Friday 30 October 2015

Macy's Will Open Stores On Thanksgiving Day Again This Year

The march of Black Friday into Thanksgiving continues.

AP / Mark Lennihan

Macy's said it will open on Thanksgiving Day for the third year in a row, just days after outdoor retailer REI drew widespread praise for closing on Black Friday and urging customers to spent the day outside instead.

"Our principal goal is to serve our customer when and how she wants to shop, and our extended hours are always in the interest of courtesy and convenience for customers," a Macy's spokesperson said in an emailed statement. "We understand and respect the impact on our associates, and we began our staffing planning early to allow associates to review available shifts throughout the holiday season, including on Thanksgiving weekend, and to volunteer for those shifts they prefer."

Big retailers seem to be digging their heels in on Thanksgiving openings, a relatively new phenomenon, even as criticism builds around putting employees to work on a national holiday.

In recent years, evidence has showed that pulling Black Friday shopping bonanzas into Thanksgiving simply spreads the weekend's sales out over an extra day, rather than drumming up extra revenue.

At the same time, it's easier than ever to offer similar deals online — Amazon successfully conjured its own version of Black Friday this July called "Prime Day," suggesting consumers will show up whenever and wherever deals are offered.

Macy's said most of its shifts on Thanksgiving day will be worked "by associates who volunteer to work those hours, and they are compensated with additional pay when doing so. Employees often tell us they prefer to work on Thanksgiving evening so they can have Friday off to spend shopping or with friends and family." Macy's staff working on Thanksgiving will be paid time-and-a-half.

Macy's, which beat retailers like Walmart and Target to the punch in announcing plans for the weekend, will open at 6p.m. on Thanksgiving, for the second year in a row. The company first opened on Thanksgiving in 2013 at 8 p.m. When it announced its plans in 2013, it specified in a statement that the opening would take place "after families across the country have finished their holiday meals and celebrations."

The Macy's spokesperson said that the 6 p.m. opening time is still after "many families" have finished their holiday meals and celebrations. Prior to 2013, Macy's opening at midnight on Black Friday in 2012 and at 4 a.m. on Friday in 2011.

Earlier this week, REI made headlines for closing on Black Friday — bypassing the Thanksgiving Day opening conversation altogether — and paying employees to go outside instead. While more than 700,000 people have used the private company's #OptOutside hashtag on social media so far, the company's chief creative officer noted he didn't expect Black Friday closures to be a trend.

"It would have been a heck of a lot harder if we were a public company," Ben Steele, the CCO, told BuzzFeed News. Macy's, in particular, has reported disappointing results this year.

Still, a number of chains have decided to close their doors on Thanksgiving Day, including GameStop, Ikea and Staples. TJX, the owner of T.J. Maxx, Marshalls and HomeGoods, which recently surpassed Macy's in annual revenue, has also typically closed in recent years.

LINK: Black Friday Was A Bust, So Why Keep Opening Stores On Thanksgiving?

LINK: Amazon Can Declare A Shopping Holiday Any Time It Wants. So Can We Have Thanksgiving Back?


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Hershey's Kisses Just Totally Copied Ferrero Rocher

Venessa Wong / BuzzFeed News

Hershey is launching a new spin on its classic Kisses starting November. Called Kisses Deluxe, the oversized, teardrop-shaped chocolates are filled with hazelnuts and come wrapped in gold foil. Hershey is calling it "the largest innovation in 25 years from America’s most iconic chocolate brand." Yet, to those familiar with grocery store chocolates, they probably look a lot like Ferrero Rocher.

Ferrero Rocher —the Italian chocolate that describes itself as "a tempting combination of smooth chocolaty cream surrounding a whole hazelnut; within a delicate, crisp wafer...all enveloped in milk chocolate and finely chopped hazelnuts" — occupies a very special place in many people's chocolate memories.

The candy, launched by Ferrero — the same company that makes the Nutella as well as Tic Tacs — in 1982, lives at the highest end of low-brow chocolates. You could find the gold-wrapped treats in gas stations, supermarkets and drug stores alongside cheaper, more everyday confectionaries, yet its glittering foil and creamy hazelnut filling put Ferrero Rocher in its own league. It was, after all, European. And it came in packaging that made it nice enough to bring to a dinner party.

It's just so fancy.

It's just so fancy.

fourthandfifteen / Via Flickr: chelmsfordblue

In the U.S., retail sales of Ferrero Rocher grew to roughly $244 million in 2014, and the candy jumped from being the 31st most popular chocolate brand in America in 2006 to 20th last year. Hershey's Kisses, meanwhile, came in 16th, show 2014 data from market researcher Euromonitor International.

The picture looks very different globally, however. Euomonitor ranks Ferrero Rocher 7th among chocolate brands, with retail sales of about $2.2 billion. Hershey's Kisses, meanwhile, has slid over the years to rank 21st globally.

Rocher's global popularity suggests fancy golden-foiled chocolates are a growth opportunity for Hershey both in the U.S. and abroad. The company only recently launched Hershey's Spreads in 2014, in chocolate, chocolate-almond, and chocolate- hazelnut flavors — presumably, as a Nutella alternative.

Ferrero declined to comment.

Hershey first introduced Kisses Deluxe in China in 2013, making it the company's first international chocolate launch, and tested them further with U.S. consumers. The limited-time Kisses Deluxe will be sold at U.S. retailers including Walmart, Sam’s Club, Kroger, Walgreens and CVS from Nov. 1 through Valentine's Day.

Hershey said in a statement to BuzzFeed News that Kisses are already the No. 1 chocolate brand sold during the holidays, and it "was inspired by our own fans who were looking for a unique, premium gifting option."

Flywheel Isn't Just Competing With Uber Anymore

Flywheel

Flywheel wants to be known as the "non a-hole alternative" to Uber, as an email pitch the company recently sent to BuzzFeed News read. But with the launch of its latest product, TaxiOS, it won't just be Uber and its ilk that Flywheel is competing with — it'll be the companies that manufacture the meters that have dominated the taxi industry for so long.

Starting today, Flywheel — which started simply as yellow cab-hailing app and later came to include a digital payment service for cashless taxi transactions — is rolling out its newest product: an all-in-one taxi operating system. According to Flywheel CFO Oneal Bhambani, the idea is that TaxiOS, a driver-facing app, will effectively replace — and, ideally, improve upon — all the hardware in taxis. That includes the payment, navigation, and dispatch systems, in addition to the taxi meters, which determine fares by counting the number of times a taxi's tires revolves during the ride. The TaxiOS app will use GPS to determine the fare, which makes it more accurate than the existing and "antiquated" taxi meters, according to Bhambani; it will also allows riders to hail taxis, then pay for the rides on their phones or swipe their card through a Square-like credit card reader.

As of right now, Flywheel's TaxiOS is operating completely independently of taxi hardware in 70 San Francisco cabs as part of a pilot program with the city's Metro Transportation Authority; the company hopes to fully implement the system in all of the Flywheel-enabled fleets in San Francisco, Los Angeles, Seattle, San Diego, Sacramento, and Portland pending regulatory authority. In New York City, Flywheel is applying to be just one of the few companies participating in a Taxi and Limousine Commission program seeking to implement new and innovative payment and taxi systems. In the meantime, Flywheel has distributed TaxiOS to approximately 1,200 taxis, and according to Bhambani, there have been more than 1 million test rides of the product and the meter to ensure it works without a hitch. (Because the company has yet to receive regulatory approval, the app works in parallel with existing meters and hardware.)

Flywheel

"We don’t think anyone else has this technology," Bhambani said of the in-app GPS-enabled meter. "We are the only one to have to have a single device solution. The old meter was essentially invented in 1891 — it counts the revolution of the tire to determine the fare. That is a really big technological barrier to entry, that’s why we believe we’re pretty well positioned to be one of the first participants in the [TLC] pilot."

While a press release Flywheel circulated to announce the launch of TaxiOS goes as far as to call existing technology "dated" and "disparate," Jason Gross, the global head of product and marketing at Verifone — one of the first companies to offer credit card payment services in taxis — patently disagrees. In fact, Gross says, Flywheel is only just getting around to doing something Verifone has been working on for a while.

"We've actually already been developing and have a virtual meter ourselves," Gross told BuzzFeed News. "We've known about the TLC pilot and have our solution ready. We have 100,000 cars around the world, we have the same exact solution as they do. This is not disruption. This is not what Uber did to taxis."

And according to Gross, Verifone is no stranger to facing off (and ultimately winning out) against newer tech companies looking to get a piece of the yellow cab industry and several years ago that was Square.

"The TLC routinely tries out new technologies and give companies the opportunity to pilot and then they see what happens in the pilot," he said. "[The TLC accepts] any vendor that can meet the rules and qualify." In 2012, Verifone and Square both participated in a TLC pilot that aimed to test out new payment systems, but when the TLC drew up rules that Gross said became too "cumbersome" for Square, Square dropped out. Verifone ended up becoming an approved vendor, ultimately signing up more than half the taxis and 80 percent of the green cabs in New York.

