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    China’s annual exports drop for the first time in seven years

    Exports rose by 2.3% year on year in U.S. dollar terms last month, more than the 1.7% increase forecast by a Reuters poll.
    Imports rose by 0.2% in December from a year ago in U.S. dollar terms. That’s slightly less than the 0.3% increase analysts polled by Reuters had expected.

    Containers sit at the Yangshan Port in Shanghai, China, Aug. 6, 2019.
    Aly Song | Reuters

    BEIJING — China’s annual exports fell for the first time in seven years in 2023, even as shipments in December beat expectations, customs data showed Friday.
    Exports rose by 2.3% year on year in U.S. dollar terms last month, more than the 1.7% increase forecast by a Reuters poll.

    Imports rose by 0.2% in December from a year earlier in U.S. dollar terms. That’s slightly less than the 0.3% increase expected by analysts polled by Reuters.
    But for 2023, exports fell 4.6%, the first such annual drop since a 7.7% decline in 2016, according to Wind Information.
    Imports dropped by 5.5% last year. Their last decline was in 2020, the year the Covid-19 pandemic began.
    China’s trade with its major partners declined in 2023 as demand for Chinese goods fell amid slower global growth.

    The Association of Southeast Asian Nations was China’s largest trading partner on a regional basis in 2023, followed by the European Union.

    By country, the U.S. remained China’s largest trading partner.
    Russia was a rare bright spot, with China’s exports to the country climbing nearly 47% in 2023, and imports rising almost 13%.
    “Chinese manufacturers anticipate production to rise over the course of 2024 amid forecasts of firmer global demand, higher client spending and new product investment,” Caixin said in a release for its December manufacturing purchasing managers’ index.
    The index showed mild improvement from November. “However, the degree of optimism softened from November and remained below the series average.”

    Read more about electric vehicles, batteries and chips from CNBC Pro

    The report also noted a decline in the employment sub-index. “Firms often mentioned that they had opted not to replace voluntary leavers or trimmed headcounts as demand was more subdued than expected,” Caixin said.
    “Our base case is for exports to rise 2% in 2024 after falling 5% [in 2023]. If exports slow more than expected, policymakers would turn more proactive in terms of domestic policy supports,” Macquarie’s Chief China Economist Larry Hu said in a Jan. 5 report.
    China’s economy has seen a slower-than-expected recovery from the pandemic, but likely ended 2023 with around 5% growth. The National Bureau of Statistics is scheduled to release the official GDP numbers on Wednesday.

    “Weak domestic demand drives competitive firms in China to expand in the global market. This helps to contain inflation in the rest of the world,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.
    “But exports as a pillar for growth in China is not strong enough to boost overall domestic demand,” he said. “The support from fiscal policy expansion is critical.”
    China, the world’s largest oil importer, said its crude oil demand fell 7.7% in 2023. However, it fell less than the 8.1% drop in November.

    Imports of integrated circuits also picked up in December.
    China’s exports in most product categories fell in 2023, with machinery, boats and home appliances among the few exceptions.
    Autos remained a bright spot, with exports surging by 69% in 2023 from a year ago, China customs data showed. That was a slightly slower pace than the 70.9% increase in the January 2023 to November period.

    China is expected to have surpassed Japan as the world’s largest exporter of cars in 2023.
    Rapid growth in the electric car market as well as demand from Russia have helped boost China’s auto exports, said Sarah Tan, economist at Moody’s Analytics.
    “After Russia’s invasion of Ukraine in February 2022, many auto manufacturers had left the country only to have that gap filled by Chinese manufacturers,” she said in an email. “In the first eleven months of 2023, auto shipments to Russia rose about six times that of 2022 in value terms.” More

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    CVS to close ‘select’ pharmacies in Target stores in the coming months

    CVS Health plans to close select pharmacies inside Target stores early this year, as retail pharmacy chains in the U.S. struggle to boost profits. 
    The pharmacy closures will begin in February and finish by the end of April.
    Employees affected by the closures will be offered comparable roles within CVS. 

