Grind for October 4th, 2018
“Personally, I’m always ready to learn, although I do not always like being taught.” – Winston Churchill
Brookstone announces bankruptcy (again)
When I was a teenager, I used to go into the local Brookstone store and sit in the massage chairs while my parents were shopping. Even then, I can remember thinking that most of Brookstone’s products fit a niche market that didn’t really exist.
Last month, Brookstone filed for Chapter 11 bankruptcy and announced it would be closing its remaining 101 mall locations.
Brookstone filed for bankruptcy in 2014 and was purchased by a Chinese consortium for $136 million.
Brookstone’s airport and online businesses remain successful, but an “extremely challenging retail environment at malls” forced the company to file for bankruptcy, said CEO Steven Goldsmith.
The company has reportedly secured a $30 million loan to keep 35 airport stores and its website open until it can find a buyer. In its bankruptcy filing, Brookstone claimed it had $500 million in liabilities and between $50 and $100 million in assets.
Brookstone opened its first retail store in 1973 and began moving into shopping malls in 1980. The company went public in the mid-1990’s with the help of Bain Capital, which at the time was led by Mitt Romney.
In the years since, the store has acted as a launching pad for brands like Fitbit, Tempur-Pedic, Segway, and Indiegogo. Best-selling products include Bluetooth speakers, massage chairs, and weighted blankets.
“We believe our strength is identifying, developing, and selling products that are functional in purpose, distinctive in quality and design, and not widely available from other retailers,” said the company in the filing.
Unfortunately this angle doesn’t work when everything is available on Amazon.
“We were the canary in the coal mine for the Internet and the digital age,” said former Brookstone executive Steven Schwartz.
Canada finally reaches agreement with US on NAFTA 2.0
Trade negotiators from the US and Canada reached an agreement late Sunday night following threats from the Trump Administration to move forward on a deal it had reached with Mexico (and without Canada) in August.
The new deal, which will replace the 1994-era North American Free Trade Agreement, will officially be called the US-Mexico-Canada Agreement or “USMCA.”
According to Administration officials, the new deal is expected to create American jobs, boost US manufacturing, and decrease the trade deficit with Mexico (which in 2017 was $68 billion).
Key elements of the deal include:
— Requires 40-45% of auto parts be made in countries where employees earn at least $16 per hour
— Opens Canada’s dairy market to American farmers
— Sets new rules for financial services and digital businesses
— Maintains a dispute-resolution process from the original deal
— Offers Canada protection from future tariffs on cars
The new pact is a victory for Trump that moves him closer to completing another campaign promise and validates his at-times controversial strategies in the area of international trade.
The deal is expected to:
— Create American jobs
— Boost US manufacturing
— Decrease the trade deficit with Mexico
At this point, it is still unclear what effect the USMCA will have on Trump’s steel and aluminum tariffs – as well as the retaliatory tariffs both Canada and Mexico have imposed on the US. Many had hoped that reaching a deal would put an end to the tariffs.
The USMCA will need to be approved by lawmakers in all three countries before it can take effect. Congress will vote on the USMCA in 2019.
GOOD TO THE LAST DROP:
Did you know… Months that begin on a Sunday will always have a ‘Friday the 13th’.