Category Archives: Money

High Class Fashion Handbags Meet Low Sales

Throwing it back to the ‘90s when high end fashion products were a symbol of nonchalance in the social facet. Coach, Kate Spade & Co.,Gucci, Michael Kors, and many more were the place to shop if you had the money. This generation’s teenagers or the “Gen Z” as we call it, have definitely deviated this concept. Adolescents nowadays do not wish for the costly, luxurious items they would have desired about a decade ago. Instead, they rather support their fashion icons who encourage them to purchase the affordable products on the market rather than the expensive. Nancy Nessel, a Generation Z expert, told Business Insider “For Gen Z, gifting is an occasion that mirrors the more conservative behavior of Gen Z: they are practical, frugal, and prefer to blend in, not standing out with glitzy items.” Concluding from Nessels statement, young people do not have interest in purchasing expensive goods such as handbags to show their standards. Researchers have noticed the changes in sales in many of these high end companies which may not be so high end anymore.

Data shows that Coach, a prevalent handbag company, dropped 12% in sales in its fourth quarter of 2015 and declined 19% in stock value. In addition, Kate Spade & Co. plummeted in stock value about 35% since the beginning of 2015. Michael Kors lost nearly half of their value in share price. Lastly, Gucci’s sales have slumped 1.1% in 2014. As you can see, reduction in sales have certainly occurred. The real question is, what conflicts will arise for these companies if the situation is not treated properly?

The shift of preferences in goods could lead to a surplus in goods for the high end companies who experience a decline in sales. The company then loses all the money they spent into producing how much is left over. In addition to sales dropping, the value of the company drops as well, inducing its share price to fall. People start selling the stock when they come to realize the company’s sales is not doing good and the company itself loses even more. The chain of events that may occur could lead to a very disastrous outcome. On the other hand, Vera Bradley, being a well known but not so lavish compared to the others, saw an immense growth in the latest holiday season in which their sales rose 48% and share price increased by 46%. Therefore, the chic companies are in trouble as a result of the Gen Z finding interest in fashionable products that are not so high end.  



The “Turing” of Tables

Back in September of 2015, the pharmaceutical industry was in complete uproar over the 5,000% price increase of a life saving drug. And just a month ago, the infamous “pharma bro,” Martin Shkreli, who was responsible for this price hike, was arrested. Ironically, his arrest was not on the basis of the unfair price increase; rather, Shkreli was arrested on fraud charges on his previous companies.

Taking a step back, Martin Shkreli, dubbed the “morally bankrupt sociopath,” “a scumbag,” “a garbage monster,” and “everything that is wrong with capitalism,” once was a rap music-loving and hedge fund manager; with one move overnight, he became the ridicule and criticism of people across the Internet and country.

Under Turing Pharmaceuticals, one of the many companies he founded, Shkreli acquired the rights to the drug, Daraprim. Previously only costing $13.50 a dose, this drug is a treatment for the relatively rare parasitic infection toxoplasmosis, and a drug that patients of weakened immune systems, such as AIDS, have come to depend on. What came to be the most controversial move in pharmaceutical history, Shkreli raised the price of this drug to $750 a dose, a 5,000% increase from its original price. Although such actions of raising drug prices for profit are commonplace in the pharmaceutical industry, seldom has any individual company dared to do so so publicly and unapologetically.

Following the public’s response, he later conceded that his only mistake, unapologetically, was not raising the price more. For a person to make a tremendous profit off a critical and devastating life situation evoked backlash from people, both morally and economically. And just overnight, Shkreli was propelled into the criticism and disdain of the public (although not as much as Trump, who knows?) and became the symbol of greed in the industry.

However, despite all this controversy, Martin Shkreli was not arrested on charges of this scandal that had made headlines. He was instead arrested for using money from a biopharmaceutical company, Retrophin, which he started as a hedge fund manager, as his own personal source of funds to pay off investors who lost money at his previous hedge fund. Shkreli’s previous business expenditures were not all that clean, and he had experienced many bankruptcies and failures. With every failure, debt accumulated and his liabilities to the investors of his hedge funds grew significantly.

And his way of paying off this debt? Even more startups.

Shkreli began a vicious cycle of creating new startups to pay off previous debt, but then having that startup fail and add to his existing debt. Using his startups to pay his private debts, his practices were soon found out and he was consequently arrested.