    CVS Health plans to close select pharmacies inside Target stores early this year, a company spokesperson said Thursday, as retail pharmacy chains in the U.S. struggle to boost profits. 
    The closures will begin in February and finish by the end of April, the spokesperson said in a statement. She added that employees affected by the closures will be offered comparable roles within CVS, and prescriptions will be transferred to a nearby CVS pharmacy before a location closes.

    The spokesperson did not disclose how many stores would be shuttered, but a report from The Wall Street Journal on Thursday said CVS would close “dozens” of locations.
    CVS operates 9,000 pharmacy locations nationwide. The company has a pharmacy in about 1,800 of Target’s 1,956 stores in the U.S., according to a Target spokesperson. 
    The Target spokesperson declined to comment on the closures or share plans for the closed CVS locations. 
    The decision to shutter the stores is part of CVS’ effort to reduce its retail footprint “based on our evaluation of changes in population, consumer buying patterns and future health needs,” the CVS spokesperson said.
    In 2021, CVS said it would close about 900 stores, which is about 10% of its U.S. locations, between 2022 and 2024, as the company pushes to transform itself from a major drugstore chain into a large health-care company.

    CVS has deepened that push over the past year with its nearly $8 billion acquisition of health-care provider Signify Health and $10.6 billion deal to buy Oak Street Health, which operates primary care clinics for seniors.
    But the company also launched a cost-cutting program last year as part of that expensive push into health care, with plans to lay off 5,000 employees.
    The closures also come after pharmacy staff from CVS and other drugstore chains walked out in the fall to protest what they call harsh working conditions that put both employees and patients at risk. CVS has told CNBC that the company is engaging with staff to directly address any concerns they might have.
    — CNBC’s Melissa Repko contributed to this report.Don’t miss these stories from CNBC PRO: More

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    New York and California make retail theft a 2024 priority: ‘We mean business’

    The governors of New York and California are proposing new laws and funding to address retail theft in 2024.
    Both governors, who represent the country’s largest Democratic strongholds, want stiffer penalties for retail crime offenses and increased police funding.
    The announcements come as voters from both sides of the aisle point to crime as one of their biggest concerns ahead of the 2024 election. 

    Axis Communications

    The governors of New York and California announced sweeping plans to crack down on retail crime this week, as trade associations and police departments lobby for government action to curb theft.
    The plans include new legislation designed to increase the penalties for retail crime offenses and more funding for police departments and district attorney’s offices to help them tackle theft. 

    Both Govs. Kathy Hochul of New York and Gavin Newsom of California, who represent the country’s largest Democratic strongholds, made preventing retail theft a top priority this year as voters from both sides of the aisle point to crime as one of their biggest concerns ahead of the 2024 election. The sheer fact that major “tough on crime” platforms are coming from Democratic governors of progressive states also threatens to upend decades of partisan political fault lines. In the modern era, Republicans have traditionally fought to stiffen criminal penalties, while Democrats have sought to address deeper causes of crime, like poverty, inequality and urban unemployment.
    But not anymore.
    Since 2022, at least nine states — including six in 2023 — passed laws to impose harsher penalties for organized retail crime offenses, and New York and California could join that list. Retailers and trade associations around the country have worked to get the bills written and past the finish line.
    It’s tough to determine whether theft offenses are up nationally, as it’s a crime that often goes unreported and undetected. It’s also unclear how effective the proposed legislation will be.
    Experts previously told CNBC that laws that increase penalties for retail crime offenses may not actually reduce theft offenses, and could disproportionately harm marginalized groups. Similar strategies implemented to address the drug trade have done little to reduce the use or availability of illegal narcotics. Similar to low-level drug dealers, many serial thieves face mental illness, poverty or drug addiction, law enforcement agents previously told CNBC. 

