Business

Vuori reached a $5.5 billion valuation after an investment round led by General Atlantic and Stripes.
Private equity’s interest in the athleisure company comes at a time when many investors are fleeing the consumer sector, indicating Vuori’s profitable business model is setting it apart from competitors.
The coastal California company, known for its joggers and shorts, is planning for an IPO, people familiar with the matter told CNBC.

When athleisure brand Vuori launched in 2015, it was headquartered in a garage, sold only men’s shorts and couldn’t get investors to give it the time of day. 
Now, the Carlsbad, California, retailer is expanding globally, backed by a string of marquee investors including General Atlantic, SoftBank and Norwest Venture Partners, after raising $825 million in November in a funding round that valued the company at $5.5 billion.  

It’s become the envy of incumbents such as Lululemon, Gap’s Athleta and Levi’s Beyond Yoga, and it’s poised to be one of the retail industry’s biggest IPOs when it eventually files to go public, which people close to the company say it plans to do.
“It’s a notable deal for the category it’s in … you haven’t seen many deals in that market at all over the last couple of years, and the deals that have happened have been more, I’d say, challenged, or more at value-oriented situations,” Matthew Tingler, a managing director in Baird’s global consumer and retail investment banking group, said of the recent funding round.
“Vuori’s bringing a lot of excitement and growth to the market,” added Tingler, an expert in the athletic apparel space who wasn’t involved in the transaction. “In ways, they’ve been taking share in that athleisure market broadly … they’re challenging the legacy players of Athleta and Lululemon.” 

Vuori’s store in the Flatiron District of New York City.
Natalie Rice | CNBC

As Vuori went from a no-name brand to one of the most highly valued private apparel retailers on the planet, it saw robust sales growth and consistent profitability, winning over consumers in a crowded space with its coastal California take on athleisure.
“Vuori competes on a differentiated product, a differentiated brand, a differentiated store experience, differentiated materials,” Vuori CEO and founder Joe Kudla told CNBC in an interview. “If you were to just survey our customer base [and ask], ‘Why is Vuori so special?’ They would tell you it’s because of our product, it’s because of the comfort, the textile, the fabrics we work with, and the fit. We are all about product, product, product, and that’s ultimately what results in great performance in our industry.” 

Despite its success, Vuori faces challenges ahead. The company operates in a crowded athleisure space that analysts aren’t sure will grow as quickly as it has in the past. Some see it as one of the fastest-growing apparel categories, while others expect it to slow as consumers look to dress up after years of dressing down.
Customers also seem to be worrying about whether Vuori’s products will stay the same as it scales and faces the demands of being a publicly traded company.
“If you go look at message boards right now, the thing that consumers of Vuori are most concerned about is, is the quality of the fabric going to fall?” said Liston Pitman, a strategy director with Eatbigfish and an expert in challenger brands. “Are they going to water down the brand that I love as an exchange for growth?”

Vuori’s Flatiron store.
Natalie Rice | CNBC

Plus, Vuori faces the same issues as other consumer discretionary companies. Retailers have been forced to work harder to win customer dollars, and demand has been unsteady as consumers think twice before buying things that may be wants rather than needs.

Vuori pulls ahead in the yoga wars

Since it is still private, not much is known about Vuori’s financial performance. But analysts estimate that it generates around $1 billion in annual revenue, and the company says it has been profitable since 2017. 
While its sales are a fraction of the $431 billion global athleisure market, Vuori has seen steady growth and has outperformed the overall sportswear market at least since 2020, according to data from Euromonitor and sales estimates from Earnest. As of the end of October, Vuori has grown sales by 23% so far this year at a time when the overall sportswear market is expected to grow by 4.3%. Last year, it grew 44% while the sportswear market expanded by only 2.4%. 

Retail analyst Randy Konik, a managing director with Jefferies, said Vuori and fellow upstart Alo Yoga have been so successful in part because they’re taking share from Lululemon, which he said has alienated its primary customer base as it has expanded into new categories. 
“Five years ago, Alo and Vuori were … nothing burgers, and that’s when Lululemon was growing 20% a year, whatever it is, or more. Today, you look at the numbers and you’re like, wait a second, the business is flat,” said Konik, referring to Lululemon’s largest market, the Americas. “It’s not growing, and yet it’s coinciding with the hypergrowth of Alo and Vuori. So … in my opinion, the data proves that that is a market share issue.”

A customer exits a Lululemon store in New York on Aug. 22, 2024.
Yuki Iwamura | Bloomberg | Getty Images

Analytics firm GlobalData found that Lululemon’s customers are now spending more at Vuori than they did previously. In 2018, 1.2% of Lululemon’s customers shopped at Vuori, but that number grew to 7.8% as of the end of November.
Last week, the longtime category leader gave a cautious outlook for the all-important holiday shopping season as it contends with slowing growth and product missteps. It wasn’t asked about the competitive threats it’s facing but acknowledged that its core customer is slowing down. 

