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  • The ‘rent-first’ lifestyle is catching on. From cars to clothes and even caskets, here’s when it makes sense to buy vs. rent

    The ‘rent-first’ lifestyle is catching on. From cars to clothes and even caskets, here’s when it makes sense to buy vs. rent

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    Owning isn’t always what it’s cracked up to be.

    For many reasons — including affordability — more Americans are choosing to rent everything from cars and apartments to clothing and furniture these days, according to a report by Intuit Credit Karma.

    Far beyond the traditional tuxedo, the rental industry has expanded in recent years to include power tools, musical instruments, designer handbags, baby gear and even funeral caskets.

    Now, 28% of adults routinely rent goods and services, Credit Karma found. However, when factoring in housing, that percentage jumps to 47%. 

    The growing share of renters is largely due to higher prices, although some people simply prefer renting over buying, opting for a “rent-first” lifestyle, according to the survey, which polled more than 2,000 adults in June.

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    Aside from affordability concerns, more than half — 58% — of those polled said they find value in renting, because it allows for more flexibility and is a way to avoid overconsumption, which has become an increasing concern among millennial and Gen Z adults. 

    “Renting is a great option for many people,” said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida. However, it always pays to do the math, she advised.

    “Some people do great renting clothes and, for special events, this can be good,” said McClanahan, who also is a member of CNBC’s Advisor Council. “However, if you know you have a lot of special events, a few really good [owned] pieces can last a long time.”

    Clothing prices have been hard hit by inflation. Since July 2020, men’s and women’s apparel prices are up 15% and 13.3%, respectively, according to the U.S. Bureau of Labor Statistics’ consumer price index.

    Meanwhile, It may not make as much sense to lease a car, McClanahan said, “as that ends up being higher costs long-term.”

    Although monthly lease payments tend to be lower than car loan payments, financing a car with a new or used auto loan usually ends up costing less than a lease in the long run, especially for consumers who hold onto vehicles for years.

    Additionally, car lease agreements often come with routine service included in the terms, but the downside is there are also mileage limits and potential charges for wear and tear.

    More importantly, car buyers will benefit from owning the vehicle outright at the end of a loan term, and have built equity in the asset.

    To buy or rent a house in today’s market

    Since housing costs are the biggest expense for most people, it may make sense to rent, at least initially.

    “Unless you are absolutely sure you are dedicated to being in a home for at least five years, you should definitely rent,” McClanahan said. “Only when you are settled with life, jobs and family is when it probably makes sense to buy a home.”

    Because millennials are more likely to postpone marriage and starting a family, they are able to cast a wider net when looking for place to live, or relocate for a job, if necessary, which makes renting more worthwhile.

    “This generation is different,” said Dottie Herman, vice chair at Douglas Elliman. “They believe in homeownership but now there is a choice.”

    According to Herman, “it’s not quite as important to them to own a house. A lot of them say, ‘I’ll rent, and I’ll think about it.’”

    Of course, some Americans, especially young adults, are renting because they must.

    Higher mortgage rates and a shortage of houses on the market relative to buyer demand have kept home prices elevated and created an affordability crunch for would-be buyers. Sometimes renting is the only option available.

    Close to three-fourths of would-be homeowners said affordability is their greatest obstacle, according to a report by Bankrate. Among younger adults, 50% said homeownership is only achievable for the wealthy, Credit Karma also found. 

    Even though wealth creation has been concentrated amongst homeowners in recent years, often there is a pressure to buy, when it may not make financial sense, according to Michael Krowe, director of financial planning at Edelman Financial Engines.

    “Don’t make a home purchase simply because you think it’s going to surge in value,” he said. “You might think your home is an investment — it’s not. Your home is a place to live.”

    “Buy a home because you like the neighborhood, schools and proximity to friends and family,” Krowe said. There may be benefits to renting in this market, he added, particularly if it allows you to avoid stretching beyond your means.

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  • Black Friday shoppers spent a record $9.8 billion in U.S. online sales, up 7.5% from last year

    Black Friday shoppers spent a record $9.8 billion in U.S. online sales, up 7.5% from last year

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    Black Friday shoppers pick out clothing in a Lacoste store as retailers compete to attract shoppers and try to maintain margins on Black Friday, one of the busiest shopping days of the year, at Woodbury Common Premium Outlets in Central Valley, New York, U.S. November 24, 2023. 

    Vincent Alban | Reuters

    Black Friday e-commerce spending popped 7.5% from a year earlier, reaching a record $9.8 billion in the U.S., according to an Adobe Analytics report, a further indication that price-conscious consumers want to spend on the best deals and are hunting for those deals online.

    “We’ve seen a very strategic consumer emerge over the past year where they’re really trying to take advantage of these marquee days, so that they can maximize on discounts,” said Vivek Pandya, a lead analyst at Adobe Digital Insights.

    Black Friday’s spending spike reflects a consumer who is more willing to spend than in 2022, when gas and food prices were painfully high.

    Pandya noted that impulse purchases may have played a role in the Black Friday growth since $5.3 billion of the online sales came from mobile shopping. He noted that influencers and social media advertising have made it easier for consumers to get comfortable spending on their mobile devices.

    Still, shoppers are price-sensitive, managing tighter budgets due to last year’s record inflation and interest rates. According to the Adobe survey, $79 million of the sales came from consumers who opted for the ‘Buy Now, Pay Later’ flexible payment method to stretch their wallets, up 47% from last year.

    The best-selling categories of Black Friday, the Adobe report found, were electronics like smartwatches and televisions, along with toys and gaming. Meanwhile, home-repair tools underperformed. Pandya said top sellers directly correlated to whichever products had the best discounts.