In the end, Shkreli was not caught legally for the crimes we know him best for, but for something we probably would never have known about had we not paid so much attention to his conducts. Martin Shkreli’s decision to drastically raise the price of the drug garnered him lots of attention, and because his action was not legally wrong, there was no way the public could throw him in jail. It’s ironic how Shkreli’s plans for profit only led him to his downfall. It was revealed that previous companies had flagged Shkreli on fraudulent charges, but had no results and conclusive findings. Yet after people paid more attention to him, were prosecutors able to find these fraudulent practices. We can only say, how the tables have turned.


Chipotle’s Stock Crisis

A recent outbreak in October 2015 has captivated everyone’s attention as hundreds of news reports dominate in about every news network. Chipotle, a franchise known for having the healthiest organic ingredients, has depreciated its stock price after several cases of E-coli were disclosed in numerous consumers. Reports reveal information about fifty-three customers who were infected with E-coli in nine states including Oregon, Washington, California, Minnesota, New York, Ohio, Illinois, Marchipotle-2yland, and Pennsylvania. As a result, forty-three Chipotle restaurants closed for cautionary purposes. Although the commotion has ended with the solution of officials from the Centers for Disease Control and Prevention investigating the issue and intensifying food safety procedures, Chipotle is still suffering through an immense decline in sales.
Customers discontinued the consumption of meals from Chipotle in fear that they would become infected with the virus. As seen in the image, profits plunged throughout the last four quarters. The chipotle.jpgpublic has lost faith in the quality of the food produced by Chipotle, causing them to abominate the restaurant for putting them at the risk of severe disease. The stock price has plunged to a disappointing $480 when it was originally $730 before the E.coli chaos. Investors have also lost faith in the company so they have sold stocks that they have invested earlier in the year. For this reason, the market value of the company has plummeted leaving the company at a loss. Merrill Lynch and CRT Capital, credit rating agencies, both downgraded Chipotle and five analysts cut their price targets for the company. As you can see, there are several factors that contribute to the slump of Chipotle’s wealth. While Chipotle is in a crisis to recover their sales, rivals celebrate as the previous Chipotle fans revert their preference to alternatives.

Data proves that Chipotle’s rivals are benefiting through Chipotle’s struggles. Many rivals had growth in sales as customers turned to alternative fast foods/restaurants. Some of these businesses include Taco Bell, Moe’s Southwest Grill, and Qdoba, all of which had a growth ranging from 4%-8%. Taking advantage of what has happened, sales increased with no extra marketing necessary because they have similar choices as the poorly repudiated, Chipotle. In addition, Chipotle lost market share to Qdoba, being its biggest rival and Meditteranean restaurant, Zoe’s Kitchen. Although Chipotle and Panera are said to be the two leading fast food chains for their healthy food choices, Panera may be taking the lead because of the E.coli outbreak.chipte stock.jpg

Not only is their reputation damaged, but profit margin may also be affected. The chain of restaurants may need to reduce their prices in the future so people start to buy their food once again. On top of low sales, the business will have a lower margin which may barely exceed their costs. The entire corporation is put at risk as it is possible for it be at default in the near future. Although these are only possibilities, Chipotle must take action to acquit their name. All in all, the erupted conflict resulted in improved cautionary procedures by the Center for Disease Control and Prevention which is one of the few beneficial impacts of the event that occurred. Going forward, other companies and Chipotle itself will be attentive so such action does not occur again.

Star Wars: A Box Office Force

In 2012, Walt Disney spent $4 billion to buy Lucasfilm. For most analysts and critics this seemed to be a relatively unwise decision
considering that there hasn’t been a Star Wars movie in nearly a decade now. People were surprised to see that there was interest
being shown in making a new Star Wars movie.
The new movie “Star Wars: The Force Awakens” is expected to make nearly $2 billion in profit. The popularity of the franchise along
with the highly anticipated reboot makes $2 billion in projected profits seem pretty reasonable. “Star Wars”  sales will also be boosted by additions to theme parks and the sale of merchandise associated with the franchise.
Through Star Wars, Disney has a new channel of profit through new and unique characters. The business of Star Wars expands far beyond just the movie itself. It is unclear how Disney divides its revenue but it’s safe to say that this new movie will be a profitable venture for the company. Additionally, four more Star Wars films to build off this success have already been talked about.
In September, Disney had a Force Friday in which they released nearly 500 items and it is expected that Star Wars will be one of the biggest sales generators for Disney. A new Star Wars video game called “Star Wars Battlefront” released by Electronic Arts has already become popular especially since the holiday season is close by. It is expected that by the end of 2015, nearly 13 million units of the game will have been sold. Disneyland is also planning to open “Star Wars” themed lands which will definitely drive up the number of visitors. They have already started planning for these “Star Wars” areas.
However, “Star Wars: The Force Awakens” has an important task along with making a large amount of revenue. It needs to restore the excitement that old fans had for the franchise. The three prequel movies from 1999 to 2005 disappointed many fans and there were many who expected a better ending. This movie could be perfect for that task but it needs to meet the expectations of the audiences. All Star Wars fans will be seeing many newcomers in the cast which may provide a new perspective for the movie.