Competitive threat 

Vuori’s valuation and interest from private equity come as investors flee the consumer sector. Its success has left some industry observers scratching their heads and wondering: How can a leggings and joggers company be worth this much, in this economy? Analysts say it comes down to Vuori’s business model, its ability to grow profitably and its product assortment, which has resonated with shoppers.
Kudla said the company was laser focused on growing profitably from the beginning because it really didn’t have another choice. Unlike other direct-to-consumer brands that were raising piles of cash at the time, investors weren’t interested in the mens-only brand that Kudla was pitching.
So he was forced to bootstrap the company using funding from family and friends. 
“We developed a working capital model that would self-fund the business, and so we were built very counter to the trend of the time, and that resulted in a really great business with a lot of discipline,” said Kudla, who was a CPA for Ernst & Young before he got into fashion. “I managed the entire business through this complicated spreadsheet, so every decision that I made, I could forecast the cash-flow impact six months from today.” 

Vuori was CEO Joe Kudla’s third attempt at a startup — and could have easily been his last.
Source: Vuori

To save money, Kudla didn’t pay himself for two years, ran the business out of a garage and hired employees who were willing to trade equity for compensation. Perhaps most importantly, he developed partnerships with his suppliers, which alleviated the cash-intensive burden of acquiring inventory and paying for it up front. 
“I started treating our suppliers like they were investors in the business, and really helping them see the vision for what we were building,” said Kudla. “I was able to convince our early factory partners to give us really great terms so that I could receive the inventory, sell it, collect cash from my wholesale partners, or sell it direct to consumer and then pay for the inventory, and that strategy ultimately led me to building a working capital model that self-funded our growth.” 
While Vuori started out as a purely online business, Kudla wasn’t precious about partnering with wholesalers at a time when many founders in the direct-to-consumer space were against the idea. By getting his products on the shelves at REI in the brand’s early days, he was able to build awareness and acquire customers in a way that didn’t drain Vuori’s balance sheet. 

Vuori’s Flatiron store.
Natalie Rice | CNBC

“We got profitable in 2017, we started generating free cash flow … there was no institutional capital involved in our business, no venture money involved in our business, until 2019, when we were already very profitable and on a pretty strong growth trajectory,” said Kudla. 
Years later, Kudla’s approach almost feels prescient. Many of the DTC peers that Vuori came up with are now teetering on the edge of bankruptcy, unable to make the unit economics of their business work. Investors no longer have patience for companies that have no path to profitability.
Now, most brands and retailers recognize that selling only online often doesn’t work. It has proven critical to partner with wholesalers and open up stores, alongside building direct channels online.
“I like how [Vuori is] going about growth,” said Jessica Ramirez, senior research analyst at Jane Hali & Associates. “With REI, it was one of their top accounts, and I feel like it was a different way of going into wholesale, but very targeted wholesale, so knowing that that is a customer that would be purchasing a particular kind of activewear.”
Vuori’s investment from General Atlantic and Stripes in November is further evidence of a robust balance sheet. The deal was structured as a secondary tender offer, which allowed early investors to sell their shares and cash in. None of it went to the balance sheet, and Vuori didn’t need new funding for its aggressive growth plans, which include expanding into Europe and Asia and having 100 stores by 2026, said Kudla. 
“We’re going to continue growing the business the same way we’ve always grown the business, which is very calculated with a lot of discipline,” he said. 

Trouble at Lululemon 

In many ways, the brands jostling for share in the crowded athleisure space can blur together. They all sell leggings, they all sell sports bras, and they’re all looking to win over consumers with their unique blend of comfort, style and performance. The same can be said for the broader apparel industry, which is why having products that stand out separates the industry’s winners and losers.
Fans of Vuori say the brand’s quality, fit, fabric and comfort are what sets it apart from competitors and keeps them coming back. Meanwhile, product missteps at Lululemon have been blamed for a sales slowdown in its largest region, the Americas. 

Vuori’s Flatiron store.
Natalie Rice | CNBC

In the three months ended April 28, Lululemon’s comparable sales in the Americas were flat after the company failed to offer the right color assortment in leggings and the sizes that customers desired. 
In early July, Lululemon launched its new Breezethrough leggings, designed for hot yoga classes, but ended up yanking them from the shelves after it received complaints about the product’s unflattering fit. Its lack of desirable new products is also limiting how much Lululemon’s core customer is spending with the brand, the company said when reporting fiscal third-quarter earnings Dec. 5. The company said it expects its assortment to be back in line with historical levels in 2025, which Truist anticipates will be the “key driver” for better U.S. sales, especially as it laps easier comparisons from the year-ago period. 
“It seems that they’ve snoozed on where the customer is going … you have to remember that today’s consumer isn’t necessarily a loyal consumer,” said Ramirez.
“Fabric does matter, movement matters … if someone you know mentions there’s another brand that, ‘Oh, you know it held me in better, or I was able to run quicker, I didn’t sweat as much, I didn’t feel as gross,’ these very, like, small things that do matter in your performance, people will give them a try.”
— Additional reporting by Natalie Rice More

Private equity and venture capital enterprises such as College Sports Tomorrow, Smash Capital and Collegiate Athletics Solutions are looking to buy in to NCAA sports programs.
The schools with the most valuable athletic programs sit in the best position to capitalize.
Football generates roughly 75% of athletic program revenue at typical Power 4 schools, according to people familiar with the economics.

Donovan Edwards #7 of the Michigan Wolverines hurdles a tackle attempt by Michael Taaffe #16 of the Texas Longhorns during the first half of a college football game at Michigan Stadium on September 07, 2024 in Ann Arbor, Michigan.
Aaron J. Thornton | Getty Images Sport | Getty Images

There’s a mad dash for cash in college sports.
Between multibillion-dollar television deals, the institution of the transfer portal and the escalation of NIL —name, image and likeness — deals for athletes, college athletic programs, particularly football, have never looked more lucrative.

