Posts tagged with "CNBC"

Class-action lawsuit filed against eight colleges snared in admissions bribery scandal

March 15, 2019

As if top U.S. colleges are not charging enough, parents are bribing industry officials to get their kids into the “right”schools.

Among the high-profile moms and dads who now are being hit with federal criminal charges for providing monetary inducements—some of them, six figures high—to college advisers, test proctors, admissions officers, or athletics coaches to admit their children are actresses Felicity Huffman and Lori Loughlin, as well as top business and legal executives nationwide.

Now, a class-action civil lawsuit has been filed in the U.S. District Court for the Northern District of California by two Stanford University students, Erica Olsen and Kalea Woods, against eight top universities in connection with the massive college admissions bribery scandal, which hit the news on March 12,

The defendants in the lawsuit are Yale University, the University of Southern California, Stanford University, UCLA, the University of San Diego, the University of Texas, Wake Forest University, and Georgetown University. Federal prosecutors have said the schools, themselves, were victims of the scam,l according to a report by CNBC.

Indeed, the suit accuses each of the universities of being “negligent in failing to maintain adequate protocols and security measures in places to guarantee the sanctity of the college admissions process.”

And the suit, which claims more than $5 million in damages, alleges that, as a result of the payoffs, “unqualified students found their way into the admissions rolls of highly selective universities, while those students who played by the rules and did not have college-bribing parents were denied admission.”

Although the only two named plaintiffs to date are Olsen and Woods, the action would ultimately include potentially thousands of students as complainants—if not more, if the case is granted class-action status by a judge.

Also named as a defendant, according to The New York Times, is William “Rick” Singer, 59, the owner of a  college preparatory business, the Edge College & Career Network, who masterminded and profited from the scheme.

The suit claims that the universities named as defendants “knew or should have known of these corrupt practices because the funds” that were being used as bribes to gain admittance for the children of wealthy parents “were often going into university accounts; and to prominent figures, such as coaches and directors in charge of university accounts.”

The suit alleges that the plaintiff, “Olsen has also been damaged because she is a student at Stanford University, another one of the universities plagued by the fraud scandal. Her degree is now not worth as much as it was before, because prospective employers may now question whether she was admitted to the university on her own merits, versus having parents who were willing to bribe school officials.”

And it says that her co-plaintiff, Woods, at the time she applied to USC for admission, “similarly was never informed that the process of admission at USC was an unfair, rigged process, in which parents could buy their way into the university through bribery and dishonest schemes.”

Wake Forest’s president, Nathan Hatch, in a letter made public said that “the university has cooperated fully with the investigation.”

Hatch said he “to make abundantly clear that Wake Forest is considered by the U.S. Department of Justice to be a victim of this fraud. In no way has it been suggested that the university was involved in the deceitful practices, nor were any employees, other than [Wake Forest volleyball coach Bill] Ferguson, accused of wrongdoing.”

Ferguson has reportedly been placed on administrative leave by the institution.

Lawyers for Olsen and Woods, as well as spokesmen for the other universities, did not immediately respond to requests for comment from CNBC.

Research contact: @_DanMangan

Deal or no deal? Senate to vote on Trump’s ‘national emergency’ declaration this week

March 14, 2019

As of March 13, fully 52% of U.S. voters continue to oppose President Donald Trump’s declaration of a national emergency at the southern border, according to findings of a Politico/Morning Consult poll.

Based on the polling results, Trump has failed to build support for his declaration in the face of congressional opposition; the results are essentially unchanged since he signed an order to reallocate military funds toward construction of a wall along the U.S.-Mexico border. Only 38% of voters support the declaration.

The partisan divides suggest that this week’s Senate vote to nullify the president’s power to declare a national emergency could put the squeeze on Republican incumbents in battleground states. Indeed, G.O.P. Senators Cory Gardner of Colorado, Susan Collins of Maine and Thom Tillis of North Carolina are expected to join Democrats in voting disapprove Trump’s declaration

Likewise, Democrats are expected to reject a move by Republicans that would amend the president’s powers under the 1975 National Emergencies Act. Under the proposed legislation, national emergencies would end after 30 days if Congress does not vote to extend them. (And the Senate vote against the president’s emergency declaration would become a moot issue.)

