WeWork’s IPO Falters, Facebook Rolls Out Dating, and Etsy Pressures Its Sellers

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GOING PUBLIC

Suddenly, WeWork’s much-derided IPO seems to be in jeopardy: “WeWork’s parent, the We Company, is considering selling its shares at a more than 50 percent discount to its valuation from earlier this year, according to two people familiar with the matter. And in recent days, the company has discussed having one of its biggest backers, the Japanese technology giant SoftBank, provide yet more cash and delaying the offering. If the public offering stumbles or is delayed indefinitely, it would be a big turning point for the often-frothy world of private companies backed by venture capitalists. Skeptics of WeWork who looked on in disbelief at the We Company’s rapid growth—the business is the largest tenant in the Manhattan office space market—would surely feel vindicated.”

THE ECONOMY

The private sector added nearly 200,000 jobs in the month of August: “Midsize businesses, or those that have between 50 and 499 employees, added 77,000 jobs. Those gains were followed by small businesses, or those with between 1 and 49 employees, which added 66,000 jobs. Large businesses, tagged as those with 500 or more employees, added 52,000 jobs. … ‘Hiring has moderated, but layoffs remain low,’ Mark Zandi, Moody’s Analytics chief economist said in prepared remarks. ‘As long as this continues recession will remain at bay.’”

LOGISTICS

For some, Amazon’s shipping policy is anything but free: “As it moves to reduce its reliance on legacy carriers like United Parcel Service, the retailer has created a network of contractors across the country that allows the company to expand and shrink the delivery force as needed, while avoiding the costs of taking on permanent employees. But Amazon’s promise of speedy delivery has come at a price, one largely hidden from public view. An investigation by ProPublica identified more than 60 accidents since June 2015 involving Amazon delivery contractors that resulted in serious injuries, including 10 deaths. That tally is most likely a fraction of the accidents that have occurred: Many people don’t sue, and those who do can’t always tell when Amazon is involved, court records, police reports and news accounts show.

“Even as Amazon argues that it bears no legal responsibility for the human toll, it maintains a tight grip on how the delivery drivers do their jobs. Their paychecks are signed by hundreds of companies, but often Amazon directs, through an app, the order of the deliveries and the route to each destination. Amazon software tracks drivers’ progress, and a dispatcher in an Amazon warehouse can call them if they fall behind schedule. Amazon requires that 999 out of 1,000 deliveries arrive on time, according to work orders obtained from contractors with drivers in eight states.”

E-COMMERCE

Sellers on Etsy’s platform might see fewer earnings with the company instructing them to add the shipping cost to an item’s price, so all items can say “free shipping” with purchase: “The directive from the company has been to staple the cost of shipping onto the item’s price, which sellers have pointed out is not actually free shipping. It doesn’t help that Etsy changed its transaction fee from 3.5 percent to five percent last June—fair enough, it had been flat for 13 years, but still, the timing. Back-to-back summers! ‘I’m like yeah, damn straight. Make everybody get free shipping,’ Jeni Sandberg says, as a stockholder. ‘Believe me, I can’t wait for fourth-quarter earnings reports. It’s going to look like their gross sales skyrocketed. It’s going to look awesome on paper.’ Then she adds, as a vintage homegoods purveyor, ‘But they’re screwing sellers to get there.’”

SOCIAL MEDIA

Facebook is rolling out its dating service: “The decision to offer the service to US Facebook users comes at a time when the social media network is facing intense scrutiny from US and European regulators over how it collects and uses data and how it protects users’ privacy. Facebook users over the age of 18 can opt-in to Facebook Dating and create a dating profile that helps them find people with common interests, events and groups. The dating profile will be separate from the users’ main profile, the company said.

“Facebook said it will only suggest matches who have opted-in to the service. The platform won’t match users with friends unless the user puts them in their ‘Secret Crush’ list and both parties add each other to the list, the company said. Thursday’s announcement pushed shares of Match Group lower by about 4.5 percent, while its majority owner, IAC/InterActiveCorp., fell four percent, according to FactSet. When the feature was initially announced at an annual developer conference last year, shares fell in the double digits. Facebook said it has worked with security experts to ensure the safety, security and privacy of its users. Facebook Dating users will be able to report and block anyone; prohibit people from sending photos, links, payments or videos in messages; and receive safety tips from the company.”