Now private equity and venture capital enterprises such as College Sports Tomorrow, Smash Capital and Collegiate Athletics Solutions are looking to buy in, and the schools with the most valuable athletic programs sit in the best position to capitalize.
At the very top of the heap are the schools that excel on the gridiron. According to people familiar with the economics, football generates roughly 75% of athletic program revenue at typical Power 4 schools, which include the ACC, Big Ten, Big 12 and SEC conferences.
This year’s expanded, 12-team College Football Playoffs kick off Dec. 20. ESPN parent Disney signed a six-year extension in March for the rights to the games through 2031. The deal is worth an average of $1.3 billion annually, more than double the previous deal, according to media reports.
Given the fact that the SEC dominates the college football ratings, experts CNBC spoke with believe the conference will leapfrog the Big Ten with the richest television deal when its current agreement expires in 2033-34.
“The SEC is almost a super-conference and, because of its football teams, owns the most valuable content in college sports,” said Irwin Kishner, a partner at the corporate department of Herrick Feinstein and co-chair of its Sports Law Group.

Private equity, of course, is not a new concept for sports. In North America, Major League Baseball, the National Basketball Association, the National Hockey League and Major League Soccer have permitted private equity firms to own limited partner stakes for several years. The National Football League voted in August to allow select private equity investors to take minority stakes.
Now the attention is turning to college programs.
“As a business, college sports, particularly football, is performing well and continuing to grow, which is why investors are looking at the asset class,” said Greg Carey, the global co-head of sports franchise in investment banking at Goldman Sachs.
Institutional investors such as Collegiate Athletic Solutions — a proposal by RedBird Capital Partners and Weatherford Capital — would provide capital to help grow a school’s athletic revenue. In return, the private equity firms would get a cut.
There is also the belief that the business acumen from outside investors could drive profits even higher.
“There’s a big opportunity to drive EBITDA [earnings before interest, taxes, depreciation and amortization] higher in college sports because there are easy ways to maintain quality while reducing expenses,” said Kishner.
And schools have incentive to bring on outside investors.
For one, a $2.8 billion settlement between the NCAA and the five largest conferences would award compensation to 14,000 students who were previously prevented from earning endorsement money. A hearing to grant final approval on the deal is scheduled to take place in April, but already schools are planning ahead for it.
And even among the biggest conferences, a gap in television revenue could cause a big competitive and economic disparity.
“Schools in the ACC and Big 12, as well as the bottom of the SEC and Big Ten who are generating less local commercial revenue, will have little choice but to take on private capital and operation expertise, or they are all but guaranteed to be left out of the top echelon of competition in the future,” said Jason Belzer, publisher of AthleticDirectorU, who has advised universities on NIL deals and is now doing the same for athletic departments seeking private equity.
To be sure, the move to private equity is complicated and could still be months off. Florida State has been reportedly working with JPMorgan Chase for about a year trying to raise institutional capital.
Yet, bankers and attorneys interviewed by CNBC believe private equity will eventually be investing in college athletic programs. More

Honda put nostalgia to the fore on December 18th when it announced that the Prelude, a nameplate last produced some 25 years ago, now being relaunched as a hybrid-electric, would come with the option of a system that simulates gear changes and combustion-engine noises. The message, however, was quickly drowned out by news with far more bearing on the Japanese carmaker’s future. It is considering merging with Nissan, a floundering domestic rival, to create the world’s third-largest carmaker by sales, behind only Toyota and Volkswagen. Yet joining together will not fix the problems of a duo stuck in the past. More

The number of extra bedrooms — defined as a bedroom in excess of the number of people in the home, and even including one for an office — has reached a new high, according to a new report from Realtor.com.
The seven-fold jump over the past 40 years comes as the number of people in any given household has declined.

Tim Kitchen | The Image Bank | Getty Images

There may not be a lot of homes for sale these days, but there is a lot of housing space sitting empty. In fact, the most in recorded history.
The number of extra bedrooms, which is defined as a bedroom in excess of the number of people in the home, and even including one for an office, has reached the highest level since the U.S. Census began recording this metric in 1970, according to a new report from Realtor.com.

Last year, which is the latest Census data available, the number of extra bedrooms reached 31.9 million, up from 31.3 million in 2022. Back in 1980, there were just 7 million extra bedrooms.
The fourfold jump comes as the number of people in any given household has declined, from a high of 3.1 persons per household in 1970 to a record low 2.5 per household in 2023.
“We are seeing more guest rooms for two main reasons: homes getting bigger and household size getting smaller,” said Ralph McLaughlin, senior economist at Realtor.com. “What’s more, we find that spare rooms are more popular in cheaper areas where it’s more affordable to buy a home with extra bedrooms.” 
The average size of a new home grew during the famous “McMansion” era, beginning in the 1980s, when builders went big. But they stopped growing about a decade ago; much of that has to do with rising costs as well as both energy efficiency and environmental demands from consumers.
So the average number of bedrooms per home over the past 50 years has increased, from an average of 2.5 rooms in 1970 to 2.8 rooms in 2023, but there has been no change over the past 10 years.

