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lavaca
Jun 11, 2010
Twitter doesn't really want to get rid of the racists because people registering new accounts after getting blocked make up a significant portion of Twitter's quarterly user growth.

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lavaca
Jun 11, 2010

CrcleSqreSanchz posted:

Bye Bye HMV Canada. Overpriced CD's, overpriced DVD's and then overpriced thinkgeek poo poo.

*salutes toilet as it flushes*

http://www.cbc.ca/news/business/struggling-hmv-canada-goes-into-receivership-1.3956302

As an American fan of the Matthew Good Band, I have fond memories of buying music online from HMV back in the day because they often had stuff that wasn't released in the US for about what it would've cost of it had been. This is when the exchange rates meant that any order with more than 2-3 items was cheaper than Amazon. Eventually I switched to MyMusic.ca, which effectively used this sort of currency arbitrage as their entire business model. That was certainly a different era.

lavaca
Jun 11, 2010
A lot of local credit unions significantly lowered their membership standards and increased their advertising budgets after WaMu and other local banks went bust. For example, you just have to live or work in the state of Washington to join what used to be called "Boeing Employees Credit Union". Now we have a bunch of credit unions pretending to be retail banks. This has worked just fine for the last few years but I suspect the next recession won't be pretty.

lavaca
Jun 11, 2010
The main reason that foreign airlines tend to be nicer than US airlines is that many countries use their airlines and airports as a way to advertise the country and subsidize them accordingly. The US doesn't really care.

lavaca
Jun 11, 2010
Almost back on topic: a creamery outside of Seattle was raided by the FDA and later shut down because they refused to recall their cheese. Apparently the cheese cave was also the listeria cave, though nobody actually claimed to have gotten sick from eating $30/pound cheese. Ignoring the FDA is a great way to go from "successful artisan food business" to "circling the drain" overnight.

lavaca
Jun 11, 2010
I think that Facebook and Google are the real winners here. Visit an online mattress or bedding site in a browser without adblock and you'll spend the next three months seeing ads for it. You can't make a profit if your sales and marketing spending alone exceeds your total revenue.

lavaca
Jun 11, 2010

Barudak posted:

Yeah, Starbucks shuttered almost all the locations to avoid self competition.

This is the official Starbucks acquisition model: buy a related company (juice bar, bakery, tea shop, etc) claim that nothing will change with that company's operations and then shut the whole thing down a year or two later. It comes off as a really inefficient version of "acqui-hire" to me.

lavaca
Jun 11, 2010
To this thread's credit, Shake Shack did report a decrease in "same-shack sales" from 2016 to 2017. I would not be surprised to see the trend get worse over the next few years as the company continues to expand. Why make a special effort to visit Shake Shack on your vacation in New York or Florida when you could visit one back home any time you want?

lavaca
Jun 11, 2010
My charitable take is that Starbucks is good at identifying failing companies that produce quality products. If Starbucks can buy a chain of fancy juice or tea shops for less than the price of developing a new juice or tea brand internally, it doesn't really matter that new line of teas comes with a few hundred retail leases because they can just shut everything down once the leases expire. We'd probably be talking about Teavana here anyway if Starbucks hadn't come along.

The coffee chain that's really circling the drain is Tully's. They sold off the profitable wholesale business years ago in a big sale-leaseback deal. The remaining retail arm declared bankruptcy a few years later and is probably going to declare bankruptcy again after being unable to renew various high-profile contracts they overpaid for. Tully's actually seems to be doing pretty well in Asia...but it's a totally separate company that just licenses the name. Maybe the Asian operator will buy the US company so that it can take ownership of the trademarks.

lavaca
Jun 11, 2010
Theranos is back in the news. Turns out the whole thing was even more of a scam than you thought.

lavaca
Jun 11, 2010
How is the Tully's Coffee shutdown going? All the "temporarily closed" signs around here have been replaced by "for lease" signs but maybe Green Mountain will do something really stupid with the IP like open a new batch of stores just to promote K-Cups.

(I know the licensed stores in Asia are doing pretty well but those are really just America-themed cafes. The problem with Tully's in the US wasn't that they didn't have hot dogs on the menu.)

lavaca
Jun 11, 2010
Aren't most of the dockless bike companies circling the drain? Ofo is scaling back its US operations. Spin just sort of quit trying around here and their website is mostly about their plans to pivot to electric scooters instead. Only Lime actually seems to be expanding.

lavaca
Jun 11, 2010

Slippery posted:

I lived in a nice community with sidewalks and parks and all sorts of poo poo like that and we had those. It is a mystery I guess.

