Raphael Stevens

More stories

  • 88 Shares159 Views

    in Finance

    Will the Fed factor turbocharge commodity prices?

    When commodity prices move in tandem, it is usually because real-world events jolt markets. China is the world’s biggest consumer of raw materials, so its economic leaps and stumbles matter. Russia’s invasion of Ukraine hindered the trade of fuels and grains, causing prices to surge. But every once in a while it is news in the financial sphere that prompts traders to act. And the most common source of such news is America’s Federal Reserve. More

  • 138 Shares169 Views

    in Finance

    American demand for international trips drives ‘travel momentum’ and overall spending

    American demand for international trips has supported continued strength in overall travel spending.
    Declining prices for international airfare has helped underpin the trend.
    Europe is the most popular destination abroad, while Asia has seen the largest annual growth.

    Hinterhaus Productions | Digitalvision | Getty Images

    Travel spending among American households continues to outpace its pre-pandemic levels, a trend underpinned by a zeal for international trips, according to new Bank of America research.
    “A key part of travel momentum lies within vacationing abroad,” Taylor Bowley and Joe Wadford, economists at the Bank of America Institute, wrote in a note Wednesday.

    Overall, travel spending is down slightly from 2023, yet it remains “much higher” than 2019 — up by 10.6% per household, they wrote, citing Bank of America credit and debit card data from January to mid-August.
    More from Personal Finance:4 big ways to save on your next trip’Dupes’ are a good way to lower trip costsWhat Taylor Swift’s The Eras Tour says about ‘passion tourism’
    International travel is “one area of continued strength,” Bowley and Wadford said.
    About 17% of Americans said in June that they intended to vacation abroad during the next six months, up from roughly 14% in 2018 and 2019, according to a recent Conference Board survey.  
    “I do expect the demand to continue,” said Hayley Berg, lead economist at travel site Hopper.

    Lower airfares underpin international travel demand

    Demand for international travel surged over the past two years as Covid-19-related health fears waned and countries began dropping their pandemic-era travel restrictions.
    Americans spent zealously amid pent-up wanderlust and a stockpile of cash.
    Falling prices for international airfare have helped underpin high demand this year, Berg said.
    “Those lower prices are definitely going to drive some incremental demand for international [travel] more so than what we’ve see the last couple years,” she said.

    For example, average round-trip fares to Europe — generally the most popular international destination for U.S. tourists — declined to roughly $950 this summer, down from more than $1,000 the prior two years, Berg said.
    European fares in 2022 were the highest on record, according to Hopper data, which goes back a decade.
    A flight to Rome during the fall shoulder season is now about $600, down from a pandemic-era peak of roughly $1,300, for example, Berg said.
    (The fall shoulder season is the time of year between the summer high season and the winter low season, usually from September to November.)
    Europe accounted for the bulk of Americans’ spending from May to July, at 43%, according to Bank of America. Canada and Mexico combined held the No. 2 spot, at 21% of spending.

    However, Asia has been the fastest-growing region: Spending on the continent jumped 11% relative to 2023, compared to 3% in Europe, Bank of America said. Advantageous exchange rates played into that relative strength, it said.
    While international travel spending remains robust, most Americans are still vacationing domestically: About 68% of all trips that start in the U.S. remain within its borders, according to a recent analysis by the consulting firm McKinsey.
    That said, “domestic demand has softened slightly, as American travelers return abroad,” McKinsey wrote.

    High earners ‘splurge on travel’

    Higher-income households — those earning more than $125,000 a year — seem to be driving the international-travel trend, according to Bank of America economists.
    High-end luxury hotels have “outperformed” standard offerings this summer, suggesting high earners “are more resilient and continue to splurge on travel,” the Bank of America report said.
    While “cost-constrained” travelers seem to be worried by a pandemic-era spike in inflation, most plan to continue traveling, McKinsey said.
    “Instead of canceling their trips, these consumers are adapting their behavior by traveling during off-peak periods or booking travel further in advance,” McKinsey wrote. More

  • 200 Shares189 Views

    in Finance

    Is the Fed ‘sleepwalking into a policy mistake?’: Abrdn analyst calls for faster easing of rates

    While British fund manager abdrn predicts that the U.S. economy will see a soft landing, there is still the risk of a prolonged slowdown in 2025, said Kenneth Akintewe, the company’s head of Asian Sovereign Debt.
    Is the economy already weaker than the headline data suggests and should the U.S. Federal Reserve already be easing? Akintewe questioned on CNBC’s “Squawk Box Asia.”
    In the U.S. on Friday, data showed the personal consumption expenditures (PCE) price index, the Federal Reserve’s favored measure of inflation, ticked up 0.2% last month, as expected. The data seems to back a smaller rate cut.

    An eagle tops the U.S. Federal Reserve building’s facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/
    Jonathan Ernst | Reuters

    While British fund manager abdrn predicts that the U.S. economy will see a soft landing, there is still the risk of a prolonged slowdown in 2025, said Kenneth Akintewe, the company’s head of Asian sovereign debt.
    Speaking to CNBC’s “Squawk Box Asia” on Monday, Akintewe asked the question: “Is the Fed already sleepwalking into a policy mistake?”

    He pointed to economic data like non-farm payrolls, saying they were later revised to reflect a weaker economic picture. In August, the U.S. Labor Department reported that the U.S. economy created 818,000 fewer jobs than originally reported from April 2023 to March 2024.

    As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported 2.9 million from April 2023 through March of this year.
    Akintewe said: “Is the economy already weaker than the headline data suggests and [the Fed] should already be easing?”
    He added that policy changes by the Fed takes time to move through the economy, “so if the economy is weaker than the headline data suggests, they will need to accumulate [a] sufficient amount of easing, you know, 150, 200, basis points, that will take time.”
    “And once you’ve done that amount of easing, it takes six to eight months to transmit that.” A spokesperson for the U.S. central bank wasn’t immediately available when contacted by CNBC.