While offering a single-device solution like TaxiOS may seem more convenient, having a credit card reader attached to a driver's phone has proven to be a problem, Gross said. "In the past, the drivers typically ask you to pass them your
card, but the TLC has said 'no, the reader in this case is going to have to be passed
to the passenger,'" he said. "In these new Nissans there’s not even a way to pass anything, so we see a lot of reason to have a credit card reader in the backseat of a cab ... A virtual meter makes perfect sense, and we're willing to try out any new technology but we still think a device in the backseat of the cab is important."

Bhambani, however, contends that existing taxi technology has a high failure rate, forcing many drivers to get them fixed frequently — in some cases as often as once a month, he said. TaxiOS would help drivers avoid that issue, in addition to enabling drivers to accept e-hails, which ideally would increase the volume of rides. Eventually, taxi drivers will also be able to use the TaxiOS platform to provide a delivery service for businesses, not unlike UberRush. But Verifone is doing that too. With its acquisition of e-hail company Curb earlier this month, and its plan to combine it with the company's proprietary taxi-hailing app Way2Ride, Verifone may prove to be as formidable a competitor to Flywheel as Uber has been.

Flywheel's technology may prove to bring more business to taxi drivers in New York City, and improve upon both the driver and rider experiences in taxis in the west coast. But with TaxiOS Flywheel certainly has a lot more than just Uber and Lyft to worry about.

Contract Workers Are Suing Amazon

Amazon doesn’t want to be known as a bad employer. But with factory workers striking, corporate employees allegedly crying at their desks, and now, contract employees suing, that’s an increasingly hard case to make.

Via youtube.com

To get packages on your doorstep in less than two hours and make almost any item you can think of available for purchase online, Amazon relies on a massive, diffuse labor network. Some of these workers are contracted by other companies; some of them contract with Amazon; still others are employees. Some are robots. But all around the organizational chart, their dissatisfaction is causing problems for the company. Workers on Mechanical Turk have long complained that they are underpaid and undercut by the company. In Los Angeles, some workers in a factory that Amazon contracts with are currently on strike, BuzzFeed News reported last month. The Huffington Post just ran an excruciating story about a Virginia contract factory worker who died on the job in 2013.

Even at the top, things may not be much better. A New York Times article that portrayed Amazon as a grueling place to work was revived in the public eye last week when Amazon's Jay Carney publicly contested the trustworthiness of some of the sources in the story. (After the story was published, the ACLU paid for a full-page ad in the Seattle Times asking disgruntled Amazon employees to contact them with potential lawsuits; BuzzFeed News has not gotten a response to an inquiry asking whether any employees had responded.) While the story of a PR executive routing around the press by publishing his concerns directly to Medium dominated the conversation of late, it didn't totally drown out the central question: Is Amazon, a company that has in many ways revolutionized labor, a good place to work?

After this week, it seems we can add another four people to the roster of those who have come out and said it's not.

Four Amazon contractors — drivers who worked for Prime Now, Amazon's two-hour local delivery service, and were hired through a third-party contracting company — have proposed a lawsuit against the company, accusing Amazon of misclassifying them as contractors.

The drivers, their lawyer Beth Ross argues, should be classified as employees for a number of reasons, including that they work shifts rather than on a gig basis, have to wear shirts and hats with company branding, and are told by the company where to be and when. In addition, the workers are concerned that the cost of gas, tolls, and other incidental expenditures makes their total income below the legal minimum wage in California. (Amazon advertises that the drivers will make around $20 an hour; the minimum wage in California, where these workers live, is $9.)

Ross, who has been working a similar case against FedEx for a number of years, says her case is much firmer than other misclassification cases against tech companies, such as the high-profile legal battle over contract labor of the moment, the one Shannon Liss-Riordan is fighting over Uber. "Once they pick their schedule, they're on the schedule," Ross told BuzzFeed News of her clients and their fellow Prime Now contractors. "They work eight hours, they get paid by the hour, and then they go home. It's as different from Uber as it could be."

Incidentally, Amazon recently launched a program for on-demand local delivery that is actually a lot like Uber. Flex allows drivers to pick up and deliver packages using an app, the same way Uber drivers deliver people. A rep for Amazon said the company is always experimenting with new ways to get packages to doorsteps faster, relying on a combo of FedEx, USPS, UPS, DHL, and more to do so.

Thursday 29 October 2015

The Golden Era Of Starbucks Is Going Strong

Afp / AFP / Getty Images

The reign of Starbucks continues.

As other global chains like McDonald's, Subway, and KFC struggle to regain stability, Starbucks ended its fiscal 2015 year in September with global comparable-store sales growth of 7%. This was the sixth consecutive year of comparable sales growth for Starbucks globally.

The Seattle-based chain's business remained robust in the U.S. too, where it grew sales at cafes open 13 months or longer by 9% last quarter.

BuzzFeed News

Starbucks — ranked the most popular restaurant among teens in a recent Piper Jaffray survey — has been growing sales through successful new food and drink offerings and its very successful loyalty program.

The company also recently rolled out mobile ordering and has increased worker pay and benefits in the U.S. "Our comp results are strongest where we are having our greatest success in reducing turnover," Starbucks CEO Howard Schultz told investors. "There is no doubt that our partner investments link directly back to our ability to post record profits."

Improvements in pay and benefits are also planned for the company's international restaurants, it said.

The current growth spree looks like it will continue through next year: Starbucks predicted global comparable store sales growth "somewhat above mid-single digit" percentages in fiscal 2016, and plans to open another 1,800 new stores, of which about 700 will be in the Americas region.

Already, Starbucks has 23,043 stores in 68 countries. Schultz is relying on the "universal appeal of the Starbucks experience" to make the chain even more ubiquitous.

Court Ruling Could Push Debt Forgiveness For Cheated Students

Photograph by Molly Hensley-Clancy for BuzzFeed News

Despite a judge's $530 million ruling Tuesday against the operator of the disgraced Everest University chain of for-profit colleges, tens of thousands defrauded students are unlikely to ever see a dime from the bankrupt company, whose meager assets were handed over to lenders long ago.

But the ruling against Corinthian Colleges may still have important implications for former Everest students: advocates say it should provide a basis for the Department of Education to forgive Corinthian students' federal loans. The lawsuit against Corinthian was filed by the Consumer Financial Protection Bureau last year.

The judgement is the first of its kind. Throughout its storied collapse, the giant for-profit college maintained it had "never been given due process to refute the unsubstantiated allegations" of fraud against students. That was essentially true: Corinthian faced an onslaught of investigations and lawsuits by state attorneys general, a probe by the SEC, and a finding of fraud by the Education Department earlier this year. One was settled without an admission of guilt; others are ongoing.

But until Tuesday, after the bankrupt Corinthian ceased to defend itself in the CFPB's lawsuit, there had never been a ruling in a court of law against the for-profit college.

"This is the first ironclad, definitive judicial finding that this operation was formally engaged in fraud," said Barmak Nassirian, a policy analyst American Association of State Colleges and Universities and a longtime critic of the for-profit college industry.

The judgement could help those trying to make the case that Corinthian's students were misled into taking out loans, and are therefore eligible to have the debt forgiven. Former Corinthian students and activists are using a previously unknown student loan protection clause, called "defense to repayment," to argue that the federal government is obligated to forgive the loans of former Corinthian students. According to that clause, students "may assert, as a defense against collection of your loans, that the school did something wrong.”

The Education Department has mostly remained vague about how it plans to determine whether Corinthian "did something wrong," enabling the government to forgive loans. But officials told reporters this summer that one of two conditions would provide sufficient evidence of misconduct: the department's own findings against a school, or a "final judgment" against a college in a court of law.

“The Department of Education should use this ruling to provide comprehensive debt relief to Corinthian students," said Maura Dundon, senior policy council for the Center for Responsible Lending. "It is now beyond clear that they were deceived into taking out their loans and deserve a fresh start.”

Denise Horn, an Education Department spokesperson, said: “The Department’s Special Master is reviewing all borrower defense claims and will consider this ruling in that process.”

The department used its own findings from an investigation against Heald Colleges, a smaller school owned by Corinthian, as a basis to offer blanket forgiveness to all former students of that chain. But the federal government has not had any findings against Everest Colleges and Universities, which was by far the company's largest chain.

Tuesday's ruling "should signal the eligibility for loan forgiveness of every one of the students who borrowed," said Nassirian.

Debt forgiveness based on Tuesday's ruling is complicated by the fact that the Consumer Financial Protection Bureau's lawsuit technically pertains only to a relatively small portion of private student loans issued by Corinthian — the only loans over which the CFPB holds jurisdiction.

The judge found that Corinthian had deceived students into taking out those private loans using misleading information and falsified job-placement rates. The CFPB says that more than 60% of Corinthian students defaulted on those private loans within three years.