"Cluster mailboxes" have been a USPS requirement for new housing developments since 2012 or so. That's why some neighborhoods have them and others don't.

lavaca
Jun 11, 2010

Krispy Wafer posted:

Apple killing their iPod in favor of the iPhone is pretty remarkable. Most companies wouldn't have cannibalized a growing and hugely profitable product over something new. For instance Apple's first attempt at a music phone was the Motorola ROKR and it was truly terrible and full of lovely compromises. That's usually what happens. The industry leader plays it safe and then someone else disrupts the market. For Apple to do it to themselves was not typical.

The iPhone was literally introduced as "iPod+cell phone". It was an upgrade, not a replacement.

Apple's brilliance was in pitching smartphones as a gadget for cool people who like iPods instead of boring people who want to send work emails on vacation.

lavaca
Jun 11, 2010
They were definitely going with the "your next iPod should be an iPhone" angle, though that didn't really happen for most people until the iPhone 4.

Thread freebie: Blackberry is somehow still in business in 2019. Do they actually do anything other than license the Blackberry trademark to TCL?

lavaca
Jun 11, 2010
There's always the Jones Soda approach. First you get really popular with twee college kids. Next, you get a bunch of press for selling weird novelty sodas that taste like Thanksgiving dinner or sweaty football players. Then you use that goodwill to take on Coke and Pepsi by vastly overpaying to become the exclusive soda vendor of an NFL team. It turns out football fans get really upset when they ask for a Coke or Pepsi and are handed a "Cane Sugar Cola" instead.

Jones is still in business somehow but I bet you haven't thought about them in a long time.

lavaca
Jun 11, 2010
Here's a story about Blue C Sushi, a company that is no longer circling the drain (because it went out of business, of course).

Get out the bingo card.

Founders have no relevant experience posted:

Neither had any experience in the business, but Allard spent time in Japan as a law student and “fell in love with conveyor-belt sushi because it was affordable”

Founders quit while business is booming posted:

In April of 2012, the founding trio even landed on Seattle magazine’s inaugural list of the “70 most powerful players in the Seattle food scene.” For three dot-commers with no prior restaurant experience, it was high praise. Even in a city crowded with sushi competitors, Blue C seemed like it would stick around.

Behind the scenes, though, things had already begun to unravel.

Three months before their appearance in Seattle magazine, Allard and Rosen left Madison Holdings — neither would comment on the reasons behind their departure.

Botched expansion into a new market posted:

Horowitz tasked the new hires with a plan to expand the franchise into California, opening restaurants in Hollywood in November 2013, then Newport Beach and San Francisco in July 2014. But things did not exactly go smoothly.

Two sources with intimate knowledge of the Blue C expansion into California, who asked not to be identified due to fear of litigation, cite major problems with this era of the business. “The build-outs were way more expensive [than anticipated], the locations were no good, and they weren’t performing well".

Lawsuit from a former executive posted:

Dalton left the company shortly thereafter. The Boston restaurateur filed a lawsuit in 2015 against Horowitz, alleging that a pattern of micromanagement made it impossible to do his job.

Financial chicanery to keep the company going (free space) posted:

According to the bankruptcy filing, Madison Holdings owes about $4.6 million to Horowitz and $21 million to Francis J. Feeney, a Boston-based financial attorney, and Madison Holdings board member, who has worked with Horowitz since the late 1990s.

Most restaurant closures are just sort of sad when you consider all the employees who got screwed over but I can always reserve schadenfreude for someone who turns a large pile of tech stock into an even larger pile of unsecured debt. The funny thing is that the restaurant run by the original founders is still going strong despite Blue C failing twice at the same shopping mall.

lavaca
Jun 11, 2010
There is definitely going to be a major reckoning in upscale grocery stores. While I do believe that people are much more willing to spend money on fancy cheese and weird fruits than they were 10 years ago, there's no way that willingness can support the sheer number of stores that have opened up in the past few years.

In Seattle...
Whole Foods is the mainstream upscale grocery store.
Trader Joe's is the cheap upscale grocery store.
PCC is the place that used to be a hippie co-op and is now just another upscale grocery store.
Town & Country is the suburban upscale grocery store.
Metropolitan Market is the upscale grocery store with really good private-label stuff.
New Seasons is the upscale grocery store that couldn't distinguish itself and is already leaving town.
Sprouts is the upscale grocery store for people who can't stop telling you that they wouldn't be caught dead in a Whole Foods.
District H is the upscale Asian grocery store.

There's a place in Ballard where you can be within a mile of five of these chains (OK, the New Seasons went under) plus two different Kroger chains, a Safeway and a Cash & Carry.

lavaca
Jun 11, 2010
Colleges circling the drain

The 115-year-old institution in Portland announced Monday it will shut down at the end of the spring 2020 semester.