Jock vs. Nerd

For the answer to the eternal question “Is it better to be a ‘jock’ or a ‘nerd’?”, consider the following:

When Michael Jordan played basketball he made over $300,000 a game. That equals $10,000 a minute, at an average of 30 minutes per game. With $40 million in endorsements, he made $178,100 a day, working or not. If he sleeps 7 hours a night, he makes $52,000 every night while visions of sugarplums dance in his head.

If he goes to see a movie, it’ll cost him $7.00, but he’ll make $18,550 while he’s there.

If he decides to have a 5-minute egg, he’ll make $618 while boiling it. He’ll make $3,710 while watching each episode of Friends. If he wanted to save up for a new Acura NSX ($90,000) it would take him a whole 12 hours.

If someone were to hand him his salary and endorsement money, they would have to do it at the rate of $2.00 every second.

He probably pays around $200 for a nice round of golf, but will make $33,390 while playing that round. Assuming he puts the federal maximum of 15% of his income into a tax-deferred account (401k), he will hit the federal cap of $9,500 at 8:30 am on January 1st of each year.

If you were given a penny for every 10 dollars he made, you’d be living comfortably at $65,000 a year.

He’ll make about $19.60 while watching the 100-meter dash in the Olympics.

He’ll make about $15,600 during the Boston Marathon.

While the common person is spending about $20 for a meal in his trendy Chicago restaurant, he’ll pull in about $5,600.

In his last year, he made more than twice as much as all U.S. past presidents did for all of their terms combined.

However, if Jordan saves 100% of his income for the next 250 years, he’ll still have less money than Bill Gates has today.

Game over.

Nerd wins.

Why Donald Trump May Cost The Republicans The Election

Donald Trump. The  name is infamous. When you think of Trump you think of a stereotypical billionaire: arrogant, disrespectful, obnoxious. You would never associate anything that is good and holy with Trump. Trump is possibly the worst candidate in the entire election. He has not vocalized his plans of reform to the public and in short, he has no plan to “Make America Great Again”. In simple terms, Trump is just an old rich dude who wants to find a fun way to spend his money.  Moreover,  the disrespect he showed to Mexicans by calling them rapists and druggies and the comments he made about Senator John McCain were outrageous and completely uncalled for.  Any sensible human being would apologize for making these comments, however, Trump is no sensible human being. His arrogance has caused him to feel like he does nothing wrong. The fact that he would call Mexicans rapists and druggies shows that he does not care for ANY minority. Unless you are white, Trump will not care for you at all. Furthermore, his comments on John McCain were disgusting. Though I don’t  generally agree with McCain’s views as a senator, I have an extreme amount of respect for him solely because of the fact that he was a war hero who was tortured for 5 years in Vietnam. Trump had the audacity to insult McCain by saying that McCain is “a war hero because he was captured” and that he likes “people that weren’t captured”. This was an insult to all POWs  and (especially the Vietnam POWs) not just McCain because while these Vets were being tortured, Trump avoided the draft and was enjoying his life here in the safety of the US. Trump has made numerous outrageous comments, but these alone will not cost the Republicans the election. Say Trump gets the nomination, right then and there the Republicans are done, they will have no chance at winning. Those Republicans that opposed Trump in the primaries will not vote for him thus creating a path for the Democratic Candidate to take office. Now let’s say Trump doesn’t get the nomination. Then Trump has two options, either admit defeat, which is highly unlikely, or run as an Independent. Usually, those that run as Independents don’t make huge differences when election time arrives. However, let’s not forget when in 2000, Ralph Nader drew enough votes away from Al Gore that George Bush won the election. It is clear that Trump has large amounts of support and that if he goes independent, he will take all his supporters with him. Supporters, whom, if Trump does not run as an Independent would vote Republican. Thereby taking away votes from the Republican party and thus again, creating a path for the Democratic Candidate to take office. The only way the Republican party has a chance to win, is if Donald Trump does not run. However, in the slight chance that Trump does win, you can find me up north drinking fresh maple syrup while riding a moose.