Looking regionally, since all real estate is local, excess space trends are highest in the Mountain West and in the South. That is simply because there is more land there, and homes are built with larger floor plans, according to the report. Urban homes have just the opposite dynamic.
“If people value having extra space, then we didn’t overbuild during the McMansion era. But if homebuyers are simply tolerating these big homes because they’re what’s available, then perhaps we did overbuild a bit over the past few decades,” McLaughlin added.
The 10 markets with the highest share of total bedrooms that could be considered excess are:

Ogden, Utah (12.2%)
Colorado Springs, Colo. (12.1%)
Salt Lake City, Utah (12%)
Memphis, Tenn. (11.8%)
Atlanta (11.6%)
Cleveland (11.3%)
Wichita, Kan. (11.3%)
Columbia, S.C. (10.8%)
Charleston, S.C. (10.7%)
Jackson, Miss. (10.7%)

The 10 markets with the lowest share of total bedrooms that could be considered excess are:

Miami (5.9%)
Sarasota, Fla. (6.4%)
New York (6.5%)
Los Angeles (6.6%)
New Haven, Conn. (6.7%)
Worcester, Mass. (6.9%)
Stockton, Calif. (6.9%)
Bakersfield, Calif. (7%)
Honolulu area (7%)
Providence, R.I. (7.1%) More

The deadly, targeted shooting of UnitedHealthcare’s CEO, Brian Thompson, has unleashed a torrent of pent-up anger and resentment toward the insurance industry, renewed calls for reform and reignited a debate over health care in the U.S. 
Many patients, advocacy groups and industry experts say the industry and U.S. health-care system are flawed or broken entirely, often disadvantaging Americans who simply need care.
But there is less consensus on the root cause of the issues around insurance and how exactly to fix the industry. 

A person holds a sign while standing on the roadside near the McDonald’s restaurant where a suspect in the killing of the CEO of UnitedHealthcare, Brian Thompson, identified as Luigi Mangione, 26, was arrested, in Altoona, Pennsylvania, U.S. December 9, 2024. 
Matthew Hatcher | Reuters

The deadly, targeted shooting of UnitedHealthcare CEO Brian Thompson has unleashed a torrent of pent-up anger and resentment toward the insurance industry, renewed calls for reform and reignited a debate over health care in the U.S. 
Almost no expert, provider, or patient would say U.S. health care works as it should for patients. The problem is deciding how to improve it.

Luigi Mangione, 26, is accused of fatally shooting Thompson outside the Hilton hotel in midtown Manhattan on Dec. 4, as the CEO headed to the annual investor day of his company’s parent, UnitedHealth Group. Investigators have said Mangione was a critic of UnitedHealthcare and the broader health-care industry.
The killing sparked a flood of social media posts voicing negative experiences with insurers, morbid praise and justification for Thompson’s killing and threats toward other insurance executives – igniting frustrations that have bubbled for years. Those reactions drew rebukes from others who condemned them as inhumane after Thompson’s death. 
U.S. patients spend far more on health care than anywhere else in the world, yet have the lowest life expectancy among large, wealthy countries, according to the Commonwealth Fund, an independent research group. Over the past five years, U.S. spending on insurance premiums, out-of-pocket co-payments, pharmaceuticals and hospital services has also increased, government data shows.
Many patients, advocacy groups and experts say the industry and U.S. health-care system are flawed or broken entirely, often burdening Americans who simply need care with exorbitant costs and daunting hurdles. But there is less consensus on the root cause of the insurance issues and how exactly to fix American health care, a complicated and entrenched system for delivering services and treatments that costs the nation more than $4 trillion a year. 
Some experts acknowledged that insurers play a valuable role and must deal with a larger system where multiple stakeholders balance providing care with profit motives. Other experts also noted that insurers have had to grapple with pressures on their businesses, such as lower government reimbursement rates for private Medicare plans and higher medical costs among enrollees in those programs. UnitedHealthcare in particular is also grappling with the fallout from a massive ransomware attack in February targeting its company, Change Healthcare, which processes medical claims.

But patients and advocacy groups stressed that those companies’ decisions often come at the expense of patients. Insurers’ moves to rein in costs for services can often lead to denied or delayed claims, higher premiums and unexpected bills, which can leave patients without care and be the difference between life or death.

Patients frustrated with a flawed system

The U.S. insurance industry is dominated by private-sector companies such as UnitedHealth Group, CVS Health and Cigna, and operates as a largely for-profit enterprise — in contrast with most other wealthy countries. That means the industry’s primary goal is to generate profit by charging premiums to customers and managing claims to minimize payouts while complying with regulations and satisfying customers.
That leads insurers to weed out care that’s not medically necessary or not backed by scientific evidence, which helps increase their profit margins. But companies can also deny reasonable and necessary claims, preventing patients in genuine need of care from getting it or leaving them with hefty medical charges. 
Tactics include delaying or denying valid claims to limit payouts, increasing premiums in a way that disproportionately burdens lower-income patients and people of color, and requiring prior authorization, which makes providers obtain approval from a patient’s insurance company before administering specific treatments. Insurers increasingly rely on technology, including AI, to review claims, which can lead to inaccurate denials or improper payouts. 

