Raphael Stevens

Luxury electric vehicle maker Lucid Group said it delivered fewer Air sedans to customers during the first quarter than it produced.
It’s another sign that the company is seeing weaker-than-expected demand.
CEO Peter Rawlinson has said too few people are aware of the company’s EVs.

With 1,050 horsepower, the new Grand Touring Performance edition becomes the most powerful version of Lucid’s electric Air sedan.
Lucid Motors

Luxury electric vehicle maker Lucid Group said late Thursday that it produced 2,314 of its Air sedans in the first quarter. But it delivered just 1,406 Airs to customers during the period, another sign that the company is seeing weaker-than-expected demand.
Wall Street analysts polled by FactSet had expected Lucid to deliver about 2,000 Airs in the first quarter. Lucid’s shares were down over 3% in after-hours trading following the news.

Lucid surprised Wall Street in February when it said that it planned to build just 10,000 to 14,000 Airs in 2023, despite having “over 28,000” reservations in hand. At the time, CEO Peter Rawlinson said that he believed “too few people are aware” of the company and its award-winning, but expensive, electric sedan – a hint that the company may have been struggling to convert reservations to sold orders.
Another hint that demand for the Air may be weak came late in March, when Lucid cut 1,300 workers, or about 18% of its workforce. The company is expected to take a one-time charge of between $24 million and $30 million for those layoffs, most of it in the first quarter.
Lucid said on Thursday that it will report its first-quarter results after the U.S. markets close on May 8.

Read more about electric vehicles from CNBC Pro More

Boeing on Thursday warned of reduced 737 Max production and deliveries in the near term due to a parts issue originating with a supplier.
Spirit AeroSystems manufacturers some of the fuselages used in Boeing jets and said in a statement it notified Boeing of a “quality issue” with certain 737 models.
It’s the latest production hiccup for Boeing amid an industry-wide shortage of new jets.

Boeing 737 Max airplanes sit parked at the company’s production facility on November 18, 2020 in Renton, Washington.
David Ryder | Getty Images

Boeing on Thursday warned it will likely have to reduce deliveries of its 737 Max airplane in the near term because of a problem with a part made by supplier Spirit AeroSystems.
Boeing said its supplier informed the company a “non-standard” manufacturing process was used on two fittings in aft fuselages. It said the issue affects certain 737 Max 8 planes, the company’s most popular model, with customers including American Airlines and Southwest Airlines. It also affects certain 737 Max 7, the 737 8200 and P-8 planes.

Boeing said the problem was not an “immediate safety of flight issue and the in-service fleet can continue operating safely.”Boeing has notified the Federal Aviation Administration of the issue and is working to inspect and address the fuselages as needed, the company said.The FAA said Boeing notified it of the issue and also said there is no immediate safety issue.
However, the issue will likely affect a significant number of undelivered 737 Max airplanes, both in production and in storage,” the manufacturer said in a statement.
Southwest said in a statement that it expects the issue to impact its delivery schedule of new Max planes and that it is discussing the details of that timeline for this year “and beyond.”United said it didn’t expect any “significant impact” to its capacity planes for this summer or the rest of 2023.
The problem, the most recent in a string of production issues, hits Boeing as it scrambles to increase production and deliveries of its best-selling plane while customers await new jetliners to capitalize on a rebound in travel. 
Shares of Boeing fell 4% in after-hours trading on Thursday after it disclosed the problem.

Spirit manufacturers some of the fuselages used in Boeing jets and said in a statement it notified Boeing of a “quality issue” with certain 737 models.
“Spirit is working to develop an inspection and repair for the affected fuselages. We continue to coordinate closely with our customer to resolve this matter and minimize impacts while maintaining our focus on safety,” the company said.
Shares of Spirit AeroSystems fell nearly 8%.
“We expect lower near-term 737 MAX deliveries while this required work is completed. We regret the impact that this issue will have on affected customers and are in contact with them concerning their delivery schedule,” Boeing said in a statement. “We will provide additional information in the days and weeks ahead as we better understand the delivery impacts.”
It’s the latest production problem for Boeing and its customers. Boeing earlier this year paused deliveries of its 787 Dreamliners for several weeks to address a data analysis flaw, and in 2021 and 2022 it struggled with other production flaws on the wide-body jets that halted deliveries for months.
The company on Tuesday reported March deliveries of 64 planes, the highest tally since December, amid an industry-wide shortage of new jets.
Airline executives have cited aircraft supply constraints as among the chief challenges in ramping up flying ahead of the peak travel season.
“We’re aware of the issue and working with Boeing to understand how it may impact our MAX deliveries,” an American Airlines spokesman said in statement.
— CNBC’s Leslie Josephs and Phil LeBeau contributed to this report. More

Walmart is selling Bonobos to brand management firm WHP Global and Express for $75 million, the second time its sold a direct to consumer brand this year.
The retail giant originally purchased Bonobos in 2017 for $310 million while it was attempting to grow its online presence under former e-commerce president Marc Lore.
WHP will acquire the Bonobos brand for $50 million and Express will get Bonobos’s operating assets and related liabilities for $25 million.