The rulings do not pertain to the billions of dollars in federally-backed loans that make up the bulk of the debt owed by former Corinthian students — the loans that former students and advocates are fighting to have forgiven.

Advocates said that when it comes to the Education Department's rulings, the distinction between fraud relating to private and federal loans should be meaningless. "If they were lying to people about private loans," Nassirian said, "they were lying about federal loans."

The New York Times Is Considering "Technical Solutions" To Ad Blockers

NYTimes.com


"Let me make it clear that we oppose ad blocking," New York Times chief executive Mark Thompson said on an earnings call Thursday. "The creation of quality news content is expensive and digital advertising is an important way in which we and other high-quality news providers fund operations."

The company seems set to test a number of responses to ad blocking software, in a manner similar to the Washington Post. As BuzzFeed News reported in September, the Post has experimented with pop-up windows asking users to turn off ad blockers, and others directing those who want an ad-free experience to become paying subscribers.

Thompson said the Times was "exploring a number of options, including, but not limited to, technical solutions, to mitigate the blockers should the threat increase."

Like most print media companies transitioning to digital, the Times is banking its future on a combination of paid online subscriptions and digital advertising. While the former category has outperformed expectations, the latter is struggling amid an industrywide glut of ad inventory and the rapid shift by readers mobile devices.

In the third quarter, the Times pulled in $48.6 million in revenue from its more than 1 million digital subscribers. Revenue from digital advertising shrunk 5% to $36.5 million and made up just over a quarter of its total advertising revenue of $136 million. In total, the company made a $22 million operating profit on revenues of $365 million.

While other publications have taken direct action in response to the rise of ad blockers, the Times has not. Along with the Washington Post, GQ sometimes asks readers to turn off their ad blocker or pay $.49 for an article, while the Guardian asks readers who use ad blockers to make a donation.

Meredith Kopit Levien, the Times' chief revenue officer, told analysts "I think the Times is at industry average in terms of the rate of adoption of blockers on the web." And the company, she said, is working to address the basic dislike of online ads that has driven the rise of blocking software in the first place.

"We're hard at work at making better digital advertising and creating more relevant experiences for our users that kind of match the surrounding New York Times product and editorial experience," Levien said.

While revenue from classified and display advertising both declined from a year ago, the "other" advertising category, which includes branded content, jumped 42% to $5 million.

Thompson told analysts "you can certainly expect to see us experimenting" and that the company was "exploring reactions and working out what works best."

On Thursday, the popular AdBlock tool reported spotting 17 blockable ads on NYTimes.com.

The Human Cost Of America’s Favorite Meat

Oxfam America

The average American poultry plant today is found at the edge of a highway, near a company town, lights blazing and chimneys smoking at all hours. Outside, the ground is all concrete and feathers, and the air smells of fried chicken and bird feces. Inside, the plant is humid, loud, and cold — kept at low temperatures to better preserve the chicken. Sharp knives fly alongside powerful machinery, and everywhere are chemicals, like ammonia and chlorine, used for cleaning, processing, and cooking. Floors are slick with blood, grease, and water to periodically clear away viscera and offal.

This is the workplace in which America's favorite meat is produced. Over the past half century, Americans have tripled their poultry consumption, and the $50 billion industry today employs a quarter of a million workers. This workforce is anything but stable: By some estimates, employee turnover in the sector has been higher than 100% in recent years.

The churn is due in part to grueling labor conditions in the plants, where low-wage workers repeat the same hanging, twisting, slicing, and hacking motions thousands of times a day to process fowl at ever-increasing speeds, as described in a new report from Oxfam America. The work leads to high rates of musculoskeletal disorders — five times that of other industries, according to the most recent numbers from the federal Occupational Safety and Health Administration (OSHA) — as line workers’ hands swell and warp from the stress, leaving them unable to hold spoons, glasses, or their children.

While workplace injuries are reported and tracked by OSHA, critics of the industry say such numbers are unreliable estimates of the true scale of harm being done to worker health. Injured staff who should be at home healing may instead be asked to come in and sit in an office so they don’t appear on lost time logs, Celeste Monforton, a former OSHA legislative analyst now teaching at George Washington University, told BuzzFeed News.

In other instances, Monforton said, workers will be given painkillers at a nurses' station and sent directly back to work on the line. Oxfam also describes how employees who can no longer work due to their swollen hands are simply fired and replaced, which keeps lost-time injury rates low.

The report implicates the nation’s four top chicken producers — Tyson, Perdue, Pilgrim’s, and Sanderson Farms — in perpetuating these harrowing, unsafe labor practices. A 2013 Southern Poverty Law Center report, a 2005 study from Human Rights Watch, and a Pulitzer Prize–winning Wall Street Journal investigation from 1994 all describe similar conditions, remarkably unchanged over the decades.

Of the four, Perdue and Tyson responded to requests for comment from BuzzFeed News, disputing the report’s accounts. Perdue said its company-wide lost-time rate due to injuries was significantly below the national average for all industries and that its rate of injuries reportable to the OSHA was half the average of the poultry industry. "We recognize our responsibility to provide a safe, productive and rewarding workplace," the company said.

Tyson said: "While we appreciate Oxfam America’s efforts, we don’t agree with everything in its report, which includes comments from former workers as well as union advocates and other interest groups known for their criticism of our industry. We believe we’re doing the right thing by our Team Members, however, we always push to do better."

The full statements from both companies are included below.

Tom Super, a spokesperson for the National Chicken Council and the U.S. Poultry and Egg Association, said in a statement, “Our employees are our most important asset and their safety is of paramount importance,” and called the industry’s record of improvement in health and safety “outstanding” over the past three decades. Oxfam vigorously disputes this.

Vasily Fedosenko / Reuters

As late as 1980, most chicken was sold whole, but by 2000, nearly 90% was processed into parts. Despite increased automation, for a live chicken to be turned into nuggets, tenders, Perdue Fun Shapes, or Pilgrim’s Honey-Dipt Strips, human hands must still slice, pull, debone, skin, coat, freeze, and package the products. Most of this kind of work has shifted from the home to the plant.

In 1994, Wall Street Journal reporter Tony Horwitz went undercover to work in poultry processing in the nation's "broiler belt" and described firsthand the dangerous line speeds and debilitating repetitive motions required to process each bird. Horwitz found workers caught in “a Dickensian time warp, laboring not just for meager wages but also under dehumanized and often dangerous conditions."

“Automation, which has liberated thousands from backbreaking drudgery, has created for others a new and insidious toil,” he wrote. “Work that is faster than ever before … and reduced to limited tasks that are numbingly repetitive, potentially crippling and stripped of any meaningful skills or the chance to develop them.”

In interviews with Oxfam America and BuzzFeed News, workers said little has improved since then. Instead, line speeds have increased, while the real value of wages has fallen 40% since the 1980s.

Sergei Karpukhin / Reuters

At the time of Horwitz’s writing, the upper limit of birds processed per minute was 91, up from the high 50s 15 years earlier. Today, the maximum permissible rate is 140 birds per minute, and the industry recently pushed for a higher limit of 170. Workers and advocates defeated the measure, and Oxfam's participation in that effort helped lead to the new report, according to Oliver Gottfried, Oxfam America senior advocacy and collaborations advisor.

Line speeds are set by the Department of Agriculture with an eye to food safety, rather than worker well-being. The rate refers to the speed at which machines eviscerate each carcass, and that number naturally determines human production speed down the line. More than 75% of poultry workers in line jobs reported cumulative trauma disorders in their hands and wrists, according to a 2013 survey by the Southern Poverty Law Center.

The National Chicken Council and the U.S. Poultry and Egg Association, the voices of the industry, say occupational injuries in the poultry sector's slaughter and processing workforce have fallen by 80% since 1994, according to Bureau of Labor Statistics data. Oxfam maintains that this statistic is the result of changes to reporting methodology and consistent underreporting of injuries.

In 2002, Oxfam notes, OSHA introduced a new form for reporting workplace injuries that eliminated the column requiring reports of musculokeletal-disorder-type injuries. After the form’s introduction, the apparent incident rate fell “abruptly and dramatically."

In fact, the Bureau of Labor Statistics itself notes in a highlighted box on the front of its report that "[d]ue to the revised recordkeeping rule, the estimates from the 2002 survey are not comparable with those from previous years."

Luc Gnago / Reuters

And increased risk of musculoskeletal injuries is far from the only danger in the life of a poultry plant worker.

In April, local Alabama media reported on the high rates of poultry plant injuries, beyond disabilities caused by repetitive motions. Federal inspectors fined the state's chicken processing plants more than $359,000 for labor violations over the past five years.

Among the more gruesome OSHA violations cited in Alabama was the following: In June 2011, Perdue Farms was fined $13,417 in part because “the firm did not properly disinfect a scissor lift that was coated with another employee's blood before telling other employees to use it.” Perdue Farms issued a statement at the time that said the plant was sold to Wayne Farms in December 2012 and cited issues were addressed.

This September, after a teenager lost a leg at an Ohio plant, the supplier faced a rare fine of $1.4 million for safety violations.

