May 21, 2024


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Disney Will Close 30 Percent of Its Stores in North America

Disney will close 30 percent of its stores in North America this year.
Credit…Joshua Lott for The New York Times

After 33 years as a shopping mall mainstay, Mickey Mouse is mostly calling it a day.

The Walt Disney Company said on Wednesday that it would dramatically downsize its chain of Disney Stores, which have struggled amid the pandemic and a broader consumer shift to online shopping. At least 60 locations in North America — 30 percent of the Disney Store footprint in the region — will close this year.

The company described the closures as the “beginning” of its downsizing effort. A significant number of overseas stores are also expected to close. According to its 2020 annual report, Disney has about 60 stores in Europe.

The Disney Store chain was founded in 1987 and once numbered more than 1,000 locations worldwide. For a time in the early 1990s, during a boom for shopping malls, Disney even experimented with an adjacent spinoff chain of Mickey’s Kitchen restaurants, where items included Dumbo burgers, Pinocchio pizzas and fries shaped like Donald Duck.

Disney redesigned many Disney Store locations in 2017 in an attempt to boost business, incorporating live video feeds from its theme parks and shifting the merchandise mix away from toys and toward fashion-conscious young adults. Results were mixed. In 2019, as shopping malls continued to struggle, Disney expanded its merchandising presence at Target stores, a move that analysts viewed as the beginning of the end for the stand-alone Disney Store business.

ShopDisney, the company’s online store, will expand over the next year and become more integrated with Disney’s theme park apps and social media platforms, according to Stephanie Young, president of Disney Consumer Products, Games and Publishing.

The supermarket chain H-E-B said it would require staff to continue to wear masks and would encourage (but not require, as an earlier caption misstated due to an editing error) customers to do so. 
Credit…Ilana Panich-Linsman for The New York Times

A day after Gov. Greg Abbott said he would lift Texas’s mask requirement and allow businesses to fully reopen, several companies said they would continue to require face coverings in the state. But industry groups are worried that businesses will not be able to enforce such policies once Texas and other states no longer require masks.

Target and Macy’s said they would continue to require customers and employees to wear masks in their Texas outlets. And Kroger, the grocery chain, said it would require everyone in its stores nationwide to wear masks until its frontline workers are vaccinated against the coronavirus.

The responsibility for mask enforcement will likely fall on the shoulders of frontline workers, who have been repeatedly harassed by customers who refuse to adhere to the policies.

“We support governors reopening their economies and giving beleaguered restaurants and other small businesses the opportunity to rebuild and rehire workers,” said Jason Brewer, the executive vice president of communications for the Retail Industry Leaders Association. “But going backward on safety measures will unfairly put retail employees back in the role of enforcing guidelines still recommended by the C.D.C. and other public health advocates.”

Texas officials had done little to enforce their own mask policies, largely relying on businesses and social stigma to uphold the rules. The role individuals and businesses play will now become even more important, some industry executives said.

“As we have seen throughout the pandemic, states and municipalities have mandated mask policies, yet have failed to provide any enforcement mechanisms,” Bill Thorne, an executive at the National Retail Federation, said in a statement.

Small business owners in Texas posted mixed reactions to the Mr. Abbott’s announcement on LinkedIn.

“We are so thankful that our local restaurants and other businesses that survive on retail/walk-in consumers are going to be able to get back to it,” wrote Jerry Drew, the chief executive of Network Thermostat, an electronics manufacturer in Grapevine, near Dallas. “Happy Days!”

Others were not so enthusiastic.

“I think the governor’s decision is a bad one,” wrote Gary Murray Sr., the owner of a fencing club in Round Rock, a suburb of Austin. “It is premature, reckless and I truly believe that he is being pressured by outside sources with no regard for health and safety.”

Volunteers from the Colis du Coeur Zakaria association hand out food to people in the working-class district of Marolles, in Brussels, in February, thanks to donations from individuals.
Credit…Stephanie Lecocq/EPA, via Shutterstock

Philanthropic giving in response to the Covid-19 pandemic topped $20 billion last year, orders of magnitude more than past disasters, man-made or natural, according to a report released Wednesday by the groups Candid and the Center for Disaster Philanthropy.