    Adobe gathers its data by analyzing one trillion visits to U.S. retail websites, 18 product categories and 100 million unique items. It does not track brick-and-mortar retail transactions.

    A Mastercard analysis of this year’s Black Friday sales found that in-store sales rose just over 1% versus online sales, which grew by over 8% compared to last year.

    “I do think the paradigm has changed around the in-store Black Friday experience, the long lines and things like that,” said Adobe’s Pandya.

    Consumers are “more in the driver’s seat” when they are online shopping, he added, because it is easier to make side-by-side price comparisons and secure a better price.

    Retailers are aware of the rise of deal-hunting consumers and want to capture as many of them as possible. Companies like Best Buy and Lowe’s have both announced higher discounting levels. Other retailers like Target and Ulta Beauty have rolled out pop-up promotions that offer 24-hour discounts on certain brands and items.

    Black Friday kept the momentum going from the day before on Thanksgiving when online sales totaled $5.6 billion, according to a prior Adobe analysis.

    Adobe expects the spending strength to hold over the weekend and through Cyber Monday with the biggest bargains still ahead. The report forecasts that online shoppers will spend roughly $10 billion over the course of Saturday and Sunday, and a record $12 billion on Cyber Monday.

    But spending will likely begin to taper off deeper into the holiday season, according to Pandya. Cyber Monday, as the last major deal day of the holiday season, could be the final spending spike on non-essential goods for the rest of the year.

    “We do expect growth to weaken because those discounts will weaken and they are dictating a lot in terms of buyer behavior this season,” said Pandya.

    He noted that there are always gift-givers who procrastinate their holiday shopping so spending could continue to trickle in late into December. But the real growth surges, he said, “end up being in November and Thanksgiving week.”

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  • Chinese fast fashion retailer Temu overtakes Shein to dominate Japan and South Korea apps

    Chinese fast fashion retailer Temu overtakes Shein to dominate Japan and South Korea apps

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    A package from Temu is seen in front of a screen with the Temu logo. (Photo by Nikos Pekiaridis/NurPhoto via Getty Images)

    Nurphoto | Nurphoto | Getty Images

    Chinese low-cost retailer Temu is dominating app stores in Japan and South Korea in its category, dethroning rival Shein after its successful expansion in Western markets.

    “Temu has rapidly expanded its footprint beyond the U.S. and into a number of international geographies and we believe is now available in 40+ countries … where we continue to see opportunities for growth in the quarters ahead,” said Goldman Sachs in an Oct. 4 report.

    The investment firm estimated that Temu, which is owned by PDD Holdings, “now generates more than $1 billion of [monthly transaction value]” and expects “continued growth into second half 2023.”

    Its rival Shein was estimated to be on track to hit $30 billion in transaction value in 2022, according to media reports.

    Temu has overtaken Shein in Japan and South Korea by staying at the top of shopping app rankings in those locations for a longer period of time, according to data.ai analysis shared with CNBC.

    Since its July launch in Japan to Nov. 2, “Temu has ranked #1 by daily iOS & Google Play shopping app downloads in Japan for 101 days out of 124 days,” said the app analytics and data company.

    By comparison, Shein spent just 17 days topping the two app stores in the same period in Japan.

    Temu was the fastest to reach four million downloads in Japan, taking around 121 days, compared to Shein which took 155 days, according to data.ai. Japanese marketplace Mercari took 427 days and Amazon 660 days, the data showed.

    Similarly, in South Korea, Temu ranked No. 1 by daily iOS & Google Play shopping app downloads for 65 days out of 93 days from Aug. 1 to Nov. 2, overtaking Alibaba‘s AliExpress (25 days) while Shein ranks among the top 5.

    Among the top shopping apps in South Korea, Temu was the fastest to reach 2 million downloads at around 88 days. Shein took 382 days while AliExpress took 366 days to hit the same milestone.

    Temu and Shein’s rivalry extend outside the e-commerce space to the courtroom. Shein sued Temu in December over intellectual-property infringement while Temu accused Shein in July of threatening and forcing manufacturers into exclusivity agreements. But recent documents showed that both parties have applied to end their lawsuits against each other.

    Temu’s rise

    Temu is backed by Nasdaq-listed Chinese tech giant PDD Holdings, which also owns China-based e-commerce app Pinduoduo.

    Launched in the U.S. in September 2022, Temu was PDD’s first major push overseas and quickly found success among budget-conscious consumers.

    In just a few weeks, the Chinese ecommerce app rose to the top of app stores and subsequently expanded rapidly across countries such as Australia, New Zealand, France, Italy, Germany, the Netherlands, Spain, and the U.K.

    Headquartered in Boston, Massachusetts, the Chinese online retailer focuses on selling made-in-China goods, from fashion to household products, at low prices to overseas consumers. Similarly, Shein relies on contracted manufacturers, mostly in China, to design, produce and ship its low-priced products.

    Temu made its foray into Asia through Japan and South Korea in July. It then entered the Philippines on Aug. 26 before launching in Malaysia on Sept. 8.

    “We believe the main reason for [PDD’s] 131% year-on-year growth in transaction service revenues and 135% year-on-year growth in cost of goods sold in second quarter 2023 was related to fast ramp of Temu performance,” Citi analysts said in a Aug. 29 report.

    The platform has been expanding rapidly since its launch by leveraging its parent company’s strength in supply chain and marketing.

    “Much of PDD’s incremental investment dollars have been deployed to make Temu happen,” said Bernstein analysts in a Sept. 15 report, adding that Temu’s multi-million Super Bowl advertisement “solidified Temu’s mind share for a number of its target customers.”

