business news in context, analysis with attitude

Published on: February 8, 2019

by Kevin Coupe

The Washington Post reports that Clear - the biometric identification company that already has a presence at some 27 US airports and a select group of sports venues - just got a multimillion dollar investment from a group of technology investors that believes the process has far greater applicability.

According to the story, “Revolution Growth, a technology venture capital firm backed by AOL co-founder Steve Case and Washington Capitals owner Ted Leonsis, announced Wednesday that it is investing an undisclosed amount of money in Clear, a New York-based start-up focused on biometric identification systems. The investment management firm T. Rowe Price also joined the investment round … Although airports are still at the core of Clear’s business, the company has been aggressively branching out to other markets. Some 13 stadiums across the country have made Clear available to season ticket-holders and others. The company recently announced a partnership with Hertz rental car company, and executives say they are engaged in discussions with health-care organizations and companies in the hospitality industry.

“Case said he thinks Clear could become an ‘iconic’ company as it finds new ways to replace more cumbersome sign-ins. It could be used to quickly check customers into hotels, he said, or seamlessly verify people’s age when they buy alcohol.”

There’s no question that the biometrics business has not been as successful as some thought it would be just a few years ago; Clear itself went into bankruptcy a few years ago, but since then has shown slow but steady growth.

For my part, I’ve been a Clear customer pretty much from its beginnings, and think that in the airports it serves, the company offers a differentiated and highly desirable experience … it is a lot better than TSA-Pre-Check, which I also love. Every time I go through Clear, I wonder why the technology hasn’t been applied to more businesses. The speed and convenience always is an Eye-Opener.

A lot of it is cost.

But, as Leonsis says in its first iteration, Clear “was a little too soon. But like with anything in technology, it gets smarter, better, cheaper, more perfected as time goes on.”

Published on: February 8, 2019

The South Florida Sun Sentinel has a story about Sedano’s, which “is among a growing number of supermarket chains using new technology to make shopping even more convenient while also competing with e-commerce titan Amazon.com. Experts say the super-competitive nature of supermarkets means grocers have to find new ways to provide groceries as fast and cheaply as possible.”

In Sedano’s case, that means using 11,000 square feet of a Miami store for a robotics system that picks product that can be delivered to 15 of its area stores, where the orders can then be picked up by shoppers who have placed their orders online.

“This new system at Sedano’s Supermarket fills online orders lightning fast - 60 items in five minutes or less,” the story says. “And that speediness is Sedano’s strategy to cater to rushed customers who don’t have the time — or desire — to walk the aisles themselves.”

“It’s a symphony of chaos,” says Javier Herran, Sedano’s chief marketing officer. “Rather than a person fill your order and go to a shelf, this machine brings the shelf to you.”

The story goes on: “Although Sedano’s is not delivering the food — yet — it’s aiming to attract customers through the faster shopping experience. The system will save Sedano’s money on clerks and cashiers, and customers will value how they don’t get billed extra fees for delivery by competitors, said Max Pedro, co-founder of Takeoff Technologies, the Waltham, Mass.-based company that created the robotics.”

Published on: February 8, 2019

Jeff Bezos, the founder/CEO of Amazon, yesterday went on social media to accuse American Media Inc. (AMI), owner of the National Enquirer, of extortion and blackmail. Bezos released emails sent to him by the AMI’s representatives saying that the National Enquirer would not release compromising photos of him and his mistress if Bezos stopped investigating the tabloid’s motives for previous coverage of his personal life.

Here’s the backstory. Last month, Bezos announced that he and his wife of a quarter-century, MacKenzie, were divorcing. That announcement came immediately before the Enquirer published an 11-page story about Bezos’ affair with Lauren Sanchez, a former host of the Fox show “So You Think You Can Dance,” and subsequent stories suggested that Bezos went public only when he knew that the story was about to be published. The Enquirer bragged that the story was the result of “the biggest investigation in Enquirer history,” and said it had tracked the couple “across five states and 40,000 miles.”

It was a story that generated a lot of attention in the business community because it raised questions about the impact of a divorce on Amazon. It also had a political angle since President Trump has been highly critical of Bezos, Amazon, and the Washington Post, which Bezos owns in a personal investment. Trump has referred to the paper as the “Fake Washington Post” and called it a “lobbyist” for Amazon.

What got Bezos’ attention was the publication of text messages between Sanchez and him.

