Business

IT WAS A bitter farewell. On May 25th Luciano Benetton, the 89-year-old eponymous co-founder, with his three siblings, of the maker of colourful jumpers, told Corriere della Sera, an Italian daily, that he would step down as chairman. Signor Luciano, as he is known, explained that he felt “betrayed” by Massimo Renon, the firm’s chief executive. Mr Renon was, in Mr Benetton’s telling, insufficiently transparent about a pre-tax “hole” of some €100m ($108m). That lack of transparency, and Benetton’s threadbare results, provoked the near-nonagenarian to throw in the towel. For the first time since its creation in 1965, Benetton will have to make do without a Benetton. The company says that Mr Renon did not break any rules or laws. On May 28th its board approved the financial statement for 2023. Revenue was €1.1 bn, with a net loss of €230m. Still, on the same day it said that Mr Renon would be replaced by Claudio Sforza, a restructuring expert with no experience in fashion but plenty in the turnaround of struggling firms. More

IMAGINE MEETING a stranger at a party. What makes for a successful encounter? Lesson one is to heed the wisdom of a shampoo commercial from the 1980s: you never get a second chance to make a first impression. Lesson two is to remember that you do not need to wear a beret or a fur stole in order to stand out. Lesson three is not to forget that what you leave out matters as much as what you say.These same principles, it turns out, apply to writing a CV. A resumé is not a list of every job you ever had. It is not your autobiography. It is, like that hair-care advert, a marketing tool. Your audience is made up of recruiters and hiring managers. Like cocktail-party guests, they do not take a long time to decide if they want to keep talking. According to one study, such professionals spend an average of 7.4 seconds skimming a job application. Your guest Bartleby has a few tips on how best to ensure that these seconds count. More

There is a wry sense of seen-it-all-before in the crucible of the world’s semiconductor industry. When your columnist took the bullet train to Hsinchu Science Park, home to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s biggest chip producer, on May 24th, China was simulating a military encirclement of Taiwan in waters not far over the horizon. An invasion would be cataclysmic. A blockade could starve the island of vital energy resources. Even cyber-attacks could be crippling. Yet after decades of belligerence, many Taiwanese greet such threats with a shrug. “It’s nothing new to me,” chuckles one seasoned chip executive. “Since 1996 China has been throwing missiles.”Semiconductor executives to whom Schumpeter spoke on a tour of Taiwan, South Korea and Japan are not nearly as relaxed about America’s economic manoeuvres against China, though. They say sanctions, subsidies, tariffs and other blunt instruments of geopolitical rivalry and industrial policy may have strategic logic. But they jeopardise one of the miracles of modern technology: the fragile semiconductor supply chain that stretches from East Asia to America and Europe, with Taiwan at its crux. Along it silicon wafers are made and polished, etched with billions of nanometre-size transistors, sliced into microchips and packaged into the brain cells of the digital age. It is a process masterfully honed to combine government support with the invisible hand of the free market. The chip war threatens to bludgeon it. More

Unrivaled, the new pro women’s basketball league founded by WNBA stars Breanna Stewart and Napheesa Collier, has closed a round of funding from sports and media investors.
The star-studded investor lineup includes former ESPN president John Skipper and former Warner Bros. CEO Ann Sarnoff, as well as athletes including Megan Rapinoe and Steve Nash.
The league, which will have a new format and is expected to launch in January, said it will offer its players equity in the league, and the highest average salary in women’s pro sports league history.

Napheesa Collier #24 of the Minnesota Lynx shoots a free throw during the game against the New York Liberty on May 25, 2024 at Target Center in Minneapolis, Minnesota. 
Jordan Johnson | National Basketball Association | Getty Images

A new women’s basketball league has attracted a star-studded roster of investors from the media and sports world at a time when ratings and general interest in the WNBA and other professional women’s leagues is rising.
Unrivaled, the pro women’s basketball league founded last year by New York Liberty’s Breanna Stewart and Minnesota Lynx’s Napheesa Collier of the WNBA, said Thursday that it had closed on a seed funding round ahead of its January launch.

Athletes will be given equity in the new league, and Unrivaled said it will also feature contract opportunities that will offer the highest average salary in women’s pro sports league history.
The lengthy list of investors include media executives such as former ESPN president John Skipper, ex-Turner president David Levy, and former Warner Bros. CEO Ann Sarnoff, as well athletes including NBA All-Star Carmelo Anthony and others who invested through the venture capital firm led by U.S women’s national soccer team captain Alex Morgan.
“I believe it’s a good investment … that David and I and the other group of investors have the chance to be on the ground floor of something that I think is going to be quite impactful,” said Skipper, who is also the co-founder of Meadowlark Media. “It’s a rare opportunity where we can create something … and don’t need to disrupt something else.”
The league — which will run in the months before the WNBA season and work in a new format — aims to offer athletes another option to play basketball in the U.S. during the offseason, as well as help boost salaries for pro women basketball players.
“It’s trying to fill a gap in the calendar for these players. It’s extending the runway of professional basketball,” said Alex Bazzell, Unrivaled president and Collier’s husband.

