Category: Business

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More of the outstanding Yeezy inventory that Adidas is looking to part ways with will soon go on sale.

Adidas revealed Friday that beginning next week, it would put more of the popular shoe designs from its ex-partnership with Ye, the rapper previously called Kanye West, up for purchase. The sportswear company intends to make donations to several organizations using a “significant amount” of the proceeds like it did last time, according to its press release.

The offloading of the Yeezy products via digital platforms will start Wednesday and will take place in phases. That strategy is meant to “help manage demand whilst ensuring a fair and premium experience for consumers,” the company said. 

It will mark the second time Adidas has sold some of the Yeezy products it has been sitting on. 

ADIDAS SELLING YEEZY SHOES ONCE AGAIN AFTER CUTTING TIES WITH KANYE

The first happened in May, with Adidas going on to report earlier this week that it had seen a “positive impact” from that initial Yeezy sale. That move partly prompted the sportswear company to change to a “mid-single-digit” revenue drop rate and a narrower €450 million ($499 million) operating loss in its 2023 financial forecast.

A report from the Financial Times that cited unnamed sources suggested the company saw people place roughly €508 million (about $565 million) of orders during the first round of sales it did. 

Adidas first found itself with heaps of Yeezy shoes and other products in outstanding inventory when it put a stop to its relationship with Ye in October. It reported the apparel was worth $1.3 billion.

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The company said it chose to do so “after a thorough review,” pointing to the “unacceptable, hateful and dangerous” antisemitic comments the rapper had made at the time.

Some other companies moved to separate from Ye after his remarks, one of which was retailer Gap. It removed Yeezy Gap items from store shelves and shut down the website associated with the apparel line it formerly had with the rapper. 

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Adidas said Wednesday that it will send some money that it makes from the Yeezy products to the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change and the Foundation to Combat Antisemitism (FCAS). Robert Kraft, the billionaire owner of the New England Patriots football team, started the FCAS a few years ago.

The company’s stock finished trading on Friday afternoon just under $102. That price represented a more than 18% increase from where it was 12 months ago.

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Global chipmakers like Intel and Samsung are seeing an end to supply surplus for semiconductors, while demand expectations from customers outside the AI industry remains low. 

The chip market has shrunk in 2023 for smartphones, PCs and data centers, as corporate customers and consumers curtail spending in an economy weakened by inflation and rising interest rates, creating an unprecedented oversupply of commodity chips.

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The oversupply resulted in a combined record of 15.2 trillion won ($12 billion) first-half operating loss for the world’s two largest memory chipmakers, Samsung and SK Hynix.

The glut is beginning to ease amid production cuts and a 11% decline in PC shipments over the June quarter compared to a 30% slump in each of the previous two quarters, data from tech analysts Canalys showed.

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The smartphone market is also on the rise, with cellphone shipments falling 8% in the June quarter, versus 14% in the first quarter, according to research firm Counterpoint.

“Demand is recovering very gradually,” Woohyun Kim, chief financial officer at SK Hynix, said on an earnings call this week.

“The recent improvement in PC shipments has been mainly led by promotions and low-end models, meaning it provided limited impact on chip demand recovery,” he added. 

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Despite chip demand increases to support generative AI as platforms like ChatGPT are launched, the sector only makes up a small portion of overall demand while crimping corporate spending on servers.

Meanwhile, Intel CEO Pat Gelsinger said on Thursday an inventory glut in server central processing units (CPUs) will persist until the second half of the year and that data center chip sales will decline modestly in the third quarter before recovering in the fourth quarter. 

China, the world’s biggest chip buyer, is now reducing its overall overlook, both Samsung and SK Hynix said China’s reopening did not invigorate the smartphone market and they were prolonging production cuts of NAND memory chips, which are used in smartphones to store digital data.

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Lam CEO Tim Archer said on a conference call with analysts said, “Advanced AI servers have significantly higher leading-edge logic, memory and storage content versus traditional servers, and every incremental 1% penetration of AI servers and data centers is expected to drive $1 billion to $1.5 billion of additional (chip equipment) investment.”

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Chipmakers are also increasing production of the high-end chips used to support AI related chips.

Reuters contributed to this report.

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A group of progressive Democrats proposed legislation this week aimed at generating millions of dollars in new tax revenue by taxing “extreme wealth.”

The Oppose Limitless Inequality Growth and Reverse Community Harms Act, or the OLIGARCH Act, was introduced by Rep. Barbara Lee, D-Calif., and several other progressive Democrats.

Lee, who is running to replace Sen. Dianne Feinstein in the Senate, said her bill is aimed at taxing extreme wealth in the name of fighting the “threat to democracy posed by aristocracy.”

“Inequality in the United States is worse in 2023 than it was during the Gilded Age. It is unacceptable that millions of hardworking people remain impoverished while the top 0.1% hold over 20% of the nation’s wealth,” she said. “The OLIGARCH Act is the solution we need to close the exorbitant wealth gap in America and create a tax system where everyone pays their fair share.”

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One sponsor of the bill, Rep. Jamaal Bowman, D-N.Y., said wealth inequality is the result of centuries-old discrimination in America that must be rectified but stopped short of calling it a reparations plan.