    If the economy suddenly shows signs of more weakness at the start of 2025, Akintewe said it will take until the second half of 2025 to see the effects of any easing transmitted through the economy, which could look “quite different” by that time.
    He also argued that the market is too focused on forecasting the size of any possible upcoming cut, asking. “The other question no one seems to ask is, why is the policy rate still at 5.5% when inflation is down [to] almost 2.5%? Like, do you need a 300 basis point real policy rate in this kind of environment with all the uncertainty that we’re facing?”

    In the U.S. on Friday, data showed the personal consumption expenditures (PCE) price index, the Federal Reserve’s favored measure of inflation, ticked up 0.2% last month, as expected.
    The data seems to back a smaller rate cut, with U.S. rate futures suggesting a lesser chance of a 50 basis-point rate cut later in September.
    Currently, markets see an almost 70% chance of a 25-basis-point cut at the Fed’s meeting this month, with the remaining 30% expecting the Fed to slash rates by 50 basis points, according to the CME Fedwatch Tool.
    — CNBC’s Jeff Cox contributed to this report. More

  • 200 Shares159 Views

    in Finance

    China’s first global gaming hit sells millions in a week. An early investor shares what’s next

    China’s first attempt at a top-tier video game has smashed world records, bolstering the industry’s global ambitions after Beijing’s gaming crackdown.
    Black Myth: Wukong, an action game set in mythological China, sold more than 10 million units three days after its launch on Aug. 20.
    Dino Ying, chairman of Hero Games, which co-published the game and was an early investor in its developer Game Science, spoke with CNBC in an exclusive interview.

    People walk past the image of the ‘Monkey King’ character, or ‘Sun Wukong’ of Chinese action role-playing game ‘Black Myth: Wukong’, developed by Chinese video game company Game Science, during its launch day in Hangzhou, in eastern China’s Zhejiang province on August 20, 2024.
    Str | Afp | Getty Images

    BEIJING – China’s first attempt at a top-tier video game has smashed world records, bolstering the industry’s global ambitions just a few years after Beijing’s gaming crackdown.
    Black Myth: Wukong, an action game set in mythological China, sold more than 10 million units three days after its launch on Aug. 20. Ten days later, the title still ranked second by revenue in the U.S., and No. 1 globally, according to the Steam video game platform where it sells for around $60 or more.

    “I think the next triple-A game is likely very close, because Black Myth: Wukong has shown everyone that a China-made AAA game can reach such high global sales,” said Dino Ying, chairman of Hero Games, which co-published the game and was an early investor in its developer Game Science. That’s according to a CNBC translation of his Mandarin-language remarks in an exclusive interview Thursday.
    Ying said he knew of at least one such game under development, which his business partner at Hero Games has invested in. But he declined to share a timeframe.
    As for how well Black Myth: Wukong has done, Ying only said sales have since increased by “much more” than the 10 million unit figure, although he indicated it had not yet doubled.

    He said that in the future, the company’s game releases will have a global strategy from the start. He also expects foreign AAA game developers to realize how large China’s market is and tailor more features to Chinese players.
    AAA games generally refer to titles with high graphics quality and significant marketing. That’s meant such video games have tended to come from companies such as Nintendo, Ubisoft and Electronic Arts.

    “China is a big country. We’re talking about 1 million concurrent players,” said Ivan Su, senior equity analyst at Morningstar. “China has 600 million gamers.”
    He said the reason why China hasn’t previously developed its own AAA game, which are typically played on computers and consoles, is the years-long production time. “It’s much more cost-effective if you create mobile games,” Su said.

    Apple’s Tim Cook visited Hero Games

    When Hero Games first invested in Game Science, Apple CEO Tim Cook visited in 2017 and was so impressed by the first game, Art of War: Red Tides, he gave it the front page of the iOS App store in 178 countries, Ying said.
    But that wasn’t a commercial success.

    Apple CEO Tim Cook visited the office of Hero Games in 2017 after it invested in Game Science, which went on to develop Black Myth: Wukong.
    Hero Games

    Hero Games had already spent three years investing 60 million yuan (about $8.5 million today) in two failed projects from Game Science when the developer approached Ying and his team in August 2020 about Black Myth: Wukong, he said.
    “We’re very lucky, we didn’t give up on Game Science before it succeeded,” Ying said, noting his business partner Daniel Wu, now CEO of Hero Games, had first discovered the startup.
    “We aren’t saying to blindly wait for all people,” he said. “When you see that kind of talent, you need to be confident that that talent has been underappreciated. It may not have found the right direction. [So you just need to] help it to find it.”

    ‘Best game that I have seen’ 

    Two days before Game Science planned to release a promotional video for Black Myth: Wukong, the company showed it to Ying and asked his team for at least 100 million yuan more, he said. If not, he said the startup planned to ask Bilibili, a major Chinese video streaming and game platform.
    After watching the video, Ying said he told his team that “I really don’t want to miss this opportunity because this is the best game that I have seen in my life.”
    Tencent then bought a 5% stake, but said it would not interfere with Game Science’s plans, Ying said. “Because this was an AAA game, under the normal process of a big business, there was no way it would have been approved.”
    Hero Games’ initial investment in Game Science was for a 20% stake.

    Beijing has only in the last two years started to approve games, after suspending new titles and limiting how many hours minors could play in 2021.
    Black Myth: Wukong got China’s government approval in February. No part of the game needed to be changed for it to pass, Ying said.
    “Personally I think in the past two years the regulation is increasingly respectful of the game industry and is beneficial to its development,” Ying said, noting that one or two years ago, there “was a misunderstanding.”