    “We believe that Temu’s rapid rise in popularity was supported by the company’s elevated marketing investments, its low prices and focus on promotions, and to the success of its referral campaigns,” said Berstein’s analysts.

    The analysts said they expect to see “an increase in the number of active users and order volume” in Temu contributing to non-U.S. transaction value and “increasingly contributing to growth from here.”

    In June, the U.S. House Select Committee alleged that Shein and Temu violated import tariff law by importing goods into the U.S. without paying import duties or making shipments subject to human rights reviews.

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  • Billionaire Bernard Arnault hits back at ‘absurd’ and ‘senseless’ money laundering allegations

    Billionaire Bernard Arnault hits back at ‘absurd’ and ‘senseless’ money laundering allegations

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    World’s top luxury group LVMH head Bernard Arnault presents the group’s annual results 2022 in Paris on January 26, 2023.

    Stefano Rellandini | AFP | Getty Images

    Billionaire LVMH CEO Bernard Arnault has hit back at allegations of money laundering, after the Paris prosecutor’s office confirmed it is investigating financial transactions between Arnault and Russian oligarch Nikolai Sarkisov.

    The prosecutor’s office confirmed Friday that a preliminary investigation had been underway since 2022 and that a report from France’s Tracfin financial intelligence unit relating to an Alpine real estate purchase by Sarkisov and “likely to characterize acts of money laundering” had been brought to its attention.

    Spokespeople for both Arnault, the CEO and chairman of the world’s largest luxury goods company and Europe’s richest man, and Sarkisov, a senior executive at Russian insurance company RESO-Garantia, have vehemently denied any wrongdoing.

    A preliminary investigation does not suggest a crime has been committed. In a statement, Arnault’s attorney, Jacqueline Laffont, said the allegations were “absurd and unfounded.”

    “The transaction that allowed for the expansion of the Hotel Cheval Blanc in Courchevel is perfectly known and was conducted in accordance with the law and with legal support. The investigation, seemingly under way, will demonstrate these facts,” she said in an emailed statement over the weekend.

    “Furthermore, who could seriously imagine that Bernard Arnault, who has developed over the past 40 years the leading French and European company, would pursue money laundering to expand a hotel? I believe the senseless nature of these allegations will be recognized by all.”

    French newspaper Le Monde reported Thursday, citing Tracfin, that Sarkisov acquired property in the French ski resort of Courchevel using a loan from one of Arnault’s companies.

    RESO-Garantia Deputy CEO Igor Ivanov told CNBC on Friday that neither the company, nor Nikolai Sarkisov personally, had been involved in the transaction, and that Sarkisov and Arnault had never met.

    “The transaction was managed by a small investment unit which invests professionally in European real estate. It consisted of acquiring flats in an old building in Courchevel from various private owners, with the view to sell them later to a developer once the entire building was bought out,” Ivanov said in an email.

    “All transactions were carried out by French companies, through French notaries by French lawyers on all sides. This was a usual real estate deal.”

    Correction: Jacqueline Laffont is Arnault’s attorney. An earlier version misspelled her name.

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  • Levi’s Strauss CEO says his biggest mistake was not firing the wrong people fast enough

    Levi’s Strauss CEO says his biggest mistake was not firing the wrong people fast enough

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    Pedestrians walk past a Levi’s store in Midtown Manhattan.

    Sopa Images | Lightrocket | Getty Images

    The CEO of the world’s most famous denim jeans company said he knew from his second day on the job that the best way to turn around the company was to fire more than half of his executives.

    “The easiest way to change the culture is to change the people. I had 11 direct reports, and in the first 18 months, nine of them were gone,” Charles Bergh, CEO of Levi’s Strauss, said.

    Still, Bergh told CNBC’s Christine Tan that his biggest regret was not firing the wrong people fast enough.

    “My biggest regret is that we didn’t lean into some of these great leaders, and we lost some because I held on to somebody longer than I should have.”

    Bergh joined the apparel retailer in 2011 at the worst possible time — consumers were no longer buying Levi’s jeans.

    “The brand was really lost. We had a whole generation of consumers that didn’t grow up wearing Levi’s like I did when I was a kid,” Bergh said.

    “The company’s performance had been really erratic for more than 10 years. One year the revenues would go up, but the profits would go down. The next year, they would fix the profits, but the revenues went down.” 

    Charles Bergh, CEO of Levis Strauss & Co., speaks during the 2015 Fortune Global Forum in San Francisco, California, U.S., on Tuesday, Nov. 3, 2015.

    Bloomberg | Bloomberg | Getty Images

    Six years later, Bergh brought what he called a once “broken” brand back into the limelight.

    In 2017, Levi’s delivered 8% annual revenue growth — its highest in a decade and well above the 3.1% growth posted a year earlier. The company kept building, notching 14% year-on-year revenue growth in 2018.

    Bergh is stepping down as CEO next year and said his biggest legacies will be jolting the company out of complacency and building a team with the brand at the center of culture.

    “I am just the orchestra conductor and have built an amazing team around me,” he added.

    Trouble still brewing

    Still, it’s not all smooth sailing ahead. The company severely cut its 2023 profit outlook after it reported a steep decline in wholesale revenue and soft sales in the U.S., its largest market. It now expects sales to grow between 1.5% to 2.5% this year versus the prior range of 1.5% to 3%.

    Like many apparel companies, Levi’s had to adapt to changing consumer preferences, especially the growing demand for comfortable and looser fit garments as workers returned to offices after the pandemic.