A banner hanging from on overpass along the southbound lane of I-83 that says, “Deny Defend Depose Health Care 4 All.”
Lloyd Fox | Baltimore Sun | Tribune News Service | Getty Images

Roughly half of insured adults worry about affording their monthly health insurance premium, according to a March survey from KFF, a policy research organization. The survey added that large shares of adults with employee-sponsored plans and government market coverage rate their insurance as “fair” or “poor” in terms of their monthly premium and out-of-pocket costs to see a doctor. 
A separate KFF survey from 2023 showed that nearly one in five adults had claims denied in the past year. People who used more health services were more likely to have claims rejected, according to the poll. 
No one knows exactly how often private insurers deny claims, since they are generally not required to disclose that data. But UnitedHealthcare, which as the largest private health insurer in the U.S. posted more than $281 billion in revenue last year, is a frequent target for criticism over how it handles claims. 
For example, UnitedHealthcare last year settled a case brought by a severely ill student at Penn State University who claimed the company denied coverage for drugs his doctors determined were medically necessary, leaving him with a bill of more than $800,000. An investigation by ProPublica outlined the lengths UnitedHealthcare went to reject claims, including by burying medical reports. UnitedHealthcare has since settled the case.
Families of two now-deceased customers also sued UnitedHealthcare last year, alleging the company knowingly used a faulty algorithm to deny elderly patients coverage for extended care deemed necessary by their doctors. In court filings earlier this year, UnitedHealth Group said it should be dismissed from the lawsuit because the patients and their families did not finish Medicare’s appeals process for claims.
Some people aired their frustrations with the company’s practices on social media when reacting to Thompson’s death.
One Instagram user wrote in a post that “My condolences are out-of-network.” Another user commented under a CNBC Instagram post about the killing, “Sorry but with the way they be denying coverage for everyday patients.. no comment.”

The logo of UnitedHealth appears on the side of one of its office buildings in Santa Ana, California, on April 13, 2020.
Mike Blake | Reuters

Celebrating or justifying the death of anyone is “appalling,” said Caitlin Donovan, senior director of Patient Advocate Foundation, which provides case management services and financial aid to Americans with serious illnesses. But she said it is not surprising that people are frustrated with the health-care system. 
“People just want the system to be fair,” Donovan said. “They want to pay a reasonable amount and have their health care covered, and they want to be able to access what their trusted provider is prescribing them.”

What is the root cause?

Though the issues are well understood, parsing out which stakeholders are to blame is a complicated task.
Some industry experts argued it is necessary for insurers to control costs under the current health-care system. Insurers are mostly paid by employers and government agencies, which set many of the rules around the coverage they offer. 
If insurers paid out every claim they received, premiums would likely skyrocket, said Evan Saltzman, professor in the department of risk management/insurance, real estate and legal studies at Florida State University’s College of Business.
“If you want to keep premiums reasonable, you do need the insurer to police some of the claims being filed,” Saltzman said. He acknowledged insurers sometimes deny “perfectly reasonable claims” and not just unnecessary or fraudulent care. 
He said insurers can also help police bad actors in the health-care system, such as some doctors who attempt to prescribe unnecessary treatments to patients to increase profits. 
Saltzman said one of the underlying causes of insurance issues is “information asymmetry” between insurers and patients. Patients often know more about their personal health risk than their insurance company, but the insurer often knows far more about the health-care networks and coverage details, Saltzman said.
UnitedHealth Group CEO Andrew Witty similarly blamed a lack of transparency in the insurance industry in a New York Times opinion piece on Friday, his first public remarks since the shooting. He said insurers, together with employers, governments and other payers, need to better explain what is covered and how those decisions are made. 
Still, he defended the way insurers make claim decisions, saying behind them “lies a comprehensive and continually updated body of clinical evidence focused on achieving the best health outcomes and ensuring patient safety.”

But Donovan said Witty’s column “missed the mark.” While the health-care system needs more transparency, Donovan said Witty’s proposed solution “puts the onus on patients when that’s not where it should be.” 
Insurance policies are often written with technical language that is difficult to understand. Patients could become confused about what is covered, and may not realize the limitations of their coverage until they try to file a claim, she said.
Donovan believes the root issue is cost — a system built around maximizing prices and revenue, rather than helping patients. 
For example, the industry has limited competition after consolidation, and its traditional payment model reimburses providers based on each service they perform, which can lead to overtreatment and higher costs. 
Drug middlemen called pharmacy benefit managers — which negotiate drug discounts with manufacturers on behalf of insurance plans — also put pressure on other parts of the system. For example, lawmakers and drugmakers have accused PBMs of charging insurers more for drugs than they reimburse pharmacies, pocketing the difference as profit. 
Donovan acknowledged that insurers attempt to negotiate with providers to cut prices for services and products. But she said insurers are often more focused on managing costs for their business than advocating for patients. 

