A $3 Million Tuna, a Battle Over Poopsie Pooey Puitton, and How an Oxford Company Copes With the China Tariffs

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Good Tuesday Morning,

DAYLIGHT  

All of a sudden, the government shutdown is getting real: New craft beers are in a holding pattern: “The team at Atlas Brew Works prepared their special spring release the same way they do with every new beer. Late last year, they started fermenting, had a couple taste tests, and finally—the last step before canning the brew—they sent the design for the beer’s label out to the Alcohol and Tobacco Tax and Trade Bureau. Because of the government shutdown, the process halted there.

“Now the Ivy City brewery is stuck with a whole tank of IPA brewed with fresh apricots that may never hit shelves. ‘It’s fermenting, currently,’ says Justin Cox, Atlas Brew Works’ CEO and founder. ‘That will have to sit in our tank.’”

INTELLECTUAL PROPERTY

Toy company MGA Entertainment is suing the parent company of Louis Vuitton to keep making “Poopsie Pooey Puitton,” a slime-filled plastic purse: “MGA argues not only is the toy obviously not a Louis Vuitton knockoff, but it was meant to slime the lifestyle of the ultrawealthy consumers who ascribe to the brand and thus should be protected as parody.

“‘Louis Vuitton and the LV Marks are associated with expensive, high-end, luxury products that evoke wealth and celebrity,’ MGA’s counsel said in the complaint. ‘The use of the Pooey name and product in association with a product line of ‘magical unicorn poop’ is intended to criticize or comment upon the rich and famous, and the Louis Vuitton name, the LV marks, and on their conspicuous consumption.’”

LITIGATION

The Weather Channel is facing a lawsuit alleging it misled users and profited off location data. The lawsuit also says the channel’s app tracked user location and data without permission and analyzed that data on behalf of hedge funds.

FOOD

A 612-pound bluefin tuna sold for $3 million at Tokyo’s Tsukiji market at the first auction of 2019. The company Kimura which runs the chain Sushi Zanmai was the proud purchaser. The prices were above normal market rates for bluefin given the size of the prized catch, not to mention it is a threatened species.

“Japanese are the biggest consumers of the torpedo-shaped bluefin tuna, and surging consumption here and overseas has led to overfishing of the species. Experts warn it faces possible extinction, with stocks of Pacific bluefin depleted by 96 percent from their pre-industrial levels.”

SELLING THE BUSINESS

Thinking about selling your business? Step one: make yourself irrelevant: “When business owners start planning for their businesses’ futures, they often do so with similar gusto as when they started the business. They want to roll up their sleeves, get their hands dirty, and guide the process from front to back.

“In fact, this desire to be heavily involved is a primary reason why owners put off business-future planning: They worry they won’t have time to commit to it, even though that’s rarely the case. This desire to be heavily involved is also the last thing a buyer ever wants to see. When planning for the business’ future, owners must make themselves inconsequential to the business’ success.” Want to dig deeper? Read Norm Brodsky’s column explaining how he increased the value of his business by taking long vacations.

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PRICING

Believe it or not, Mark Zuckerberg has a new controversy and it has nothing to do with Facebook; instead, it has to do with the aggressively pricing policies of a  hospital that carries his name–all set off by a $20,000 emergency room bill: “Zuckerberg San Francisco General, recently renamed for the Facebook founder after he donated $75 million, is the largest public hospital in San Francisco and the city’s only top-tier trauma center. But it doesn’t participate in the networks of any private health insurers—a surprise patients like Dang learn after assuming their coverage includes a trip to a large public ER.”

STARTUPS

Looking to flip the economics of education, an online learning start-up called Lamda School is raising  $30 million in funding from prominent venture capitalists that values the school at $150 million: “Instead of charging students tuition—which often requires them to take out thousands of dollars in loans—students go to school for free and are required to pay back a percentage of their income after graduation, but only if they get a job with a good salary.”

M&A

From M&A Guy Zack Eller: DaySmart Software, a provider of business management software has acquired PupKeep, a pet services cloud software company. The terms of the deal are undisclosed. “PupKeep was founded in 2017 and is a platform for pet boarding and daycare owners. PupKeep’s product will be combined with DaySmart’s 123Pet software offerings.”

READER RESPONSE

Member Milt Thomas offered a response to an item in yesterday’s Morning Report that quoted the chairman of a family business, EBW Electronics, who said he felt betrayed by President Trump’s trade policies. “He should know that this type of market component is never determined by how it impacts the individual but how it impacts the market … the American market. This is the role of a man, like DJT, and the office held by him. If successful, DJT will provide Mr. Chairman a larger market … in China. So, Mr. Chairman, put on your Chairman Pants and get your attitude right. No pun intended.”

SPOTLIGHT

Last spring, Laura Zander, co-founder and CEO of Jimmy Beans Wool, acquired a knitting and handbag and accessories brand whose products have been produced by small, family-owned businesses in China. We spoke to her about the president’s trade policies:

Have you been affected by the tariffs?

Definitely … but our timing was actually really, really lucky because the brand had been defunct for a couple of years before we bought it.

Why was that lucky?

We didn’t relaunch the brand until late September–after the tariffs had been put into place. We were able to build the tariffs into our pricing. We are going to be okay in the short term. Long term, who knows …

Have you considered moving your production to a different country?

I have not. The families that I work with have been making these products for over ten years and are fantastic to work with.

Jimmy Beans Wool handbag

Are you trying to sell more outside the US?

We are digging into what it would take to ship directly from China to other countries … taking the tariffs completely out of the equation.

And that’s what’s ahead.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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