    A guest wears a blue denim shirt from Levi’s during New York Fashion Week, on September 13, 2022 in New York City.

    Edward Berthelot | Getty Images Entertainment | Getty Images

    In 2021, the company acquired activewear brand Beyond Yoga, a move that Bergh previously told CNBC would help grow its women’s business. At the time, he said the goal is for women’s wear to account for 50% of Levi’s business.

    “It drives me crazy watching a woman walk into our store, buying our bottoms and then walking out and going to an unnamed competitor’s store to buy their top,” Bergh said.

    Sales of women’s products made up 35% of net revenue in the first half of the year.

    Expanding footprint in Asia

    Pedestrians walk past a Levi´s store in Hong Kong.

    Sopa Images | Lightrocket | Getty Images

    Still, Asia accounts for less than 20% of the company’s total sales and China makes up less than 3% of the company’s total business, according to Bergh. 

    “Many of our competitors are 10% or more. Look at Nike, 40% of Nike’s market cap is probably China. So we know we’ve got an opportunity here,” he said.

    “We’re adding about 100 doors a year net globally, and about a third of those stores are going to be here in Asia.”

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  • Watches of Switzerland shares plunge by a quarter after Rolex buys retailer Bucherer

    Watches of Switzerland shares plunge by a quarter after Rolex buys retailer Bucherer

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    A tray of Rolex watches are seen on a dealer’s stand at the London Watch Show on March 19, 2022 in London, England.

    Leon Neal | Getty Images

    The Watches of Switzerland Group lost a quarter of its value on Friday morning, heading for the stock’s worst day ever, after luxury watchmaker Rolex announced a deal to buy watch retailer Bucherer.

    Rolex said the acquisition followed the decision of Bucherer owner Jorg Bucherer — the 86-year-old grandson of founder Carl Bucherer — to sell the business in the absence of any direct descendants to take the reins.

    “This move reflects the Geneva-based brand’s desire to perpetuate the success of Bucherer and preserve the close partnership ties that have linked both companies since 1924,” Rolex said in a statement.

    “The Rolex group is convinced that this acquisition is the best solution not only for its own brands but also for all the watch and jewellery partner brands, as well as for all the employees of the Bucherer group.”

    Bucherer will retain its name and brand and its management team will remain unchanged, Rolex confirmed, with its integration into the Rolex business set to complete once competition regulators approve the takeover.

    In a subsequent statement on Friday, Watches of Switzerland attempted to soothe apparent market concerns that Bucherer, the world’s largest luxury watch retailer, will seize more market share through its tie-up with the iconic brand.

    Watches of Switzerland insisted the acquisition was solely about succession planning for Bucherer and that Rolex — which is breaking with its modus operandi of acting solely as a manufacturer — is not making a “strategic move” into the retail market.

    In its statement, Watches of Switzerland noted that Jorg Bucherer “has no family succession and his wishes are to form a legacy foundation with the proceeds of this transaction.”

    “This is not a strategic move into retail by Rolex. This is the best-judged reaction to the succession challenges of Bucherer SA,” Watches of Switzerland added.

    “There will be no operational involvement by Rolex in the Bucherer business. Rolex will appoint non-executive Board members. There will be no change in the Rolex processes of product allocation or distribution developments as a consequence of this acquisition.”

    Nevertheless, shares of the London-listed company plunged by as much as 29% in early trade, before paring losses.

    Reassurance has ‘fallen on deaf ears’

    Russ Mould, investment director at stockbroker AJ Bell, said investors fear that the tie-up will mean Bucherer receives “preferential treatment including better access to the watches that consumers are desperate to buy.”

    “Watches of Switzerland’s efforts to reassure the market that there will be no change in how Rolex allocates stock have fallen on deaf ears,” Mould said in an email.

    “This is what Rolex might have promised now, but that could easily change in the future.”

    Mould noted that a trend had emerged among various product manufacturers, including big sportswear brands, of selling directly to consumers, in turn learning more about customer preferences and growing margins by cutting out retailers.

    “Imagine that happening with Rolex. Theoretically, it could use Bucherer as its channel to sell and not have to bother with other authorised dealers such as Watches of Switzerland,” Mould said.

    “It’s worth noting that Watches of Switzerland has been a favourite stock among many mid-cap fund managers. They will have to look hard at the Bucherer announcement and decide if it radically changes the investment case.”

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  • China’s Shein denies U.S. IPO rumors

    China’s Shein denies U.S. IPO rumors

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    Two people hold two Shein bags after entering SHEIN’s first physical store in Madrid, Spain, June 2, 2022.

    Cezaro De Luca | Europa Press | Getty Images

    Chinese fast fashion giant Shein on Friday denied a Reuters report that said it has confidentially filed for an initial public offering in the U.S.

    “Shein denies these rumors,” a Shein spokesperson told CNBC.

    Reuters, citing sources familiar with the matter, reported the listing could happen before the end of the year.

    Founded in 2012 by Chris Xu, the brand rose to global prominence for its budget-friendly and trendy apparel. Shein was recently valued at $64 billion, according to Reuters.

    But Shein, as well as Pinduoduo’s budget e-commerce app Temu, have been accused of exploiting trade loopholes to import goods into the U.S. without paying duties or making shipments subject to human rights reviews, according to a report from a U.S. House committee.

    Shein told CNBC last week its policy is to “comply with the customs and import laws of the countries in which we operate” and that it will continue to “make import compliance a priority.”

    Reuters noted the listing could make Shein the most valuable Chinese company to go public in the U.S. since Didi Global.