How health care could be reformed

Industry experts don’t expect insurance companies to make material changes to their policies in response to the killing. 
Policy changes at companies alone won’t drastically improve care for patients, according to Veer Gidwaney, the founder and CEO of Ansel Health. His private company offers simplified supplemental insurance for members diagnosed with more than 13,000 conditions
Gidwaney said there will need to be structural changes to the entire industry, which will require harder, longer-term legislative efforts. That may prove difficult with Republicans set to take control of a closely divided Congress for the next two years.
To decrease costs and barriers to access for patients, Donovan said the government could more heavily scrutinize the health-care consolidation that eats up independent providers. She also said legislators could pass more laws to protect patients from surprise ambulance bills and address shortages across the health-care system that drive up costs, such as the limited supply of certain drugs or clinicians. 
The incoming administration under President-elect Donald Trump could also push for more transparency in the health-care industry, according to Stephen Parente, an insurance professor at the Carlson School of Management at the University of Minnesota. Parente served in two different health policy roles in the first Trump administration and has worked directly with UnitedHealthcare’s Thompson. 
He noted, for example, that the Trump administration issued a rule that required most employer-based health plans and issuers of group or individual plans to disclose price and cost-sharing information for covered items and services, which went into effect in July 2022. 
“There might be fresh pressure for denial rates to be put out. I’d like for insurers and Medicare to be transparent about their denial rates,” Parente said. 
Until any significant changes occur, patients can “really try to take control of their own health,” said Michael Hinton, a patient who was diagnosed with a chronic digestive disease called gastroparesis more than 14 years ago. He said that could look like taking notes and asking questions during appointments, tracking insurance payments, learning more about the condition they suffer from and turning to third parties for help.
In Hinton’s case, the Patient Advocate Foundation helped him navigate coverage for a critical surgery that was denied twice by his insurance. 
“I find it so disturbing and sad. It’s just unbelievable,” Hinton said, referring to the fatal shooting earlier this month. “There are other methods of change — and that could look like trying to be your own advocate.”  More

Stellantis said Wednesday it will further delay an all-electric Ram pickup from next year until 2026.
The decision to delay the full battery-electric model, which had already been postponed from this year, will assist in prioritizing an electric range-extended version of the truck called the Ramcharger.
Ramcharger will be open for customer orders in the first half of 2025 followed by the Ram 1500 REV launch in 2026, Stellantis said.

2025 Ram 1500 Ramcharger Tungsten

DETROIT — Stellantis said Wednesday it will further delay an all-electric Ram pickup from 2025 until 2026, as the automaker confronts slower-than-expected adoption of EVs and competitors struggle to make profits on electric trucks.
The decision to delay the full battery-electric model, which had already been postponed from this year, will help in prioritizing an electric range-extended version of the truck called the Ramcharger that features a gas engine combined with EV technologies, the company said.

“The decision to launch Ramcharger first was driven by overwhelming consumer interest, maintaining a competitive advantage in the technology and slowing industry demand for half-ton BEV pickups,” Ram said in a release.
Ramcharger will be open for customer orders in the first half of 2025, followed by the Ram 1500 REV launch in 2026, Stellantis said.
The change in priorities is the first major announced shift since Ram CEO Tim Kuniskis returned earlier this month, following a management shake-up that included Stellantis CEO Carlos Tavares leaving the company.
Kuniskis had retired from Stellantis in May before coming back to the automaker. He said earlier this month to expect changes for the embattled brand, which reported a 24% sales decline through the third quarter of this year.

Tim Kuniskis, CEO of Dodge Brand, Stellantis, introduces the Dodge Charger Daytona SRT Concept all-electric muscle car at its world reveal during Dodge’s Speed Week at M1 Concourse on August 17, 2022 in Pontiac, Michigan.
Bill Pugliano | Getty Images

“I did not get off the bench to not come here and call some audibles, so stay tuned. More coming,” he said during a brief media appearance a day after returning to the company.

Kuniskis attributed current problems with the brand’s sales to a slower-than-expected rollout of its redesigned Ram 1500 model as well as delays to its upcoming heavy-duty trucks.
“It’s getting better every day, but we got a lot of work to do,” said Kuniskis, who referred to the Ramcharger pickup as the brand’s “Goldilocks truck” — equating to the right mix of power, range and capabilities.  
The Ramcharger is known as an “extended-range electric vehicle,” or EREV. It can operate as a zero-emissions EV until its battery dies and an electric onboard generator — powered by a 27-gallon, 3.6-liter V6 engine — kicks on to power the vehicle.
Stellantis estimates the range of the Ramcharger to be up to 690 miles, including up to 145 miles powered by a 92 kilowatt-hour battery when fully charged without the extended-range power from the gas engine and 130 kilowatt electric generator.

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S&P Global, Edmunds and Cox Automotive expect new auto sales to increase year over year by 2.5% or less to achieve the industry’s best results since 2019.
The increase is expected to be driven by a continuing “normalization” of vehicle inventories, incentives/discounts from automakers, and easing financing and loan rates.
Electric vehicle sales in the U.S. are forecast to set another record in 2024, with total sales volume near 1.3 million, according to Cox. That would mark roughly 8% market share.

A sale sign is seen at car dealer Serramonte Subaru in Colma, California.
Stephen Lam | Reuters

DETROIT — U.S. new vehicle sales are expected to rise next year to their highest level since 2019, led by lower interest rates and improving affordability, according to industry analysts.
Cox Automotive expects new light-duty vehicle sales to hit 16.3 million in 2025, slightly higher than forecasts by S&P Global Mobility and Edmunds of roughly 16.2 million sales next year. Such sales would be up from expectations of 15.9 million to 16 million this year and mark the highest results since roughly 17 million in 2019.