    Hochul in her State of the State address Tuesday said she is planning to introduce bills that would create criminal penalties for online marketplaces and third-party sellers that contribute to the sale of stolen goods. She also aims to work with the legislature to strengthen penalties for those who assault retail employees. 
    In addition, Hochul plans to set up two new task forces dedicated to tackling theft – one for building cases against organized retail theft rings and another that addresses so-called smash-and-grab robberies.
    As part of the initiatives, Hochul called for expanded funding for state police departments and district attorney’s offices to better equip them to tackle retail theft and other property crimes like burglary. She also wants to establish a tax credit for business owners who implement store security measures to help them offset those costs.
    “Across our nation and our state, retail theft has surged, creating fear among customers and workers. Thieves brazenly tear items off shelves and menace employees. Owners go broke replacing broken windows and stolen goods, driving many out of business,” Hochul said in her address.
    “These attacks are nothing less than a breakdown in the social order. I say: no more. The chaos must end.”
    Newsom said on Wednesday that California will invest $1.1 billion over the next four years to address “safety and security” – $373.5 million of which will be dedicated to combating organized retail theft, according to his office. 
    In his state budget address, Newsom said 52 sheriff’s and police departments have already received upward of $250 million in new grants to combat retail theft. He added district attorney’s offices are receiving assistance to advance prosecution efforts. 
    “We mean business in this space,” Newsom said.
    Newsom this week also called for new legislation that would address organized retail crime. He wants to target in particular people who are accused of repeatedly stealing from the same stores and “professional thieves” who resell stolen goods. 
    The proposals include new penalties that target people who engage in retail theft, including by increasing felony penalties and prison time, and bolstering existing laws so police can arrest theft suspects even if they didn’t witness the crime as it was happening. 
    Newsom is also calling for changes to the state penal code that would allow police to aggregate theft incidents within a given time period so it’s easier to charge repeat offenders with grand theft and other felonies. Currently, someone has to steal more than $950 in goods in a single incident to be charged with grand theft in California.
    — CNBC’s Christina Wilkie contributed to this report.
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    Here’s the inflation breakdown for December 2023 — in one chart

    The consumer price index, a key inflation gauge, rose 3.4% in December 2023 on an annual basis, the U.S. Department of Labor reported.
    That’s up from recent months, but those figures mask disinflationary pressure under the surface, economists said.
    Inflation has declined substantially from its 9.1% peak during the Covid-19 pandemic era.

    Consumers shop in Rosemead, California, on Dec. 12, 2023.
    Frederic J. Brown | Afp | Getty Images

    The annual inflation rate edged higher in December following two months of declines. However, that reversal likely isn’t cause for concern — and may be somewhat misleading, economists said.
    “We’re still making progress in the inflation fight,” said Sarah House, senior economist at Wells Fargo Economics.

    The consumer price index rose 3.4% last month relative to a year earlier, the U.S. Department of Labor reported Thursday. That’s a larger increase than the 3.1% in November and 3.2% in October.

    The index has fallen by half since December 2022 — when the inflation rate was 6.5% — and has declined significantly from the 9.1% pandemic-era peak in June 2022.
    Consumers’ buying power also increased over the past year. Hourly wages after accounting for inflation — so-called “real earnings” — rose 0.8% from December 2022 to December 2023, according to the Labor Department.

    Inflation is ‘moving in the right direction’

    The CPI, a key inflation gauge, measures how fast the prices of everything from fruits and vegetables to haircuts and concert tickets are changing across the U.S. economy.
    Lower energy prices had helped pull down the overall index in recent months but didn’t provide as much relief to consumers in December, economists said.

    Further, so-called “base effects” made the latest yearly CPI reading seem somewhat distended, economists said. This term refers to how fluctuations in the monthly inflation rate can influence the magnitude of an annual change.
    More from Personal Finance:Deflation vs. disinflation: One is ‘the more ideal outcome’Why workers’ raises are smaller in 2024What to consider before paying for a dating app
    Basically, there was an “unusually small” monthly increase — 0.1% — in prices from November 2022 to December 2022, said Andrew Hunter, deputy chief U.S. economist at Capital Economics. Meanwhile, CPI rose 0.3% from November 2023 to December 2023 and that difference was enough to increase the year-over-year comparison.  
    For this reason, monthly figures often provide a more accurate gauge of inflation trends relative to the annual reading — and the monthly indicators are “still moving in the right direction,” Hunter said.

    Where inflation jumped in December

    Shelter prices rose 6.2% over the past year. As the largest piece of the average household’s budget, shelter accounted for more than two-thirds of the CPI’s increase since December 2022, according to the Labor Department.
    Other categories with “notable” increases during that time include motor vehicle insurance, prices of which jumped 20.3%; recreation, such as admissions to concerts and sporting events, 2.7%; personal care, such as haircuts, 5%; and education costs, such as tuition and daycare, 2.4%, the Labor Department said.