    In 2021, the ride-hailing giant listed on the New York stock exchange at a $68 billion valuation, but de-listed less than 6 months later due to pressure and data security concerns from Chinese regulators.

    In May, U.S. lawmakers urged the SEC to crack down on Shein for allegedly selling clothes made by forced labor in Xinjiang, China.

    “We have zero tolerance for forced labor,” a Shein spokesperson had told CNBC in May.

    Shein recently hosted a group of influencers at its facilities in Guangzhou, China. While the influencers posted videos praising the company, dismissing allegations of forced labor, many viewers criticized the creators for repeating “propaganda.”

    — CNBC’s Penny Chen contributed to this report.

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  • Nike’s approach to solving the biggest problem for girls in sports

    Nike’s approach to solving the biggest problem for girls in sports

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    Portland Press Herald | Portland Press Herald | Getty Images

    In recent decades, data from sports researchers revealed an encouraging trend: young girls were participating in sports in greater numbers. But the research also uncovered a big missed opportunity. Girls drop out of sports at “alarming rates,” specifically when they hit puberty.

    There is one obvious solution that sports retail giant Nike CEO John Donahoe, and many others, think can make a big difference: more female coaches.

    In the historically male-dominated world of sports, girls and women have always had to fight for their right to compete and to be viewed as competitive athletes. The sexism that has prevented girls from competing in sports has also prevented women from becoming youth coaches.

    “I think league administrators are kind of trained to look for dads to coach and think more often the dads are going to be the ones to step up and do it. I think sometimes they may not even be trying to recruit females,” said Mary Fry, professor and director of the University of Kansas Sport & Exercise Psychology Lab.

    Nearly 75% of youth head coaches are men, according to Aspen Institute’s Project Play. Even when women are offered the opportunity to coach, they are fearful that they’re not good enough to take on such a position because of the sexist stereotypes society often promotes.

    When Jen Welter, the first-ever female NFL coach and a two-time gold medalist in Olympic football, was offered the opportunity to coach football for the first time, she recalled instinctively thinking “girls don’t do that.”

    “When you don’t see it, it’s really hard to say, ‘You know what, I can do that,’” Welter said.

    “Most young people rarely, if ever, get the opportunity to be coached by a woman. This is a miss for all,” said Vanessa Garcia-Brito, Nike vice president, and chief social and community impact officer. “To get girls active and invite them into a lifetime of sport, they have to see it to believe it – and that starts with more female coaches.”

    In March, Nike launched Coaching HER in a partnership with the University of Minnesota’s Tucker Center for Research on Girls & Women in Sport. The digital coaching resource is designed to help coaches of all genders improve their understanding of gendered bias and discrimination in sports.

    Puberty changes girls’ relationship with sport

    Female coaches are not just important in terms of giving young girls a positive role model – they also offer a safe space to discuss and process the difficulties that can come with a young woman’s changing body and mind. Even for girls who grew up loving sports, puberty shifts girls’ relationship with sports and very often results in them disengaging with physical activity.

    The data related to this critical period in a girl’s life is clear. One in three girls participate in a sport from age 6-12, according to the Aspen Institute. But nearly one in two girls will quit sports during puberty, according to menstrual product manufacturer Always.

    Research from a 2018 report by Tucker Center, Nike’s partner, gathered data globally and found that the highest rate of drop-off from girls in sports often occurs between the ages of 11 to 17, “the range when girls feel the most pressured to conform to identities shaped by their peers and adults — which includes coaches,” its report states, and it concluded that how girls feels about their coaches is a determining factor in whether they continue to play organized sports.

    The Women’s Sports Foundation, created by Billie Jean King, has found that 40% of teen girls are not actively participating in a sport.

    “For boys, that moving through puberty can be kind of a plus, you gain more muscle mass, and you get taller, stronger. For girls, it’s just not always the same case,” Fry said. “They’re kind of in survival mode in middle school.”

    There are both physical and psychological dimensions to the problem, namely, periods and low body confidence as barriers preventing girls from continuing in sports, according to Youth Sport Trust CEO Alison Oliver. As girls’ bodies change throughout puberty, they become increasingly insecure and physical activity begins to feel different. The charity Women in Sport found that 65% of girls don’t like others watching them during sports, as it makes them feel self-conscious, vulnerable, and objectified. What’s more, seven in 10 girls avoid being active when on their period.

    Coaches are critical agents that impact girls’ experiences in sports, according to the Women’s Sports Foundation, and if a girl isn’t properly supported or understood by their coach in a time as daunting as puberty, they’re going to be discouraged to compete. For example, most of the time, girls are not educated on or fitted for proper sports bras, making participating in sports painful.

    “If you started to feel uncomfortable as a female athlete … it’d be pretty tough to go to a male coach about some of those things,” Welter said.

    A June 2019 Nike event in London when it took over iconic recreational sports park Hackney Marshes for a football festival to celebrate the women’s game, hosting more than 1,000 women and girls, with 79 teams taking part in the tournament, across different age groups.

    Kate Mcshane | Getty Images Sport | Getty Images

    “These bonds that develop between a coach or a mentor and the kids is just so much bigger than just the physical activity part of it,” Fry said. “They have women in their lives they can bounce things off of, they can trust.”

    Fry co-founded the Strong Girls program at the University of Kansas, where young girls are assigned a female college student as their mentor. Half of the program focuses on participating in sports together, while the other half concentrates on positive youth development. The program typically attracts girls who tend to be less athletic and creates a safe environment where they feel encouraged by female mentors to participate in sports that they normally wouldn’t pursue.

    “Girls and women can’t have enough strong women in their lives. We just benefit from that,” said Fry, who is director of the program.