That would equate to a forecast sales gain in new cars and trucks of 2.5% or less. The increase is expected to be driven by a continuing “normalization” of vehicle inventories, incentives/discounts from automakers, and easing financing and loan rates.
“Consumers are still feeling the pinch, but the market has become a slightly friendlier place for car shoppers than it was at the start of the year,” Jessica Caldwell, Edmunds’ head of insights, said in a Tuesday release.
One of the largest growth markets is expected to be entry-level and less expensive vehicles. The industry has been dealing with years of elevated prices and lower inventories since the coronavirus pandemic.
Edmunds reports the average transaction price for new vehicles was $47,465 in 2024, a 0.8% decrease compared with $47,851 in 2023, and a 27.2% increase compared with $37,310 in 2019.

EVs

Another expected growth area remains electrified vehicles, including hybrids, plug-in hybrid and all-electric models, according to analysts.

All-electric vehicle sales in the U.S. are forecast to set another record in 2024, with total sales volume near 1.3 million, according to Cox. That would mark roughly 8% market share, up from 7.6% compared with last year but lower than expectations of 10% earlier this year.
That’s despite a forecast year-over-year decline in U.S. EV leader Tesla’s sales for the first time since 2014.
“The top three manufacturers are Tesla, Hyundai Motor Group and General Motors, with GM having the largest increase in market share year over year at 2.7% at the brand level. Even though Tesla’s market share has declined below 50%, the Model Y and Model 3 continue to hold the top two spots,” said Stephanie Valdez Streaty, Cox director of industry insights, on Tuesday. “Various other models are collectively taking away share from Tesla.”
Cox expects roughly 25% of new vehicle sales to be electrified in 2025, including a more than 10% penetration for all-electric models.
Valdez Streaty and others cautioned EV sales could be weaker if there’s an end to federal consumer credits for purchasing the vehicles of up to $7,500, which the Trump administration has vowed to kill. 

‘Radical disruption’?

Analysts warned that regulatory uncertainty ahead of President-elect Donald Trump’s inauguration could impact new U.S. vehicle sales. Most notably, Trump’s tariff threats could affect vehicle production in Canada and Mexico.
Cox Automotive’s chief economist, Jonathan Smoke, said tariffs on those countries, which Trump has said could be 25%, would be “a radical disruption” to the U.S. new vehicle market.

U.S. President-elect Donald Trump delivers remarks at Mar-a-Lago in Palm Beach, Florida, U.S., December 16, 2024. 
Brian Snyder | Reuters

“We know that there are twists that could be coming with policy shifts, but some key assumptions that we’re making are that most of those shifts are likely to take time, and ahead of when they’re implemented, will actually likely drive demand to be pulled forward,” Smoke said Tuesday during a virtual briefing. “As it relates to tariffs, specifically, we are not making any assumptions that major new tariffs will be implemented.”
The expected increase in U.S. new vehicle sales could actually be counterintuitive for some automakers’ earnings next year due to higher incentive rates and an expected decline in pricing, according to Wall Street analysts.
“We continue to see signs that pricing is not sustainable,” Wells Fargo analyst Colin Langan said in an investor note Monday, citing rising inventories, increasing incentives, falling dealer profits per vehicle and other overall less pricing power for automakers.
Pricing remains near-record highs but the growth has slowed, which is good for car buyers but bad for companies.

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Retailers, including Walmart and Home Depot, are trying to capitalize on customers who are going big on seasonal decor, even as they watch the budget with other discretionary spending.
Consumers said they planned to spend 9% more on nongift purchases than a year ago, with most of that jump coming from higher spending on holiday decorations, according to Deloitte’s annual holiday survey.
Yet the National Tree Company said sales of artificial trees are slow, after the pandemic bump and due to inflation’s lingering impact.

Arrows pointing outwards

The Milam family turned its front lawn into a holiday-themed putt-putt course. Going all out on Christmas decorations has become a tradition for the Dallas family.
Courtesy: Mike Milam

For the holiday season, the front lawn of the Milam family’s house in Dallas has transformed into a mini golf winter wonderland.
Visitors stop by from nearly sunrise to sunset to admire the Christmas decorations — and to borrow a club to play a round of putt-putt themed around Santa, candy canes, snowflakes and more.

“You can see not just the excitement and wonderment of kids, but also of adults,” said Mike Milam, a firefighter and father of two.
Decking out the front yard has become an annual tradition for the Milam family since the Covid pandemic. The family of four’s elaborate decorations capture a trend that many retailers, including Home Depot and Walmart, have sought to capitalize on in recent years: Some customers are going bigger on seasonal decor, even as they watch how much they spend on other discretionary items.
Consumers are prioritizing decorations and experiences over gifts this holiday season, according to an annual holiday spending survey by consulting firm Deloitte. The survey found that respondents expected to spend a little less on gifts this year – down about 3% year over year. But they planned to spend about 9% more on nongift purchases, with most of that jump coming from holiday decorations.

The Milam family turned its front lawn into a holiday-themed putt-putt course. Going all out on Christmas decorations has become a tradition for the Dallas family.
Courtesy: Mike Milam

Survey respondents said they planned to spend $181 on home-related items, furnishings and holiday decorations, up 22% year over year and nearly 60% more than the pre-pandemic 2019 holiday season.
Holiday decor is providing a boost for retailers, even those like Target, Dollar General and Dollar Tree, which have noticed a pullback in other categories.

