International

Riots in French territory wreak havoc

France is attempting to stifle protests in one of its foreign territories. Last week, riots swept across France’s overseas territory, New Caledonia. A proposed voting reform caused violent protests to erupt, leaving at least five people dead, including two police officers, and hundreds injured.

Rioters, enraged over the electoral reform, burned businesses, torched cars, looted shops, and set rigged road barricades, removing access to medicine and food, authorities said. France declared a 12-day state of emergency in response.

A territory divided

New Caledonia, a semiautonomous Pacific territory located between Australia and Fiji, has been part of France since 1853. While voters among the 270,000 residents have decided to remain part of France in the three referendums since 2018, many still believe the area should become an independent state, which has caused tension for decades.

• The chaos began after a proposed amendment to the French Constitution to grant local voting rights to those who have lived on the islands for at least 10 years was put forward.

• French Parliament passed the amendment on Tuesday.

Critics say the amendment will erode progress made in a 1998 accord which established voting rights to the indigenous New Caledonians, known as Kanaks (who make up 40% of the current population) and those who lived on the islands before 1998, as well as their children.

Chaos in the streets

On Friday, France sent over 1,000 police officers to the territory as apart of a larger operation to regain control of the capital. Hundreds were arrested and protests started to subside slightly after police presence increased and a curfew was put in place.

France’s High Commissioner Louis Le Franc stated that teams of reinforcements were tasked with taking down booby trapped barricades and clearing mines, as well as delivering critical supplies to the public, like food and medicine.

There has been economic consequences: 

• The looting and the destruction of local businesses added up to an estimated $217 million in damage, said the New Caledonian Chamber of Commerce and Industry.

• The riots interrupted mines, which make New Caledonia a major supplier of nickel, a metal used in electric batteries.

France also made the controversial move to ban TikTok in the territory, marking the first time an EU country has done so.

Finance

The Dow crossed 40,000 for first time in history

Apparently, you can teach 128 year-old indexes new tricks. The Dow Jones Industrial Average surpassed 40,000 points for the first time on Thursday, reflecting optimism amid signs of continuing US economic strength.

The Dow, which is commonly considered an indicator of economic health, was launched in 1896 by Charles Dow (who co-founded The WSJ), and tracks the prices of the 30 largest US companies' stocks.

Of the 30 companies, sometimes known as “blue chips,” included in the Dow, Goldman Sachs added the most points (a weighted measure of stock value) to the index since it crossed 30,000 in November 2020, while 3M subtracted the most points.

What does this mean?

The latest financial news in what has been a surprisingly good year for Wall Street, the Dow hitting the 40,000 point mark shows investors bullish (optimistic) mentality amid anticipated returns from the artificial intelligence craze and possible interest rate cuts as inflation slows.

• The Dow has more than doubled since March 2020, when it dropped ten-thousand points to 19,000 in a matter of weeks.

• It also advanced 5.8% this year, setting 18 record closes during its run.

However, it’s not just the Dow that’s doing well: The S&P 500 and Nasdaq also hit new highs, with the former crossing 5,300 points for the first time last week Wednesday. The S&P has also seen a 27.5% rise in the last year.

While the S&P 500, which tracks the market capitalization of 500 companies, is typically preferred among professional investors as a gauge of overall market health (see the difference between the two), the Dow’s rally still reflects renewed optimism at a time of economic uncertainty.

Retail

Wayfair is opening its first physical store

Digitally native companies are increasingly looking for growth IRL, and Wayfair wants to join the party. The online home goods retailer is opening its first physical, large-format store this week in a suburb near Chicago, following a trend of other fully online businesses moving to the real world.

Brick and mortar

The store will feature two floors dedicated to dining room essentials, faucet applications, and other home goods over the course of 150,000 square feet. It will also offer custom cabinets and a “gallery wall creator” for anyone who isn’t satisfied with the stock options. Not to mention, it will boast a cafe called “The Porch.” Now you’ll know where to look for your mom when you can’t find her.

A growing trend: Consumers and businesses alike have thought e-commerce would replace the need for physical stores for a long time. And while that may be true to a certain degree, many brands are finding a balance between the two.

• Wayfair is joining an increasing list of exclusively online brands that have transitioned to a hybrid online/in-person presence, including Allbirds, ThirdLove, and Warby Parker.

