Breakingviews

Coach tries LVMH model on for size with shoe buy

January 6, 2015

The U.S. leather-goods purveyor is paying $574 mln for Stuart Weitzman, the first acquisition since its 1941 founding. While this looks like an admission its core brand has maxed out, Coach is betting it can use its know-how to expand other marques like LVMH and Kering have.

A double-speak guide to modern markets

January 5, 2015

As the market perpetually shifts, so do the rhetorical stylings its players use to talk their way out of problems. The past year saw above-average creativity when it came to saying one thing and meaning another. Breakingviews offers up 10 euphemisms we’d like to see disappear.

IBM turnaround requires atypical activist fix

December 31, 2014

Big Blue’s strategy of cost cuts and debt-fueled buybacks is no longer working – but the tech giant keeps trying. A tarnished balance sheet, lean staffing and a history of disposals rule out typical activist wheezes. Prodding the company to invest in its business could pay off.

Shake Shack IPO disappoints in taste test

December 30, 2014

Celebrity restaurateur Danny Meyer’s global chain of burger joints is serving up some of the uncommon fixings found in new tech stocks. Two classes of shares and creative financial metrics are unappetizing. At least the bottom line offers a sweet refreshment to wash it all down.

Tesco will have to fight for its independence

December 30, 2014

At $40 bln, the UK’s No. 1 grocer would be an M&A mouthful. A leveraged buyout looks tricky but strategic buyers have a rare opportunity. Tesco’s long-suffering current shareholders might jump at a chance to cash out. Much depends on the person chosen as the new chair.

JPMorgan soul-baring cuts room for error

December 24, 2014

Jamie Dimon’s bank has followed Goldman Sachs’ 2011 lead by publishing a report detailing how it has responded to crises. Amid the PR-speak are some worrying admissions and much-needed improvements. Future failures and shareholder concerns will be harder to explain away.

Mary Barra gets a second first year at GM’s wheel

December 24, 2014

The carmaker’s ignition-switch fiasco crashed her debut as CEO. The crisis may, though, have speeded up much-needed changes. Barra needs to show these will stick. She also has to prove the Motown firm is prepared for what may be some of the biggest changes the industry has faced.

Bank cyberinsurance is overdue to come of age

December 23, 2014

It’s a confusing market, but growing fast. No wonder with a huge breach at JPMorgan in 2014, never mind monsters at Sony and Home Depot. Add a Washington campaign, and insurance may become standard. As well as financial cover, that could improve security – but only at the margin.

Acquirers can expect more M&A investor skeptics

December 22, 2014

There’s no reason to think the $3.2 trln pace of deals will slow in 2015, but the uproarious reception from shareholders is already showing signs of subsiding. As easy pickings of squeezing costs from overlapping operations evaporate, the laws of corporate finance will prevail.

First case against algorithm could reboot U.S. law

December 22, 2014

A market manipulation prosecution essentially turns on whether one program duped another. That makes proving criminal intent seem futuristic at best. Similar obstacles could trip up other cases where software is the de facto defendant. Judges will tackle the issue in 2015.