“The extreme wealth inequality we see today, which disproportionately impacts Black and brown families, is a result of centuries of discrimination towards working-class, vulnerable communities while allowing tax breaks for the rich and wealthy,” he said.

The bill creates a 2% tax on all wealth between 1,000 and 10,000 times median household wealth, which the U.S. Census Bureau said was $140,000 in 2020. Using those numbers, the Democrats’ bill would hit people with a 2% tax if their wealth was between $140 million and $1.4 billion.

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A 2% tax on $1.4 billion would create a tax bill of $28 million.

The tax rises to 4% for wealth between 10,000 and 100,000 times median household wealth, or between $1.4 billion and $14 billion using 2020 data. Within this bracket, applying the 4% tax on $10 billion worth of wealth, for example, would create a tax bill of $400 million.

The tax jumps again to 6% for wealth between 100,000 and 1 million times median household wealth, or between $14 billion and $140 billion. Within this bracket, a 6% tax on $100 billion in wealth would create a $6 billion tax.

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Finally, the bill creates an 8% tax on all wealth above 1 million times the median household wealth, or about $140 billion. Very few people have wealth that falls into that category. Elon Musk was reportedly worth about $240 billion as of July, and one sponsor of the bill mentioned Musk and other wealthy businessmen in a statement supporting the bill.

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“Right now, the 400 richest Americans have 22,000 times the political influence of the bottom 90%,” said Rep. Summer Lee, D-Pa. “Our teachers, firefighters and nurses are paying more in taxes than Jeff Bezos, Elon Musk and Mark Zuckerberg.”

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The Meghan Markle-led drama series, “Suits,” brought in big numbers at the end of June and four years after the final season aired.

Nielsen reported that the legal series, which helped catapult Markle to fame, set a new record for an acquired series, with over 3 billion streams the week of June 26 to July 2 on Netflix and Peacock.

The previous record was held by “Manifest,” with 2.49 billion watch minutes from June 14-20, 2021, per The Hollywood Reporter.

The Nielsen report only factors in U.S.-based television streaming, so content viewed in other countries did not figure into the results. 

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Nielsen also noted the show is attracting a younger audience. The median viewing age for “Suits” is younger than when the series debuted 12 years ago.

The Duchess of Sussex starred as Rachel Zane on the series, which ran from 2011-2019. “Suits” also starred Gabriel Macht, Patrick J. Adams and Sarah Rafferty.

After Markle and Prince Harry’s engagement in November 2017, the duchess stepped away from acting entirely. 

Following the royal engagement, USA Network announced the actress would be leaving the show after season 7. Markle and co-star Adams both stepped away from the series after the seventh season, but the show continued two additional seasons.

“Suits” became available on Netflix in June, which happened to be the same day as King Charles III’s birthday parade. 

Trooping the Colour, a royal tradition going back hundreds of years to King Charles II’s 17th-century reign, is held every summer to celebrate the monarch’s birthday. 

Markle and Harry wed in a lavish wedding at Windsor Castle in 2018. The couple participated in their first Trooping the Colour in 2018 after their wedding. 

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The explosive week for “Suits” in June comes after Netflix reportedly said it’s sticking with Harry and Markle after Spotify abruptly ended its deal with the couple and canceled the duchess’ podcast “Archetypes” at the end of its first season.

“We value our partnership with Archewell Productions,” a Netflix spokesperson told People magazine of Harry and Meghan’s production company. “‘Harry & Meghan’ was Netflix’s biggest documentary debut ever, and we’ll continue to work together on a number of projects, including the upcoming documentary series ‘Heart of Invictus.’”

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The Duke and Duchess of Sussex signed a multimillion-dollar deal with Netflix in 2020 to produce exclusive documentaries, docuseries, feature films, scripted shows and children’s programming.

Fox Business’ Brie Stimson contributed to this report.

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Ford Motor Company is conducting a recall of hundreds of thousands of F-150 trucks in the U.S. that could potentially experience a wiring-related problem with their electric parking brakes.

In a safety recall report to the National Highway Traffic Safety Administration, the vehicle company said contact with the rear axle housing may damage a wiring harness, which could lead to unexpected activation of the electric parking brake.

The 870,701 trucks potentially affected belong to the 2021 through 2023 model years and feature single exhaust systems. Production of the recalled vehicles happened over roughly three years. 

People who own the affected F-150 trucks will receive letters informing them of the recall and the fix for the issue beginning Sept. 11, the same date dealers will get notification, according to the report.

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The recall report indicated nearly 300 of more than 900 warranty and field reports for the wire chafing issue included an unintentional electric parking brake activation. Nineteen of those incidents happened with a driver operating a truck, it said. 

The issue has not resulted in any known injuries or crashes, according to the report.

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The issue will be addressed in one of two ways at dealerships. Either the recalled trucks will have a harness swapped out for a new one or a protective tie strap and tape wrap will be applied at no cost to owners.

A harness will be replaced if tape covering the area has experienced wear, the recall report said. New harnesses feature a plastic shield that prevents chafing. 

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A group within Ford started looking into reports of the unintentional parking brake activation in February, according to the report.

Reuters contributed to this report.

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