    Massive market potential

    In the first half of this year, domestic game sales in China reached 147.27 billion yuan, said Ashley Dudarenok, founder of China digital consultancy ChoZan, citing industry figures.
    But console game revenue was just 0.5% of that, she said.
    Ying pointed out that many people in China bought PlayStations or upgraded their graphics cards after Black Myth: Wukong’s release, similar to how many people first bought the Nintendo Switch because of Zelda.

    Something that’s lasted 1,000 years, people will definitely like it

    Hero Games, chairman

    As for the global market, Dudarenok said overseas sales of China-developed games rose to $16.4 billion in 2023, up from $11.6 billion in 2019.
    “Chinese games often incorporate rich cultural elements that appeal more and more to a global audience,” she said. “This unique cultural flavor sets them apart from games developed in other regions”
    Ying said he expects China has at least five to 10 other stories that have been passed down over the last millennia that can be turned into games.
    “If I create a new thing, I don’t know if people will like it. But something that’s lasted 1,000 years, people will definitely like it,” Ying said. “We don’t know why it was preserved over so many years. But we just need to respect the [original] artisans.”
    He said Game Science sent teams and equipment to ancient temples in China to scan and replicate the designs, boosting the game’s immersive feel.

    Indie Chinese games 

    In the more niche market of independent games, Chinese companies are also on the rise.
    Shanghai-based Cotton Game, which has a staff of 70 people, won the 2024 award for best development team in indie games from the French-supported Game Connection organization and ChinaJoy, which runs a major annual game conference in China.
    “It depends on how capable we are, but [we hope to] use games as a way to share art, philosophy and thoughtful content,” the company’s CEO, who goes by the English name Cotton Guo, said in Mandarin translated by CNBC.
    Cotton Game’s Sunset Hills – which took five years to draw by hand – also won the “Game of the Year” and “Best Indie Game” awards. The $20 game launched on Aug. 21 on Steam after raising $13,000 on Kickstarter.
    The game follows an anthropomorphic dog through a Europe-like village, accompanied by the sounds of nature and music. Players solve puzzles along the way.
    “Everyone is quite tired. In society today, the speed of life is very fast,” Robin Luo, the manager of Sunset Games. Its main character is based on his own dog. “So my hope while making Sunset Hills was that everyone playing the game could [find it] refreshing.” More

  • 200 Shares159 Views

    in Business

    NBC ripped up its Olympics playbook for 2024 — so far, the new strategy paid off

    Comcast’s NBCUniversal put all of its resources across the company into the Summer Olympics.
    It appears to have paid off as more than 30 million viewers tuned in across NBC’s TV and streaming platforms.
    Executives say a lot of the same strategies will be used for future live sports, including subsequent Olympics and a new agreement with the NBA.

    Mike Tirico is seen on the set of NBCUniversal Paris 2024 Olympics coverage on August 04, 2024 in Paris, France. 
    Kristy Sparow | Getty Images

    Comcast’s NBCUniversal has a longstanding bet on the Olympics, but this summer the company threw all of its resources at the Games in a bid to grab more viewership — especially for its growing streaming platform, Peacock.
    It appears to have paid off so far — more than 30 million people tuned in to NBC’s TV and streaming platforms to watch the games, and a record $1.2 billion in advertising revenue was generated.

    NBC executives, having touted the Olympics as a growth driver and differentiator in the increasingly crowded landscape of streaming and live sports, are now looking to extend the benefit beyond the Games and into future live sports.
    “We completely changed the game plan internally. We ripped up the playbook two years ago,” said Jenny Storms, chief marketing officer of entertainment and sports at NBCUniversal. “It was very scary at the time to take the institutional knowledge that we had for so long and rip it up and start over. We really started new and fresh in totality, from production to company wide counterparts.”
    The Olympics have long been key to NBCUniversal. Paris marked the 18th Olympic Games broadcast by NBC in the U.S. The company renewed the rights in 2014, agreeing to pay $7.65 billion for the Games between 2022 and 2032, amounting to more than $1.2 billion for each.
    Just before Paris, efforts had fallen flat. The 2021 Tokyo Olympics and 2022 Beijing Olympics drew the lowest-ever audiences for Summer and Winter Games, respectively.
    Storms noted there were factors at play in those last two Olympic Games that were largely out of NBCUniversal’s control.

    Both of the Games were shrouded by the early stage of the pandemic. Tokyo was postponed by a year, and fans and families weren’t present at either games. The time zone difference from Asia worked against the U.S. broadcast, too.
    But notably the strategy for Peacock during those Games appeared to be the biggest misstep. In Tokyo, very few events were available to stream live on Peacock. In Beijing, the live content was there, but fans had trouble finding what they wanted to watch.
    “We made a claim that Peacock would be the home of the Olympics, and we didn’t exactly deliver,” said Mark Lazarus, chairman of NBCUniversal Media Group. “We were nervous about how much content to put on there, how to program it and how to cross-deliver it [with traditional TV]. And we were rightly told by the fanbase that we didn’t deliver what we said we would.”

    NBC family plan

    Snoop Dogg is interviewed at the beach volleyball event on day five of the 2024 Paris Olympic Games at Eiffel Tower Stadium in Paris on July 31, 2024.
    Carl Recine | Getty Images Sport | Getty Images

    Executives across the company have credited Paris as a part of the success of this year’s Olympics, between the eye-catching scenery — with the Opening Ceremony on the Seine River and beach volleyball played in front of the Eiffel Tower, to name a couple — and favorable time zone working in NBC’s favor.
    The company also began marketing the Olympics much earlier this time around, employing various parts of NBCUniversal to get the word out, from news programs and talk shows, to various forms of advertising, Storms said.
    Both Storms and Lazarus also noted the success of airing the Olympic trials in the weeks before the games.
    “We never really pushed hard with the trials before,” Storms said. “But it was the most streamed trials ever, and it was important to warm America up.”
    And then there was the star factor of NBCUniversal’s internal roster.

