Tesla moves to online-only sales to reduce car prices – Mashable

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Tesla announced that they are closing down most of their physical stores in order to cut down on company costs. Only a few stores in busy areas will remain open, acting as galleries and “information centers.” Elon Musk says the shift to online exclusivity is intended to reduce the price of all Tesla cars by 6%.

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What Old Navy’s spinoff says about America’s cheap clothing addiction – CNN

New York (CNN Business)When Old Navy stepped onto the scene in 1994, it seemed certain to shake up retailing. And it did just that.

In four years, Old Navy hit $1 billion in annual sales by hawking trendy, low-priced clothes for Americans across age groups. Old Navy reached kids and teens in a big way, as well as their parents. Last year, Old Navy’s sales were about $8 billion.
The retailer’s strength shows how Americans have become addicted to super cheap clothing. It’s a chain that is emblematic of the staying power that kind of merchandise has in retail — both in boom times, and in bust.
“Customers want exceptional value,” said Oliver Chen, analyst at Cowen. He said the country is gravitating to retailers where “price is part of their DNA.”
Now, after 25 years, Old Navy has become so successful that it is breaking off from its parent company, Gap, Inc. (GPS) And while there will probably be some bumps ahead for Old Navy, its future looks bright compared to the Gap’s prolonged slump.

Discount is king

Old Navy’s sales at stores open at least a year grew 3% in 2018. And it’s not the only discount retailer that is growing, even amid low unemployment and growing wages. Sales at stores open at least a year at TJX (TJX)— the parent of TJMaxx, Marshalls, and HomeGoods — grew 6% during the holidays compared with last year.
Department stores are feeling pressure from discounters. Macy’s (M), for example, is opening new discount Backstage stores within its larger locations.
Meanwhile, sales at stores open at least a year at Nordstrom’s (JWN) full price line fell 1.6% during the holidays, while it’s off-price Rack stores grew 4%.
“You can great clothes that are not very expensive,” Chen said of the industry.
The discount chains are also getting a lift from the hollowing out of the middle in retail, which has left shoppers with fewer choices to find quality stuff for cheap. Bon-Ton has liquidated. Sears is on life support. And Payless is going out of business.

Go in, and get out

The Gap, a premium brand known for its denim jeans, logoed sweatshirts and turtlenecks, is struggling, too. And those problems have often overshadowed Old Navy’s accomplishments.
“We have found ourselves having to debate internally what’s right for Old Navy versus what’s right for one of the other brands,” chief financial officer Teri List-Stoll admitted to analysts Thursday.
Old Navy and the Gap are moving in opposite directions and chasing different customers, which led Gap to free its discount-focused subsidiary at last.
The split, which Gap expects to finalize in 2020, will allow Old Navy to open up new stores in the United States and abroad to reach more budget shoppers, while also expanding online. The company’s other brands — including the Gap, Banana Republic, Athleta, Hill City — will attempt to firm up their higher-income customer bases.
“A lot of this is real estate and location,” Susan Anderson, senior analyst at B. Riley FBR, said of the split.
Old Navy, as well as TJX, Ross (ROST) and Burlington (BURL), are mostly located in strip malls. The Gap is tied to traditional malls, where traffic is slowing.
At strip malls, “it’s easy to park, you go in, you pick whatever you want, and you get out of there,” Anderson said. “Consumers don’t want to go walk through a whole entire mall anymore.”

Steering Old Navy

While Old Navy has been the crown jewel of the Gap portfolio, the brand had its share of troubles.
It flopped during the late 2000s and went through a period of sales declines during the recession and its aftermath. In 2012, Stefan Larsson took over as president of Old Navy. He revitalized the brand by focusing on families and introducing a fast-fashion model that he helped pioneer after a long tenure at H&M.
“Larsson is credited with infusing more fashion into the brand,” while still keeping prices down, said Tiffany Hogan, senior analyst at Kantar Consulting.
Sonia Syngal, who took over as CEO in 2016, will guide Old Navy into its next phase. She began her tenure at Gap more than a decade prior after stints at tech company Sun Microsystems and Ford (F). Peck touted her “proven track record of results” to analysts Thursday.
“I stepped back and reflected on what I wanted to do at 35 years old,” Syngal told her alma mater, Kettering University, in 2016 of her decision to enter retail. “I thought a lot about when I was in my teens, when I did a lot of designing and making of my own clothing,” she added. “I wanted to get back into that creative environment.”
Syngal declined an interview for this story through a company spokesperson. But she has previously said she wants the brand to appeal to a brand range of customers.
“It’s all about inclusivity, democracy, and the democracy of style,” she told ABC last year. Old Navy launched a “Size YES” campaign in 2018, which brought the brand’s formerly online-only plus-size collection to 75 stores.