    Meanwhile, prices have leveled out — or even declined — in some categories. Largely, that trend has occurred in physical goods such as new and used cars; household furnishings; recreational goods such as toys, televisions and musical instruments; and education and communication commodities such as computers and college textbooks, economists said.
    For example, prices of used cars and trucks have decreased 1.3% since December 2022. Those of household appliances fell 4%, while those for dishes and flatware declined 2% and those for men’s suits, sport coats and outerwear fell 6%.
    Broadly, that easing is attributable to “an unwinding of the pandemic-era supply shortages,” Hunter said. Supply chain bottlenecks and elevated consumer demand had fueled those shortages.

    Meanwhile, seasonally adjusted gasoline prices rose 0.2% from November to December, whereas they’d declined 6% and 5% in November and October, respectively. They’re down 1.9% over the year.
    Food inflation has also moderated, as grocery prices rose an annual 1.3% in December compared to 1.7% in November. There have been signs of consumers doing more bargain hunting at grocery stores, which has in turn gotten somewhat more competitive in pricing to woo consumers, House said.
    While shelter inflation has been stubbornly high, it’s expected to fall over the coming months since marketplace rents have been flat to down, said Mark Zandi, chief economist at Moody’s Analytics. It takes time for those dynamics to feed through into the Labor Department’s CPI calculations, he said.
    “What’s important for most Americans is the cost of staples — the cost of a gallon of regular unleaded gasoline, and food and rent — those things are moving in the right direction,” Zandi said.
    While food and housing prices are “still very elevated” relative to two to three years ago, consumers can “take some solace that they’re no longer rising,” he said.Don’t miss these stories from CNBC PRO: More

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    Here’s what a bitcoin ETF actually means for investors

    The Securities and Exchange Commission approved the first-ever spot bitcoin ETFs on Wednesday, paving the way for them to begin trade.
    The move will give investors increased ways to gain exposure to bitcoin, which they can now hold via existing financial instruments.
    CNBC runs through what you need to know about the new bitcoin ETFs, and why they’re a big deal for investors — and for the cryptocurrency itself.

    Chesnot | Getty Images

    The U.S. Securities and Exchange Commission just approved the first-ever batch of spot bitcoin exchange-traded funds to come out of the U.S.
    The agency gave the green light on Wednesday to sponsors of 10 ETFs, including BlackRock, Invesco, Fidelity, Grayscale, and Ark Invest — paving the way for these funds to begin trading as soon as this week.

    The move was largely expected, even after a social media hacking snag. A false statement saying the regulator had approved a bitcoin ETF was published Tuesday on the SEC’s social media account on X, formerly known as Twitter. The agency later clarified that its account had been compromised.
    The actual approval Wednesday marked a massive step for the cryptocurrency, as it will give investors increased ways to gain exposure to the token — not just from holding it directly, but via existing financial instruments that trade on a regulated stock exchange.

    But what does that all mean exactly, and how does it affect investors? CNBC runs through everything you need to know about the bitcoin ETF milestone.

    What’s a bitcoin ETF?

    An ETF is an investment fund that tracks the performance of an underlying asset. That could be stocks, a basket of currencies, a precious metal like gold, or, in this case, bitcoin.
    It’s a way for investors to get exposure to the value of the underlying asset without directly owning it.

    ETFs trade on traditional stock exchanges, and their value should rise when the underlying asset increases in price, or fall if it decreases.
    As crypto investors look to assess what the market impact of a bitcoin ETF might be, many are comparing Wednesday’s news to the greenlighting of the SPDR Gold Shares ETF — the first-ever spot gold ETF — in 2004.
    The total gold market capitalization was worth around $1 trillion to $2 trillion before the gold ETF was approved, and this subsequently ballooned to $16 trillion in a few years after, according to Vijay Ayyar, vice president of international markets for Indian crypto exchange CoinDCX.
    “Bitcoin’s adoption will be much faster and bigger than that,” Ayyar told CNBC via WhatsApp.

    Ayyar said the story for bitcoin and crypto will “accelerate” in 2024, as the approval of a spot bitcoin ETF could spark interest from retail investors who were previously sitting on the sidelines.