    (L-R) Comedian and host Jimmy Fallon and Sha’Carri Richardson, American track and field athlete attend the Men’s Gold Medal game between Team France and Team United States on day fifteen of the Olympic Games Paris 2024 at Bercy Arena on August 10, 2024 in Paris, France. 
    Pascal Le Segretain | Getty Images Sport | Getty Images

    The company used its own talent more strategically in 2024, executives said. Besides airing promos for content, NBC A-listers were integrated into the events themselves, co-hosting and reporting from the sidelines. Fan favorite Snoop Dogg, a special correspondent for NBC Olympics, generated social media buzz and drew more eyes to the live events. And, his stand-out presence in Paris helped promote his upcoming role with NBC’s “The Voice” this fall.
    “We had a great experience with Snoop, we are definitely in the Snoop business with ‘The Voice,’ and hope to be in the Snoop business in the future,” said Lazarus, adding NBCUniversal doesn’t have a commitment yet with Snoop Dogg for future Olympics.
    Other NBC talent attended the Games to promote their projects, too. Mariska Hargitay, who’s played the character Olivia Benson on “Law & Order: SVU” since 1999, was in Paris promoting the show’s 26th season. A variety of “Saturday Night Live” cast members were present, including Colin Jost, who covered surfing in Tahiti and had to make an early exit due to health issues.
    Shows from both NBC and Peacock were also promoted at the Games, and Universal’s upcoming film, “Wicked,” was highlighted often, with stars Ariana Grande and Cynthia Erivo appearing on the Opening Ceremony red carpet.
    The “Wicked” actors also voiced a promotional piece for U.S. gymnastics powerhouse Simone Biles, and an exclusive clip of the film was aired during the “Today” show from Paris. NBC said among moviegoers, “‘Wicked’ gained ground across measures during the Olympics, doubling our level of top of mind awareness, and increasing total awareness,” according to polling.

    Plumping up Peacock

    A view of bread with NBC logos and the Olympic Rings at The TODAY Show at Rockefeller Plaza on April 17, 2024 in New York City. 
    Dustin Satloff | Getty Images Sport | Getty Images

    Arguably no NBC property shined brighter during the Olympics than streaming platform, Peacock.
    Due in large part to Peacock, 23.5 billion minutes of the Olympics were streamed, up 40% from all prior Summer and Winter Olympics combined, according to a release.
    “Peacock delivered in every way that we hadn’t before,” said Lazarus.
    Besides having all live coverage, exclusive shows like “Gold Zone,” hosted by Scott Hanson of “NFL Red Zone,” gave fans more options for all-day viewing. There were also features built solely for the Olympics, such as an artificial intelligence function featuring daily recaps in the voice of Al Michaels, a longtime voice of marquee NFL games.
    An estimated 2.8 million consumers signed up for Peacock during the first week of the Summer Games, averaging nearly 400,000 additions daily, according to data provider Antenna. This nearly matched the sign ups driven by Peacock’s exclusive NFL Wild Card game in January, according to Antenna. The game is considered the most streamed live event in history with 27.6 million viewers, according to Nielsen.
    While Comcast recently reported Peacock had 33 million paid customers as of June 30 — 500,000 less than the prior period, and widely attributed to the loss of customers exiting after the Wild Card game —analyst Craig Moffett of MoffettNathanson said it’s worth noting the customers that remained since the Wild Card game.
    “I suspect they’ll have the same experience with the Olympics,” Moffett said. “Sure, some of those customers will leave but they will probably end up keeping a lot more than not.”
    Still, traditional TV made up the bulk of viewership during the Paris Games — nearly 90% of viewers watched on broadcast and cable channels, Lazarus said. Aided by the more favorable time zone, NBC aired live events on TV and Peacock during the day and rebranded the evening broadcast as “Primetime in Paris,” replaying big events with sidecar programming and interviews.
    The strategy used in Paris will serve as the roadmap for future Olympics — the Milan Winter Olympics in 2026 and Los Angeles Summer Games in 2028 — as well as other live sports aired on NBC’s TV networks and Peacock, executives said.
    Shortly after the 2024 Olympics comes the new seasons of English Premier League soccer, American college football and National Football League. NBC will also be the rights holder of National Basketball Association games beginning in the 2025-2026 season.
    “I think Peacock is getting much more sophisticated, as we’ve seen with the Olympics, in how they can do sports coverage,” said Shirin Malkani, co-chair of the sports industry group at Perkins Coie.
    Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032. More

  • 113 Shares99 Views

    in Business

    These 10 restaurant chains filed for bankruptcy this year

    Chapter 11 bankruptcy filings have soared this year, and the restaurant industry is not immune to the trend.
    Excluding franchisees, at least 10 restaurant chains have filed for bankruptcy protection this year.
    Red Lobster, Buca di Beppo and Roti are among the notable names that filed for Chapter 11  bankruptcy protection.

    The Red Lobster logo is displayed outside of a closed restaurant in Torrance, California, on May 14, 2024.
    Patrick T. Fallon | Afp | Getty Images

    Restaurant bankruptcy filings have surged so far this year, echoing a broader rise in corporate bankruptcies across sectors.
    At least 10 restaurant chains, not including multi-unit franchisees, have filed for bankruptcy in 2024. August alone brought three Chapter 11 filings from notable eateries. The increase in bankruptcies comes as diners pull back their spending, labor costs keep rising and Covid-era government help disappears.