The closure will result in approximately 1,518 layoffs, according to the Office of Workforce Investments and the Higher Education Coordinating Commission.

Concordia follows Marylhurst University and the Oregon College of Art, both small, private schools that shut down in the past few years.

“The big question at this point is not whether there will be more closures- it’s how many,” explained Rick Seltzer of the online publication Inside Higher Ed.

Seltzer warns many small colleges across the country are facing similar financial pressure, which could lead to more closures.

“My sense from talking to different people, from looking at financial statements, from doing a lot of reporting on this is that we are likely to fall in the 10 to 15 range every year,” explained Seltzer.


My uncharitable take is that small colleges are finally seeing the end of a 70-year bubble that started with the GI Bill in the 40s and 50s and probably won't survive an inevitable student loan bust. My own liberal arts college announced a plan to grow enrollment by 20% starting in 2005 but has instead been stagnant since 2010 and is now going all-in on nursing. They can't be unique.

lavaca
Jun 11, 2010

Barudak posted:

Golden Corral was the only buffet chain doing well prior to this plague, for, and you wont believe this, maintaining quality and higher prices.


Sizzler seems pretty healthy here in Japan, so probably.

Sizzler in Japan is owned by a totally separate company so it will survive even if the American version goes under. Sort of like how Tully's Coffee is still a thing in Asia even though the American original is kaput.

The way the cruise lines responded to norovirus was not to let guests touch anything in the buffet for the first few days of the cruise. That works pretty well when you're paying Filipino wages and can have someone at every single station but not so well when you're paying American wages.

lavaca
Jun 11, 2010
It is with good reason that Hertz went bankrupt while the other car rental companies are still solvent. They were owned by private equity for a while, but you can't even blame that because everything they've done since then has been pretty boneheaded. They had a bad CEO, they alienated a bunch of employees by relocating the corporate office, they completely bungled the acquisition of Dollar Thrifty, they had a big accounting scandal that led to executives being sued, Carl Icahn got involved and all along the whole operation rested on a lot of financial chicanery.

Matt Levine posted:

Why did car-rental company Hertz Global Holdings Inc. file for bankruptcy on Friday? Bloomberg and the Wall Street Journal both have good narrative accounts of the business missteps that Hertz made that put it in this position, but the simple immediate answer is that Hertz had basically taken out a margin loan against its cars, the coronavirus crushed the value of those cars, its lenders issued a margin call, and Hertz didn’t have enough money to meet it. So the lenders can seize the cars to sell them off, and Hertz filed for bankruptcy to delay that.

I mean Hertz doesn’t put it that way. Technically the story is that Hertz finances its cars using asset-backed securities: An entity called Hertz Vehicle Financing LLC buys the cars and leases them to Hertz, and HVF gets the money to buy the cars from an entity called Hertz Vehicle Financing II LP, and HVF II gets the money by selling securities (backed by the cars and the lease payments) to investors. But the lease payment—that Hertz makes to HVF, which passes it to HVF II, which passes it to the ABS investors—is variable, and it goes up when the value of the used cars in Hertz’s fleet goes down.

The cars in Hertz’s fleet are the ABS investors’ collateral; Hertz can keep their money because the value of the cars should be enough to cover their debt. Or that is the usual idea. During the pandemic, the value of used rental cars has plummeted: No one is buying used cars, so demand is down, and no one is renting cars, so supply is way up. The ABS investors are undercollateralized—their cars are worth less than they’re supposed to be, putting the debt at risk—so they effectively issued a margin call: Hertz has to pay more in operating lease payments to protect the ABS investors from the declining collateral value. Hertz declined to do that, so the ABS investors get to seize the cars.

They'll probably be fine in the end, if for no other reason than that their creditors really have no interest in actually taking ownership of Hertz's cars. "Own a bunch of assets that nobody else wants" can be a pretty effective financial strategy sometimes.

lavaca
Jun 11, 2010
It's funny to consider that California Pizza Kitchen started out as a Spago knock-off back when BBQ chicken pizza was a genuine novelty and Wolfgang Puck was an actual chef. That was a long time ago. I guess the patron saint of airport dining is the one who gets the last laugh here.

lavaca
Jun 11, 2010
You might think that everyone spending all of their time outside would be good for companies that sell outdoor gear. It wasn't great for REI and it really didn't help MEC in Canada.

quote:

First, you’re probably wondering, “what happened?”
MEC has experienced increasing performance issues since 2016. In July 2019, new leadership was brought in to develop a plan to turn MEC around. We were making significant progress but then the global pandemic hit and exacerbated MEC’s financial challenges.
A Special Committee of the Board engaged in an extensive examination of options to address the persistent financial issues. As part of the review, the Special Committee, in concert with expert advisors, sought refinancing from over 65 potential lenders, proactively explored and leveraged applicable government support programs, and examined funding MEC through voluntary member assessments.
Ultimately, a sale was the only option that would save MEC from bankruptcy or liquidation.