Uncertain future

Despite Syngal’s success so far, she will still have her work cut out for her.
Although Old Navy’s sales at stores open at least a year increased compared to 2017, sales were flat during the holidays.
“The fourth quarter was disappointing, particularly in stores,” List-Stoll told analysts. She said Old Navy “missed opportunities,” and she blamed the weather for the lackluster holiday period.
Anderson, the B. Riley FBR analyst, said it “was a little bit eye opening that this past quarter did slow.” She questioned how much growth Old Navy will get from opening up new stores, since more people are shopping online.
Breaking apart from the Gap also means Old Navy loses the advantages of operating under a huge parent.
For example, Old Navy relies on Gap to help it keep down costs and run operations. It runs joint loyalty programs with Gap, shares customer data, and even has a spot on Gap’s website.
“Old Navy has been carrying the business, but it’s been benefiting from the scale of the parent,” said Simeon Siegel, analyst at Nomura Instinet. “This doesn’t put them in a stronger position.”

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Subaru recalls 1.3M vehicles in US for brake light problem – The Associated Press

DETROIT (AP) — Subaru is recalling 1.3 million vehicles in the U.S. because the brake lights may not illuminate properly.

The recall covers certain 2014 to 2016 Forester, 2008 through 2016 Impreza and 2013 through 2017 Crosstrek vehicles.

Subaru says cleaning products containing silicone can emit a gas that can seep into the brake lamp switch and cut off the electrical contact. That can stop the brake lights from working but brakes will still function.

The automaker says the problem doesn’t happen very often. It has only 33 reports in the U.S.

Subaru says it discovered the problem. It will reach out to affected customers and replace the switch.

The recall is being done worldwide, but information about the number of vehicles affected and the models wasn’t available Saturday.

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HBO boss quits as owner AT&T seeks more shows and more profit – Ars Technica

Change at HBO —

Richard Plepler, 28-year veteran of HBO, was reportedly frustrated by new owner.

HBO CEO Richard Plepler.

Getty Images | Drew Angerer

HBO CEO Richard Plepler announced his resignation yesterday, less than a year after AT&T completed its acquisition of HBO and the rest of Time Warner Inc.

In a company-wide memo available in this Hollywood Reporter story, Plepler told employees that he made the “difficult decision” to leave at “an inflection point in the life of this wonderful company.”

Plepler worked at HBO for nearly 28 years, serving as chairman and CEO since 2013 and as co-president from 2007 to 2013. He struck a positive tone in his memo. “Thanks to all of you, we are today churning on all cylinders both creatively and as a business,” he wrote. “Thanks to all of you, I can move on to the next chapter of my life knowing that the best team in the industry remains here to carry on our continued progress and success.”

But “Plepler found he had less autonomy after the merger, according to two people familiar with his thinking,” The New York Times reported.

Other reports cited the same problem. As CNBC wrote:

According to people familiar with the matter, this is an issue of autonomy. Plepler wanted to run HBO, and new WarnerMedia CEO John Stankey, an AT&T veteran, was effectively running HBO. Plepler had ideas about technology and international expansion that didn’t jibe with Stankey’s vision, according to a person familiar with the matter. The two are also “different people” and didn’t have the closest relationship, another person said. So after six years of running HBO autonomously, Plepler told Stankey earlier this month he wanted to leave, two of the people said.

Turner President David Levy is also leaving the company, and he announced his decision in an internal memo that said he’s “ready for a professional change,” CNN reported.

AT&T seeks big changes

HBO has succeeded for decades by producing a limited number of high-quality shows. But shortly after AT&T completed its purchase of Time Warner in June 2018, the new owner told HBO employees at a town hall-style meeting that the network wasn’t making enough money. HBO needed more content to keep viewers’ attention for hours every day and to get “more data and information” about customers, Stankey told HBO employees at that meeting. Stankey warned employees that they would face “a tough year,” and they would need to do “a lot of work to alter and change direction a little bit.”

Changes sought by AT&T seem to be geared toward making HBO a bit more like Netflix, the biggest streaming video provider.

“Plepler and [HBO] entertainment president Casey Bloys had brushed off suggestions that HBO would need to up its content tally, modest in comparison to Netflix’s, but all that changed when [AT&T division] WarnerMedia was formed,” the Hollywood Reporter article said. “The network is now looking to ramp up its original offerings in an effort to stay competitive with Netflix, Amazon, and umpteen other upcoming streaming rivals.”

AT&T CEO Randall Stephenson, speaking about HBO parent WarnerMedia and its “creative imagination,” told The Wall Street Journal last year that “you need to guard that culture with your life.” But Stephenson also said that “the business model does have to change,” and that it would be a “very difficult migration,” the Journal wrote.

Plepler’s departure came days after a federal appeals court upheld AT&T’s acquisition of Time Warner, dealing a blow to the Justice Department’s attempt to reverse the merger.

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