    Several more restaurant chains could file for bankruptcy before the end of the year. BurgerFi, which also owns Anthony’s Coal Fired Pizza & Wings, said in a regulatory filing in mid-August that there is “substantial doubt” about the company’s ability to operate. Others, such as Mod Pizza, have narrowly avoided bankruptcy through a last-minute sale.
    Restaurants are not the only companies seeking bankruptcy protection as high interest rates weigh on businesses. Chapter 11 filings have climbed 49% this year as of Aug. 20, according to BankruptcyWatch. Mall retailer Express, nursing home chain LaVie Care Centers and Joann Fabrics and Crafts are among the companies that have filed for bankruptcy protection this year.
    Here are the 10 notable restaurant chains that filed for bankruptcy protection in 2024:

    Roti

    Mediterranean fast-casual chain Roti filed for Chapter 11 bankruptcy protection on Aug. 23. The company said it is working with its landlords and suppliers to keep its 22 locations open while it searches for a new buyer or investors.
    The company began struggling during the Covid-19 pandemic because roughly half its locations were in downtown business districts, CEO Justin Seamonds said in a statement at the time of the bankruptcy filing. New investors helped it hold on, but the recent downturn in consumer spending led to insolvency.

    Roti had raised $58 million as of June, according to Pitchbook.

    Buca di Beppo

    People dine outside a Buca di Beppo restaurant in San Diego on Aug. 11, 2020.
    Bing Guan | Bloomberg | Getty Images

    Buca di Beppo declared bankruptcy on Aug. 5. The Italian American chain is keeping 44 of its locations open while it restructures, and plans to open another restaurant, too.
    The company blamed its financial difficulties on rising costs and labor challenges, according to court filings.
    Buca di Beppo was founded in 1993 and sold to Planet Hollywood in 2008, following an accounting scandal involving some of its top executives.

    World of Beer

    The exterior of World of Beer at Crossgates Mall in Guilderland, New York.
    Lori Van Buren/ | Albany Times Union | Hearst Newspapers | Getty Images

    Tavern chain World of Beer filed for bankruptcy protection on Aug. 2. The company blamed high interest rates, inflation and a slow return to pre-pandemic dining habits.
    World of Beer plans to restructure and end leases at underperforming locations through bankruptcy.
    The company was founded in 2007, when craft beer popularity was soaring. These days, craft beer sales have fallen as consumers broadly drink less.

    Rubio’s

    Rubio’s Restaurants filed for Chapter 11 bankruptcy protection in June. The fast-casual chain, known for its fish tacos, had 86 locations at the time across California, Nevada and Arizona.
    The company said rising food and utility costs, the shift to hybrid work cutting lunchtime traffic and minimum wage hikes in California put too much pressure on some of its restaurants.
    In April, California raised its minimum wage for fast-food workers at chains with more than 60 locations to $20 an hour. Several days before it filed for bankruptcy, Rubio’s closed 48 underperforming restaurants in California.
    In August, Rubio’s agreed to a sale to an affiliate of TREW Capital, one of its lenders.
    The restaurant company previously filed for Chapter 11 bankruptcy in 2020.

    Melt Bar & Grilled

    In June, the Cleveland-based chain said it was struggling to pay its vendors and landlords. It turned to Chapter 11 to save the business.
    The company, known for its grilled cheese sandwiches and craft beer offerings, was founded in 2006. It had 14 locations at its peak, but its footprint had dwindled to four restaurants by the time of its bankruptcy filing.

    Kuma’s Corner

    Kuma Holdings, the parent company of Kuma’s Corner, filed for bankruptcy protection in June.
    The midwestern burger chain opened its first location in 2005, setting itself apart from the competition with its metal- and punk-themed menu items.

    Red Lobster

    A menu is displayed on a plate at a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
    Brandon Bell | Getty Images

    Seafood giant Red Lobster filed for bankruptcy protection in May, citing a “difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition.”
    One scapegoat for its insolvency was its disastrous “endless shrimp” promotion in 2023. But a less-obvious culprit was a lease-back agreement made under a prior owner that made Red Lobster’s leases too expensive, especially as sales fell.
    On Tuesday, the investment group buying Red Lobster tapped former P.F. Chang’s CEO Damola Adamolekun as the company’s next leader if it exits Chapter 11 successfully.

    Tijuana Flats

    A Mexican-style pizza from at Tijuana Flats.
    Jeff Greenberg | Universal Images Group | Getty Images

    In April, Tijuana Flats announced new ownership, a Chapter 11 bankruptcy filing and the closure of 11 restaurants in a single press release.
    AUA Private Equity Partners sold the fast-casual Tex-Mex chain to Flatheads LLC as part of the restaurant company’s restructuring.
    The chain was founded in 1995.

    Sticky’s Finger Joint

    Chicken-tender chain Sticky’s Finger Joint also declared bankruptcy in April. Rising commodity costs, the hangover from the pandemic and legal expenses from a trademark case brought by rival Sticky Fingers led the company to restructure.
    Sticky’s was founded in 2012. By 2023, it had annual sales of $22 million, according to a court filing.

    Boxer Ramen

    The Portland, Oregon ramen chain filed for Chapter 11 bankruptcy protection in February. In late April, it abruptly closed all four of its locations, more than a decade after the chain’s founding.

    Don’t miss these insights from CNBC PRO More

  • 138 Shares99 Views

    in Business

    A look at the behind-the-scenes business of Hollywood studio lot tours

    Major movie studios are offering more ways than ever for film buffs to get a behind-the-scenes peek at how — and where — the magic is made.
    Universal, Warner Bros., Sony and Paramount use such tours to show off the movie-making process from set design and sound recording to costumes and props.
    They also bring in revenue for the studios, offer a training program for lower-level employees and can serve as supplemental marketing for upcoming projects.