The New York Times writes this morning that “after seeing his texts in the tabloid’s pages, Mr. Bezos sprang into action, starting his own investigation into the tabloid’s motives as The Post prepared an article speculating on its potential political agenda. His tying of The Enquirer’s motive to politics, Mr. Bezos alleged in a post on Medium on Thursday, prompted associates of David J. Pecker, the chairman of American Media Inc., to threaten to publish graphic photos it had apparently obtained, as well as more of the steamy text messages … Mr. Bezos said A.M.I. had political reasons for wanting him to stop looking into its decision to publish the article. He pointed to the publisher’s past cooperation with Mr. Trump, as well as its connections to the government of Saudi Arabia. The Washington Post has relentlessly reported on the murder last year of its columnist Jamal Khashoggi, a Saudi dissident.”

In his blog posting yesterday, Bezos wrote, “It’s unavoidable that certain powerful people who experience Washington Post news coverage will wrongly conclude I am their enemy. President Trump is one of those people, obvious by his many tweets. Also, The Post’s essential and unrelenting coverage of the murder of its columnist Jamal Khashoggi is undoubtedly unpopular in certain circles … Of course I don’t want personal photos published, but I also won’t participate in their well-known practice of blackmail, political favors, political attacks and corruption,” Mr. Bezos wrote about AMI. “I prefer to stand up, roll this log over and see what crawls out.”

The Times notes that “Mr. Bezos is hardly the sort of character the Enquirer typically puts on its cover, and the (original) story set off speculation in Washington and New York media circles that the coverage was tied to The Enquirer’s alliance with the White House. The relationship between the tabloid’s owner, American Media Inc., and the president had been frayed by a cooperation deal struck by The Enquirer’s leadership with prosecutors looking into its role during the 2016 campaign, when it helped orchestrate the payment of hush money to women who alleged past affairs with Mr. Trump.”

Neither AMI nor Amazon have commented on the charges.

Published on: February 8, 2019

A federal judge yesterday okayed the sale of bankrupt Sears Holdings to its chairman, Eddie Lampert for $5.2 billion, a move that the judge said made “sound business sense” because it would keep some 425 stores open and about 45,000 people employed.

The New York Times writes that the hearing was “a referendum on Mr. Lampert, the company’s chief executive and largest shareholder who has controlled Sears since 2005.

“Many of the company’s creditors accused Mr. Lampert and his hedge fund, ESL Investments, of running Sears into the ground, racking up losses and falling behind competitors, while spinning off the company’s most valuable assets in ways that enriched his hedge fund. They questioned why Mr. Lampert, after years of failing to turn around the company, should be given the opportunity to acquire Sears out of bankruptcy. A committee of creditors wanted to liquidate the company and collect the proceeds, rather than take another risk on Mr. Lampert.”

The judge in the case ruled that the creditors “failed to prove that they would recover more money by selling off the stores and other properties,” though the Times writes that the “creditors committee nevertheless won an important concession in the case. It can still file lawsuits against Mr. Lampert for past deals that resulted in spinning off real estate and other valuable assets to companies that his hedge fund had stakes in. A lawyer for ESL said the claims were without merit.”

Published on: February 8, 2019

TechCrunch reports that food delivery company Postmates has “confidentially filed documents with the Securities and Exchange Commission for an upcoming public offering” that would value the company at $1.85 billion.

The story says that Postmates, “which competes with several large players in the food delivery space, including Uber Eats and DoorDash,” operates in some 550 communities and is expected to post “$400 million in revenue in 2018 on food sales of $1.2 billion.”

Published on: February 8, 2019

The Los Angeles Times this morning reports that US Food and Drug Administration (FDA) has announced a planned meeting with senior executives at Walgreens Boots Alliance “to discuss what they said was a pattern of illegal tobacco sales to minors at the pharmacy giant’s stores.” FDA says that almost a quarter of all the Walgreens stores it inspected “had illegally sold tobacco products to minors,” and one store in Miami will not be allowed to sell tobacco products for 30 days.

“Walgreens is currently the top violator among pharmacies that sell tobacco products,” FDA said in a statement, adding that it “is considering additional enforcement action against Walgreens.”

According to the Times, “The FDA inspected 6,350 Walgreens stores, agency spokesman Michael Felberbaum said. He said Walgreens has received more than 1,550 warning letters from the FDA and been hit with 240 financial penalties for selling tobacco to minors since 2010.”

Walgreens said that it takes the issue “very seriously” and looks forward to meeting with FDA.

Published on: February 8, 2019

TechCrunch reports that meal kit business Blue Apron “is introducing a lower-cost version of its meal kits, initially only for Jet.com shoppers in the greater New York City metro area. The new recipe kits, called “Knick Knacks,” still require refrigeration, but require customers to supply their own protein and produce to complete the meal. But by dropping the two most expensive ingredients from the meal, the company has brought the price down to $7.99, compared with prices that ranged from $17 to $23 for the meal kits that launched on Jet last fall.”

Published on: February 8, 2019

• Digiday reports that “Amazon is using two accelerator programs to fuel its own business. These programs are meant to get in on the ground with startup brands, and also strike up partnerships with established companies to get them to sell with Amazon.”