    What does a bitcoin ETF mean for investors?

    A bitcoin ETF opens up the audience of people and institutions that can buy and sell bitcoin to those with little experience trading cryptocurrency.
    “This ETF has two main impacts: increased distribution in the US (a moderate impact, as there have been ETFs outside of the US for years) and increased credibility of crypto as an ‘asset class’ (a very high impact),” Kevin de Patoul, co-founder and CEO of crypto liquidity provider Keyrock, told CNBC.
    “There is now a U.S. bitcoin spot ETF, and bitcoin is no longer considered shady or infamous. This significantly changes the perception for the mainstream public.” 
    It also means that bitcoin could start appearing in mainstream portfolios, where many more retail investors can gain exposure.
    Big institutional fund managers can add it to their investment funds. Retirement planners can now include it in employer-sponsored 401(k) plans.
    This makes it much easier to own bitcoin, as you don’t have to rely on a vulnerable piece of hardware for storage. Investors don’t need to tackle the difference between “hot” and “cold” wallets, which store digital tokens.
    Instead, they can just buy an ETF from one of the many regulated asset managers that are set to go live with their own ETFs.

    “The approval of a Bitcoin ETF has huge implications for US investors because they can now hold crypto in their brokerage account, which they couldn’t do before,” Timo Lehes, co-founder of blockchain firm Swarm Markets, told CNBC.
    “This gives the green light for portfolio diversification into the asset, and we expect major inflows of capital into the market, as a result.”
    A bitcoin ETF could bring the cryptocurrency exposure to a more diverse set of holders with different levels of size and experience in the market.
    Ayyar said the approvals Wednesday “mark a key moment in the maturity of the crypto asset class.”
    “Mass retail now has an easy, safe way to gain exposure to the asset class through their brokerage account,” Ayyar told CNBC.
    “The ETF approval also provides a credible stamp of approval for large institutions and market participants that were waiting for an easier way to access the asset class rather than buying crypto directly, which always has inherent price and custody risks.” More

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    Coinbase, Robinhood shares rise as bitcoin ETF approval adds credibility to cryptocurrency industry

    SAN ANSELMO, CALIFORNIA – JUNE 06: In this photo illustration, the Coinbase logo is displayed on a screen on June 06, 2023 in San Anselmo, California. The Securities And Exchange Commission has filed a lawsuit against cryptocurrency exchange Coinbase for allegedly violating securities laws by acting as an exchange, a broker and a clearing agency without registering with the Securities and Exchange Commission. (Photo Illustration by Justin Sullivan/Getty Images)
    Justin Sullivan | Getty Images

    Shares of Coinbase and Robinhood popped Thursday as traders bet the approval of bitcoin exchange-traded funds in the U.S. would give the cryptocurrency trading platforms a boost in demand.
    Coinbase and Robinhood were both up 3.7% in premarket trading.

    On Wednesday, the Securities and Exchange Commission approved rule changes that allow for the launching of bitcoin ETFs in the U.S. The news has been long awaited by investors in the crypto space as it is seen as lending more credibility to what has been a volatile industry and asset class.

    Stock chart icon

    “This is a monumental step for the crypto industry,” Coinbase CEO Brian Armstrong told CNBC’s Andrew Ross Sorkin in an interview that aired Thursday. “There’s 52 million Americans who have been using crypto over the past decade, and I think they’ve been waiting for some kind of acknowledgment from the government, and the SEC in particular, that this asset class is here to stay — and they finally got that.”
    There is some concern that the advent of a spot bitcoin ETF in the U.S. could put pressure on Coinbase down the road — as it offers investors an easier way to invest in the cryptocurrency. But investors appear to be betting that it will raise interest in the crypto industry as a whole.
    To be sure, Coinbase is a custodian of several of the ETFs that are slated to begin trading soon, meaning the company will generate fees from that service.
    “We see the impact of a Bitcoin ETF as having both positive and risky elements for Coinbase, but given the appreciation of Coinbase’s stock price, we see the risks as more relevant to shareholders,” JPMorgan analyst Kenneth Worthington wrote.