    The Hollywood sign is viewed during a clearing storm.
    Mario Tama | Getty Images News | Getty Images

    For over 100 years, Hollywood has transported audiences to worlds outside their own, from the slick streets of New York City to the yellow bricks of Oz. 
    Hundreds of acres of land in Los Angeles are dedicated to crafting stories for the biggest and smallest screens, and movie studios are offering more ways than ever for cinema lovers to get a behind-the-scenes peek at how — and where — the magic is made.

    “Touring the studios, being able to go where this stuff happened, to be in the physical space of all these things that for over 100 years now people have been watching, seems the most natural kind of tourist destination in the world,” said Robert Thompson, a professor at Syracuse University.
    Hosted by Universal, Warner Bros., Sony and Paramount, studio lot tours showcase the movie-making process from set design and sound recording to costumes and props. These paid experiences not only drive revenue to the studios, but can also act as a training program for lower-level employees who are just getting started at the companies and as supplemental marketing for upcoming projects.
    “Los Angeles is the only destination in the world where guests can visit multiple working studio lots, located in distinct neighborhoods in our city,” said Adam Burke, president and CEO of the Los Angeles Tourism Board and Convention Board.
    The film industry brings in more than $100 billion in tourism, according to the Los Angeles Department of Public Works. Attractions like studio tours, the Hollywood sign, the Grauman’s Chinese Theatre and the Hollywood Walk of Fame entice tourists from near and far.
    “While visitors are often drawn to studio tours by their favorite TV shows or movies … we hope they leave with a deeper understanding of the entertainment industry, LA’s unique culture and the city’s vibrant creative legacy,” Burke said.

    Universal, Warner Bros., Sony and Paramount declined to specify how much their studio tours generate each year or how many people pass through their gates, but each noted that foot traffic and demand remain strong for their offerings.
    “[Studio lot tours] can appeal to all different levels of people, the people who really are fascinated with the behind the scenes and how it works and how it gets made, and even for regular people that don’t have that level of curiosity, just the thrill of being present in the place where all of this stuff actually gets done,” Thompson said.

    Sony

    Situated in Culver City, Sony Pictures Studio is the newest tenant of its 45-acre lot. The complex was the original studios of Metro-Goldwyn-Mayer and is now home to popular TV staples “Jeopardy” and “Wheel of Fortune.” 

    The “Seinfeld” set at Sony Pictures Studio.
    Sarah Whitten | CNBC

    Sony’s two-hour walking tour, which costs $55 per person, starts by taking guests through a recreation of the “Seinfeld” set and through a prop display with items from famed films and TV shows like “Spider-Man,” “Justified,” “Jumanji: Welcome to the Jungle,” “Groundhog Day,” “A League of Their Own” and “The Social Network.”
    Guests will quickly see the massive 94-foot rainbow, constructed in 2012 by artist Tony Tasset, that looms over the studio. It is an homage to “The Wizard of Oz,” which was filmed on the lot more than 85 years ago. Tour guides eagerly point out which sound stages were the site of different moments from the film, including the infamous Wicked Witch melting sequence.

    The Sony Pictures Entertainment movie studio lot.
    Aaronp/bauer-griffin | Gc Images | Getty Images

    The lot’s modern tenants, “Jeopardy” and “Wheel of Fortune,” are among the most-watched programs on television outside of live sports. When the shows are not filming, guests can step onto the sets; otherwise, the tour guide will showcase different locations. Tours change daily based on which areas of the studio are open to the public and which are closed for production use.
    Additionally, Sony allows guests to step into its Foley studio to see how sound is created for movies and television.

    A cluttered collection of kitchen items used in the Foley stage at Sony Pictures Studio.
    Sarah Whitten | CNBC

    The cluttered space has a hodgepodge of flooring — wood, concrete, stone, gravel — multiple handles on doors with different kinds of locks, a shelf of various shoes, a kitchen set up with an assortment of plastic and metal bottles, cups, cutlery and, yes, some coconut shells, as well as a closet filled with jackets which can be used to make different zipper sounds.
    Vehicles from “Breaking Bad” and “Ghostbusters” are also on display.

    A “Ghostbusters” vehicle spotted during the Sony Pictures Studio tour.
    Sarah Whitten | CNBC

    Warner Bros.

    Warner Bros. goes big for patrons of its studio lot tours.
    In addition to a guided tour of the grounds, which can range from one to three hours, depending on the package, the company has created a full interactive sound stage, known as Stage 48, to show off how movies and television shows get made and provide guests with plenty of free and paid photo opportunities. 
    The tour is a mix of walking and being carted around backlot neighborhoods. Guests are allowed to walk around the suburban filming locations for “Friends,” “The Big Bang Theory” and “Gilmore Girls” as well as the jungle area that “Jurassic Park,” “True Blood” and “Aquaman” have all used.

    Building facades at the Warner Bros. studio lot. 
    Sarah Whitten | CNBC

    Tourists will notice that a number of non-Warner Bros. productions take place on the lot, which is common across all of Los Angeles’ studios. Productions will rent studio space at other studios based on need. For example, the famous upside-down kiss on the fire escape from 2002’s “Spider-Man” was produced by Sony but filmed on the Warner Bros.’ lot.
    The guided tour also includes a brief walk through Warner Bros.’ expansive prop house. This area has replicas of the falcon statues from “The Maltese Falcon,” an entire section of marble and faux marble busts, and a room filled floor to ceiling with lamps, candelabras and chandeliers.

    Floor to ceiling shelves filled with marble and faux marble busts at Warner Bros.’ studio tour prop house.
    Sarah Whitten | CNBC

    After the guided portion of the tour, guests arrive at Stage 48. This area features a recreation of Central Perk from “Friends,” including purchasable food and drinks.
    Here fans of “Friends,” “The Big Bang Theory,” “Lord of the Rings,” the Batman films and “Harry Potter” can take photos on recreated sets and on green-screen sets. Some of these photo ops cost extra.