“Republican Senators are proposing new legislation to allow the president to violate the Constitution just this once in order to give themselves cover,” House Speaker Nancy Pelosi (D-California) said on her official website, adding, “The House will not take up this legislation to give President Trump a pass.”

By promising not to bring the legislation to the floor, Pelosi hopes to put pressure on Republican lawmakers trying to balance their desire to support Trump’s immigration policy and their professed concerns about presidential power, CNBC reported on Wednesday.

Trump has recently tried to pressure Republicans by framing the vote as one about border security rather than executive power. CNBC said.

The president has pledged to veto any bill that would kill “emergency” funding for his wall. Neither the House nor the Senate appears to have the two-thirds majority support needed to overcome his opposition.

Research contact: @jacobpramuk

No extra legroom, just more money: United announces new charges in coach

December 12, 2018

Air travel alert: Even sitting in coach is getting way more expensive. Starting December 14, coach passengers on United Airlines who want to avoid the back of the plane may have to ante up for it, according to a December 10 report by CNBC.

The air carrier will charge a fee for so-called “preferred seats” on flights throughout its network. These seats don’t come with extra legroom or other perks. They’re standard economy seats are located behind the Economy Plus rows, which do come with more space to stretch out.

Ready to switch airlines? It won’t help. United’s rivals American Airlines and Delta Air Lines already have a surcharge in place for such seats, CNBC notes—pointing out that the airlines all seem to be attempting to get customers to pay up for perks that used to be included in airfare.

United did not say how much more travelers would have to pay for seats in these preferred locations. On competitors Delta and American, the prices vary by aircraft, route, and demand, the cable news outlet says.

For example, a preferred seat on a Delta flight from New York to Los Angeles in early January was $80. On an American flight from New York to Paris at that time, the price of a preferred location seat ranged from $62 to $81. Prices are for each leg of the itinerary.

Seating is a key part of the airlines’ bare-bones basic economy product, which United and American rolled out last year, following Delta. In exchange for what is usually the lowest fare, basic economy passengers can’t pick their seats ahead of time or make changes to their tickets. They also board last.

What’s next? Maybe charging for the oxygen masks that deploy when an airplane hits an air pocket and sinks rapidly in rough weather.

Research contact: @lesliejosephs

UK ‘player’ Hamleys may expand into U.S. toy sector

December 11, 2018

Although Toys R Us has returned as a pop-up store at Kroger for the holidays (and maybe longer), the retailer that used to rule the toy realm is just a shadow of its former self. And, without the industry leading Toys R Us megastores, nationwide, an $11 billion toy industry has been left with no dominant retail player in the sector, reported CNBC on December 10.

Companies like TargetWalmartAmazon and Kohl’s are trying this holiday season to sell more toys to kids and their parents, but the verdict is still out on which company will best fill the void that Toys R Us left behind, the news outlet said.

But now—seeing a huge opportunity— one iconic, international toy retailer could soon make its first move into the States with a flagship location in New York, and plans for a wider rollout of stores to follow. British toy retailer Hamleys is close to finalizing a deal for roughly 30,000 square feet at 2 Herald Square in Manhattan, near Macy’s and Victoria’s Secret, a person familiar with those negotiations told CNBC, requesting anonymity because the talks are confidential. The store is expected to open in 2020, should the deal go through, said the source—cautioning talks are still ongoing between the tenant and landlord and nothing has been finalized.

According to CNBC, Hamleys has been around since 1760 when it opened its first location in England. Today, it has a flagship shop on tourist destination Regent Street in London, in addition to locations all across the Middle East, Asia and Africa. And in North America, Hamleys has three stores in Mexico.