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RETAIL

Target has turned itself around by investing in employees and store renovations: “Analysts had begun to fear that the chain was slipping into irrelevance, as traditional department stores had done. … By the end of 2020, Target will have remodeled 1,000 of its 1,800 stores; it’s also rolling out smaller, brand-new locations in dozens of higher-end city neighborhoods. Changes visible to shoppers include fancier presentation of apparel (think mannequins sporting ‘looks,’ instead of stacks of shirts on shelves) and better-lit, sleeker checkout areas. … The outcome? Two and a half years after its big bet spooked shareholders, Target is posting ticker-tape-parade-worthy results. The company has notched eight straight quarters of comparable sales increases. Target’s total first-quarter sales hit $17.4 billion, 8.7 percent higher than the same quarter in 2017. … 

“Managing all these initiatives puts new demands on workers. Target has raised employees’ pay, pledging its lowest hourly wage will jump to $15 by late next year, in part because of how much more involved the typical job has become. Target is training workers to have expertise in particular merchandise categories, notably apparel and beauty products, rather than be a ‘general athlete.’ That approach echoes the classic department-store model—an interesting twist, given that Target was originally founded as an offshoot of a Minnesota department-store chain. ‘What Target has become is the modern department store,’ says Neil Saunders, managing director of GlobalData Retail.”

STARTUPS

Fyollo, which just raised $16 million, helps cannabis companies advertise online. The company is “the industry’s first marketing tech platform. Fyllo uses an algorithm to track cannabis marketing legislation at the federal, state and local levels in real-time. As states (and even individual communities) iron out their stances on recreational pot, Fyllo helps cannabis companies avoid the hefty fines and penalties that come with noncompliance. For example: In some states, the proposed legal age for recreational marijuana use is 18. In others, it’s 21. Losing track could create big problems for small to mid-tier retailers. If regulators decide their advertisements target that 18-to 20-year-old crowd in the wrong state, they could be fined tens of thousands—or forced to close.”

Argent’s “stylish but functional” women’s business wear has found a customer base among the most sartorially scrutinized women today—politicians: “Hillary Clinton, one of the most visible women in American politics, was an early adopter of Argent’s suits. … The brand’s popularity among politicians … reveals a shift happening in the way candidates use fashion to wield a political message. Argent specializes in designing statement-making, fashion-forward suits that also project confidence and power, helping candidates express themselves rather than blend in. And the fact that Argent is a female-founded American brand—which sells affordable, accessible designs—makes it appealing to women whose fashion choices are, for better or worse, analyzed nearly as thoroughly as their political platforms.”

Lab-testing startup uBiome has filed for bankruptcy protection amid a federal investigation for the company’s billing practices: “UBiome had been trying to build a business on testing patients’ microbiomes based on emerging science that suggests microorganisms in the gut and other parts of the body can play a role in health. The startup had raised $83 million in a financing round from investors that included 8VC and Y Combinator. But the company has suspended the two lab tests for which it was billing insurance companies. Some of the companies had already largely or completely stopped paying claims. UBiome co-founders Jessica Richman and Zac Apte, who were earlier suspended from their positions as co-chief executives, resigned from the company’s board.”

CLIMATE CHANGE

Disaster prep is becoming a big business, and mainstream companies are taking notice: “One of them is Biolite, a 10-year-old company that specializes in creating outdoor stoves and off-grid energy solutions. This month—which is National Preparedness Month—Biolite is debuting a series of limited-edition prep kits. There are three kits for families of different sizes, ranging from $129.75 for the ‘solo’ kit to $459.45 for the ‘family’ kit. All the kits include a Lifestraw (a water filtration system), along with things like headlamps, solar panels, and lighting systems that can use either electricity from the grid or solar energy.”

MARKETING

For decades, a Christian bookseller in Massachusetts went by the name CBD: “The Peabody-based company announced last month that it would be undergoing an official rebranding, retiring its long-used CBD name in favor of ‘Christianbook.’ … As part of the overhaul, ‘CBD’ has been scrubbed from the company’s catalogs and its website. The bookseller is also in the process of changing employee e-mail addresses, which end in ‘at cbd.com.’

“For the record, Hendrickson says, the change comes not from concerns of being accidentally associated with a less-than-holy product. Rather, it’s the confusion that has followed as the cannabis-related CBD has worked its way into the American lexicon. Employees said they’ve gotten strange looks when they wear company gear in public. On one occasion, a company representative spent a confusing 30 minutes on the phone with a caller trying to locate his order information before the customer, in describing the product he’d purchased, mentioned it had a marijuana leaf on the bottle. … Even those associated with the company have been left occasionally bewildered. While driving with his 90-year-old mother one day, Hendrickson says, she pointed to a sign outside a business that read ‘CBD Sold Here.’

“‘Is that us?’ she asked.

“‘No, Mom,’ Hendrickson replied. ‘That’s not us.’”

And that’s what’s ahead.

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