    A view of Central Perk at Stage 48 during the Warner Bros. Studio Tour Hollywood Grand Re-Opening at Warner Bros. Studios.
    Matt Winkelmeyer | Getty Images Entertainment | Getty Images

    This area also has a number of costumes from famous classic films and interactive stations showcasing various elements of the post-production process.
    Guests are then carted back to the welcome center to walk through an area where Warner Bros. showcases costumes and props from films in the DC cinematic universe like “Wonder Woman,” “Aquaman” and “The Flash,” costumes from “Game of Thrones,” and props and costumes from Harry Potter and the Fantastic Beasts franchises.

    A view of costumes on display in Action Made Here: DC Universe during the Warner Bros. Studio Tour Hollywood Grand Re-Opening at Warner Bros. Studios on June 24, 2021 in Burbank, California.
    Matt Winkelmeyer | Getty Images Entertainment | Getty Images

    The one-hour guided tour, plus two hours unguided at Stage 48 costs $73 per ticket. Meanwhile, a two-hour guided tour, which comes with the Stage 48 access and lunch, costs $160, and the deluxe three-hour guided tour, which comes with a fine-dining lunch and access to Stage 48, is $330 per ticket.
    Warner Bros. also recently launched its Turner Classic Movies tour, which takes guests through areas of the lot that were used for films like “Casablanca,” “My Fair Lady” and “The Music Man.”

    Paramount

    While the Warner Bros. tour focuses much of its attention on completed works of film and television, Paramount’s studio lot tour delves deep into how these movies and shows are made.
    This tour features a combination of walking and being carting around the lot, as a guide — who is part of Paramount’s page program — brings guests to meet with the people who keep production running.
    For the first six months of their employment with the studio, these pages serve as studio tour guides. After that, they become eligible to work utility positions around the lot, assist with audience management for TV shows and even be hired to do VIP tours.

    The Paramount Studios in Los Angeles, California.
    Bloomberg | Getty Images

    The Paramount tour has three tiers: the regular studio tour, which lasts two hours and costs $65 per person; the premier tour, which lasts three hours and gives guests access to the archives and more of the backlot and costs $150 per person; and the VIP tour, which takes four hours and costs $215 per person.
    That most in-depth option introduces guests to a number of tradesmen on the lot, including lighting crew members and signmakers, as well as an on-staff archivist who will walk them through a collection archival costumes and props, including jewelry. The VIP option also comes with a private lunch or breakfast.

    Signs created in Paramount Studios sign studio.
    Paul Dergarabedian

    Guests will get to see where director Alfred Hitchcock’s office was, walk around “New York” and peek into the “blue sky tank,” which has been used in “Star Trek IV: The Voyage Home,” “The Truman Show” and “The Curious Case of Benjamin Button.”
    The prop warehouse features a number of vehicles, including the “egg mobile” from “Sonic the Hedgehog” and a pod from “Star Trek: Beyond,” as well as a life-size Bumblebee from the Transformer franchise.

    Universal Studios 

    The Universal Studios Hollywood theme park actually began as a studio tour. Starting 60 years ago, guests were given exclusive access to the production lot and, over time, Universal began to introduce special effects attractions. 
    These have developed to include a staged flash flood, where 10,000 gallons of water rush downhill toward the guests, an earthquake simulation and, of course, the terrifying Jaws erupting from a small lake.

    The set of the Steven Spielberg film “Jaws” is pictured at Universal Studios in Hollywood.
    Gabriel Bouys | Afp | Getty Images

    The one-hour studio lot tour attraction, which is included in the theme park’s admission, also features two immersive rides: One shows King Kong fighting off dinosaurs, and the other sees the cast of the Fast and Furious films entering into a high-speed street chase. Guests remain on their trams while experiencing these rides.
    The standard tour also takes parkgoers through several classic sets including the Bates Motel from “Psycho,” the plane crash from “War of the Worlds” and the courthouse from “Back to the Future.”

    The press take the Universal Studios tram tour of the newly rebuilt New York Street, which was gutted by a fire two years ago. Universal Studios Hollywood will open the New York backlot tram tours on Friday, which was rebuilt after a 2008 fire destroyed the New York Street area.
    Allen J. Schaben | Los Angeles Times | Getty Images

    General admission to the theme park ranges starts at $109 per person but can vary depending on the time of year — the holiday seasons are often more expensive.
    Those who want a more in-depth look at the studio lot can purchase VIP tour packages, which include extended backstage access, a private trolley, a buffet lunch and front-of-the-line access for all rides and attractions at the park. The VIP experience can cost between $379 and $499 a person.
    “The concept of Hollywood is so elusive and when guests visit Los Angeles there’s always a part that wonders ‘Will I see a movie star?,'” said Dennis Satterfield, director of studio tour operations at Universal Studios Hollywood. “The Studio Tour helps take some of that wonder away. Guests have access to a real movie studio, have a chance to see production, movie sets and maybe sometimes movie stars in their environment.”
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

  • 150 Shares179 Views

    in Business

    Cannabis industry targets luxury consumers with Fifth Avenue marijuana dispensary, Hamptons presence

    Cannabis consumption is gaining traction in the luxury market — as are retailers targeting high-end clients.
    There’s now a high-end marijuana dispensary on New York’s iconic Fifth Avenue.
    The upscale marijuana experience isn’t limited to dispensaries, as companies start selling luxury accessories and THC-infused drinks.

    The Travel Agency on Fifth Avenue in New York Cityis an adult-use recreational marijuana dispensary.
    Courtesy: The Travel Agency

    Cannabis consumption has turned a corner — and now it’s on Fifth Avenue.
    Shoppers walking along the iconic New York stretch of retailers can pick up jewels from Cartier and new threads from Saks, as well as pre-rolled, New York state-grown marijuana joints from a new dispensary. 

