Sep
 28
 2017



Ulrike

Hello,

Happy Thursday! Welcome to a new edition of The Spin. Today we look at initial reactions to US President Donald Trump's proposed tax reform and the first of possibly many consequences of a crime-thriller style scandal involving the FBI, undercover agents, US college coaches, an Adidas executive, and quite possibly a few other large sports brands. Enjoy and feel free to share! Cheers, Ulrike



brands

Adidas arrest. Following a two-year FBI investigation, Jim Gatto, Director of Global Sports Marketing for Basketball at Adidas North America, and nine others have been arrested on corruption charges. Gatto is accused of conspiring with coaches and others to bribe high school athletes to play for colleges sponsored by the German sports giant, allegedly using $250,000 in company funds. Adidas AG has put (in German) Gatto on leave, plans to cooperate with US authorities and has launched its own investigation.


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Tip of the iceberg. The University of Louisville has already put its head men's basketball coach Rick Pitino and athletic director Tom Jurich on leave. The multimillion dollar battle for top-tier college basketball teams is fought hard among the large sports brands, and the FBI investigation with undercover agents, wiretaps and the analysis of financial data remains ongoing. Experts expect "a tremendous fallout" with wide reaching consequences potentially involving more colleges and brands.





retail

Jump start. Iconic LA retailer Fred Segal just opened an experimental flagship store in West Hollywood. From there, CEO Allison Samek plans to take the brand to the next level. The 1,200 sqm concept includes multi-brand retailers, single-brand shops and pop-ups starting with Levi's. Also on board is the Council of Fashion Designers of America (CFDA) with a space that will rotate a slew of designers including Adam Lippes, Colette Malouf and Whit. The location is a blueprint for further locations including Europe, where the company is currently looking for retail partners in countries like Germany, Austria and Switzerland.



Tumbling profits. Due to their "aggressive summer sale" Swedish fashion retailer H&M failed to meet its own sales targets during the last three months. While sales excluding VAT increased 5 per cent from June 1 to August 31 SKr51.23 bn (€5,35 bn), profits after taxes tumbled 20 per cent to Skr3.8bn. Furthermore, H&M announced to launch another new brand next year as "important part of our growth strategy".





markets

Backing Trump. US retailers back President Donald Trump's proposed tax reform which looks to cut the corporate tax rates from 35 to their lowest rate in 80 years, supposedly providing a major boost to the US economy. Although lower taxes might benefit workers, democratic law makers allege that the plan further benefits the rich at the expense of the middle class. According to the National Retail Federation, which supports (video) the proposal, high corporate taxes suppress the wages of average US workers by as much as $4,690 per year.





people

Moving on up. Michelle Gass, who came to Kohl's Corporation in 2013 after a 17-year run at Starbucks, will be promoted to CEO following the retirement of President, CEO and Chairman Kevin Mansell in May 2018. The move will make Gass, who currently holds the position of Chief Merchandising and Customer Officer, one of the highest-profile female executives in US retail.



From Girbaud to Lanvin. Simone Mantura has been named (paywall) Deputy Managing Director at Lanvin, effective October 1st. He will work alongside former CEO Michèle Huiban who has added the Deputy Managing Editor position. Mantura comes from the GIR+A&F joint venture between Marithé + François Girbaud and Ferretti, where he was CEO. At Lanvin he will oversee women's and men's ready-to-wear and accessories as well as some operations and report to majority owner Shaw-Lan Wang.





tech

Level playing field. To prevent further European Commission antitrust fines, US tech giant Google will spin-off its shopping service and treat it the same way as rivals. As reported, Google was fined €2.4 billion for unfairly favoring its own service over those of competing companies. From now on, Google Shopping and other price-comparison services will bid on equal terms for ads in Google's shopping box. Rivals had complained that they had lost about 90 percent of traffic to Google Shopping. That reflects the percentage of the European search market Google currently controls.



Message, super-sized. To help its users be more expressive, Twitter currently tests a doubled length limit for tweets allowing up to 280 characters. Since September 2016, the online networking service already excludes photos, videos, GIFs, polls and quotes from the character total, after briefly considering - and then dismissing - the idea to raise the character limit to 10,000. Currently, about 9 percent of all tweets in English hit the original 140 character mark which was established to reflect the length of SMS messages.







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