    “On the positive side, we see Coinbase as the custodian of choice for Bitcoin ETFs, with Coinbase hired as the custodian for 8 of the 11 Bitcoin ETFs approved by the SEC in addition to its surveillance sharing agreements,” he said. “We think the approval of the Bitcoin ETFs are potentially a lose/lose situation for Coinbase as we see a Bitcoin ETF, if particularly successful, as a competitor to Coinbase.”
    Coinbase is coming off a monster year, rallying 391.4% in 2023. Robinhood also soared more than 56% last year.
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    Wolverine World Wide sells Sperry to Authentic Brands Group in shoe retail deal

    Footwear and apparel company Wolverine World Wide has sold Sperry to brand management firm Authentic Brands Group.
    Sperry, best known for its boat shoes and loafers, saw sales drop by more than 40% in the three months ended Sept. 30.
    Retailers have been looking to carve out underperforming assets and reinvest in growth drivers against an increasingly uncertain economic backdrop.

    Sperry Top-Sider Bill fish Tan and Beige.
    Mayra Beltran | Houston Chronicle | Getty Images

    Wolverine World Wide has sold Sperry to brand management firm Authentic Brands Group and Canadian retailer the Aldo Group, the company announced Thursday.
    The deal will generate $130 million, which Wolverine plans to use to pay down debt, it said.

    Wolverine originally acquired Sperry in 2012 from Payless ShoeSource owner Collective Brands in a $1.23 billion deal that also included Saucony, Stride Rite and Keds. 
    The terms of the partnership between Authentic and Aldo weren’t immediately clear. The two companies already work together, with Aldo helping Authentic run brands like Roxy and Brooks Brothers.
    Wolverine, which runs a portfolio of apparel and footwear brands that includes Merrell, Hush Puppies and Sweaty Betty, said in May it was seeking strategic alternatives for Sperry after it realized the investments the segment needed would be better served in other parts of its business. 
    “It just became apparent that Sperry was going to continue to require investment that was going to take away from where we think the upside is,” Wolverine’s then-CEO, Brendan Hoffman, said on a call with analysts in May after the company reported fiscal first-quarter earnings. 
    He said the decision would allow Wolverine to put more resources behind expanding Merrell’s lifestyle business, extending Saucony’s reach beyond its core active and lifestyle consumers, and stabilizing Sweaty Betty’s home market in the U.K. and Ireland. 

    Retailers slim down

    Wolverine’s decision to sell Sperry comes as retailers look to streamline their businesses and focus on growth drivers by carving out their underperforming assets as they navigate an increasingly uncertain economy. 
    In November, Calvin Klein’s parent company, PVH, sold a trio of lingerie and intimates brands – True & Co., Warners and Olga – to Basic Resources for $160 million. Walmart, meanwhile, offloaded Moosejaw, Bonobos and Eloquii in a series of transactions earlier in the year. 
    Before its decision to sell Sperry, Wolverine made a deal to sell Keds to Designer Brands, the parent company of DSW, for more than $90 million. It sold the Hush Puppies intellectual property in China, Hong Kong and Macao for $58.8 million. It also has plans to sell its U.S. Wolverine Leathers business for $6 million. 
    The retail industry has seen consumers pull back on spending as they face persistent inflation, high interest rates and most recently, the resumption of student loan payments. But the footwear and apparel sectors have felt that pressure acutely.
    Foot Locker has reported quarter after quarter of sales declines, and even Nike has started a $2 billion restructuring as it prepares for what it called a “softer” revenue outlook.
    In the three months ended Sept. 30, Sperry posted just $46.2 million in revenue, a 41.4% drop from the year-ago period, when it saw $78.9 million in sales. 
    While slow sales at Sperry have dragged on Wolverine’s overall business, the downturn has created an enticing entry point for Authentic, which is in the business of buying struggling brands at attractive valuations and then putting in the resources necessary to revive them. 
    In November, CNBC reported that Authentic competitor WHP Global was also interested in buying Sperry. At the time, GlobalData retail analyst Neil Saunders said Authentic’s and WHP’s interest in Sperry, as well as Hanesbrands’ Champion line, made “perfect sense.” 
    “They have a good operational backdrop that they can integrate these brands into, whether that be through licensing, through international expansion, through getting them into physical retail more, through selling them direct to consumer,” Saunders said previously. “They almost have an operating model that you can just sort of drop brands into and start seeing better performance.”  More