Oxfam America

In a particularly dispiriting aspect of the job, poultry plant line workers are regularly denied breaks to relieve themselves, Oxfam found. As a result, workers report developing prostate pain and urinary tract infections from waiting until the end of their shifts to go — some urinate or defecate on themselves on the line. Nearly 80% of workers surveyed by the Southern Poverty Law Center in 2015 reported not being able to take bathroom breaks during the day when needed. The Wall Street Journal reported similar conditions in the '90s.

One worker in Springdale, Arkansas, said she wore Pampers so she wouldn’t have to leave her post to use the bathroom. Her overseer told her not to eat and drink so much water and food. “Myself and many, many others had to wear Pampers,” she told Oxfam. “It made me feel ashamed.”

Tyson spokesperson Gary Mickelson said in a statement that restroom breaks at the company’s plants are not restricted to scheduled work breaks and supervisors are instructed to "allow Team Members to leave the production line if they need to use the restroom.”

Andrew Renneisen / Getty Images

The grim conditions at processing facilities contrast with the booming market for their end product, with American consumers showing a voracious appetite for all things processed and avian. In the fast food industry, fried chicken sandwiches are a white hot category.

At Chick-fil-A’s recent opening of its flagship store in New York, customers braved the possibility of a Category 4 storm for a chance at a year's worth of free fried chicken sandwiches. The chain averaged $3 million in profits for each of its more than 1,800 locations in 2014, more than McDonald’s, or any of the competition for that matter.

To stay in the chicken game, the Golden Arches recently introduced a Buttermilk Crispy Chicken Sandwich this summer and credited it with driving sales in a quarter when the company returned to growth for the first time in years. KFC and Popeyes have been waging a “$5 chicken meal war” over the best value combo of legs, thighs, tenders, and bone-in pieces. Customers have rewarded the chains with increased sales.

While more fast food companies have recently promised cage-free hens and the elimination of antibiotics in their supply chains, they have not yet shown similar commitment to worker well-being. Chick-fil-A and Popeyes did not respond to requests for comment on the report. KFC declined to comment.

As the Fight for 15 movement to improve fast food labor conditions gains traction and the Department of Labor improves protections for farmworkers, Gottfried said he thinks the moment is right to bring the public's attention to conditions inside poultry plants. On Tuesday, House Democrats sent a letter to OSHA asking them to address hazards in the industry, stating that "enforcement from your agency is critical to protecting these workers."

In the short term, line worker turned organizer Bacilio Castro said he’s focused on gaining permission for workers to take more frequent restroom breaks in the plants and raising consumer awareness about conditions.

“We’re not asking you to stop eating chicken,” said Castro. “We’re simply asking to be treated as human beings and not as animals.”

Digital, Fancy And More Expensive: Panera Is The Future Of Fast Food

Venessa Wong / BuzzFeed News

For a glance at what American fast food could look like in the future, take a look at what's going on at Panera.

"Panera 2.0," the name the St. Louis soup and sandwich chain gave to a plan it launched in 2014, is in large part about turning restaurants into eateries for the 21st century. Stores are illuminated by twinkling tablets that allow customers to punch in orders themselves, and have taken the place of some cashiers. Orders pour in from Panera's smartphone app, too. Menus are now more customizable, promote more paid add-ons, and are getting — ever so gradually — pricier.

Meanwhile, the chain has been touting its exhaustive list of artificial ingredients banned from its kitchens, in the name of more natural eating.

Consumers seem to have embraced the changes at Panera: Digital orders in remodeled restaurants now account for 22% of sales, the chain said Wednesday, and transaction counts are growing.

"Indeed, to our knowledge, this is the highest digital utilization percentage of any public restaurant company in the industry, exclusive of the pizza [chains]," Panera CEO Ron Shaich told investors Wednesday.

Similar changes have been trickling through fast food, from McDonald's (which is installing ordering kiosks) to Taco Bell (which has a mobile app).

Venessa Wong / BuzzFeed News

The emergence of self-service ordering in fast food must be understood, to some extent, in relation to rising wages and healthcare costs.

A number of cities recently passed $15 minimum wages, including Seattle, San Francisco, Los Angeles, and a fast food-specific hike in New York, and more are expected to approve similar increases. "We believe the structural pressure on labor costs will likely continue for the foreseeable future," said Shaich.

As far as labor is concerned, one of the benefits of Panera's 2.0 system is that self-service ordering facilitates "more efficient" use of workers in stores, Shaich said. As labor costs rise, it frees up workers from cashier duties to help move more orders through the kitchen faster. This, of course, assumes the technology is bringing in more orders.

Sales in the remodeled stores are in fact growing faster than in the old stores. Still, Panera has had to increase menu prices to offset rising expenses, despite efficiency gains from self-service ordering. The chain increased menu prices 1% in September 2014, then 1.3% in early 2015, and then 2.1% last quarter.

Panera's customers don't seem to mind the new prices — not yet anyhow — as reflected by continued traffic growth. The average order in Panera is already more than $10, according to data from restaurant consultancy Technomic.

BuzzFeed News

More price hikes are on the way.

Shaich told investors the recent price increase was still "not quite enough" to cover rising wage and healthcare costs and food inflation in the third quarter "but going forward, our plan is to do just that. We believe we can effectively take price to cover inflation, particularly when competitors are doing the same thing, which is what we're seeing when we see minimum wage increases."

In other words, he sees menu prices increasing at Panera and its competitors. Already, Starbucks and Chipotle increased prices this year after workers got raises.

Labor expenses at Panera have increased to 32.6% of sales, up from 29.4% in 2012, as a result of wage increases and the labor needs in the 2.0 restaurants. Its operating profit margin last quarter was down 1.2% from a year ago "primarily the result of structural wage increases and costs related to the startup and transition expenses associated with our strategic initiatives," according to the company.

Similar trends may very well emerge at other fast food chains. Taco Bell also launched an ordering app last year and recently added ordering capabilities to its website. Starbucks began rolling out mobile ordering in 2015. McDonald's is installing in-store kiosks and will start testing mobile ordering in 2016. Chipotle this month said it is looking to improve its mobile ordering system.

Fast food is getting more digital as it raises pay for workers and offers them more benefits. It also seems to be tightening historically lax food quality standards, with initiatives to remove artificial ingredients and buy meat raised without antibiotics. Many consumers have demanded these changes from restaurants, and now, it appears, it's time for them to pay for it.

Russell Simmons Announces Fund For RushCard Customers

Kevin Winter / Getty Images

Russell Simmons announced Thursday that he's creating a multi-million dollar fund to compensate customers of RushCard, a pre-paid debit card that he founded, the AP reported.

Customers were left in a lurch earlier this month for as many as 10 days when they lost access to the funds saved in their RushCard accounts. The fund will be used to reimburse customers who had incurred late fees to overdue bills or for any other financial hardships they may have faced at the time.

The hiphop mogul spoke to the AP Thursday and said he was devastated and wants to do right by his customers.

The company told the New York Times that "hundreds of thousands" of customers were affected and that it was discussing a reimbursement fund with regulators and was waiting for their approval to start compensating customers.

Richard Cordary, the head of the Consumer Financial Protection Bureau said in a statement last week that the regulator "is prepared to use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve."

The problem started for RushCard users on October 12th after scheduled maintenance took longer than expected. By October 13th, some customers were no longer receiving direct deposits and seeing zeroed-out accounts.

RushCard, along with other prepaid debit cards, targets the millions of low-income Americans who struggle to be served by the traditional banking industry.

LINK: Government Says RushCard Will Be Held Accountable For Failure

LINK: Eight Days OF Chaos For Users Of Russell Simmons' Debit Cards

LINK: This Baltimore Mom Had To Walk To Work On RushCard's 9th Day Out


Wednesday 28 October 2015

After Heavy Criticism, Urban Outfitters Kills Off On-Call Scheduling Nationwide

Just weeks ago the company said it would stop the controversial practice only in New York, where the attorney general is investigating whether it breaks labor laws.

Dan Dennison / Getty Images

Urban Outfitters is the latest retailer to abandon the controversial practice of on-call scheduling in its stores nationwide, just weeks after it was criticized for only stopping the practice in New York, where the state attorney general is investigating whether it breaches labor laws.

The retailer, which also owns Free People and Anthropologie, said earlier this month it would stop scheduling employees for call-in shifts in New York, where Attorney General Eric Schneiderman said the unpaid shifts may be violating state law. Other retailers that announced plans to abolish call-in shifts in recent months, including Gap, Victoria's Secret and J.Crew, did not restrict the change to New York.

The Philadelphia Daily News, where Urban Outfitters is based, published ascathing front page column today that criticized the company. The column accused Urban Outfitters of "exploitation as usual" in its stores outside of New York. "You're doing the right thing in New York only because New York law requires you to," it said. "As for everywhere else, it's human decency be damned."