    Female coaches were fundamental to both the success and enjoyment of sports for Christina Collins, a former youth athlete who later became a coach. “I had female coaches, as well as male, of course, and it [had] such an impact on me to realize that it was an option for me to grow up and do that. And I felt like I definitely connected with them at a deeper level than I might have [with] male coaches that I had,” said Collins, who is now a physical education and health teacher in Westchester County, and a professor in the physical education masters program at Manhattanville College.  

    Female coaches, she says, can offer unique insight based upon their own personal experiences as women. “[My identity] has impacted the way in which I deliver all coaching. It is meant to increase first and foremost the child’s confidence, then second, their performance ability,” said Collins, who also is founder and owner of NeverStopMoving365, a company that seeks to use sports and physical activity to promote confidence and teach life lessons. 

    She says this approach isn’t only benefit to girls, but extends to youth athletes of all genders, and female coaches as well. 

    Nike’s 20,000 female coach goal

    Nike is one of the few major companies directly addressing this issue. Corporations from Target to Disney and Bank of America are being targeted for taking a stand on social issues in the current divisive political climate. Donahoe, who made his comments on the issue of girls’ sports participation rate at the recent CNBC CEO Council Summit in Santa Barbara, California, said that he believes Disney CEO Bob Iger is handling the feud with Florida Governor Ron DeSantis properly, and he pointed to Nike’s efforts in girls’ youth sports as another example of how a company can focus on social issues that are core to its values and integral to its brand.

    “We’re trying to train 20,000 female coaches, moms and other former athletes to be coaches to promote youth,” Donahoe said. “So that’s less of a controversial issue, but it’s one we care about as a value,” he said. 

    Nike also has an aim to achieve 50% girl participation in the sport-based community programs it supports by 2025.

    As a former athlete, Collins says there are lifelong benefits that come when young women and girls remain involved with sports and feel supported.  

    “I don’t use the actual sports as my primary form of fitness, or just the sports skills in general at all. But I pull from my toolkit of life lessons that athletics taught me,” she said. 

    Coaching HER encourages all coaches, regardless of gender, to give girls the chance to continue developing their character and learning life lessons from sport, and offers detailed training for coaches on how to lead girls and young women in sports.

    “It’s not just women, for women. It’s women and men working together to elevate girls. That’s one of the key components. How do we work better together?” Welter said.

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  • Lululemon used tiny organisms instead of fossil fuels to make the nylon for its new shirt

    Lululemon used tiny organisms instead of fossil fuels to make the nylon for its new shirt

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    Lululemon’s plant-based nylon shirt launches on its website on Tuesday.

    Photo courtesy Lululemon

    Lululemon has started to sell shirts that are made partly with nylon created from plant-based sources, instead of raw materials that come from the petrochemical industry, according to an announcement on Tuesday.

    The shirts are the result of a 2021 partnership born from Lululemon’s equity investment in biotechnology company Geno.

    The short-sleeved shirts are made from at least 50% biologically sourced nylon, at least 40% recycled polyester and 3% elastane (itself made with 30% plant-based content). The shirts cost the same as the conventionally sourced version: $78 for the men’s version, and $68 for the women’s.

    As part of a goal to make 100% of its products with sustainable materials by 2030, Lululemon has partnerships with other companies that make materials in novel and sustainable ways. For example, in February 2022, Lululemon launched two products — a meditation and yoga mat bag and the Lululemon barrel duffel bag — made out of the mycelium-based leather from Mylo.

    Conventionally, nylon is mostly made from ingredients sourced from fossil fuels like coal, natural gas or crude oil.

    The petrochemicals used to make nylon are adipic acid and hexamethylene diamine, and the climate impact of making adipic acid is particularly damaging, Stephen Wallace, a professor of biotechnology at the University of Edinburgh, told CNBC.

    Conventional adipic acid manufacturing processes releases nitrous oxide, a greenhouse gas that is as much as 200 times more potent than carbon dioxide, Wallace told CNBC. “It’s been estimated that 8 to 10 percent of all human-associated nitrous oxide emissions come from this single industrial process” to make adipic acid, Wallace told CNBC.

    To make the nylon precursor used in the Lululemon shirts, Geno uses biological organisms instead of chemicals from fossil fuels.

    “As with all of the products that are produced with Geno technologies, we utilize biotechnology to convert plant-based sugars into the products we target,” Christophe Schilling, the CEO and founder of Geno, told CNBC.

    Here is a look at Geno’s laboratory where it does its fermentation development in 2-liter reactors before moving to larger systems.

    Photo courtesy Geno

    “Plants take up CO2 from the air, and with sunlight providing energy, convert that into sugars, which can be collected and then fed into a Geno process.” That biomanufacturing process uses fermentation to create the same nylon precursor ingredient, Schilling said.

    A preliminary life cycle analysis suggests that the bio-nylon will offer at least a 50% reduction in carbon emissions, said Sasha Calder, the head of Impact at Geno.

    ‘A big push’ to reinvent plastics

    Remaking supply chains that have depended on fossil fuel-based ingredients is generally a hot topic right now, according to Christopher Reddy, an environmental chemist and a senior scientist at the Woods Hole Oceanographic Institution who studies how plastics break down in the environment.

    Many of the synthetic products used in modern, everyday life, including nylon, are made from the leftovers at an oil refinery after a product is made.

    The Lululemon shirt made in partnership with Geno, a biotechnology company, is made by in part nylon made from plant based sources.

    Photo courtesy Lululemon

    “Most of the plastics are made up of carbon and some small other elements,” Reddy told CNBC in a phone conversation on Friday. “So the big push right now is: Can we use another source of carbon — like from plants or kelp or food waste — and can we use that as the starting material and maybe still keep making nylon?”