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    Bill Ackman provides a lesson in activist investing

    As with every skirmish in America’s culture wars, how you view the ousting of Harvard University’s president has much to do with where you are sitting. Claudine Gay resigned on January 2nd. Progressives see her as a competent administrator who, as Harvard’s first black president, was subjected to a smear campaign. Conservatives, meanwhile, spy a plagiarist who failed to quash antisemitism on campus. Naturally, your columnist—perched at a Bloomberg terminal—views the episode in its true light: as a blood-on-the-carpet coup by an experienced activist investor, disposing of an errant chief executive.The investor in question is Bill Ackman, one of Wall Street’s more outspoken hedge-fund bosses. He is also one of Harvard’s more generous donors, having given it $50m. And he has spent recent months on the warpath, berating the university for failing to protect Jewish students from antisemitic attacks.Then came a congressional hearing in which Ms Gay and two other university presidents prevaricated over whether calling for a genocide of Jews would violate their institutions’ codes of conduct. “The world will be able to judge the relative quality of the governance” at the three schools, Mr Ackman wrote, “by the comparative speed with which their boards fire their respective presidents.” A month on, two of the three are gone.Although Mr Ackman’s fund prefers “quiet, constructive engagements” with the companies it owns, he made his name as a fearsome boardroom brawler. Over the years he has picked high-profile fights with America’s Municipal Bond Insurance Association, the Canadian Pacific railway and Target, a retail giant. Unsurprisingly, then, his most recent campaign bore all the hallmarks of a veteran activist heading into battle—and carries lessons for how to win one.First, and most important, make sure you are in good company. Mr Ackman was just one of many to go after Ms Gay, making the tactics of a successful campaign much easier to deploy. The obvious one is financial pressure: Mr Ackman says he is aware of $1bn-worth of donations being withheld from the university since October 7th. That sort of firepower is a lot easier to muster if you are acting in concert with others. Think of the pack of hedge-fund managers George Soros assembled to short the pound in the 1990s.Strength in numbers also made the second line of attack—forensic analysis of the opponent—more deadly. Activist short-sellers (a group that once included Mr Ackman) obsessively comb through their targets’ accounts; one of them, Carson Block, talks of reading many years of call transcripts, starting with the oldest. In the Harvard mess it was Mr Ackman’s fellow travellers, such as Christopher Rufo, a conservative activist, who trawled through Ms Gay’s work to find lines apparently copied from others without attribution. It was ultimately these accusations of plagiarism that toppled her. While others reviewed the documents, Mr Ackman was freed up to do his own due diligence, meeting hundreds of Harvard students and faculty members to establish how insiders viewed events.No amount of allies, though, can help with the third requirement for an activist campaign: bloody-mindedness. Whatever the target, they are unlikely to be broken by the initial salvo—and may fire back. In 2021 Andrew Left, another short-seller, decided to quit the scene after furious meme-stock investors sent threatening messages to his children. Sure enough, Mr Ackman is now embroiled in a much bigger feud. On January 4th Business Insider, a news site, accused his wife, a former professor at the Massachusetts Institute of Technology, of a “similar pattern of plagiarism” to Ms Gay’s. Suspecting the allegation came from MIT, Mr Ackman responded by promising a plagiarism review of everything published by the university’s president, board and faculty.For all its admirable chutzpah, the escalation points to danger ahead. Mr Ackman began by trying to combat antisemitism at Harvard by unseating a president who seemed soft on it. He now appears to be gearing up for a fight with much of America’s academic establishment over plagiarism, diversity policies and the future path of higher education. This scope may seem plausible to a man who rose to prominence by shorting the American mortgage market. Yet the best activist campaigns have specific aims and endpoints—and tend not to be fought against people with tenure. Even for Mr Ackman, his new venture will prove a tall order. ■Read more from Buttonwood, our columnist on financial markets: Why bitcoin is up by almost 150% this year (Dec 18th)The mystery of Britain’s dirt-cheap stockmarket (Dec 14th)Why it might be time to buy banks (Dec 7th)Also: How the Buttonwood column got its name More