement, ceramics and bricks.

Some of India’s largest real estate developers have been hit. Abhishek Lodha, who runs Mumbai-based Lodha Developers, said recently that construction costs have risen about 5 per cent since the war’s beginning.

In Australia, the supply chain crunch has threatened to derail the government’s pledge to build 1.2mn new homes by 2029, with some developers warning that the rise in costs could add up to A$50,000 ($36,000) to the cost of building a new home.

Reece, the country’s largest supplier of plumbing equipment, warned its customers in March that the disruption would force it to pass on costs to customers. It said the price of high-density polyethylene pipes used in civil infrastructure would jump by 36 per cent, and the price of PVC pipes used for residential plumbing would rise by 28.5 per cent.

Last week the UK purchasing managers’ index for construction showed the sharpest decline in five months, after input costs rose by the most in three decades, excluding a surge during the pandemic.

Noble Francis, economics director at the Construction Products Association, said some UK contractors have been warned of 10—30 per cent price increases over the next three months. The CPA is expecting an increase in contractor insolvencies over the next 12 months.

Major price hikes are already a reality in Japan. Yoshihide Kimura, chief executive of Toyama-based contractor Tomiso, said that emails and faxes poured in last month notifying him of “extraordinary” increases. PVC prices, for example, jumped as much as 70 per cent, he said.

Kimura said that his firm could not pass on the costs to customers, as they would need to renegotiate housing loans, and the uncertainty was causing customers to hold back.

“Everyone feels stuck,” he said.

Jeff Bezos’s Blue Origin weighs first external fundraising

Rocket maker’s chief tells staff it will need outside capital to meet ambitious launch plans

Blue Origin is weighing its first external fundraising as part of a push by Jeff Bezos’s rocket venture to hit ambitious launch targets and tap investor appetite boosted by SpaceX’s upcoming initial public offering.

Chief executive Dave Limp told employees at a recent all-hands meeting that the company would require outside investment if it were to significantly increase its launch cadence, according to details of the meeting from two people who attended.

He said it would “take a lot of capital” to achieve the number of rocket launches Blue Origin has targeted — more money than would be available with “just one investor”, the people added.

Blue Origin has set ambitious launch targets after reaching orbit with New Glenn, a 98-metre tall heavy-lift rocket, for the first time in January 2025. It is competing with SpaceX for large commercial contracts and to develop a lunar lander for Nasa’s Artemis programme.

Blue Origin is considering fundraising as SpaceX, which dominates the space launch market, gears up to list on the public market as early as June, with a valuation in excess of $1.75tn.

Limp told employees Blue Origin would have to demonstrate strong economics but that external funding was one option “on the table”, the people added.

Blue Origin declined to comment.

Limp was speaking to employees as he responded to questions on a new stock option plan. He said that similar to OpenAI and SpaceX, the group could use fundraising rounds to help staff exercise stock options. “We wrote this plan intentionally to allow for that,” he said.

He said the company needed to be “ready for external funding” and he was confident in strong interest from outside investors.

Bezos, who founded Blue Origin in 2000, is the company’s sole shareholder and its primary source of financial backing. He has largely used the sale of Amazon stock — he owns nearly 9 per cent of the group, according to proxy filings — to fund the rocket maker.

Blue Origin is spending heavily as it scales operations including building an 800,000 sq ft manufacturing facility and a second launch pad in Florida. It is also investing in the testing and development of its reusable rocket booster and orbital upper stage.

The company is expected to spend roughly $4.8bn this year, according to analysts at Capstone, a Washington-based consulting firm. It estimates the group has spent nearly $28bn since its inception.

Josh Parker, an analyst at Capstone, said Blue Origin had faced significant cost increases in recent years as it developed New Glenn in a “brutal inflationary environment”. He said competition for talent with SpaceX had also forced up salaries.

Limp, a former Amazon executive who took charge of Blue Origin in late 2023, told employees that he did not expect Bezos would ever sell the business. He did not rule out a potential IPO in the future, the people added.