A garment factory worker packing Bonobos brand shirts in a factory in Hanoi, Vietnam.
Manan Vatsyayana | AFP | Getty Images

Walmart has sold menswear brand Bonobos to brand management firm WHP Global and Express in a $75 million deal announced Thursday.
It’s the second time this year Walmart has offloaded a direct to consumer brand that it bought under former e-commerce President Marc Lore after it sold Moosejaw to Dick’s Sporting Goods in February. 

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Walmart originally purchased Bonobos in 2017 for $310 million while it was attempting to grow its online presence and compete with Amazon under Lore, who founded Jet.com. It was just one of the DTC brands the mega-retailer picked up under his tenure and later sold, including Bare Necessities, Shoes.com and ModCloth. Lore left Walmart in 2021.
WHP, which took a 60% stake in Express in December, will acquire the Bonobos brand for $50 million, the company said in a news release. Express will get Bonobos’s operating assets and related liabilities for $25 million.
As part of the deal, Express will enter into a licensing agreement with WHP that will allow it to run Bonobos in exchange for royalty fees. 
The transaction is expected to close in Express’s second fiscal quarter of 2023, which typically ends in late July. 
“Bonobos is delivering double-digit sales growth and we plan to continue that momentum while also realizing operating synergies and other economies of scale,” Express CEO Tim Baxter said in a statement. 

“This is a compelling addition to our brand portfolio, and I expect the transaction will be accretive to operating income and free cash flow positive in fiscal 2023.”
Once the acquisition is finalized, WHP’s portfolio will include more than 10 consumer brands that are nearing $7 billion in total retail sales, said Yehuda Shmidman, WHP’s Global Chairman and CEO.
In a statement, a Walmart spokesperson said the company decided “it’s the right time to sell Bonobos” after nearly six years. 
“Bonobos joined the Walmart family to expand our assortment and expertise in Menswear. Since acquiring Bonobos, Walmart.com has grown from 70 million to hundreds of millions of items,” the spokesperson said. 
Online sales accounted for about $53.4 billion — or nearly 13% — of Walmart U.S.′ total net sales in the past fiscal year, which ended in late January, according to company filings. That’s a jump from $15.7 billion, or roughly 5% of Walmart U.S.′ total net sales, in 2019.
Last February, Bonobos launched Bonobos Fielder – a more affordable riff on the original brand that sold athleisure on its website, Walmart.com and select Walmart stores. 
A few months ago, Walmart decided to discontinue the brand because it overlapped with its men’s activewear and casual lines, the spokesperson said, adding the decision to discontinue the line wasn’t related to the sale of Bonobos. 
Bonobos CEO John Hutchinson will become brand president of Bonobos and report to Baxter after the deal closes. 
“This is an exciting moment for Bonobos as we embark on the next phase of our growth,” said Hutchison. “Born a digitally native vertical brand, we plan to build on our strength in eCommerce and customer loyalty, leverage EXPR’s expertise in omnichannel retailing and scale through WHP Global’s partnerships in licensing and distribution.”
Additional reporting by CNBC’s Melissa Repko More

The Washington Commanders are nearing a sale to an ownership group led by Philadelphia 76ers and New Jersey Devils Owner Josh Harris at around $6 billion, people familiar with the deal told CNBC.
The deal would represent a record price for a North American sports franchise.
The NFL’s finance committee and league owners still need to approve the deal.

Josh Harris speaks with members of the media during a news conference in Camden, N.J., Tuesday, May 14, 2019.
Matt Rourke | AP

The Washington Commanders are nearing a sale to an ownership group led by Philadelphia 76ers and New Jersey Devils Owner Josh Harris at around $6 billion, people familiar with the deal told CNBC.
The deal to purchase the embattled team still has to be submitted and approved by the NFL’s finance committee, and at least three-quarters of other team owners would need to approve it.