Stewart and Collier announced plans last year to form Unrivaled in response to the WNBA’s new prioritization rules as part of the 2020 collective bargaining agreement. Those rules require players to return from playing internationally by the start of training camp, which means they might lose out on lucrative overseas contracts. Many female athletes play in other countries when the WNBA season ends to boost their earnings potential.
“For a long time, going overseas was the only option that people had in their offseason, and so this is kind of changing the narrative around that and giving another option,” said Collier. “Overseas is a great option for some players, but it shouldn’t be the only thing you can do to make money and play basketball and get better.”
Unrivaled’s season will run from January to March and feature 30 of the top women’s basketball players across six teams for a 3-on-3, compressed full court style of play on a soundstage in Miami.
Although 10 players have signed on already, they have yet to be formally announced.
The league is building its own facility in Miami. It has two baskets, but it’s about two-thirds the size of a regular court.
“So it’s shorter, but that really allows you to have that space for athletes to showcase their skills and go head to head every night and not have those extra four players on the court to kind of bog you down,” Collier said.

Unrivaled investors

New York Liberty forward Breanna Stewart (30) and Las Vegas Aces forward Alysha Clark (7) in action during game 4 of the 2023 WNBA Finals between Las Vegas Aces and New York Liberty on October 18, 2023, at Barclays Center in Brooklyn, NY. 
M. Anthony Nesmith | Icon Sportswire | Getty Images

The investor roster shines a light on the variety of people looking to invest in women’s sports, as well as the potential for the league. The size of the seed funding round — which was oversubscribed — is undisclosed.
Through Morgan’s venture firm Trybe Ventures, other top athletes and sports figures invested in Unrivaled include NBA all-star Steve Nash, LGPA champion Michelle Wie West, Olympic gold medalist Megan Rapinoe, and Koby Altman, the general manager of the NBA’s Cleveland Cavaliers. The NCAA University of Connecticut women’s basketball head coach Geno Auriemma and the NBA’s Tyrus and Tre Jones are also investors.
Other investors with a stake in Unrivaled include Richard Sarnoff, chairman of media at private equity firm KKR; actor Ashton Kutcher; Moira Forbes, the executive vice president of Forbes; Gary Vaynerchuk, CEO of VaynerMedia; Desiree Gruber, TV producer and founder and CEO of Full Picture; Dan Rosensweig, executive chairman of Chegg; Andor Capital founder Dan Benton; and Range Group.
While Skipper has been on board since last year, Levy — who is also the co-founder and co-CEO of Horizon Sports & Experiences — learned about the opportunity to invest in recent months and jumped on board.
“Part of the vision of this agency [HS&E] was to get involved in women’s sports, and grow women’s sports and put our money where our mouth is,” Levy said.
In addition to investing, Skipper and Levy will negotiate the media rights deals for Unrivaled. Lucrative media rights deals and fees help drive sports’ leagues finances and player salaries. Sports rights have become a particular focus for media companies in recent years as live sports draws outsized audiences.
The duo said media rights negotiations have yet to start, but an important part of the conversation will be getting the games as much viewership as possible.
“We want to make sure that people can see the product,” said Levy, adding that a key component is the one-hour length of the Unrivaled games, which is a plus when trying to fit programming schedules.
The league also plans to line up sponsorship opportunities, which Levy’s HS&E will also be involved in. Bazzell said a few brands have already committed to Unrivaled, but announcements are to be made at a later date.

Heightened interest in women’s sports

Caitlin Clark poses with WNBA Commissioner Cathy Engelbert after being selected first overall pick by the Indiana Fever during the 2024 WNBA Draft.
Sarah Stier | Getty Images Sport | Getty Images