In a statement today, Urban Outfitters said it is "always looking for ways to improve, and as such we have decided to end on-call scheduling for all URBN brand associates throughout North America."

"Lifestyle merchandising is both our business and our passion, and our talented associates share our commitment to building strong emotional bonds with our customers. While our brands today are the strongest they have ever been, our continued growth requires that we consistently foster a creative, flexible and friendly work environment."

On-call scheduling, once most commonly associated with medical personnel, emergency responders and police officers, has become commonplace in the retail industry. Call-in shifts usually appear alongside regular shifts on store workers' schedules, but require them to phone in before start-time — sometimes as little as two hours before — to find out if they're needed or not. If not, they go unpaid.

Some retail workers say they're "on call" for up to 20 hours a week, wreaking havoc on their lives, while saving retail companies millions in labor costs, a BuzzFeed News investigation found in June. An Urban Outfitters handbook shared with BuzzFeed News at the time showed Urban Outfitters' employees were expected to call in three hours before the start of such shifts.

In the wake of the story, which centered around Victoria's Secret's use of call-ins, several major chains have worked with Schneiderman's office to end the practice in New York and nationwide. Gap Inc., Victoria's Secret's parent company L Brands, J.Crew and Abercrombie & Fitch have all said they plan to cease the practice. Together, the companies own a wide variety of brands, including Old Navy, Bath & Body Works, Hollister and Madewell.


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IBM Is Buying The Owner Of The Weather Channel

The Weather Company, which owns of The Weather Channel along with a bunch of weather websites, apps and other businesses, will sell the entire company, aside from the TV channel, to IBM.

IBM said it would acquire The Weather Company's corporate and digital business, which includes a lucrative set of operations that store and analyze weather data and license it to other companies. The Weather Company's former owners — NBC Universal, and private equity firms Bain Capital and Blackstone — will continue to own the Weather Channel, which will do a licensing deal with IBM for weather data.

"The Weather Channel operates as a distinct and separate business with its own leadership team, which enables this to be a smooth and seamless transition," said Dave Shull, the CEO of the channel, in a statement.

While the two companies didn't disclose a sale price, the Wall Street Journal reported that a deal would be for around $2 billion. IBM said the Weather Company sells its data and services to more than 5,000 corporate and government clients.

IBM, best known for selling computing hardware and consulting to companies, has made big investments into supercomputing and the large scale data collection and analysis that goes with it. The public face of such efforts is the supercomputers like the company's Jeopardy-winning machine, Watson.

The company said acquiring a giant archive of weather data, as well as the systems and talent to understand it, is another step in its supercomputing efforts. As an example, IBM said the acquisition could help it do "predictive weather analytics coupled with real-time analysis of social media chatter," helping "retailers and distributors finely tune and maintain availability of vital goods in times of need."

Weather data can be useful across a range of industries, from transport to energy and farming. "The Weather Company’s cloud-based data platform will allow IBM to collect an even larger variety and higher velocity of global data sets, store them, analyze them and in turn distribute them and empower richer and deeper insights across the Watson platform," IBM said in a statement announcing the deal.

The acquisition will also give IBM a foothold in people's smartphones, where it will take over the Weather Channel app, which it says is the fourth most used app in the United States on a daily basis — as well as a valuable source of data in its own right. The Weather Company's "sophisticated models analyze data from three billion weather forecast reference points, more than 40 million smartphones and 50,000 airplane flights per day, allowing it to offer a broad range of data-driven products and services," IBM said.

While much of the raw data used for forecasting and analysis is generated by government, weather can still be big business for companies that serve the industries that most care about it. The Climate Corporation, a startup foudned by former Google employees that sells data analysis to farmers and agricultural companies, was bought by Monsanto for over $1 billion in 2013.

IBM is currently valued at about $128 billion, and its shares were up 2% in the hours following the deal's announcement.

Tuesday 27 October 2015

It's Getting Harder And Harder For Twitter To Find New Users

Twitter just isn't growing like it used to.

The social media company said on Tuesday that its number of monthly active users totaled 307 million in the third quarter of the year, excluding those who use the service through texting. While that may seem like a big number, it's only 8% more users than in the corresponding period a year earlier. Compared to the second quarter of this year, the number of users grew just 1%.

This 8% growth rate is slow, particularly in the eyes of Wall Street investors. In all of the quarters since Twitter went public in 2013, it hasn't reported a slower rate, according to an analysis by The Wall Street Journal.

Employees of Japanese toy company Tomy dressed as Twitter birds during the company's Halloween Day event.

Yoshikazu Tsuno / AFP / Getty Images

In important ways, Twitter exceeded analysts’ projections. The company reported $569 million of revenue for the quarter, beating the expectation of $560 million. And its profit, adjusted to exclude some expenses, came in at $67 million, or 10 cents a share, better than the expectation of 5 cents per share. Without those adjustments, the company made a $132 million loss.

But Twitter's struggles with growth are what investors have focused on in the last year, and its stock fell more than 12% in after-hours trading on Tuesday. Investors were also spooked by the company's disappointing forecast for its fourth-quarter performance.

As of the close of trading on Tuesday, Twitter stock is down 30% from the price it traded at after its first day as a public company in November 2013. On that first day, investors valued the then loss making company at almost $25 billion, betting that it would grow in the explosive manner familiar to those who have followed internet success stories like Facebook and Google. Instead, the company has struggled.

Just take a look at this chart. One almost gets the feeling that Twitter is a slowly deflating balloon. Each quarter, a little more air seeps out.

Users are the crucial ingredient in Twitter's business plan. More people using the service means more eyeballs viewing ads and other promotions, thus generating more revenue for Twitter.

Twitter is doing some things to try to attract more people. It recently introduced Moments, which lets people follow particular stories, and it's planning on running an ad during the World Series tonight.

But so far, Twitter hasn't been able to produce the kind of hockey-stick-shaped growth that investors love. It's not Facebook, a company that overcame an initial setback after its IPO by dramatically sharpening its focus on mobile devices.

Here's another version of the user growth chart, focusing on the United States. The big question for Twitter -- and the fear keeping investors up at night -- is whether user growth has simply begun to plateau.

Amazon Is Considering Making Its Own Clothing Lines

Amazon / Via amazon.com

Amazon, which has been working hard for years to build up Amazon Fashion, anticipates selling its own private-label clothing brands, an executive said at a conference Tuesday.

"For Amazon, we know our customers love brands, many of the brands in this room...and that's where the lion's share of our business comes from," Jeff Yurcisin, vice president of clothing at Amazon Fashion and CEO of Amazon's Shopbop unit, said at the WWD Apparel and Retail CEO Summit on Tuesday. "When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that." Amazon may get into private-label for those kinds of goods, he added.

The remark is significant given Amazon Fashion's efforts have centered around convincing clothing brands to sell their goods on a website better known for its low prices and efficiency over, say, presentation and curation. Amazon's willingness to manufacture its own version of products that it can't get from actual fashion brands might be a new negotiating chip for the company, not to mention more profitable.

Amazon Fashion / Via instagram.com

Amazon has targeted food and clothes as two of its major growth opportunities in coming years, and in late may the Wall Street Journal reported the company was preparing to launch a number of private-label grocery products.

Expanding into apparel could come with its own challenges. As The New York Times wrote in July, many fashion brands have been "concerned about tying their brands to a website that is far more a utility than a boutique." In June, the Business of Fashion said: "While women’s, men’s and children’s apparel are some of the e-tailer’s fastest growing product categories, Amazon is simply not the first place most people think of when it comes to buying clothing."

Yurcisin, speaking to a roomful of retail industry executives, was conscious of such criticism as he emphasized that 40 million customers shop Amazon Fashion, and that its pricing model is no different from other retailers.

“We work just like any other retailer — we buy at full price, try super-hard to sell at full-price…then we follow a traditional markdown cadence,” he said. He also noted that Amazon has a hold on its Prime customers, which major retailers can gain access to by selling on Amazon. The company does carry a number of well-known brands on its website, such as Calvin Klein, Levi's, Kate Spade, New Balance, PUMA and Steve Madden, as per its website.

Earlier this year, the Times of India reported that Amazon India was building a team for private fashion brands though it was unclear where those goods would be sold. Amazon declined to comment on the report at the time.

Fashion goods generally have a profit margin of 30% to 40% while private label products can earn 55% to 65%, according to a note from Nomura analysts in April.

Almost Half A Million People Have Supported REI In Shunning Black Friday

REI / Via optoutside.rei.com

REI's unprecedented decision to close on Black Friday and pay its employees to go outside instead is making a huge splash, with more than 480,000 people using the #OptOutside hashtag on social media so far. Such a flood of support, all within 24 hours, is making the company's decision to publicly shun Black Friday look more and more like a stroke of marketing genius.

“Nobody’s ever done this before so we didn't really spend a lot of time trying to project results,” Ben Steele, the company's chief creative officer, said in an interview with BuzzFeed News. “We’re really overwhelmed by this early response."