    (Reddy was speaking about plastics supply chains more broadly, as the Lululemon-Geno product announcement was not public yet.)

    “Because nylon, like it or not, has a lot of good value,” Reddy told CNBC. “There’s lots of reasons why plastics are bad to the environment, but at the end of the day, plastics, nylons are part of our everyday life.”

    There’s already a long history of making plastics from petrochemicals — nylon itself was invented in the 1930s — and so reimagining those infrastructures takes both time and money, Reddy said.

    An effective replacement product has to work well and be cost-effective, too. “Look at those first-generation replacement straws — they didn’t work, and everybody’s annoyed,” Reddy told CNBC. “So, when you go and make these changes for a cleaner, better environment, you better make sure they work.”

    Geno is acutely aware of these challenges.

    “Across our portfolio, we review each technology before it goes to market to ensure that the carbon profile offers significant sustainability benefits, while also being cost-competitive and of similar or better performance as the incumbent source it’s replacing,” Geno’s Schilling told CNBC.

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  • Gen Z is driving luxury sales as wealthy shoppers get younger

    Gen Z is driving luxury sales as wealthy shoppers get younger

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    Peter Cade | Stone | Getty Images

    Luxury shoppers are getting wealthier and younger, with purchases by some of the newest consumers expected to grow three times faster than older generations over the next decade, according to a new report.

    Generation Y, also known as millennials, and Generation Z accounted for all of the luxury market’s growth last year, according to a report from Bain & Co. Spending by Gen Z and the even younger Generation Alpha, or those under 13, is expected to make up a third of the luxury market through 2030, reflecting “a more precocious attitude toward luxury” among the younger ranks than older generations, the report said.

    Gen Z consumers are starting to buy luxury goods — everything from designer handbags and shoes, to watches, jewelry, apparel and beauty products — at age 15, three to five years earlier than millennials did, the report said.

    “By 2030, younger generations (Generations Y, Z, and Alpha) will become the biggest buyers of luxury by far, representing 80% of global purchases,” it said.

    Luxury sales have so far been largely immune to rising interest rates, a slowing economy and high inflation. Bain estimates that global sales of personal luxury goods sales surged 22% in 2022, to 353 billion euros, or roughly $381 billion.

    This year, luxury sales are expected to grow between 3% and 8%, depending on China’s recovery and the economies in the U.S. and Europe.

    The U.S. regained the top spot for luxury sales in 2022, surpassing China, with 25% sales growth and total sales of 113 billion euros, or about $121 billion. China’s luxury sales dropped 1% due largely to Covid lockdowns. Europe also saw strong growth, at 27%, helped in large part by American tourists spending on luxury goods in Europe over the summer.

    Accessories, led by handbags, led the growth in 2022 and are expected to continue driving luxury goods sales in the coming years.

    Sales of leather goods soared 23% to 25% last year, and were up over 40% from pre-Covid levels. While new models and “hero products” accounted for some of that growth, the biggest driver of growth came from price increases — such as the Chanel small Classic Flap bag, which is now priced over 60% higher than before the pandemic. Bain estimates that 70% of sales growth in leather goods in 2022 came from price increases.

    Analysts and luxury executives say the appeal of luxury brands to ever-younger consumers is tied to a surge in wealth creation over the past few years, along with social media.

    “What has changed is the affluence level of the U.S. customer, and the prevalence of social media that tells the customer what is cool, ” said Jan Rogers Kniffen, CEO of retail consulting firm J Rogers Kniffen WWE. “The generation before the Z’s pushed the age of first luxury purchase to 18 to 20. Wasn’t 15 to 17 the next logical stop? Is that the bottom? Probably not.”

    Buying luxury shoes and handbags online has become much more accessible in recent years as luxury companies have embraced online sales and a host of secondhand luxury good websites have emerged.

    Bain said Web 3.0, including the metaverse and NFTs — a type of digital asset called nonfungible tokens — will help future luxury sales to younger consumers even further.

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  • Nike stock surges after earnings and revenue top expectations

    Nike stock surges after earnings and revenue top expectations

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    People walk past a store of the sporting goods retailer Nike Inc. at a shopping complex in Beijing, China March 25, 2021.

    Florence Lo | Reuters

    Nike on Tuesday reported quarterly results that easily topped Wall Street’s expectations, even as higher costs squeezed the company’s margins.

    Shares of Nike rose more than 12% after hours Tuesday.

    Here’s how Nike did in its second fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

    • Earnings per share: 85 cents vs. 64 cents expected
    • Revenue: $13.32 billion vs. $12.57 billion expected

    The company reported net income for the three-month period ended November 30 of $1.33 billion, or 85 cents per share, compared with $1.34 billion, or 83 cents per share, a year earlier.

    Nike reported revenue of $13.32 billion, up 17% from $11.36 billion a year earlier.

    Over the past three quarters, Nike has beaten Wall Street’s expectations, but like other retailers, has struggled with inflated inventory levels that arose from supply chain disruptions, rising consumer demand and unpredictable in-transit shipping times.

    Inventories were up 43% to $9.3 billion in the quarter, compared to last year. The merchandise glut led to aggressive markdowns, which helped reduce Nike’s gross margin to 42.9% from 45.9% a year ago. However, inventories declined from $9.7 billion in the previous quarter.

    The company also saw a 10% year-over-year uptick in selling and administrative expenses to $4.1 billion, mostly led by advertising and marketing costs and investment in Nike Direct as the company continues to move away from wholesalers.