The total includes global giving by foundations, corporations, public charities and wealthy individuals.

“It’s far and away more than we have ever seen for disasters,” said Grace Sato, director of research at Candid. “It’s an overused term to say unprecedented, but I would say funding for Covid-19 has been unprecedented in terms of giving.”

By comparison, Candid found only $1 billion in gifts responding to the terror attacks of Sept. 11, 2001, and just $362 million for the Ebola crisis in West Africa less than a decade ago.

Demands on frontline charities have grown even as they face immense financial pressure. The Center for Civil Society Studies at Johns Hopkins University estimated that nearly 1 million jobs had been lost in the nonprofit sector in the United States from the start of the pandemic through January 2021, a 7.7 percent decline from February 2020.

The needs created by lockdowns, shortages of medical equipment and millions of deaths were unusual, but many of the names leading the way in giving last year are familiar. Among foundations, the two biggest givers were the Bill and Melinda Gates Foundation, which pledged $1.33 billion in response to the crisis, and the Rockefeller Foundation, which pledged more than $1.1 billion.

Corporations were responsible for 44 percent of total giving, with Google’s philanthropic arm pledging $1.16 billion.

Ms. Sato said the report did not capture smaller individual gifts to frontline charities, work by mutual-aid societies or crowdsourced fund raisers. It did include significant gifts announced by major donors, including MacKenzie Scott, a relative newcomer to mega-philanthropy.

Ms. Scott, a novelist and the ex-wife of Amazon founder Jeff Bezos, gave away nearly $6 billion last year. The report counted $4 billion of that as responding to the pandemic, totaling nearly three-quarters of Covid-19 related giving by high-net-worth individuals.

While the more than $20 billion in donations was an enormous amount of giving compared with past crises, that figure is dwarfed by the trillions of dollars in government stimulus packages.

“Compared to government spending, it’s a drop in the bucket,” Ms. Sato said.

Neel Kashkari, the president of the Minneapolis Federal Reserve Bank, has pushed for greater attention to racial disparities and inequality.
Credit…Hiroko Masuike for The New York Times

The Federal Reserve’s latest report on economic conditions across its 12 regional banking districts included new sections from the Minneapolis branch on minority- and women-owned businesses and on the experiences of workers.

The report, known as the Beige Book, generally focuses on economic life through the eyes of businesses. Neel Kashkari, the president of the Minneapolis Fed, has pushed for greater attention to racial disparities and inequality in general. He was among a group of central bank officials who initiated the Fed’s Racism and the Economy conference series.

The additions to the Minneapolis branch’s anecdotal survey of businesses in February detailed what had been pulling workers into or keeping them out of jobs and highlighted concerns that might have gone overlooked in a more general survey of businesses.

“Contacts noted hesitancy among immigrant business owners to apply for assistance out of concern for jeopardizing the immigration status of themselves or family members,” the minority-led business section noted. “Financial instability was high among these firms.”

Laid-off workers in the service sector were slower to move to other fields — like manufacturing — than expected. The worker section was drawn from conversations with organizations such as labor unions, nonprofit groups and work force development agencies.

“A job service contact suggested that some of the inertia may be due to employers providing false hope that workers will be called back to their previous jobs,” the report noted. It also said that “family care responsibilities, remote learning in many school districts, fears of infection” had increased the cost of working for prospective workers.

The Beige Book is published eight times a year. It described “modest” economic growth in the country as a whole, with mixed pricing power for businesses.

The Alamo Drafthouse in downtown Austin, Texas, a 90-year-old movie palace known as the Ritz, will close permanently.
Credit…Tamir Kalifa for The New York Times

The Alamo Drafthouse theater chain, which operates some 40 locations across the country and is known for its curated screenings, elevated food and drink options and over-the-top fan interactions, announced Wednesday that it was filing for Chapter 11 bankruptcy protection.