Big Data, Big Advantage

How can a company maximize revenue? How can it go above and beyond what it already earns? How can it make sure that its product/service sells vastly and quickly among the masses? When asked these questions, we may be inclined to suggest the traditional routes: lowering prices, decreasing production costs, widening the target demographic, etc, etc. Sure, sure, a company can do all of that, but the time period needed to implement such changes isn’t a short one. Say, a business that sells organic products suddenly decides to lower the price of its fruits from $2.00 per pound to $1.50 per pound. Of course, new customers will be drawn to the fifty cent drop, and daily customers will buy even more fruit, largely due to the income effect.

But, a change in price is practically useless if the product/service doesn’t generate sufficient demand. The decreased price for organic fruit is certainly tempting, but not to those who don’t even want organic fruit to begin with. In other words, a company will have the highest chance of maximizing its revenue when the factor of demand is on its side. But, how can a business truly know if its product/service is in demand? How can it infiltrate the minds of countless consumers and discover what they really want?


For many businesses nowadays, big data is turning out to be a very popular answer. Big data, essentially, is a term for a massive amount of data, both structured and unstructured, that is difficult to process using baseline software techniques. This includes the online footprints of the thousands of people that use social media, engage in web transactions, and have some record of general online activity. If successfully captured and organized, such data can give companies some strong clues about the preferences of the public. For example, let’s say Person A is on the hunt for a new car. During his search, he posts on Twitter: “Looking for a ride with class and a lot of safety features! #safetycomesfirst.” Big data analysis actually picks up on these little details, and the Audi dealer a few streets down can make sure to offer a model with multiple safety features if Person A happens to come by. How’s that for acquiring more revenue?

Not only that, but big data analysis also provides insight on how a company can go about changing its product/service for the better. Again, with unstructured social media posts in which consumers express their true sentiments about the things they purchase, companies can see what aspects of their output make people unhappy and alter these aspects for the better. Going off the previous example, let’s imagine Person A again, this time driving the new Audi he bought from the local dealer. Person A is happy with his overall purchase, but is dissatisfied with one key element: the heating system. Hence, he writes a blog post saying, “This Audi is nice… but wish I didn’t have to freeze for the first ten minutes while it heats up.” With big data, the Audi dealer can now see that Person A is discontent with the heating system, and then go on to investigate if others across the nation are reporting the same problem online. If so, the Audi company as a whole can take steps to improve this apparent defect by addressing individual concerns, upgrading current production, and/or releasing new and improved models.


So, indeed, big data analysis has the power to completely change the course of a company. Businesses who have not yet invested in this technology should do so immediately. With big data at their side, they can stop the guessing games and actually know what consumers want – the biggest advantage of all.

Startup Success

New ideas – are they really new? Are they really the ingenious products of a genius person’s mind or just simple ideas that were waiting quietly to be found? It’s hard to tell, but the newest and most successful companies of the year are turning out to be strong testimonies of the latter. Once mere start-ups, these full-fledged companies that are now bringing in millions of dollars in revenue have used the subtleties of the modern world in order to create a thriving venture.

Take, for example, Instacart. No, not Instagram, but Instacart, a San Francisco-based company that transformed grocery shopping from a mundane, time-consuming task to one that’s easy and quick. How? Well, in the same way you open the door to a Dominoes delivery guy on a lazy Saturday night, you can now call an Instacart shopper who will fetch everything on your long list of vegetables and milk and deliver the items to your house in a reasonable amount of time. It’s an idea brimming with a lot of potential, something that founder Apoorva Metha and Max Mullen were lucky to have caught on to. But, the idea is far from novel. Many established chains already offer grocery delivery services. So, what makes Instacart such a success?


The answer is, like I mentioned before, a focus on the subtleties. The Instacart shoppers are paid well, an average of around $25 and maybe even more if the worker is faster at his/her job. This fair treatment of workers, and moreover, the decreased use of technology in order to aid those who need the financial help, is a significant tweak in the way that the company goes about handling its deliveries. Thus, with the added power of the workers who are willing to expend all their time and effort in order to support themselves, Instacart in turn is booming. So, although its appealing service lays a strong foundation, it is the company’s labor force that has brought Instacart a long way.