REI, which operates on a co-op model and brings in more than $2 billion in annual sales, shared its plan to close its 143 stores on Black Friday last night. It was a bold move for a major retailer to turn its back on one of the largest shopping days of the year, dubbed by many in the industry as "the Super Bowl of shopping." Steele, who started at REI in January, said the company "had a lot of conversations around the risks and the tradeoffs" of shuttering on one of its top 10 sales days.

“At the end of the day, it really was for us not about dollars and cents, but what’s right for this co-op, what’s right for our employees, what’s right for our customers,” he said, noting that 12,000 employees will get the day off. “At the risk of sounding corny, it was the ‘doing the right thing’ that became the focus for us.”

After telling employees of the decision, "the next thing you hear is, ‘I’ve been in retail for 35 years, 40 years, and I’ve never had that day off,’” Steele said. “It suddenly becomes pretty powerful and pretty human in a different way. Letting people really focus on what Thanksgiving is about, being with the people you love, taking stock of it."

It's also getting REI a lot of fans. On Facebook and Twitter, REI is garnering lots of love and loyalty for its move. It's counting the number of people using the #OptOutside hashtag across social channels on its "Opt Outside" website, where it also offers local options for camping, hiking and the like. The number is steadily climbing (much as it hopes you will, on rocks, post-Thanksgiving.)

Indeed, it's a contrast to the rest of the retail industry, which has been criticized for dragging Black Friday sales into Thanksgiving day itself in recent years, forcing employees to work on a cherished national holiday. More bad publicity has come from the chaotic, sometimes violent incidents associated midnight shopping frenzies on a day meant for expressing gratitude with loved ones. A number of chains, like Ikea, T.J. Maxx and GameStop, have started closing on Thanksgiving, while others, like Patagonia and Everlane, have urged customers to repair goods they already own or donated profits from Black Friday.

REI / Via Facebook: REI

REI is aware that its status as a co-op, free from the pressure of stock market investors or private equity owners, made its decision possible. The company isn't criticizing other retailers for staying open.

“I don’t think you’re going to see a retailer shut their doors on Black Friday — I think it’s a hard thing to do" Steele said. "It would have been a heck of a lot harder if we were a public company."

Steele also noted that the company isn't, by any means, anti-deals.

“People are certainly free to make the choices they want to make, and I want to make really clear we’re not anti-deals, anti-sales or anti-value,” Steele said. “But it’s a good conversation and it’s a nice moment for individuals and for a wider group to think about, 'How do I spend my time? Who do I want to be?' Those are good conversations to be having. “

LINK: REI Is Closing Its Stores On Black Friday And Paying Employees To Go Outside

LINK: Amazon Can Declare A Shopping Holiday Any Time It Wants. So Can We Have Thanksgiving Back?

LINK: Black Friday Dead At The Hands Of Thanksgiving, “Super Saturday"

Here's What Troubled The FDA When It Inspected Theranos This Summer

The agency raised concerns about whether the blood testing startup had properly vetted its technology.

Theranos founder and CEO Elizabeth Holmes.

Andrew Burton / Getty Images

Theranos, the much-hyped Silicon Valley startup valued at an eye-popping $9 billion, has been facing questions over whether its proprietary technology can actually do what it claims: diagnose diseases and health conditions from a few drops of blood.

The Wall Street Journal first raised those questions in an Oct. 16 story, followed by a report that Theranos recently stopped collecting tiny vials of blood for all but one of its tests after a recent FDA inspection. Theranos has defended itself, saying that the stories "say or imply many things that are simply wrong"; the WSJ has stood by its reporting.

The saga took another twist Tuesday when the FDA posted documents from that inspection during late August and September in response to public records requests. As heavily redacted and jargon-filled as they are, they don't look great for Theranos: The FDA questioned whether its technology was validated, called its blood vial "uncleared," and said the company wasn't set up to handle customer complaints or vet its internal processes.

The agency ​argued that​ Theranos failed to show adequate proof, in real or simulated conditions, that ​its technology lived up to what it claimed to do.

"Given the number of observations that relate to the same sorts of topics, I think it's fair to say generally that the FDA is concerned about the validation under the appropriate conditions of the design" of the technology, Patti Zettler, an associate professor of law and FDA expert at Georgia State University, told BuzzFeed News.

The agency also said that ​Theranos' "nanotainer" — its tiny vial for drops of blood — isn't cleared​ by the FDA or properly classified according to FDA definitions, yet Theranos was sending them throughout California, Arizona, and Pennsylvania. "If that observation holds, that's a pretty clear violation of the law," Zettler said.

The documents:

The documents:

FDA


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Apple Had A $51 Billion Quarter, But The Real Action Comes In The Holidays

The company has now beat analyst expectations in every quarter for the last two years, with 48 million iPhones sold in the last three months.

Josh Edelson / AFP / Getty Images

Apple beat Wall Street estimates for profit and revenue again in its most recent quarter, bringing in $11.1 billion in earnings on $51.5 billion in revenues. The company has now beat Wall Street projections for profits every quarter for the past two years, according to data collected by Bloomberg.

And the real action is still to come: Apple's biggest quarter comes next, as the holiday shopping season spurs a frenzy of phone, tablet and laptop sales. Apple predicted revenue for the final three months of the year at between $75.5 billion and $77.5 billion, while analysts expect revenue in that quarter to be $77 billion. In the holiday season last year, Apple had the most profitable quarter in American history, turning an $18 billion profit on $75 billion in revenue.

Investors cheered Tuesday's results, sending the stock up over 3% to $118 in after-hours trading; Apple stock was up almost 4% for the year as of the end of trading Tuesday, prior to the results being announced.

Andreas Solaro / AFP / Getty Images


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Snapchat Takes Over An Infamous L.A. Beachfront Party Palace

Snapchat, which is rapidly expanding its footprint in the Los Angeles beachfront neighborhood of Venice, has quietly laid claim to a locally infamous party palace.

The company has rented a beachside penthouse apartment that once was the venue for late-night ragers thrown by a prominent tech investor, the building's owner told BuzzFeed News. Snapchat, though, has more sober-minded plans for the luxurious abode, whose 5,000 square-foot glass-enclosed deck features a fire pit, a jacuzzi, and a geodesic dome.

The $22,500-a-month penthouse is a crown jewel in Snapchat's burgeoning empire of beachfront office space. The startup, which has a reported valuation of at least $16 billion, has signed a number of new leases this year along the beach and near Abbot Kinney Boulevard, the hip shopping street that epitomizes the neighborhood's glittery new face.

Perhaps unfairly, Snapchat has been blamed for exacerbating the gentrification of Venice which began long before the company was founded in 2011. The wealthy startup has paid top dollar to rent tens of thousands of square feet of new space in the neighborhood, according to local real estate agents. Residents complained earlier this year when Snapchat displaced a group of business tenants on month-to-month leases, but many debate whether the company's ascendancy is a cause of the change hitting Venice, or merely an effect.

What's clear is Snapchat has secured its status as the king of Silicon Beach, as the L.A. tech scene is known. And now it has a penthouse befitting royalty.

Snapchat acquired the pad through a five-year lease that started in mid-September, according to the owner, Brad Neal. The startup is paying $22,500 a month, a shade below the asking rent of $25,000.

As part of the deal, Snapchat agreed not to use the penthouse as a party venue, Neal said. That will be a departure from the way the space was used by a previous renter, Paige Craig, an ex-Marine who is one of L.A.'s most prominent venture capitalists.

Craig, a managing partner of Arena Ventures, is the kind of investor who likes to close deals over tequila shots. After moving to L.A. in 2008, he developed a reputation for the raucous soirees he would host at the Venice Beach penthouse, well into the night. It hasn't been all debauchery though: at one point, he used the space for a Lego building contest for local engineers.

The parties helped establish Craig as a force in Silicon Beach, a term he says he coined.

It's not clear exactly how Snapchat will use the penthouse. The company might host sales events there, or meetings with VIP guests. A spokesperson declined to comment.

Whatever business is done there, it will transpire before panoramic ocean views and amid well-appointed surroundings. The deck, organized across multiple gas-heated zones, includes a 20-seat dining table under a sun pavilion, according to pictures on the apartment's website. The main structure, featuring one bedroom and two bathrooms, spans 1,100 square feet. There's also a detached 200-square-foot guest room.

And then there's the geodesic dome.

Snapchat is not immune to the penthouse's charms. A Snapchat executive was seen at a party there thrown by Neal on a September night. In a crowd of revelers on the deck, the executive, Philippe Browning, Snapchat's head of monetization, danced as a band played Van Morrison's "Brown Eyed Girl."


Online Charter Schools Have An "Overwhelming Negative Impact," Study Finds

Mary Ann Chastain / AP

Online charter schools, which enroll 200,000 students nationwide, have an "overwhelming negative impact" on the academic outcomes of students by almost every measure, according to a series of sweeping national reports released today by three different policy and research centers.