Blue Origin’s CEO in April said the group was planning between eight and 12 launches in total this year with New Glenn. A target of 14 launches had earlier been shared with employees internally.

He said the group had a longer-term goal of hitting 100 launches a year, with a significant portion of these expected to help build out its TeraWave satellite communications network for business customers.

Investors hunt for winners in market that for years has lagged behind Wall Street’s rally

A small number of European AI stocks have posted huge gains so far this year, as investors hunt for ways to ride a global spending boom in a continent often derided for its lack of large and successful technology companies.

The top four performers in the region-wide Stoxx Europe 600 index this year are chipmaker STMicroelectronics, which has more than doubled; semiconductor equipment manufacturers Aixtron and BE Semiconductor Industries, up 168 per cent and 87 per cent respectively; and Nokia, which is up nearly 100 per cent and provides hardware connecting cloud services and data centres.

The gains show US and Asian AI fervour has spread to Europe, say analysts, with investors keen to find the next AI winners in a market that for years has lagged far behind Wall Street’s tech-driven rally.

“Whoever is investing in Europe is desperate to get a claim on this AI trade,” said Emmanuel Cau, head of European equity strategy at Barclays, pointing to a “gold rush” in the sector.

“The fact is Europe is a small market and there are not millions of AI winners,” he added. “So anything that is part of it is doing very well.”

The Stoxx Europe Total Market Semiconductors index is up about 74 per cent this year, while the broad Stoxx Europe 600 is up roughly 2 per cent.

“I think that the first leg of this AI trade was purely about US hyperscalers, and I think that it’s natural as that rally has gotten legs that investors have started to look outside of the US,” said Kasper Elmgreen, chief investment officer for fixed income and equities at Nordea Asset Management. 

He added that investors’ focus in Europe had shifted away from the “Granolas” — a term coined by Goldman Sachs to describe 11 large European stocks focused on healthcare and luxury consumption — to the continent’s push for so-called strategic autonomy, including in tech.

“Those [Granolas] were the only names you really wanted to own in Europe. That has changed,” said Elmgreen. “There’s a theme around Europe of the structural need for strategic autonomy.”

While the Netherlands’ ASML remains the region’s biggest tech stock, Elmgreen said some smaller stocks had performed well this year as investors searched for companies making the “picks and shovels” needed for the AI boom.

France’s Soitec — a specialist in silicon-on-insulator wafers that help to reduce chip power consumption — has risen more than fivefold since the end of last year. The dramatic upturn in fortunes of the company, based outside Grenoble, came after its share price had tumbled 90 per cent by early 2025 from its high in November 2021. However, hedge funds including Two Sigma have built total disclosed shorts — bets on falling prices — of about 4.5 per cent against Soitec, according to data group Breakout Point.

Another French company based near Grenoble, chip designer Kalray, has surged more than fivefold. France’s Riber, which makes equipment used to add layers of atoms on to semiconductor wafers, has more than tripled in price this year.

A lack of opportunities compared with the US meant that money in Europe was increasingly chasing “critical suppliers . . . in some kind of niche”, said Roland Kaloyan, head of European equity strategy at Société Générale.

Electrification and utilities stocks have also seen gains from investors searching for potential AI upside.

“The way the market has played the AI story through European markets the last few years is through the energy story and electrical components,” Kayolan said.

While underperforming the top AI bets, Prysmian, a specialist in optical fibres and electrical cables, is up 71 per cent this year while Siemens Energy has risen 43 per cent.

However, some in the market are growing cautious. Kaloyan said he believed the sector was “quite expensive”, while Cau at Barclays pointed to crowding in some stocks.

STMicroelectronics, for instance, is on a forward price-to-earnings ratio of about 37 times, while Aixtron is on 47 times, according to Bloomberg.

“It’s obvious that you need more selectivity now than you did six months ago,” Elmgreen acknowledged. “But I think there are still really good opportunities.”