Hey Snackers,
Lanthanum. Gadolinium. Toss in some Yttrium.
China ~~threatened~~ hinted that the "rare earth minerals" it mines for the technology you use might become its next tariff bargaining chip.
Potential tech/trade war drama that could affect your iPhone was enough to drop the Dow to a 3-month low Wednesday.
Weather, logos, and fancy — Fashion lost $2.9B in value in 1 day
Wardrobe malfunctions happen... Last week, we broke down the ecommerce-induced retail-pocalypse facing some department stores. Yesterday, 3 distinctive-ish fashion stocks fell enough to wipe out $2.9B in stock market value. Total faux pas:
- Throwback, logo-packed Abercrombie & Fitch: -26% — Worst drop since its 1996 IPO.
- Fancy jacket newbie Canada Goose: -31% — Worst loss ever.
- Luxury label conglomerate Capri Holdings (formerly known as Michael Kors): -10% — Worst in almost a year.
Where's the blame?... Not all on ecommerce. Each brand revealed it's struggling for completely different reasons:
- Abercrombie is closing 40 stores — including 3 big city flagships — because its style still hasn't recovered from your middle school days.
- Canada Goose's CEO claims spring weather is more "unpredictable" than ever, so it's harder to stack its stores with the right $1,000 parkas.
- And Capri's Michael Kors diluted its brand by selling in too many department stores... and doesn't want to make the same mistake with Versace (which it just bought).
2 types of retail stores are thriving... "Small" and "Experiential." Abercrombie is shutting extremely expensive flagships, while Mikey Kors pulls out of malls. But Target and Ikea's smaller "urban" stores are expanding — And startups Casper and Allbirds are adding "experiential" stores with nap-zones and human hamster wheels to try-on shoes. The new fashion playbook is clear.
iRobot launches 2 (eerily) coordinated house-bots
"New bot, who dis?"... The new Roomba s9+ and Braava Jet m6. These frustratingly named hardwares were just launched by iRobot to clean your home together. Vacuuming, mopping, dusting — They "talk to each other." Founded by MIT grads in 1990, iRobot is one of the few publicly-traded robotic companies pumping out consumer products you actually use.
Can we please talk about the “immediate addressable market”?... That's not all the customers iRobot could target (aka everyone with a home with floors). It's the customers who fit its ideal profile — humans with homes who live tech-forward, clean-always lifestyles. iRobot really wants to talk about its immediate addressable market crew:
- It's already got 14M US households as customers.
- Its immediate addressable market is 25M more households.
- If it gets those Americans iRobot-ing, that could triple sales.
- One catch: Its freakishly self-sufficient $1,300 vacuums are made in China. They're already getting hit by tariffs, and China's competing with lower cost knockoffs.
It's a cleaning/grooming company... And it may only be that. iRobot started with the Roomba vacuum. Then its Brava mop/duster came second. Product line #3 is "Terra," the lawn mowing robot coming soon. But iRobot doesn't seem interested in roboticizing other human activities we don't like to do:
- Military robots: Until 2016, iRobot made rovers with robotic arms that could do dangerous things (they were built to be used on Mars). But it sold that line.
- Delivery robots: Postmates created a robot named "Serve" for restaurant delivery, but iRobot hasn't shown interest in the fast-growing delivery industry.
Brex hits $2B valuation by giving credit cards to startups
The titanium credit card... is one way to innovate plastic. Brex is going in a different direction — it's offering venture capital darlings credit cards. And for becoming the payment choice for tech startups, it's about to reach a $2B valuation with its latest fundraise. Everything Brex does is fast:
- Growth: It joined the rarefied club of unicorns under 2-years-old thanks to plenty of funding from PayPal co-founder Peter Thiel and other big-time investors.
- Marketing: If your hometown is full of tech startups, its taxis, bus stops, and billboards are probably wallpapered with Brex ads.
- School: The Brazilian co-founders are in their early 20s and exited college fast (by dropping out of Stanford).
Future > Past... That's the premise of Brex in 3 words or less. Most credit card companies want to see a robust and consistent credit history when a customer applies. But Brex looks at a startup's credit future instead. That tweak of an evaluation strategy lets Brex offer business cards for well-funded startups and their employees.
Fintech is about asking "why?"... The credit card industry's focus on credit histories to approve cards is a catch-22: Startups couldn't get credit cards without credit histories, but they couldn't get a credit history without a credit card. If a VC is willing to invest $10M in a startup, then Brex realizes the business can handle a 10K credit card line.
What else we’re Snackin’
- Swipe: Apple's ApplePay is coming to NYC's 4-5-6 subway lines
- Zzzz: Nintendo's new Pokémon app will reward you for sleeping
- Blame: Teva Pharmaceuticals falls to a 19-year low because opioid lawsuits could cost $4B
- Forget: Amazon's new Alexa feature lets you delete her recordings of you
- LeMeat: Beyond Meat plans to launch European production of its plant-based protein next year