Target’s Chief Commercial Officer Rick Gomez said on an earnings call in late November that customers are “looking for ways to add a little bit of seasonal decor,” which drove higher sales of accessories including frames, candles and vases in the most recent quarter.
Dollar General CEO Todd Vasos said on the company’s earnings call in early December that the retailer was pleased by customers’ response to “the discretionary side of Halloween.” He said shoppers’ reactions to that seasonal decor offered “some glimmers of hope” as the dollar store chain headed into the peak of the holiday season.

Christmas decorations are for sale at a Home Depot store on November 14, 2023, in Miami, Florida. 
Joe Raedle | Getty Images

Decor may not save the holidays

Yet holiday decor sales may not look as as jolly as some companies wish.
For example, National Tree Company CEO Chris Butler said sales have been slower in the past two years. He said the New Jersey-based company, which sells online through retailers including Kohl’s, Amazon, Macy’s and Home Depot, expects sales to be flat year over year.
Nearly 70% of the company’s sales typically come from artificial Christmas trees, but it also sells decor like wreaths and garlands, Butler said.
Sales surged in 2020 and 2021 during the pandemic, when consumers had extra stimulus money to spend and more time at home, Butler said. Since then, 2022 and 2023 “have been down years because we’re getting over that the big boom,” he added.
Based on the company’s research, consumers typically get a new artificial tree every five to six years. Pandemic purchasing patterns, and the pressure inflation put on families, stretched that replacement period out longer, he said.
“If you can try and make that tree last one more year, consumers are probably going to do that rather than buy new trees,” Butler said.
Home Depot, a longtime seller of both real and artificial Christmas trees, has leaned more into seasonal decor — especially after its 12-foot skeleton, Skelly, became a viral sensation during the pandemic. It’s selling an eight-foot Santa and an eight-and-a-half-foot reindeer this year, along with a wide range of other decor like animatronic Disney characters.
Yet the home improvement retailer struck a balance to attract customers looking to spend less for holiday cheer after the run of high inflation, said Lance Allen, senior merchant of decorative holiday for the home improvement retailer. He said it bought more low-priced artificial Christmas trees, such as a prelit tree that sells for $49, this holiday season compared to past ones.
He added its “porch greeters” — plastic figurines like a little snowman or a golden doodle in a Santa hat — are also a more wallet-friendly pick at under $40.

At Walmart, red bows, giant nutcrackers and artificial icicles have been popular so far this holiday season, according to Sheila Wiles, lead merchant for holiday décor at Walmart U.S
Melissa Repko | CNBC

Target’s leaders have stressed value, too, as they try to win over consumers who are more discerning in spending on wants rather than needs. The big-box retailer is also tapping into trends, such as pink Christmas decor, mini figurines for mantel landscapes, oversized bows for entryways and walls and nostalgic ceramic ornaments, spokesperson Brian Harper-Tibaldo said.
And to drive sales, Walmart has chased social media-fueled trends while trying to offer value. It debuted a six-foot tall white nutcracker after it noticed that customers were buying its painted large nutcrackers and redecorating them.
The nutcrackers sold out when they first went on sale last year, said Sheila Wiles, lead merchant for holiday decor at Walmart U.S. Walmart doubled its inventory of them this year, but they still were nearly sold out before Halloween, she said.
She said low-priced decor has also been a hit, with customers making their own garlands out of $1.98 red velvet bows and decorating their Christmas trees with 98 cent artificial icicles instead of ornaments.
Home Depot, Target and Walmart declined to share sales figures for holiday decor this season, or say if the category is performing better than last year.

The Milam family has decked out the front yard with themes including Nintendo’s Super Mario.
Courtesy: Mike Milam

Maximizing decor

Though the Milam family created a holiday spectacle, it also wanted to find value along the way.
Instead of buying a lot of decor, the Milam family made most of it. The family spent about $1,000 on its front yard decorations to make the mini golf course, Mike Milam said. Most supplies came from Home Depot, where he bought lumber, paint and other tools. The family of four — Mike; his wife Katie; 12-year-old daughter Merrick; and 10-year-old son Nash — built the putt-putt holes together on nights and weekends starting in the fall.
This year, the family also bought an eight-foot real Christmas tree from Home Depot for $129 and a festive, plastic Christmas chicken for $20 on Amazon.
But most of the Milams’ decor is recycled from past years, Mike Milam said. In his neighborhood, he said most families have put up the same decorations and inflatables in the yard as last year.
Mike Milam said he was “more conscientious” about spending this year. Food and electricity cost more than they used to. Plus, as his kids get older, they have more sports activities that come with a price tag.
“Everything is a little more expensive,” he said.
Despite the expense of decorating, he plans to continue decking out his property — and has plenty of other ideas in mind for the front yard. So far, the family has filled out out the front yard with themes including Nintendo’s Super Mario and a Christmas spin on Steven Spielberg’s classic movie “E.T. the Extra-Terrestrial.”
As he’s spent more money and time on holiday decorations, he’s cut back on spending on gifts for his kids.
“I’d rather have experiences than stuff,” he said.
Through the projects, he said his children have become handier by learning how to paint, lay AstroTurf and use an electric saw. It’s become a way for the whole family to get creative and bond.
“We have probably 12 to 15 years worth of ideas,” he said. “I’ll do it as long as I work and my kids are around and want to be part of it.” More