As part of the process, the company will sell its assets to its senior lender group, including Altamont Capital Partners, affiliates of Fortress Investment Group and the company’s founder, Tim League.

The company said the move would provide the company with the financing needed to weather the pandemic, which has had an outsize impact on the movie theater business. Many theaters across the country have been forced to close, at least temporarily, and movie studios have delayed their blockbuster releases.

Alamo, which is based in Austin, Texas, is one of the most prominent movie chains to seek Chapter 11 protection during the pandemic.

“Because of the increase in vaccination availability, a very exciting slate of new releases and pent-up audience demand, we’re extremely confident that by the end of 2021, the cinema industry — and our theaters specifically — will be thriving,” Mr. League said in a statement. “That said, these are difficult times and during this bankruptcy we will have to make difficult decisions about our lease portfolio. We are hopeful that our landlord and other vendor partners will work with us to help ensure a successful emergence from bankruptcy and viable future business.”

Alamo’s downtown Austin location, a 90-year-old movie palace known as the Ritz, will close permanently, along with locations in Kansas City, Mo., and New Braunfels, Texas. Development at a proposed site in Orlando will cease.

The company’s other locations that are operational plan to remain open during the restructuring. And plans to open a new Brooklyn location remain on track, though it won’t be ready on Friday, the day that New York has said movie theaters can reopen.

On Tuesday, Gov. Greg Abbott of Texas eliminated the state’s mask mandate and allowed businesses to open at 100 percent capacity. Alamo pushed back against this decision, telling patrons in a tweet that the company’s mandatory mask policy and six feet of social distancing would remain in place at its Texas locations.

“We are only following the guidance of the C.D.C. and medical experts, not politicians,” the company said.

The Bank of England, in London. There is growing interest in exploring how central banks can address climate change.
Credit…Neil Hall/EPA, via Shutterstock

The British government has updated the Bank of England’s objectives to include green and sustainable goals, a move that could affect which corporate bonds the central bank buys.

Rishi Sunak, the chancellor of the Exchequer, announced the change in his budget presentation on Wednesday. The government is charged with setting the remit of the central bank. For years, that mandate has included maintaining stable inflation, targeting an annual 2 percent increase in the consumer price index. The Bank of England is also required to support the government’s economic policy.

In a letter to the central bank’s governor, Andrew Bailey, Mr. Sunak said he was updating the bank’s mandate “to reflect the government’s economic strategy for achieving strong, sustainable and balanced growth that is also environmentally sustainable and consistent with the transition to a net zero economy.”

There were no details on how this update might change the policies or tools of the central bank. But there has been growing debate about how central banks can contribute to climate change goals. In December, the U.S. Federal Reserve joined a network of central banks and regulators focused on the financial impacts of climate change, called the Network of Central Banks and Supervisors for Greening the Financial System. The Bank of England was a founding member of the group.

Britain has passed legislation to become a net-zero emitter of greenhouse gases by 2050.

Karen Ward, a strategist at JPMorgan Asset Management, said: “As investors we should not underestimate the impact this could have on the already strong momentum behind sustainable investing. This could tilt the preference of the central bank’s asset purchases and involve considerable regulatory change to encourage private capital to do likewise.”

The Bank of England said on Wednesday that it welcomed the change. In a statement, the central bank added that it would provide details in the coming months about how it would change its corporate bond-buying program to “account for the climate impact of the issuers of the bonds we hold.” The central bank has purchased £10 billion ($14 billion) in corporate bonds during the pandemic, doubling its holdings. It’s a relatively small slice of its overall bond-buying program, which is mostly made up of government bonds and will reach £895 billion by the end of the year.

During the last week of February, seven of Anthropologie’s top 10 selling items online were dresses, a “striking change,” the company said.
Credit…Bing Guan/Reuters

After roughly a year of isolation and demand for leggings and at-home apparel, Urban Outfitters, the owner of the namesake brand as well as Anthropologie and Free People, said that it was seeing new interest in dresses and other “going out-type apparel.”