In the United Kingdom, Hamleys’ stores are known to draw kids in for exciting experience, including the opportunity to play with life-size Lego figures. Often, employees dress up as fictional characters to entertain shoppers. This excitement in stores is what many people say the toy industry is now missing in the United States, CNBC reports. And shoppers prefer it to the online experience, where it is impossible to pick up a toy and look at it, or try it.

After an opening in New York, Hamleys would likely mote into other  major markets such as Los Angeles, Chicago, and Miami to open store;  and would consider moving into some of the more profitable malls in the country, said the person familiar with its plans.

Hamleys didn’t immediately respond to CNBC’s request for comment.

Research contact: @laurenthomasx3

Way to go: Waymo debuts commercial ride-share service

December 6, 2018

After months of testing and millions of miles developing self-driving vehicle technology, Waymo—a subsidiary of Alphabet that originated as a Google project in 2009—has officially launched the country’s first commercial autonomous ride-share service, CNBC reported on December 5.

Based in Mountain View, California (like Google), Waymo stands for “a new way forward in mobility.” Since testing began, the company’s fleet of self-driving vehicles has included modified Toyota Priuses, Lexus SUVs, a custom-built prototype vehicle (named “Firefly”), and now, fully self-driving Chrysler Pacifica Hybrid minivans. In addition, Waymo has partnered with Jaguar to create the world’s first premium electric self-driving car—the Jaguar I-Pace.

The company’s Waymo One program gives riders access to an app that they can use on their smart phones to call its self-driving vehicles, 24/7. Initially, the service will be limited to cities surrounding Phoenix, including Tempe, Mesa, and Chandler, CNBC said. Customers in the Phoenix area include hundreds of people who have been test users of the Waymo self-driving vehicle fleet that has been in development since April 2017.

“Self-driving technology is new to many, so we’re proceeding carefully with the comfort and convenience of our riders in mind,” Waymo CEO John Krafcik told CNBC. One example of Waymo taking a cautious approach rolling out its ride-share service is the company’s use of safety drivers to supervise the rides, at least initially

“For now,” the company says on its website, “Waymo-trained drivers are in the cars to make sure our riders have a great experience and serve as a backup only.” In addition, the company’s app and consoles in the Waymo One vehicles will allow riders to instantly connect with support agents who can assist riders with questions.

Alphabet‘s Waymo One marks the start of the race by automakers, tech companies and other firms to launch autonomous ride-share services, CNBC notes. General Motors subsidiary Cruise plans to launch a similar service using self-driving vehicles next year.

What’s driving the competition? The pursuit of greater profits. Studies of have shown the biggest cost for ride-share operations is the expense of paying a driver. General Motors estimates it costs ride -share companies more than $3 per mile in San Francisco. However, GM believes that cost could drop to roughly $1 per mile by 2025 with driverless vehicles in ride-share fleets.

According to CNBC, Waymo has said it expects the cost to consumers for using Waymo One to be competitive with Uber, Lyft, and other ride-hailing services.

Research contact:  @Lebeaucarnews

Airbnb’s Samara group to design and construct homes for communal living

December 3, 2018

Airbnb has already changed the way people travel. Now, the eight-year-old company is aiming to bring the peer-to-peer economy to housing, with the introduction of Backyard—described on a new website as “an initiative to protype new ways homes can be built and shared, guided by an ambition to realize more humanistic, future-oriented, and waste-conscious design.”

Airbnb’s design studio, Samara, announced the project on November 28, CNBC reports. The Backyard initiative will “investigate how building could utilize sophisticated manufacturing techniques, smart-home technologies, and vast insight from the Airbnb community to thoughtfully respond to changing owner or occupant needs over time.”

The goal: To test prototypes Backyard units as soon as the fall of 2019.

“We began with a simple question: What does a home that is designed and built for sharing actually look and feel like?” Airbnb co-founder Joe Gebbia—who alo serves as the leader of the design and innovation studio Samara—said in a statement about Backyard. “The answer is not simple at all.