According to the story, “the Brand Accelerator Program serves to get in early with startup brands to help them get off the ground by funding marketing pushes and other costly retail logistics like shipping and inventory management. In exchange, Amazon asks for a level of long-term commitment to a doing a certain amount of business through sales and advertising on the platform.” The Manufacturer Accelerator Program, on the other hand, looks for businesses “that can help drive Amazon’s private-label ambitions by doing the heavy lifting on the production end. Through that program, Amazon solicits new products to be manufactured and exclusively sold on Amazon directly. In return, Amazon will handle the marketing and promotion of the product.”


• Delish reports that Taco Bell now is delivering nationwide through Grubhub, one year after beginning the partnership.

“Taco Bell has also worked to perfect the service,” the story says, “ensuring faster delivery and hot, fresh food. While for their part, Grubhub is bringing more drivers to T-Bell-rich areas to provide a seamless transition for customers.”

The story notes that for a limited time, “in honor of the milestone, the famed Tex-Mex fast food chain is also offering free delivery on orders over $12.”


• MarketWatch reports on a poll conducted by Investing.com saying that consumers would like to be able to buy prescription drugs, medical marijuana and cryptocurrency on Amazon.

The story says that “of the 1,013 respondents to a question asking which products and services they would feel comfortable purchasing beneath an ‘Amazon’ brand, 36.7 percent said prescription drugs, 29.5 percent said medical marijuana, 16 percent said virtual doctor visits and 12.7 percent were OK with cryptocurrencies.

“Nearly three-quarters of respondents (72.9 percent) said they would be comfortable buying an Amazon-branded computer, the top answer.”

Published on: February 8, 2019

• Business Insider reports that Walmart is launching a new line of furniture called MoDRN, described as “a new and exclusive line of home decor targeting customers who ‘embrace a modern aesthetic’.”

The line features some 650 items, ranging from sofas to dinner plates.

The story says that “MoDRN is organized into three aesthetics: retro glam, refined industrial, and Scandinavian minimal,” and is positioned to compete with the likes of West Elm, Crate & Barrel, and Wayfair, though at a sharper price point.

“The launch of MoDRN, the story says, “is part of Walmart's broader strategy to ramp up its assortment online and focus on categories such as fashion and home goods that inspire shoppers to browse its site. The line will be available on Walmart.com, Jet.com, and Hayneedle.com starting Friday.”

Published on: February 8, 2019

…with brief, occasional, italicized and sometimes gratuitous commentary…

• The Associated Press reports that Wisconsin-based retail chain Shopko Stores has announced that “it plans to close an additional 139 Shopko and Shopko Hometown stores.,” a move that “brings the list of closings to 251 stores, about two-thirds of the company's retail locations.”

The company said in a statement that “it believes the closings will help make Shopko more attractive to potential buyers.”


• Axios reports the formation of the National Cannabis Roundtable, described as “an industry-funded group to lobby for cannabis reform, including changes affecting medical research, banking and taxes.”

The announcement of the group will be made today by John Boehner, the former Speaker of the House of Representatives, who is on the board of Acreage Holdings, which is one of the seven founding members of the new trade association.


• Woody Allen has sued Amazon in federal court for at least $68 million, accusing the company of breach of contract. Allen says, according to the New York Times, “that the company’s streaming service had improperly backed out of a four-movie deal because of a renewed focus on allegations of sexual abuse on Allen’s part.”

The allegations are that Allen sexually abused his daughter in 1992, when she was seven years old. Allen has denied the allegations, and has never been charged with or convicted of any crime.

Amazon made a deal in 2017 to release Allen’s next four films, but as the allegations have gotten greater traction in the media - especially because of similar charges made against powerful show business men including Harvey vWeinstein, Kevin Spacey and Louis C.K. - it has declined to do so.

Amazon, according to the suit, “said that the deal had become ‘impracticable’ because of ‘supervening events, including renewed allegations against Mr. Allen, his own controversial comments, and the increasing refusal of top talent to work with or be associated with him in any way, all of which have frustrated the purpose of the agreement’.”

Out of curiosity, I checked, and it looks to me like Woody Allen’s last five movies didn’t together generate a total of $68 million in box office receipts. On that basis alone, I’d question why Amazon even made the deal … especially because it knew Allen’s reputation.

I always was a Woody Allen fan, but I cannot even watch his films anymore. It is all just too distasteful, and just feels wrong. I’m not sure what Amazon’s legal culpability is, but I don’t blame it for walking away from this arrangement.

Published on: February 8, 2019

Two deaths of note to report this morning…

• John Dingell Jr., who served in the US House of Representatives representing a Detroit district for 59 years and 21 days - longer than any other Congress member in history, passed away yesterday. He was 92.