In the last week of February, seven of Anthropologie’s top 10 selling items online were dresses, Richard A. Hayne, chief executive of Urban Outfitters, said on an earnings call on Tuesday. “Over the past year, we were lucky if they included one or two dresses,” Mr. Hayne said, referring to the shift as a “striking change.”

“We believe as vaccines become more widely distributed, new Covid cases continue to fall and government restrictions begin to loosen, women will feel more comfortable venturing out and apparel demand will accelerate,” he said. “The exact timing is hard to predict, but we believe it will coincide with spring weather.”

Urban Outfitters said Wednesday that its net sales for the fourth quarter, which ended Jan. 31, declined 7 percent, to $1.1 billion, from the same period a year earlier. Sales for the year fell 13 percent, and the company posted a net profit of $1 million.

Apparel retailers have struggled with the pandemic in the past year, as many people stayed home and canceled social events. An uptick in sales of dressier clothing could signal that consumers are preparing to return to life outside the home as the pace of vaccinations increases.

Still, many are proceeding cautiously. Peter Nordstrom, president of the department store chain, said on a Tuesday earnings call that “we’ve seen things like dresses and some of these things improve, but it’s still pretty early in the game.” He said that the company was still seeing the most strength in areas like casual clothing, activewear and home wares.

Michaels has more than 1,200 stores in North America and some 44,000 employees.
Credit…Gabby Jones for The New York Times

Apollo Global Management announced Wednesday that it would acquire the crafts retailer Michaels in a deal that valued the company at $5 billion.

The acquisition is a bet that Michaels can continue to ride the wave of enthusiasm for crafting spurred by Americans stuck at home during the pandemic. The company, which is based in Irving, Texas, has also invested in its digital business, starting curbside pickup and same-day delivery.

The deal values Michaels shares at $22, a 47 percent premium to the stock’s closing price before news of private equity interest in the retailer was first reported. The deal, which is expected to close in the first half of Michaels’ fiscal year, includes a 25-day “go-shop” period, allowing Michaels to weigh potential superior offers.

Shares of the retailer, which has more than 1,200 stores in North America and some 44,000 employees, have risen nearly 300 percent over the past year, giving it a market capitalization of around $2.3 billion.

The company’s “impressive growth transformation” during the pandemic led Apollo to submit “an unsolicited offer to buy the company,” said James A. Quella, chairman of Michaels.

The deal will bring Michaels back into the hands of private equity after seven years as a public company. Two private equity firms, Bain Capital and Blackstone, acquired Michaels in 2006, taking it private in a deal worth more than $6 billion. The company made its way back into the public markets in 2014, at a market value of about $3.5 billion. Bain is still a large shareholder.

Apollo sees “significant opportunity to enhance the Michaels brand, store experience and omnichannel offering to its customers across North America,” said Andrew Jhawar, a senior partner at Apollo and head of the firm’s retail and consumer group. The firm is buying Michaels through funds managed by its affiliates.

As a private company, Michaels will have “financial flexibility” to further expand its retail and online business, said Michael’s chief executive, Ashley Buchanan.

Credit…Joe Cavaretta/Associated Press

“Hey, I know this is like a crazy idea. But would you ever buy the Venetian?”

That’s a call that David Sambur, Apollo Global Management’s co-head of private equity, recounted receiving while walking in Central Park this fall.

The answer, ultimately, was yes.

On Wednesday, Las Vegas Sands, the world’s largest casino company, announced that it would sell the Venetian, long seen as one of its prized assets, to Apollo and Vici Properties for $6.25 billion. Apollo will operate the property and Vici will own the real estate.

Executives from Sands, which was founded by the billionaire gambling magnate and Republican megadonor Sheldon Adelson, who died in January, called the deal “bittersweet,” but said they will use the proceeds to invest in the group’s casinos in Macau and Singapore, which form the “backbone” of the company.