But those terms, first reported by Sportico, would represent the highest sale price paid for a North American sports team. The Walton family purchased the Denver Broncos in June for a then-record price of $4.65 billion.
Harris’ ownership group includes Washington D.C.-based billionaire Mitchell Rales and NBA legend Magic Johnson. Harris is a co-founder of Apollo Global Management. He’s also the founder and managing general partner of Harris Blitzer Sports & Entertainment and holds stakes in the Crystal Palace Football Club in the Premier League and in the Pittsburgh Steelers.
Amazon founder and Washington Post owner Jeff Bezos was exploring the sale process, but decided not to make an offer, according to ESPN.
Houston Rockets owner Tilman Fertitta told CNBC’s “Fast Money” Wednesday that he dropped out of the process after making an offer of $5.6 billion.
“If they can get somebody to pay them more than that, good luck to them. That’s all I can say. I own a franchise, so I love them selling for a lot. But at some point, I don’t think $6 billion is the right number,” Fertitta said.

Irwin Kishner, who represents a number of pro sports teams in the deal-making space, said he’s not surprised by the $6 billion sale price.
“You had some very, very wealthy competition to win the bid. This bid came out to be the strongest,” said Kishner, co-chair of the Sports Law Group with New York law firm Herrick, Feinstein.
Representatives for the Commanders, the NFL and Harris declined to comment.
For Commanders fans and former employees, progress in the sale process is welcome news.
“Today marks the end of a long, difficult chapter for all employees and fans of the Washington football organization,” said Lisa Banks and Debra Katz, attorneys who represent over 40 former Commanders employees, who alleged widespread misconduct from inside the Commanders front office. “We are proud of our many clients who made this moment possible – the brave women and men who came forward repeatedly and at great personal risk to expose the decades of sexual harassment and financial wrongdoing at the team. Their determination and perseverance forced this sale to happen.”
Commanders owner Dan Snyder announced in November of 2022, that he was putting the Commanders up for sale.
In July 2021, he was fined a record $10 million and removed from day-to-day operations after an investigation found the organization’s workplace “highly unprofessional.”
Snyder and his wife, Tanya, purchased the team in 1999 for $800 million.
Kishner said a sale marks the end of a “very long saga.”
“But alas, I think it’s best for the league. I think it’s best for the team, and I think it’s best for everyone to do well,” he said. More

The luxury watch market has seen soaring secondary market prices, boosted by new demand from younger generations.
Francois-Henry Bennahmias, CEO of Audemars Piguet, said the collectors are here to stay.
In response to claims of artificially tight supple, Bennahmias said, “We’re not playing the market. We’re not doing anything to make the price go one way or the other.”

The luxury watch market is well-positioned to avoid a crash as tight supply and a new generation of young collectors drive demand, according to the CEO of Audemars Piguet.
Luxury watch prices on the secondary market fell 8% last year, with some top models falling more than 20% from their peak, according to WatchCharts. Experts have been warning that the watch bubble could burst, along with crypto, NFTs and other trendy post-pandemic booms. Yet in the past two months, prices have begun to stabilize on the back of what some see as lasting, strong demand.

“I don’t see prices going much lower,” said Francois-Henry Bennahmias, CEO of Audemars Piguet — one of the so-called Big Three of the luxury watch world along with Rolex and Patek Philippe. “People still want to reward themselves, and when they want to reward themselves, they will look at the most respected companies, in watches, jewelry, fashion, you name it.”
Bennahmias said the luxury watch market is benefitting from a vast and structural shift to younger buyers. During the pandemic, a flood of millennials and Gen Z consumers poured into the collectible watch world, educating themselves online and coveting rare watches worn by sports stars and celebrities on social media.
With the top watchmakers built on the promise of limited production, supply can’t keep pace with demand.
“The quantities from the watch companies didn’t evolve,” Bennahmias said. “And the demand became crazy, because we saw the arrival of young people that just were more and more interested in watches. And some people with money who were not even looking at watches before found out that building a watch collection could be something interesting.”

Audemars Piguet’s Royal Oak Offshore Selfwinding Chronograph in black ceramic, celebrating the 30th anniversary of the collection.
Source: Audemars Piguet

Bennahmias said unlike the fickle meme-stock investors of 2021, today’s young watch collectors are here to stay. The average age of an Audemars customer is now 10 or 12 years younger, he said, than in the company’s recent history. Despite living most of their life online and immersed in digital products, Gen Z and millennials have developed a particular attraction to highly crafted, mechanical watches.