“Other questions quickly emerged,” said Gebbia. “Can a home respond to the needs of many inhabitants over a long period of time? Can it support and reflect the tremendous diversity of human experience? Can it keep up with the rate at which the world changes? Can we accomplish this without filling landfills with needless waste?

“It’s a tall order.”

While there are no details about what the homes might look like or how much they will cost, Gebbia told Fast Company that Backyard isn’t just about a house, it’s an “initiative to rethink the home.”

“We helped people activate underutilized space—from a spare bedroom or treehouse to your apartment while you’re away—and built a community that connected people around the world,” Gebbia said. “With Backyard, we’re using the same lens through which Airbnb was envisioned—the potential of space—and applying it more broadly to architecture and construction.”

As The Washington Post points out, the project “could augment Airbnb’s home-rental marketplace, adding real estate development to its portfolio, as cities continue to limit the company’s short-term rentals.” Cities from New York to Washington, D.C., and Boston are passing regulations that have the effect of restricting Airbnb offerings.

Airbnb management started the initiative by surveying the construction industry for practical solutions—but quickly found that it would be “necessary to start from a blank slate.”

“If we’re truly going to reimagine the design of homes,” Gebbia remarked, “ we have to be holistic. We can’t approach Backyard solely from the point of view of design, architecture, urbanism, civic ordinance, sustainable materiality, or manufacturing. We have to grapple with the whole of it.”

He said, “For us, this goes beyond a business opportunity. It’s a social responsibility. The way buildings are made is outdated and generates a tremendous amount of waste. In order to meet the demands of the future, whether it be climate displacement or rural-urban migration, the home needs to evolve, to think forward.”

It’s a tall order—and, says CNBC, Airbnb is not the only company expanding into residential real estate and shared living space: In 2016, collaborative workspace startup WeWork launched WeLive— which currently has two apartment locations (one in New York City and the other in D.C.). Both have dorm-like living spaces and communal social spaces.

Research contact: @sarahelizberger

Gap to shutter hundreds of stores ‘quickly and aggressively’

November 23, 2018

Gap is considering shutting hundreds of its eponymously named stores at shopping malls nationwide, as sales of the nearly 50-year-old clothing brand continue to slide, CNBC reported on November 21.

The retailer said that it still has 775 Gap-branded stores globally—in addition to those under the Old Navy, Banana Republic, and Athleta banners, for a total of 3,000.  The namesake brand, however, has been the weakest unit of the company of late, the cable business news network reports.

In the third quarter, sales at Gap stores open for at least 12 months fell 7%, while those at Old Navy and Banana Republic were positive; rising to a positive 4% and 2%, respectively.

“There are hundreds of other stores that likely don’t fit our vision for the future of Gap brand specialty store, whether in terms of profitability, customer experience, traffic trends…” CEO Art Peck said during a call with analysts on November 20. “The range from the very best to the very worst stores is extremely broad.”

Peck, who has held his position since October 2014, said that. should the company “address” the bottom half of its fleet of Gap stores, it could contribute more than $100 million to earnings

CNBC, which listened in on the call, said that Peck noted that the company is looking to make decisions about shutting stores “with urgency,” including looking at closing some of Gap’s “amazing flagships.”

“There likely will be a cash cost to exit many of these stores, which we will attempt to minimize…” Peck told analysts. “But I plan to exit those that do not fit the future vision quickly. I’m going to move thoughtfully but aggressively.”

Gap shares were recently up about 3.5% on November 21 . The stock has fallen more than 25% already this year.

According to CNBC, Gap hasn’t named the specific locations it will close but said it will give more details when the company provides its forecast for the next fiscal year.

Research contact: @laurenthomasx3

Dia serves the 70% of U.S. women whom the fashion industry ignores

November 21, 2018

Nearly 70% of American women—about 100 million coast-to-coast—wear a size 14 or larger, according to market research firm Houston-based Plunkett Research. But what are they wearing? Only 18% of the clothing sold in 2016 was considered plus-size, Port Washington, New York, market research firm NPD found in a recent study covered by the cable network CNBC.