    In the 3½ years since New York state legalized adult-use marijuana, licensed cannabis sales have taken off, topping $100 million last year. And now, legal avenues for cannabis consumption are gaining traction in the luxury market. 
    As New York officials crack down on the hundreds of illicit shops throughout the city, 166 licensed dispensaries are open to shoppers across the state, including over 50 in New York City — and one just across the street from Lululemon and Ted Baker. 
    The Travel Agency on Fifth Avenue is an adult-use recreational marijuana dispensary outfitted with white interiors, glass cabinetry, a host of “budtenders” and a lot of marijuana.
    The retailer’s exterior fits in with the chic storefronts of its neighbors, and with its sister locations in Union Square and Downtown Brooklyn. All three stores opened in the past year and a half, and founder Paul Yau said a fourth is coming soon to one of the city’s other high-end shopping districts, SoHo.

    The Travel Agency on Fifth Avenue in New York Cityis an adult-use recreational marijuana dispensary.
    Courtesy: The Travel Agency

    At The Travel Agency, Yau said the average purchase includes two products, largely gummies, marijuana flower or pre-rolls, at the average price of $80 to $90 a ticket. Products range from $3.50 THC seltzers to flower selling at $150 per ounce, and accessories go for even higher price points.

    New York City’s first licensed dispensary, Housing Works Cannabis Co., sells products at rates that are similar, but a shopper can spend even more there, paying up to $240 on one ounce of marijuana. All of Housing Works Cannabis Co.’s proceeds support the Housing Works nonprofit in NYC. 
    The Travel Agency’s Union Square location donates 51% of its proceeds to the Doe Fund, which supports formerly incarcerated people transitioning to life outside of prison. The Fifth Avenue and Brooklyn stores are run by owners with a past in the justice system related to cannabis.
    While the elevated interiors get legacy and new shoppers through the door, Yau said the ethical mission keeps customers coming back. “It’s huge, it just provides such a halo,” he added.

    Reaching the ‘canna-curious’

    New York has always had what the industry calls the “legacy” customer base, or those who used marijuana before it was legalized.
    Now, with The Travel Agency locations in high-traffic, high-spending areas, Yau said he’s reaching the “canna-curious” with curated product offerings and an architecturally inspired space to ease onboarding into the legal market.

    The Travel Agency on Fifth Avenue in New York Cityis an adult-use recreational marijuana dispensary.
    Courtesy: The Travel Agency

    “The 40-year-old female shopper is a really strong demographic, and that demographic is just emerging in New York,” Yau said, adding that the stores were designed with that kind of new shopper in mind. “When people came into our store, they knew immediately it wasn’t an illicit store.”
    One such female patron, Katie, a 37-year-old advertising executive working in New York who declined to give her last name, said the atmosphere and the employee expertise keep her coming back. “You feel like you’re in a boutique,” she said.
    THC seltzer company Cann is also hoping to appeal to curious consumers, particularly those who have had a negative experience in the past with marijuana. Both Yau and Cann founder Jake Bullock told CNBC that marketing is key to navigating that headwind in onboarding the canna-curious.

    THC seltzer company Cann sells a 12-pack of 8 ounce seltzers with 2 milligrams of THC for $49.95.
    Courtesy: Cann

    “Part of the reason we made these cans, little and small and pink and pastel, is because we’re trying to communicate approachability to the consumer, like you can drink the whole thing. Don’t worry, it’s just 2 milligrams,” Bullock said.
    A 12-pack of 8 ounce Cann seltzers with 2 milligrams of THC costs $49.95. By comparison, shoppers can find a 12-pack of White Claw alcoholic seltzers for well under $20.
    The upscale marijuana experience isn’t limited to THC products.
    Luxury home designer Jonathan Adler sells marijuana home decor items like marijuana storage canisters and bowls for nearly $300 a piece. Lifestyle brand Edie Parker sells everything from smoker-friendly handbags to rolling papers, giant colorful glass pipes and $450 table lighters, many of which can be found at boutiques and legal dispensaries like The Travel Agency and Housing Works Cannabis Co. 
    Actor Seth Rogen’s lifestyle and decor brand Houseplant also caters to the luxury cannabis user. Marble rolling trays and ash trays go for well over $200, and the company recently collaborated with high-end apparel retailer Kith.

    The Travel Agency on Fifth Avenue in New York Cityis an adult-use recreational marijuana dispensary.
    Courtesy: The Travel Agency

    The collaborations will likely keep coming. Yau said he thinks dispensaries like The Travel Agency offer promising partnerships for fashion brands hoping to tap into the “coolness” of the burgeoning cannabis industry. 

    Finding luxury consumers where they are

    THC seltzer company Cann has backers that are high-end themselves, including actress and lifestyle entrepreneur Gwyneth Paltrow and two-time NBA All-Star Baron Davis. The beverage company is trying to catch consumers where they’re willing to spend. 
    At the Montauk Surf Lodge in New York, where guests pay a minimum of $3,000 for a one-night table, they can now purchase a hemp-derived version of Cann’s seltzers alongside local rosé and high-end liquor.
    Cann co-founder Jake Bullock said his brand’s target audience is a premium, largely millennial consumer, and its competition is alcohol. Bullock and his co-founder Luke Anderson view the Surf Lodge partnership as an ideal introduction to that audience — via the wealthy Hamptons crowd that’s already indulging and spending big.

    THC seltzer company Cann sells a 12-pack of 8 ounce seltzers with 2 milligrams of THC for $49.95.
    Courtesy: Cann

    “It kind of has that very classic customer that Luke and I thought about the brand as fitting into their lives,” he said.
    Yau, who spoke to CNBC while working remotely near the Hamptons, is also aware of that target audience. “We think we’re still in the first inning of New York’s legal cannabis,” he said. More