    While the focus on Nike Direct was largely to blame for the increased administrative expenses, the investment has paid off. Nike Direct sales were up 16% for the quarter at $5.4 billion and digital sales were up 25%. For the last several quarters, wholesale revenue has been effectively flat but was up 19% for the quarter.

    Nike’s sales in China, its third biggest market by revenue, dropped by 3% compared to last year, continuing a trend the retailer has been contending with as the country deals with lingering Covid lockdowns and a slowdown in retail spending. Overall retail sales in the country fell by 5.9% in November compared to a year ago and clothes and shoe sales plunged by 15.6%, according to the National Bureau of Statistics of China.

    After earnings from Nike’s fiscal first quarter were released in September, executives said the company’s inventory had grown 65% over the last year in North America alone and as a result, the company enacted an aggressive promotional strategy to liquidate the merchandise and make way for new products.

    The plan was a key part of Nike’s strategy to shift its sales directly to consumers and away from wholesalers by improving the in-store experience and enticing customers to shop directly from the company online.

    On Friday, Nike announced its new “Jordan World of Flight Milan” store located on Via Torino, a famed shopping district in the Italian locale well known for its designer shoe stores.

    The initiative reflects the steps Nike is taking to grow the company as a direct-to-consumer brand.

    The store, called a “first-of-its-kind retail experience” by the company in a news release, has a built-in members lounge and will include interactive shopping experiences tailored to fans of the renowned sneaker brand.

    Read the company’s earnings release here.

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  • Adidas employees raised concerns about Ye’s conduct for years, report says

    Adidas employees raised concerns about Ye’s conduct for years, report says

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    Gilbert Carrasquillo | Getty

    The chief executive and other senior leaders at Adidas discussed the potential fallout from its relationship with Kanye West as far back as four years ago, according to a report from The Wall Street Journal.

    During a 2018 presentation to the Adidas executive board, a group of employees reportedly outlined the risks that they faced by interacting with West, who has legally changed his name to Ye. The presentation included a number of mitigation strategies that included cutting ties with the Yeezy creator, the report said.

    But Adidas executives did not sever ties when these concerns were raised, and instead continued to meet with Ye to try and hold onto the partnership, which made nearly $2 billion a year for Adidas, or 10% of its revenue, according to Morningstar analyst David Swartz. During one meeting in September of this year, the report said, Ye accused Adidas executives of stealing his designs and showed them a clip of an adult video.

    The German sportswear giant officially terminated its partnership with Ye in October after the musician made a series of offensive and antisemitic comments.

    “Adidas does not tolerate antisemitism and any other sort of hate speech,” the company said in a statement. “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”

    A month later, Adidas announced that it is investigating accusations made by staff relating to Ye’s conduct after an anonymous letter alleged years of abuse.

    Ye’s alleged behavior was not new, according to employees who spoke to the Journal. Some of them had raised concerns about Ye to leaders and human resources at Adidas as far back as 2018.

    “It is currently not clear whether the accusations made in an anonymous letter are true,” Adidas said in a statement Thursday. “However, we take these allegations very seriously and have taken the decision to launch an independent investigation of the matter immediately to address the allegations.”

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  • Adidas warns of big earnings hit after ending Ye partnership

    Adidas warns of big earnings hit after ending Ye partnership

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    Kanye West at an event announcing a partnership with Adidas on June 28, 2016 in Hollywood, California.

    Getty Images

    Adidas on Wednesday cut its full-year guidance on the back of the German sportswear giant’s termination of its partnership with Kanye West’s Yeezy brand.

    The company ended its relationship with Ye, formerly known as Kanye West, on Oct. 25 after the musician launched a series of offensive and antisemitic tirades on social media and in interviews.

    Adidas now projects a net income from continuing operations of around 250 million euros ($251.56 million), down from a target of around 500 million euros laid out on Oct. 20. The company now expects currency-neutral revenues for low single-digit growth in 2022, with gross margin now expected to come in at around 47% for the year.

    Adidas reported a 4% year-on-year increase in currency-neutral sales in the third quarter, with double-digit growth in e-commerce in the EMEA, North America and Latin America. Gross margin fell by one percentage point to 49.1% on the back of “higher supply chain costs, higher discounting, and an unfavorable market mix,” the company said.

    Operating profit came in at 564 million euros, while net income from continuing operations of 66 million euros, down from 479 million euros a year ago, was “negatively impacted by several one-off costs totalling almost 300 million as well as extraordinary tax effects in Q3,” Adidas said.

    “This amount differs from the preliminary figure published on October 20, 2022, due to negative tax implications in the third quarter related to the company’s decision to terminate the adidas Yeezy partnership. This negative tax effect will be fully compensated by a positive tax effect of similar size in Q4,” Adidas said.

    The company also revealed that it had already reduced its full-year guidance on Oct. 20 as a result of “further deterioration of traffic trends in Greater China, higher clearance activity to reduce elevated inventory levels as well as total one-off costs of around 500 million euros.”

    “The market environment shifted at the beginning of September as consumer demand in Western markets slowed and traffic trends in Greater China further deteriorated,” Adidas CFO Harm Ohlmeyer said in a statement.

    “As a result, we saw a significant inventory buildup across the industry, leading to higher promotional activity during the remainder of the year which will increasingly weigh on our earnings.”

    Ohlmeyer said the company was “encouraged” by “noticeable” enthusiasm in the buildup to the FIFA World Cup in Qatar later this month.

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  • Nike’s results offer a clue about the strong dollar and the upcoming earnings season

    Nike’s results offer a clue about the strong dollar and the upcoming earnings season

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