Stanford's Center for Research on Education Outcomes, or CREDO, found that students at online charter schools saw dramatically worse outcomes than their counterparts at traditional, brick-and-mortar schools. Over the course of a year, cyber school students lost out on the equivalent of 180 days of learning in math and 72 days reading, the center said.

In the most comprehensive examination to date of online charters, CREDO found that more than two-thirds of online charter schools had academic growth that was worse than traditional schools. James Woodworth, a research analyst for CREDO, called the study's overall findings "somber" in a statement.

The online charter sector is dominated two for-profit companies, which manage around two-thirds of all cyber charter schools. The two largest such companies are K12 Inc., a publicly traded education company, and Connections Academy, which is owned by Pearson, the world's largest education company. The CREDO study found no particular correlation between how schools were managed and the outcomes of online charter students.

In its own report, Mathematica Policy Research found that online charters had dramatically higher student-to-teacher ratios than at brick and mortar schools; more than a third of the schools had more than 50 students to a class. Students at online charter schools, Mathematica said, received less live contact with teachers in a week than those at traditional schools did in a single school day. The schools lacked support staff like guidance counselors and tutors.

And a third report, by the Center on Reinventing Public Education at the University of Washington, found series gaps in oversight and funding of online charters by states. The study was funded by the Walton Family Foundation, which has traditionally been highly supportive of charter school growth nationwide.

China Was Once The Future Of KFC, But Now It's A Liability

Teh Eng Koon / AFP / Getty Images

"The Yum! growth story is clearly about China and a whole lot more." So declared the owner of KFC, Pizza Hut, and Taco Bell with great confidence in 2012. Across the Pacific, in the world's most populous country, Yum! Brands was on a tear.

Just three years later, China's role in the Yum's future is being downsized. This week, the Louisville, Kentucky company made the dramatic decision to shift China from the center of its strategy into a quarantine of sorts, reflecting the real challenges of focusing a global business on a fast-developing but volatile market.

Until recently, China and its 1.3 billion people seemed like a dream market. The economy was growing fast and it's people were hungry — literally — for a taste life in the global middle class, including fast food. They took a particular liking to KFC, which now has more restaurants in China than any other Western chain, including McDonald's.

But business for Yum's 6,900 restaurants in China took a sharp downward turn in recent years. Food safety scandals took their toll, as did increased competition both from Western chains and fast growing local ones. And the Chinese economy, while still in boom mode relative to any other big economies, is no longer growing as fast as it once was. Sales at Yum's restaurants have been declining for the last three years.

The company's response came last week, when it announced it would split off its Chinese business into an independent, publicly-traded company. The Yum growth story may be about China, but once the spin-off is complete, the market will be kept at an arms-length distance from business.

ELMONTAJISTA.TUMBLR.COM / Via giphy.com

"Yum is looking to compartmentalize their risk."

As you would expect, Yum's explanation for the spin off was upbeat. The new company can "intensify focus on its distinct commercial priorities, allocate its own resources to meet the needs of its business, and pursue distinct capital structures and capital allocation strategies," said CEO Greg Creed in a statement.

But for onlookers familiar with the company's development over the past decade, the move looks more like a way to contain a potentially troubled unit. "I’m not totally surprised they are doing it," restaurant consultant Aaron Allen told BuzzFeed News. "Yum is looking to compartmentalize their risk. Of the major U.S. [fast food companies] operating with such global footprints, Yum is the most exposed in China."

The newly spun off company will operate as the franchisee of Yum! Brands in China, and will also be the company's largest franchisee globally. The split is expected to be completed in about a year, and Yum said it hasn't yet decided on a company name, the royalty rate it will pay to the corporation as a franchisee, or what stock exchange it will trade on.

Yum said it remains bullish on China and is simply trying to offer investors more options — they will be able to invest in a China-focused business, or the global parent, or both. But the restructuring is a large strategic shift for a restaurant company that has consistently described China "the best restaurant growth opportunity of the 21st century."

Not too long ago, Yum's restaurants — namely KFC and Pizza Hut — seemed nearly invincible in China.

Unlike in the U.S., Yum directly owns most of its restaurants in China. In 2011, there were 3,701 KFCs in China, and 626 dine-in Pizza Huts. While KFC is a fading chain back home in the U.S., it was the first foreign fast food chain to enter China, back in 1987, and has grown into a king in China's growing restaurant industry.

"KFC is the clear leader in Western [fast food brands]" in China, Yum's then-CEO David Novak told investors in 2012. "Pizza Hut is far and away the Western casual dining leader." Sales at Yum's restaurants open at least one year in China grew by 19% in 2011.

While Yum was noting slowed economic growth in China as early as 2012, this did not impact the company's long-term outlook on the market.

Johannes Eisele / AFP / Getty Images

Then, trouble hit swiftly in late 2012.

An investigation in December 2012 revealed that farms supplying KFC's poultry suppliers were using excessive levels of antibiotics in their chicken. KFC's legions of dedicated Chinese customers abandoned the chain, causing Yum's same-store sales to decline 6% that quarter, which was just the start of its troubles.

Just a few months later, as Yum was working out supply chain issues to reassure consumers that its chicken was safe to eat, a bird flu outbreak hit China in March 2013. "Our sales recovery has been adversely affected by the recent news of Avian flu," Novak told investors.

Yum's same store sales in China declined by 29% in April and were unable to recover from the negative perception. For the year, comparable sales fell 13% in China.

Just as things were starting to pick up in 2014, a third food safety scare pummeled KFC.

Another news investigation found that a supplier, a subsidiary of the U.S. company OSI, was selling expired meat. "Even though OSI was a minor supplier, sales at KFC and Pizza Hut were disproportionately impacted given our category-leading positions," the company explained to investors at the time.

Yum's comparable sales in China plummeted again in the second half of the year, continuing through early 2015. In July, Yum Brands' newly appointed CEO, Greg Creed, said things would get better by late 2015 as Chinese consumers' perception of Yum's restaurants slowly improved.

But it was already too late.

Chinafotopress / Getty Images

Activist investors began calling on Yum to to separate its China business earlier this year.

In May, Corvex Management founder Keith Meister, told CNBC that while Yum was in the process of fixing its issues in China, it was significantly exposed to volatility in that market because its business model.

Yum still owns most of its restaurants in China, where franchising remains a relatively new concept. KFC didn't open a franchise location there until 1993. As a comparison, about 33% of McDonald's China stores are franchised, with another 17% that are licensed (the licensee owns all assets).

Operating stores is much more capital intensive than franchising because it means Yum! Brands is responsible for maintaining the stores, paying workers, and all other aspects of running the business. As a franchisor — as Yum is in markets outside of China — it licenses the brand to local business owners who handle all those aspects and pay Yum royalties and other fees.

By splitting off the China business into one that would franchise from the corporation, Meister said "they get the best of both worlds" with a "more Chinese business" that could focus on the Chinese market that also has the support of an experienced management team. It also protects Yum from some of the volatility in China while still collecting royalties from franchisees there.

In August, Yum! Restaurants China got a new CEO, Micky Pant, and in October, Meister joined Yum's board.

Yum's problems reflect the risk of chasing fast growth in China.

Over the summer, China's stock market plummeted as individual investors worried about a devalued yuan, a string of weak economic data, and lending rates. A few days before Yum announced the separation of its China business, China reported that GDP growth slowed to 6.9% during the third quarter, the lowest rate since 2009.

Yum's chief financial officer Pat Grismer told investors earlier this month that "extraordinary volatility in financial markets, the surprise currency devaluation and overall softer economic conditions" in China are denting its Pizza Hut business. Online ordering competitors were offering delivery from competing "mom and pop" restaurants, and Pizza Hut's marketing promotions didn't meet expectations.

"In today’s volatile environment with the recent macro and competitive pressures we mentioned, it continues to be difficult to forecast sales in China for both brands," Grismer said.

Separating itself from its China division to become a franchisor will offer Yum some protection from problems there. Still, the company has restaurants in 126 countries, including other risky markets like Russia. The global company will likely find that it remains exposed to problems on several fronts, even if it doesn't own those restaurants.

REI Is Closing Its Stores On Black Friday And Paying Employees To Go Outside

REI / Via Facebook: REI

On Black Friday this year, REI is closing its 143 stores and paying its employees to be outside — and it wants you to do the same.

The company, which operates as a co-op, emailed its members last night about its plan, quoting national parks advocate John Muir in 1901: "Thousands of tired, nerve-shaken, over-civilized people are beginning to find out that going to the mountains is going home." The email continued: "We think Black Friday is the perfect day to remind people of this essential truth."

"While the rest of the world is fighting it out in the aisles, we hope to see you in the great outdoors," REI wrote. It's sharing the plan under the hashtag #OptOutside and created a website with ideas on where people can go on Black Friday to spend time outdoors.

REI / Via optoutside.rei.com

REI joins a handful of other retailers in rejecting the shopping wars of Black Friday, which have increasingly crept into Thanksgiving in recent years, though its plans take the idea to a new level.