Unrivaled comes at a time when interest in women’s sports has been growing — from viewership to investments.
Levy noted that it takes time for growth and interest in sports, with the WNBA only being a few decades old in contrast to longstanding leagues like the NFL, the NBA, MLB and the NHL.
“I am very excited that every player will have equity,” Collier said. “That was a huge thing for us, just creating that generational wealth for these athletes.”
There’s been renewed scrutiny on the salaries of professional women athletes in light of WNBA rookie Caitlin Clark, who recently exploded onto the sports scene.
Clark was the NCAA’s all-time leading scorer for both men’s and women’s basketball and has attracted record TV viewership numbers. The former Iowa star was drafted No. 1 in April by the Indiana Fever, a show that broke the league’s record for draft viewership.
However, despite the bright spotlight on her, Clark’s rookie salary contract will be $338,056 over four years, according to the WNBA’s collective bargaining agreement. This is in stark contrast to the NBA’s No. 1 draft pick last year, Victor Wembanyama, who signed a $55 million four-year contract with the San Antonio Spurs.
Even President Joe Biden weighed in on the matter, saying on social media that “Women in sports continue to push new boundaries and inspire us all. But right now, we’re seeing that even if you’re the best, women are not paid their fair share.”
While Clark has secured numerous sponsorship deals with companies like Nike and Gatorade, WNBA Commissioner Cathy Engelbert recently told a CNBC summit that a “false narrative” is circulating around Clark’s expected salary.
Engelbert compared Clark’s earning potential to how C-suite salaries work, adding that in addition to endorsements, Clark “has the ability to make up to a half a million dollars just in WNBA wages this year.” She noted the focus has been on Clark’s base salary, which is collectively bargained and low.

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Activist investor Nelson Peltz has sold his entire stake in Disney, according to a person familiar with the matter.
In early April, Peltz’s Trian lost a proxy battle at Disney as shareholders reelected the company’s full slate of board nominees.

Activist investor Nelson Peltz has sold his entire stake in Disney, a person familiar with the matter tells CNBC.
Peltz sold all of his Disney stock at roughly $120 a share, the person said, making about $1 billion on the position. The stock currently trades for about $100 per share.

The exit comes weeks after Peltz’s Trian Partners lost a proxy battle at Disney in early April as shareholders reelected the company’s full slate of board nominees. Peltz had been seeking to elect himself and former Disney finance chief Jay Rasulo to the company’s board.
Peltz had long taken issue with Disney governance. In October, CNBC reported he upped his stake in the company to about 30 million shares and had reignited his proxy campaign, taking particular aim at Disney’s streaming strategy and a failed succession plan for CEO Bob Iger.
“We are proud of the impact we have had in refocusing this Company on value creation and good governance,” Trian said in a statement following the April shareholder vote.
Shares of Disney are up about 11% so far this year, slightly edging out the S&P 500.
Disney didn’t immediately return a request for comment.

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American Eagle is making gains in improving profit and saw its fiscal first-quarter net income nearly quadruple compared to the year-earlier period.
Still, it has a cautious outlook for the second half of the year as it plans to lap tougher comparisons and contend with “noise” around the upcoming election, finance chief Mike Mathias told CNBC.
American Eagle President Jennifer Foyle said the company is revamping its product assortment and reducing the number of items it sells.

An American Eagle Outfitters store in New York, US, on Monday, May 27, 2024. American Eagle Outfitters Inc. is scheduled to release earnings figures on May 29. 
Stephanie Keith | Bloomberg | Getty Images

American Eagle on Wednesday said it’s making gains in boosting profitability as it works to improve its product assortment and tweak operations. Still, its fiscal first-quarter sales came in weaker than Wall Street expected. 
Nevertheless, revenue gained 6% year over year and marked a record for the first quarter, the company said in a news release. 

Shares fell about 5% in extended trading on Wednesday.
Here’s how the apparel company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 34 cents vs. 28 cents expected
Revenue: $1.14 billion vs. $1.15 billion expected

The company’s reported net income for the three-month period that ended May 4 nearly quadrupled compared to the year-ago period. American Eagle posted net income of $67.8 million, or 34 cents per share, compared with $18.5 million, or 9 cents per share, a year earlier. 
Sales rose to $1.14 billion from $1.08 billion a year earlier.
American Eagle said it’s continuing to expect operating income in the range of $445 million to $465 million, reflecting revenue growth of up 2% to 4% compared to the prior year. That’s slightly below estimates of up 3.4%, according to LSEG.