The Wall Street Journal remembers Dingell, writing that “known as a master legislator, the World War II Army veteran and onetime prosecutor chaired the House Energy and Commerce Committee at the height of his power in the House, skillfully—and at times ruthlessly - wielding its gavel to shape legislation involving wide swaths of the American economy.”

Dingell also comes from a tradition of public service. He was preceded in his office by his father, Rep. John Dingell Sr., and succeeded by his wife, Rep. Debbie Dingell, who remains in office today.


• Frank Robinson, who hit 586 home runs as a Hall of Fame outfielder - mostly with the Cincinnati Reds and Baltimore Orioles - and then brought his famously feisty, intense and intimidating presence to the dugout as Major League Baseball’s first back manager, has passed away after a long illness. He was 83.

Robinson is the only winner of the Most Valuable Player Award in both the National and American Leagues.

Published on: February 8, 2019

Regarding Amazon’s new patent on a system that could use buses to deliver orders, MNB reader Chris Weisert wrote:

Smart. Think about bus riders that can eliminate a stop, having their purchases on the bus they ride home. They don’t have to shop, hassle with finding a seat for themselves and their packages. Simply ride the bus home as they do today and take their groceries inside when they arrive.



Responding to our piece about business lessons from the John Wanamaker department store company, MNB reader Peter Talbott wrote:

I was a trainee and assistant buyer at John Wanamaker’s 12 floor grand department store in Philadelphia few decades ago.  My department was TV and video, where we sold TV consoles in many beautiful finishes including french provincial (because a TV was furniture), stereos by Fisher, LP records, and a new product called a VCR which cost $749, as well as a Betamax for $999 which the salesmen preferred because the commissions were higher.

We were adjacent to the expansive  piano department where each week I could hear the blind piano tuner at work.  Behind the piano dept was John Wanamaker’s perfectly preserved original executive office, which was the highlight of the store tour for generations of employees and tourists alike. Mr. Wanamaker was what we now call a ‘disruptor’ with a long line of retail innovations including the price tag and the money-back guarantee.  After his department store career, he became Postmaster General of the United States.  Quite a guy.



MNB reader Jon Townsend wanted to share a recent customer service experience:

My DISH satellite box lost its signal. After 45 minutes on the phone with tech support they decided I needed a tech on site. The nice young lady said I would be charged $95.00 for the service call. I asked her to pause, then I asked her to explain to me why. I said that I rent the receiver from DISH (because you cannot buy them) I pay for the signal along with the receiver  rental. I asked her to confirm that I indeed did not own the receiver that DISH still owns it. So I asked for clarification on the fact that they cannot send me a signal to the receiver they own, so they must fix it, but are going to charge me. How in the hell do they get away with this? It is like renting a hotel room, air conditioner quits working, their maintenance fixes it, and then charges you for the repair. Pretty good gimmick if you ask me. Should  be against the law.



Responding to my several commentaries in favor of a traditional liberal arts education in which even people who study business or science are required to take Humanities courses such as English and History, MNB reader Dave Wiles wrote:

Some studies in the Humanities is fine. We need a well rounded student to advance to the real world. The problem, as I see it, is that there are far too many students matching their studies to ineffective (in work life) majors. "Advanced Underwater Basketweaving" may be a fun topic but where is the job, in their future, to make a living?

People love to use examples such as "Advanced Underwater Basketweaving” or “Eskimo Poetry” or “Esperanto” as examples of useless courses … but I wonder how many people actually study such things. I’m talking about studying history, civics, Shakespeare, etc…

Published on: February 8, 2019

I’m a big fan of movie trailers. Unlike many people who get annoyed at the theater when a half-dozen or more previews are played before the main feature, I’m actually thrilled … and never more so than when I see a trailer that I haven’t seen before that makes me want to see a movie.

That happens less often than used to, and now, unfortunately, I end up feeling the trailer has sown me all the interesting parts of movies I don’t want to see.

This week, though, while I didn’t have much time to see anything new, I did see two trailers for movies that I didn’t even know were coming out, but now want to see.

The first was for Hobbs & Shaw a spinoff from the Fast & Furious film series (none of which I have any memory of seeing). But this buddy action/comedy - with Dwayne Johnson, Jason Statham and Idris Elba - looks like it could be a lot of fun.

And then there was the trailer for Shaft, with Samuel L. Jackson as John Shaft (he played the role in in a 2000 movie), Jessie Usher as his estranged son, and the great Richard Roundtree as his uncle, the original Shaft (he played the role in the 1971 original, and in 1972 and 1973 sequels). I didn’t even know this was in production, but again, it looks like a lot of fun.



That’s it for this week. Have a great weekend, and I’ll see you Monday.

Sláinte!!