“When the Apple Watch came out in 2014, everyone was telling us that we will actually die,” Bennahmias said. “They said no young person would ever wear a watch again, if they did it would be a smartwatch. The funny thing is, we thought that young people couldn’t appreciate exclusivity, craftsmanship, watchmaking. They did.”
Bennahmias said younger generations are becoming some of the brand’s top ambassadors.
“They are the ones preaching the choir with social media and everything. They are our best advertising campaign, and they are bringing their parents actually to the brand,” he said.

Market markups

The big challenge for watchmakers is the secondary market, where pre-owned watches can sell on any of the dozens of online watch sites.
With demand for watches outpacing supply of new inventory, prices for pre-owned watches have skyrocketed, along with online sites like Chrono24, Watchfinder and Watchbox that buy and sell pre-owned watches. Preowned watch sales reached $22 billion in sales in 2021, accounting for nearly one-third of the overall $75 billion luxury watch market, according to a recent report from Boston Consulting Group.
Prices for pre-owned versions of some of the top “trophy” models — like the Patek Philippe Nautilus, the Rolex Daytona and the Audemars Piguet Royal Oak — can run two or three times their retail price. A pre-owned Audemars Piguet Royal Oak “Jumbo” that retails new for $35,000 is currently listed on Chrono24 for $115,000. Some have listed for over $130,000.
The mark-ups have sparked widespread frustration among collectors, who claim watchmakers are deliberately limiting production to boost prices and resale values — making their watches more attractive as investments. Bennahmias said many of the price corrections are “healthy” and that the watchmakers prefer customers who are true, long-term watch-lovers rather than speculators trying to pump up prices.
“I want this to be very clear for everyone,” Bennahmias said. “We’re not playing the market. We’re not doing anything to make the price go one way or the other. We make a certain amount of watches that we think could be accepted by the world. We say this is the right number, then the market is free and will do whatever they want.”
Audemars Piguet produced only 50,000 watches last year and is expected to produce about 51,000 this year, Bennahmias said. The brand, founded in 1875 and still family-owned, has long championed quality, craftsmanship and exclusivity over revenue growth.
Audemars Piguet is continuing to expand its production and facilities in Switzerland. But Bennahmias said that even if the company wanted to meet demand, which would be well over 80,000 watches a year, the company wouldn’t be able to find and train watchmakers fast enough.

Francois-Henry Bennahmias, CEO of luxury watchmaker Audemars Piguet.
Credit: Audemars Piguet

“The board of directors, meaning the family members, have never ever asked me in my 11 years for any growth in percentage terms, ever,” Bennahmias said. “They have never said ‘Francois, we want 10% or 15% or more.’ No. They say, ‘Francois, we still want to be around 200 years from now.’ That’s a completely different vision on how to build the success of a brand.”
Bennahmias admits the company has “made mistakes” when it comes to handling customers who arrive at their stores only to be told there are no watches available or that the wait time, if they’re lucky enough to get on the list, is up to two years. He said sales staff are now better trained to explain the limited production, the low numbers of each model produced and how many are delivered to each country.
He also said he wants 30% of all watches to go to buyers who have never owned an Audemars Piguet, to keep bringing in new customers.
“We are learning every single day, and it’s not always perfect,” he said. “What we found out through the course of the last three, four years, is that we need to educate people more.”

Audemars Piguet’s Royal Oak Offshore Selfwinding Chronograph in black ceramic, celebrating the 30th anniversary of the collection.
Source: Audemars Piguet

Audemars is now celebrating the 30th anniversary of its popular Royal Oak Offshore model, a larger version of its signature Royal Oak. When the Offshore was first launched, however, the model was widely scorned, according to Bennahmias.
“People trashed it,” he said. “When the watch came out people looked at it and said, ‘You guys are crazy.’ And we were not so confident in launching it. Slowly but surely it took off, to the point where it was a huge success.”

Next steps

Bennahmias, who will be leaving his role as CEO at the end of this year, declined to identify his potential successor or his next position.
He more than tripled Audemar Piguet’s sales during his tenure to over $2 billion and is well known in the watch world for his close ties to Jay-Z and other hip hop stars, as well as Hollywood celebrities, professional athletes and artists.
Some have speculated his next job is as likely to be in sports or music as it is luxury or watches.
“I think I’ve done what I was supposed to do with Audemars Piguet,” he said. “I’ve got so many other things I want to do with my life. I’ve got many different passions. Music is one. Sports is another one. And luxury obviously, and I want to do other things. I’m not done yet.” More