Finance Chief Mike Mathias told CNBC that American Eagle is maintaining a “cautious” view for the back half of the year as it prepares to lap some tougher comparisons, awaits interest rate decisions from the Federal Reserve and prepares for “noise” around the upcoming presidential election. 
He added the company is waiting to see how the back-to-school shopping season goes to get a better idea on how the rest of the year plays out. 
For the current quarter, American Eagle expects operating income in the range of $95 million to $100 million, reflecting revenue growth of high single digits, which is in line with the 7.4% uptick that analysts had expected, according to LSEG. 
The apparel company, which runs its namesake banner and intimates brand Aerie, is in the midst of a new strategy to boost growth. It’s looking to grow sales by 3% to 5% each year over the next three years and get its operating margin to about 10%.
Some of its efforts are beginning to bear fruit. During the fiscal first quarter, American Eagle grew its gross margin by 2.4 percentage points. Mathias said that’s the company’s second highest rate since 2008 in the company’s earning call. The gains were driven by better inventory management, lower product and transportation costs and leverage on expenses including rent, delivery and distribution and warehousing. 
“Key drivers of growth included women’s overall, especially in tops which as I reviewed is a major priority for us. I’ll also highlight strength in dresses, skirts and jeans, in these areas we are seeing a positive customer response as we look to capture the social casual dressing occasion and a wider age demo. Both of these are key growth opportunities within our long term plan,” American Eagle’s president and executive creative director Jennifer Foyle added in the earnings call.
American Eagle’s strategy has also focused on revamping its product assortment, removing items that weren’t working for its customers and drilling down on the categories that are resonating. 
Foyle told CNBC that the company was just “over-skued” — meaning it had too many different individual products, often referred to in the industry as SKUs, for consumers to choose from. 
“We knew we could do more with less,” said Foyle. “So deeper investments in our bottoms but less SKUs so that we are servicing our customer on the fits that they’re demanding from us.” 
“We’ve really taken that category back, we’re winning,” Foyle said of the company’s denim business. “Definitely in women’s, some early earnings in men’s, as I mentioned you will see more of that earnings in Q3. We remain very nimble in that category but we’re definitely more balanced than we had been in the past.”
The company has also been working to revamp its stores and introduce new formats. It recently implemented a new store design for American Eagle, which is “outpacing the balance of the chain,” said Foyle. 
“We’re excited about remodeling our stores with a new feeling for the brand that I think expresses exactly what we’ve been up to,” she said. “The customer, obviously is loving what they see in that store design based on the results.”

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American Airlines will slash its capacity growth in the second half of the year and consider a host of other changes to its operations, CEO Robert Isom said.
The carrier cut its revenue and profit forecast and is parting ways with Chief Commercial Officer Vasu Raja.
Pressure has been mounting on American’s leadership team after more upbeat results from rivals Delta and United.

An American Airlines’ Embraer E175LR (front), an American Airlines’ Boeing 737 (C) and an American Airlines’ Boeing 737 are seen parked at LaGuardia Airport in Queens, New York on May 24, 2024. 
Charly Triballeau | AFP | Getty Images

American Airlines will slash its capacity growth in the second half of the year and consider a host of other changes to a sales strategy that backfired, CEO Robert Isom said Wednesday. The comments come a day after the carrier cut its revenue and profit forecast and said it is parting ways with its chief commercial officer, Vasu Raja.
American will grow capacity about 3.5% in the second half of the year compared with the year earlier, down from roughly 8% year-over-year growth in the first six months of 2024.

The company’s shares tumbled more than 13% on Wednesday as investors weighed the airline’s missteps as the peak travel season gets underway, with some analysts questioning how American can capitalize on what rivals expect to be a record summer. It was the stock’s biggest percentage drop in nearly four years, during the travel plunge early in the Covid-19 pandemic.
United Airlines shares rose more than 2% and Delta’s fell less than 1%.
Isom said American is weighing changes to a plan Raja led to drive direct bookings at the airline in lieu of third-party sites and travel agencies, a strategy that included gutting the airline’s sales department.
The changes angered travel agencies who weren’t able to access some of the carrier’s fares as before, making it harder for them to sell tickets on American flights.
The chief commercial officer will leave the company next month.

Stock chart icon

An American Airlines stock chart shows how the company’s shares have tumbled in the past year.

“We’ve used a lot of sticks. We’ve got to put some more carrots in place and make sure that our product is available wherever customers want to buy it,” Isom said at the Bernstein Strategic Decisions conference on Wednesday.
American in February said it would limit some travel agency bookings from being eligible to earn AAdvantage frequent flyer miles. Isom said Wednesday that the airline would reverse that decision.
“That’s off,” Isom said. “We’re not doing that because it would create confusion and disruption for our end customer.”
Isom called Raja, who has been at American for 20 years “an innovator, a disruptor,” adding that “sometimes we need a reset.” Raja didn’t immediately comment.