“The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” said Robert Goldstein, the chief executive of Sands. “As we announce the sale of The Venetian Resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history.”

For Apollo, the deal is a bet that leisure and business travel will return to pre-pandemic levels, or close enough to make the purchase pay off. It follows similar investments, like buying a stake in travel booking company Expedia early in the pandemic and extending a loan to Aeromexico in October after the Mexican airline filed for bankruptcy a few months before.

Other casino companies, like Caesars Entertainment, have been saying that leisure travel in Las Vegas is poised to recover quickly. Judging when business conventions will return is harder, Mr. Sambur said. Apollo’s research found that the conference business tends to track the stock market and corporate profits, both of which are strong right now.

“It’s a very audacious bet to make,” he said. “But all of the fundamentals are there if you look hard enough.”

  • The S&P 500 fell 1.3 percent on Wednesday as government bond yields resumed their rise.

  • The tech-heavy Nasdaq composite fell 2.7 percent as shares of Apple, Alphabet, Amazon and Microsoft dropped 2.5 percent or more.

  • The yield on the 10-year Treasury note rose to 1.47 percent. Bond yields have jumped sharply this year, reflecting optimism about economic growth but also raising concerns about inflation and that the Federal Reserve might pull back on its efforts to bolster the economy.

  • Shares of Michaels jumped more than 20 percent after Apollo Global Management said it would acquire the craft retailer in a $5 billion deal.

  • European indexes were mostly up, with the Stoxx Europe 600 gaining less than 0.1 percent and the FTSE 100 up 0.9 percent.

  • Automakers were among the big gainers in Europe, with Volkswagen and Renault rising more than 5, after analysts gave both companies positive outlooks. Stellantis, the name for the merger of Fiat Chrysler and PSA, said it would aim for a profit margin of 5.5 percent to 7.5 percent, assuming no further significant lockdowns; shares fell slightly.

  • Asian markets ended the day higher, with the Shanghai composite in China up 2 percent higher and the Nikkei in Japan gaining 0.5 percent. In Australia, the S&P/ASX 200 gained 0.8 percent after the government announced the economy grew 3.1 percent in the final quarter of 2020 over the previous quarter; for all 2020, the economy shrank 1.1 percent.

  • Oil prices were higher, with futures of West Texas Intermediate, the U.S. benchmark, up 2.5 percent, to $61.25 barrel, and the global benchmark, Brent crude, up 2.1 percent to $64 a barrel.

  • The chairman of Rio Tinto, the giant Anglo-Australian mining company, said he would step down after the destruction of two ancient rock shelters in Australia that were sacred to Aboriginal groups. The company blew up the caves in May to get at iron ore underneath them, raising an outcry that caused the chief executive to step down in September.

  • The Biden administration unveiled a plan on Thursday to invest $9 billion in minority communities, taking a step in fulfilling its promise to ensure that those who have been hit hardest by the pandemic have access to loans as the economy recovers. The Treasury Department said that it was opening the application process for its Emergency Capital Investment Program, which will provide a major infusion of funds to Community Development Financial Institutions and Minority Depository Institutions as they look to step up lending.

  • Facebook said on Wednesday that it planned to lift its ban on political advertising across its network, resuming a form of digital promotion that has been criticized for spreading misinformation and falsehoods and inflaming voters. The social network said it would allow advertisers to buy new ads about “social issues, elections or politics” beginning on Thursday, according to a copy of an email sent to political advertisers and viewed by The New York Times.

  • Darren W. Woods, the chief executive of Exxon Mobil, said in an interview before an annual presentation to investors that Exxon would try to set a goal for not emitting more greenhouse gases than it removed from the atmosphere, though he said it was still difficult to say when that might happen. Under pressure from activist investors, Exxon said this week that it was adding two new directors with no previous ties to fossil fuels to its board. The company recently said it would create a new business that captured carbon dioxide from industrial plants and buried it deep in the ground. It also recently invested in Global Thermostat, a company that aims to suck carbon dioxide out of the air.