We’ve been asked, “what is CCAA?” and “why don’t members vote on this decision?”
Our persistent financial challenges combined with the pandemic created a situation in which MEC became insolvent, and this necessitated a filing under CCAA. In CCAA, the court oversees the restructuring process to ensure fairness. A member vote (or in the case of corporations, a shareholder vote) is not required.
CCAA allows an organization to maintain its business ‘in the ordinary course’ while giving it the breathing room necessary to restructure its affairs. This is done to preserve as much of its business as possible for the benefit of employees, members/customers, suppliers and other stakeholders in the communities in which it operates.

Many are wondering “why wasn’t the board more forthcoming or transparent?”
First of all, we understand that many are upset and apologize for not communicating more or sooner. As a member-based co-op, we know the importance of transparency, and value co-operative principles. But in exercising our fiduciary duty, the board’s top priority was preserving jobs and saving MEC from bankruptcy or liquidation. In short, we prioritized MEC’s survival.

lavaca
Jun 11, 2010
The latest private liberal arts college circling the drain is my own alma mater.

Background: a former member of the college's board of trustees was a known creep and is currently facing criminal charges for sexually assaulting students. The professor who was the faculty representative on the board was not at all happy about the board's response to this situation and has been fighting with the board chair and college president about it. Eventually the professor took his concerns to the rest of the faculty and was able to get them to hold a vote of no confidence in the chair and president. When talking to the press, the professor also mentioned that the president has a habit of making rather tasteless "jokes" about Jews.

Unsurprisingly, the administration is not happy about the whole situation. They found a lawyer willing to say "you can totally fire this tenured professor without due process", so that's what happened.

FIRE posted:

The justifications offered by Linfield’s leadership to the Chronicle are incoherent.

President Davis misses every note:

When asked whether the faculty-handbook procedures had been followed in Pollack-Pelzner’s firing, Davis said that the handbook had “not been updated” and that there are a “number of things in that handbook that are not valid.” The handbook says “Fall 2020″ on its title page, and the most recent update was in January of this year. The president said he was unaware of the guidelines, hadn’t seen the most recent version of the faculty handbook, didn’t know who had updated it, and didn’t believe it had been approved by the administration.

Davis’s answer is wildly implausible on its face and incomprehensibly at odds with the basic conception of tenure. No competent university leader could credibly believe that tenured faculty are at-will employees.

If this were to be credited, Davis — Linfield’s president for the last three years — either did not know that Linfield had guidelines for terminating tenured faculty members, believes that the university has replaced those policies, or believes that the current policies were implemented without his administration’s approval. The employee handbook — every page of which is stamped “Revised December 2020 (by Finance & Administration)” — expressly refers to the faculty handbook and specifically cites the faculty handbook’s appendix laying out the procedural mechanisms for disciplinary action involving tenured faculty.

Prior to the firing this was just a local story. Now it's national news. I'm really looking forward to the college's fundraising efforts switching from "please support the next generation of future leaders" to "please support our legal defense fund".

lavaca
Jun 11, 2010
Has any restaurant chain actually succeeded at the "grow from 20 to 2,000 locations overnight" strategy? It seems like the only sustainable way to make it work is to ride a larger wave like Starbucks did during the espresso boom in the 90s.

If I were being uncharitable I would say that most rapid expansion strategies are really just attempts to defraud investors by juicing the growth numbers for a few years and then cashing out before everyone catches on.

lavaca
Jun 11, 2010

the holy poopacy posted:

Didn't Chipotle basically do this? I know they had a lot of big corporate backing though

Yeah, that is a good one. Chipotle had a big expansion using McDonald's money and then a second big expansion push a few years later. The second expansion famously resulted in a bunch of food poisoning incidents because their quality control procedures didn't work as well with 2,000 restaurants as they did with 500. Not circling the drain today, that's for sure. In Seattle I think Chipotle's growth mostly came at the expense of other casual Mexican places like Taco del Mar, Qdoba, Baja Fresh and various local chains. There are probably about as many places around here to watch someone make a burrito in front of you in 2021 as there were in 2010 but far more of them are Chipotles now.

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lavaca
Jun 11, 2010
I had a wild experience seeing Broker at a Regal theater last month. There were no pre-show ads and no trailers or promos except a brief clip of Koreeda saying "I hope you like my movie". The people who showed up 15 minutes after showtime must've been pissed when they realized that they had missed the whole opening sequence.

(Whatever executive signed off on giving Broker a wide release in the hope that it would be the next Parasite must have been pissed too, but for a different reason.)

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