• However, the difference between Wayfair and other brands is the number of items sold. Wayfair has a much broader catalog, and thus needs more square footage to sell all of its products.

Wayfair saw net revenue peak at nearly $14 billion in 2020, when everyone was stuck at home and online shopping thrived; the retailers revenue dropped $2 billion last year and knew something needed to change.

Almost 85% of retail purchases happened in-person last year, according to Census data, showing consumers really want to jump on the bed before they buy it.

Grab Bag

Red Lobster is on the ropes

RIP to the glorious cheddar biscuits and endless shrimp, you will be missed. The iconic seafood chain, which was once the largest in the world, announced yesterday that it filed for Chapter 11 bankruptcy protection, attempting to find a buyer before it’s too late.

The chain has more than $1 billion in debt and less than $30 million cash on hand, struggling to finance its locations as it closes more stores.

The fall from grace

Red lobster was founded in 1968 and ran under Bill Darden, a pioneer of casual dining in America. The restaurant revolutionized casual dining and was soon sold off to General Mills.

In 2014, Red Lobster was sold off by Darden to Golden Gate Capital, a private equity firm, but the sale included a sale-leaseback agreement, which forced Red Lobster to take on the added cost of pricey leases.

However, since 2020, the chain has struggled under its new management, Thai Union Group.

• Since 2019, foot traffic decreased over 30% during the pandemic and has only increased marginally.

• Executives came in and out like a revolving door, with five different CEO’s since 2021.

• The endless shrimp deal (god bless) went from an occasional promo to a permanent feature, costing the business $11 million in Q3 of last year, making the total annual loss $76 million.

• Earlier this year, Thai Union Group said they would sell the company, taking a $530 million loss.

Earlier this year, 93 locations, or around 15% of its restaurants to help avoid bankruptcy. The chain has been looking for a new owner for months, but no one wants to take on the task of reviving a dead lobster. Unless there is butter involved. And a bun.

Brands are asking you to come up with ideas for them

Brands from various industries want your opinion. Large brands are increasingly allowing fans to partake in the invention process, changing the way products are designed for those who want them.

Toy talk

Lego started off in 2008 by letting fans submit ideas via its Lego Ideas program, which let’s fan submit creations and vote on those they think are worthwhile.

• Any with 10,000 votes and over will be considered by Lego for production (over 100 designs meet that standard a year).

• 56 fan created designs have reached production.

Mattel (who make Barbie, Hot Wheels, among other toys) take a similar approach. Mattel Creations is a site where fans can participate in crowdfunding campaigns and buy limited-edition collectibles.

Sites like these offer brands a unique insight into not only what their dedicated fans want, allowing them to get a jumpstart on production, but also gather data that is difficult to collect otherwise. Now other companies are starting to see the allure…

Interactive consumerism

Seeing how fans being involved in the idea generation process has helped companies like Lego, more brands are starting to hop in on the trend:

• Frito-Lay created the “Do us a Flavor” campaign, which allowed fans to pick a new potato chip flavor, received around four million submissions.

• PepsiCo has consistently relied on fans to see what they like and don’t like, asking on social media and taking polls to see what is popular.

• NASCAR runs a Fan Council community where over 10,000 dedicated fans get an inside look at marketing and event decisions to help the organization bounce ideas around.

• Movie production studio Legion M turned fans into investors, letting them take a portion of the profit.

Other companies like Starbucks, Hasbro, and Porsche also tried using crowdsourcing to see what kind of products fans want released.

While this can be beneficial in many ways (idea creation, data collection, loyalty), there has to be limits to how much control fans can actually have… or else you end up with something like pop flavored Lay’s.

Fast Facts

Easy Money: A Massachusetts woman won a $1 million lottery prize twice in 10 weeks. This teaches us a valuable life lesson: never stop gambling.

Interstellar Images: NASA’s best photos of the year will leave you shocked.

Suspicious Shape: The Norton Disney History and Archaeology Group said a Roman dodecahedron found in England is “one of archaeology’s great enigmas.” Over 130 have been found since the 1700’s but no one really knows what they were used for… except for Reddit.

Milk Machine: A dairy in Philadelphia opened the city’s first 24-hour cheese vending machine. I need one for my room.

Dollar Donation: After he couldn’t find a buyer, former Washington Commanders owner Dan Snyder donated his $34.9 million mansion to the American Cancer Society. It’s the organization’s largest gift in its more than century long history.