Patagonia has asked customers "to celebrate the stuff you already own," offering in-store repairs on old Patagonia products on the shopping holiday, and spreading its plan through hashtags like #AntiBlackFriday and #BetterThanNew. Everlane has closed shop on Black Friday in the past; last year, it opened but donated proceeds to beautifying one of its factories in China.

Few retailers have shared their plans for Black Friday this year, though more are opting to close on Thanksgiving, especially as data has shown it tends to just disperse a static amount of sales during the weekend.

"We're passionate about bringing you great gear, but we're even more passionate about the experiences it unlocks for all of us," REI said in its email.

From REI's email to its members.

REI / Via REI Email

LINK: Amazon Can Declare A Shopping Holiday Any Time It Wants. So Can We Have Thanksgiving Back?

LINK: Patagonia Rebels Against Black Friday Mania By Urging Repairs Of Old Clothing




Monday 26 October 2015

Tinder's Owner Says Advertising Is Still Not A Priority

Tsering Topgyal / AP


IAC, the internet conglomerate that owns dating sites like Match.com, Tinder, and OKCupid, has told its investors to expect a surge in mobile usage — but says the resulting surge in advertising dollars will take a little longer to arrive.

The company's online dating businesses are already booming, and revenue for IAC's Match Group, which runs dozens of dating sites and also owns the Princeton Review, grew 19% in the most recent quarter, IAC said Monday. But the company is going through a transition familiar to the rest of the internet economy — from desktop to mobile, with users moving to mobile faster than the advertising dollars that target them.

Match, which filed for an IPO earlier this month, said it will be relying on its existing subscription products "to continue to drive revenue growth even without enhancements." In the first half of this year, Match said in the IPO filing, 96% of its $433 million in dating revenue was "direct revenue" from paying users, while the rest was "indirect revenue" — almost entirely advertising. And on mobile, it's harder to convince free users to sign up for paid subscriptions.

"The continued shift to mobile devices in our businesses with pre-existing desktop businesses, while long-term positive, continues to present conversion challenges in the near term," said Greg Blatt, Match's chairman. "On average our mobile products have lower conversion than their desktop counterparts."

The best example is Tinder, an app that is mostly free to use and has been growing insanely fast. Match has started to sell ads on Tinder, a potential revenue goldmine as companies seek to reach the young and thirsty. Match has said that generating ad revenue "has historically not been a principal focus" and that on Tinder, it has sold less than 2% of all available advertising spots.

So while more ads will be showing up on Tinder in the long run, the company still needs to figure how to get people to pay for mobile products. Tinder has been charging for access to special features, and in prepared remarks today Blatt said that Tinder's subscription products "continue to perform well," especially its "Super Like", which "has driven an increase in subscription rates, an increase in match rates, and higher rates of conversations."

The Super Like, which can only be used once a day for free, lets users see that they have been liked before they decide to like someone back. If you want to do it more than once a day, you can get five daily Super Likes, plus other subscriber-only options, as part of the $9.99 per month Tinder Plus service (the company charges less than this for users in some international markets, and more for people older than 30.)

Ads are still not a priority for the dating app. "Tinder product resources are primarily now focused on growth initiatives, not monetization initiatives," Blatt said.

Tinder introduced ads in April, and in an earnings call in July, Blatt said "in a world of scarce resources we opted not to devote meaningful time this year to developing the sort of roadmap," but noted that "there's huge demand from advertisers." In June, Tinder co-founder Sean Rad said that users swipe right 20% of the time for brand profiles and that Tinder users watch the app's video ads all the way to the end at a significantly higher rate than other mobile video ads.

Match said in its IPO filings that it has 59 million monthly active users and 4.7 million paid users. The company said it would stop disclosing those numbers and instead disclose "average paid member count," which is the sum of paid subscribers at the end of every day in a quarter divided by the numbers of days in that quarter. Right now, the average paid member count is 4.2 million, up from 3.6 million a year ago.

Friday 23 October 2015

J.Crew Ends Controversial On-Call Scheduling

Mike Mozart / Via flic.kr

J.Crew will end the controversial practice of on-call scheduling in its stores, following pressure from workers, advocates, and regulators to halt the practice. The company will make the change nationwide by the end of the month, New York attorney general Eric Schneiderman’s office announced on Friday.

The move will affect tens of thousands of retail workers, who previously could be scheduled for shifts that could be cancelled just hours before starting time, with no compensation. A BuzzFeed News story in June focused on the difficulties retail workers face managing work, life, school, and family amid the system's unpredictable hours and pay.

J.Crew's decision to end the practice is the latest since the attorney general's office opened an inquiry into on-call scheduling last April, sending letters to 13 major retailers warning their scheduling practices may be in violation of state law. Collectively, the brands operated more than 16,000 stores in North America.

"Workers deserve protections that allow them to have a reliable schedule in order to arrange for transportation to work, to accommodate child care needs, and to budget their family finances," Schneiderman said in a statement Friday.

J. Crew has also agreed to provide one week of advance notice about schedules to employees at New York store locations (though not nationwide), according to the attorney general's office.

J.Crew Senior Vice President Maria Di Lorenzo confirmed the news to the AP, saying on-call shifts have helped the company manage staff absences and changeable product deliveries. Di Lorenzo said the company will now fill shifts on a voluntary basis, adding new pressures for managers. A spokesperson did not immediately respond to a request for comment Friday.

Chains including Victoria’s Secret, Bath & Body Works, Gap, and Abercrombie & Fitch have all agreed to end on-call scheduling at their stores in recent months. (L Brand owns both Bath & Body Works and Victoria's Secret, and the Gap also owns Banana Republic, Old Navy, Piperlime, and Athleta.) Urban Outfitters has stopped the practice only at its New York locations.

Government Blasts Rushcard For Outage, Promises "Comprehensive Response"

RushCard founder Russell Simmons

Dima Gavrysh / AP


The Consumer Financial Protection Bureau has issued a blistering statement targeting RushCard, the prepaid debit card founded by Russell Simmons whose system failure has prevented some customers from accessing their money for more than ten days.

CFPB chief Richard Cordray said he has "personally spoken" with Rick Savard, the CEO of RushCard's parent company, "to make sure that action is being taken to address harm that has occurred," along with "harm that may still be occurring, and the cascading financial effects of consumers not having access to their funds for more than a week."

Cordray also hinted at further regulatory action. "We indicated that the CFPB is prepared to use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve," he said in the statement. Cordray also said he had spoken with other financial and consumer regulators, including the Office of the Comptroller of the Currency, which overseas banks, and the Federal Trade Commission.

He said these discussions were to "ensure a comprehensive response that addresses the situation quickly and holds accountable all of the parties involved to make consumers whole."

The CFPB, which was inspired by Democratic Senator Elizabeth Warren, who also helped set the agency up, has long taken a very public stance against what it sees as bad actors in the financial services industry. After news broke that thousands of RushCard customers were unable to access cash for up to a week, the CFPB has been soliciting consumer complaints on social media and its website.

“It is outrageous that consumers have not had access to their money for more than a week,” Gail Hillebrand, the associate director for consumer education and engagement at the at the CFPB, told the New York Times Tuesday. “We are looking into this very troubling issue. Consumers increasingly are relying on prepaid products to keep their funds, make purchases and manage their money.”

The problem started for RushCard users on October 12th after scheduled maintenance took longer than expected. By October 13th, some customers were no longer receiving direct deposits and seeing zeroed-out accounts.

RushCard, along with other prepaid debit cards, targets the millions of low-income Americans who struggle to be served by the traditional banking industry. Like other prepaid cards, the Russell Simmons product has drawn criticism for its fees, which include a $10 activation fee and $7.95 monthly fee, along with a $2.50 out-of-network ATM fee. The company said this past weekend that it would suspend those fees through the end of February.

On Thursday, Simmons said on Twitter "ALL FUNCTIONS back up," but noted that "there area few people that have problems with card to card transfer fixing that now" [sic]. Simmons also said some customer had been seeing transactions show up twice, but said this was just a display issue that was being corrected.

Here is CFBP chief Richard Cordray's full statement

“The CFPB is taking direct action to get to the bottom of this situation that may have harmed thousands of innocent consumers already. Today, I have personally spoken with UniRush CEO Rick Savard to make sure that action is being taken to address harm that has occurred, the harm that may still be occurring, and the cascading financial effects of consumers not having access to their funds for more than a week. We have stressed that RushCard and its relevant business partners must ensure that no other consumers will be denied access to their funds. Further, we indicated that the CFPB is prepared to use all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve. We also agreed that the most constructive path forward for UniRush to reduce consumer harm is to take immediate action to resolve these issues. The CFPB has also engaged in discussions with fellow regulators, including the Office of the Comptroller of the Currency and the Federal Trade Commission, to ensure a comprehensive response that addresses the situation quickly and holds accountable all of the parties involved to make consumers whole. Affected consumers should continue to file complaints directly with UniRush or with the CFPB at consumerfinance.gov or toll-free at 855-411-2372.”