Suja Juice is another company that took a product as basic as juice and turned it into organic, cold-pressed, yet processed drinks that sell for prices as high as nine dollars. When the brand was first launched in 45 Southern California stores, it sold out almost immediately. As of now, Suja’s annual revenue is approximately 45 million and expected to double in 2015. It’s astounding growth, but the more shocking thing is: juice? Really? Once again, details come into play. With its emphasis on juice that is cold-pressed and therefore packed with fresh nutrients, Suja attracts a large crowd that’s getting tired of over processed drinks. Indeed, it’s a subtle change, but enough to push a company to great heights.


Other companies like AdBoom Group, RocketDrop, and Carvana have also come out on top as the most promising of the year. Like Instacart and Suja, they are examples of other businesses that have taken raw ideas and turned them into keys to success by changing the means of how the ideas are brought to life. Carvana specializes in online car shopping, but in such a way that it provides on the spot financing and house delivery as well, taking online auto deals to another level. Clearly, the most successful companies of today began as start-ups that extracted the real potential from the most unembellished ideas. Evidently, the way to prosperity for start-ups around the world is to focus on their own creative edge in a vastly competitive world.

The Euro Tumbles as the Dollar Regains Power

Last Wednesday, the Euro dropped to a 12 year low of $1.05 and is expected to continue dropping. This means that the dollar is on the rise and is expected to surpass the Euro for the first time since the financial recession. A strong dollar is good for any tourists but at the same time this is bad news for the United States’ exporters. It also resulted in the decline of stocks because several multinational corporations rely on foreign investment to expand sales.

The reason the dollar is on the rise is that the economy is much stronger. The European markets have been gradually falling so this decline was imminent. Since the economy is doing well the banks will raise interest rates. Since the U.S. economy is doing well European investors will invest in U.S. Treasury bonds. On the other hand, the European central bank will lower interest rates to encourage investment in the economy to revive the failing standards.

A bond bought in the U.S. with the same maturity as a European bond will have a higher return in interest rates. Since the monetary policy of the U.S. and Europe is going in opposite directions the gaps in the value of both currencies will continue to widen indefinitely. By the end of 2017, it is expected that the Euro will fall to 85 cents.

This event has been termed as a kind of currency war. If the U.S. doesn’t act and lets the dollar go up too much in value it can be detrimental to domestic exporters. This situation is a perfect example of how a strong dollar can also be a weakness. In order to bring this into control the U.S. must continue to alter their interest rates and consider how European investment will impact the economy.

Apple Breaks Market Records

As of now, Apple Inc. has set a new record for the stock market as it has become the first company to have a market value of over $700 billion. In contrast, its main rivals Google Inc. and Microsoft Inc. are worth considerably less, valued at $363 and $349 billion respectively. This development can certainly be called a win for Apple as they have only further cemented their positions as one of the top companies in the United States, if not the world. The news also proves that Apple’s products are still quite popular among consumer, even though newer versions of products like the Iphone and the Ipad have often been seen as merely thinner than the previous model. It seems as if Apple has silenced criticisms with its current gains.

Apple CEO Tim Cook attributes the new market value to the company’s amazing performance in China. Cook states that the rapid economic growth in China allowed for the formation of a large middle class. These new consumers had the potential to become a big market for smartphones and Apple capitalized on that opportunity, making nearly $38 billion in profits from smartphone sales. The company also fared quite well in the domestic market. When the new Iphone 6 and 6+ were released in September, there were predictably long lines around nearly every Apple store in the country, filled with customers who wanted the latest version of Apples’s aesthetically pleasing Iphone. Domestic sales for the new models totaled around $18 billion, another sales record broken for the already distinguished company. Apple once again did very well this year and is expected to grow at an even faster rate next year.

For now, the only questions that remain about Apple are what it has planned for the future. Tim Cook announced that that the company has planned to invest $860 million in building a solar farm in California. The farm is expected to cover 2,900 acres and should power around 60,000 homes, along with Apple’s future headquarters in Cupertino. Apple also unveiled plans for a new IWatch, and plans to release the innovative piece in April this year. So far, 2015 has proven to be a momentous year for Apple and it is possible that the resulting years can be just as great if Apple continues to stay at the forefront of marketing and design.