Corporate travel troubles

Raja said last month American’s corporate booking growth was coming in behind big rivals Delta and United.
Corporate bookings are particularly lucrative for airlines especially when those travelers book at the last minute when fares are at their highest — so called close-in bookings. Airlines had struggled during the pandemic and shortly afterward when business travel was slow to return, but carriers have seen improvement lately.
“The weakness that you’ve seen in American is, I do believe, something that speaks to close-in bookings, the highest premium customers that, unfortunately, we haven’t made ourselves as available and easy to work with as we can,” Isom said.
On an earnings call last month, Raja said American’s corporate bookings were up mid-to-high single-digit percentage points in the first quarter compared with increases of around 14% touted by Delta and United.
“A significant miss driven in part by close in bookings puts AAL’s ability to reap the full value of a robust summer flying season in greater doubt,” Bernstein airline analyst David Vernon said in a note.

Revenue shortfalls

After the market closed Tuesday, American said its unit revenues could fall as much as 6% in the second quarter from a year earlier, down from its forecast last month of a no-more-than-3% decline. Airlines make the bulk of their money during the second and third quarters, but some areas have fared better than others.
Isom admitted Wednesday that the company has logged softer bookings than it expected and noted a supply and demand “imbalance” that has prompted carriers to discount tickets. He said industry capacity should come down in the second half of the year, while it slows its own growth.
United, minutes after American’s forecast adjustment Tuesday, reiterated its second-quarter earnings estimates, though it didn’t provide a revenue outlook.
“American’s diminished guide speaks far more to its flawed initial forecast than any broad-based shift in passenger demand,” JPMorgan airline analyst Jamie Baker said in a note Wednesday, adding that United’s reiterated forecast was an encouraging sign for Delta.
American has also been prioritizing Sun Belt cities and its large hubs in Texas and North Carolina over coastal markets.
The Transportation Security Administration screened the most people ever over Memorial Day weekend, and executives from United and Delta have predicted a record summer, with very strong trans-Atlantic bookings.

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A top McDonald’s executive is weighing in on claims that the company has jacked up its prices by more than 100%.
Joe Erlinger, president of McDonald’s USA, said in an open letter the average price of a Big Mac meal today is up 27% from 2019. The price for a 10-piece McNuggets meal is up 28% over the same period, and the price of medium french fries increased 44%.
McDonald’s has not been immune to long-awaited consumer pullbacks at restaurants.
The fast-food giant will soon offer a $5 value meal for about a month.

A sign is posted in front of a McDonald’s restaurant in San Leandro, California, Feb. 6, 2024.
Justin Sullivan | Getty Images

A top McDonald’s executive is weighing in on claims that the company has jacked up its prices.
Joe Erlinger, president of McDonald’s USA, said in an open letter Wednesday that the average price of McDonald’s menu items is up around 40% since 2019. The breakdown comes in response to claims on social media from House Republicans, among others, that the fast-food company upped prices by more than 100%. 

“Americans across the country are making tough calls about where to spend their hard-earned money,” Erlinger said. “And while we’ve been working hard to make sure our fans have great reasons to visit us, it’s clear that we — together with our franchisees — must remain laser-focused on value and affordability.”
Erlinger said the average price of a Big Mac meal today is $9.29, up 27% from $7.29 in 2019. The price for a 10-piece McNuggets meal is up 28% over the same period, and the price of medium french fries increased 44%.
Erlinger added the cost increases are tied to similar increases in input costs such as crew salaries and cost of goods.
“For a brand that proudly serves nearly 90% of the U.S. population every year, we feel a responsibility to make sure the real facts are available,” Erlinger said.

Consumer prices have increased 3.4% over the past year, according to the latest data from the Bureau of Labor Statistics. In response to persistently steeper costs, some consumers are pulling back across the restaurant industry, a trend that has not spared the fast-food giant.

McDonald’s recently reported same-store sales below expectations in its first-quarter earnings report. The company will also soon offer a $5 value meal for roughly a month, beginning June 25.
That offering will include a McChicken or McDouble, four-piece chicken nuggets, fries and a drink, CNBC previously reported.
Analysts at BTIG characterized the promotion as being more about value perception than a profit driver.
“In our view, this new deal is more about value perception, seeking to change the media narrative around McDonald’s recent price hikes to refocus around a deep(er) value offering. We believe the new one-month meal deal could actually hurt sales (check decline) and margins, but help reinstate McDonald’s as a value leader in the industry,” the analysts said in an investor note.
An independent advocacy group of McDonald’s franchisees is pushing to make the discounted offering sustainable for operators, saying it will require greater investment from the company if it sticks around menus beyond the initial monthlong run.
“There simply is not enough profit to discount 30% for this model to be sustainable. It necessitates a financial contribution by McDonalds,” the board of the National Owners Association wrote in a letter to membership that was viewed by CNBC.
— CNBC’s Kate Rogers contributed to this report.

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