On a personal level, that’s something that Nadia Boujarwah, CEO and co-founder of New York City-based Dia&Co, has realized for a long time. The former Wall Street executive says on her company’s website, “I’ve always loved fashion, but struggled to find clothes that fit my body and worked with my personal style. I’ve been everything from a size 12 to a size 22 and I couldn’t help but notice, no matter my size, that there was nothing for me.”

Indeed, she told CNBC in a recent interview, since the retail industry isn’t catering to this majority, “the average plus-sized woman is only spending 20 cents on the dollar that women in smaller sizes are spending on apparel.”

“So instead,” Boujarwah says, “I co-founded Dia&Co in 2014 [along with Lydia Gilbert], as a way for women just like me to embrace their individuality. It grew out of a personal need and now, Dia&Co is a place where everyone can explore all the incredible things that style can really do.”

The company offers clients personal styling exclusively in sizes 14 and up, as well as monthly boxes of curated plus-size clothing. A spokesperson for the company said the styling service has had more than 1 million users and ships to all 50 U.S. states.

Like the popular online retailers, Stitch Fix and Trunk Club, Dia&Co asks prospective customers to complete a profile, and then a stylist curates the items that are shipped to her. Dia charges a $20 styling fee, and the customer pays for the clothes she wants to keep.

Boujarwah told CNBC that her company is not only helping the customer find clothes, but it’s helping create clothes as well. “We do everything from work with brands to enter plus for the first time,” she said. “We build our own brands, all the way down through really creating the content and the community, to inspire her to participate.”

She added: “If you think about how many problems that are inherent” among plus-sized women, Boujarwah explained, Dia has taken “a very comprehensive view, and we’ve really said every part of this challenge for her is our job.”

Research contact: @erincstefanski

Half retail pop-up, half laboratory: Mall owner debuts BrandBox

November 14, 2018

One of the nation’s biggest mall operators has come up with a way to fill empty storefronts—and it’s offering emerging brands plenty of perks to move in and do business for six to 12 months.

Santa Monica, California-based Macerich is launching a concept known as BrandBox at Tysons Corner Center just outside Washington, D.C., CNBC reported on November 12.

Under the BrandBox concept—half retail pop-up, half laboratory—the mall will house six brands, including luxury apparel retailer Naadam (founded in 2010) and upscale makeup company Winky Lux (founded in 2015).

Each brand will pay rent for its own mini store inside an 11,000-square-foot space, with new retailers funneling in and out each year, CNBC said.

For its part, Macerich will provide fixtures like shelving, data on foot traffic, radio-frequency identification tagging for inventory, marketing and even help finding staffing.

The rollout of BrandBox comes as more than 140 million square feet of retail space has been shuttered nationwide in malls and shopping centers already this year, according to real estate research group CoStar. Closures by Sears and Toys R Us are leaving a blank canvas at many malls for new uses like these so-called pint-sized and modern-day department stores.

Macerich plans to take BrandBox to its malls in Santa Monica, California; Philadelphia; and Scottsdale, Arizona, CNBC reported. In fact, the idea eventually is envisioned for all of its U.S. malls in some way. The company is considering adding multiple BrandBox locations inside some shopping centers, where there’s more demand for smaller retailers over department stores.

“I think what we’re learning as an industry is that we need to have modular space that can be reconfigured, “Macerich Chief Digital Officer Kevin McKenzie told CNBC. The physical walls within each BrandBox will be movable, he said. Sometimes two companies might fill the space; sometimes, seven.New York-based fashion house DKNY, an already established brand, also will be inside BrandBox at Tysons Corner Center at launch to test a new concept. McKenzie said the space can be a way for even traditional retailers to try out a new market before investing in establishing a permanent presence there.

Brands are appreciative of the real estate and the perks. “We view BrandBox as a safe environment to test our brand in a mall environment,” Matt Scanlan, CEO of Naadam, told CNBC. The technology Macerich is offering is a “major perk,” he said. “They have set us up with retail technologies and subscription software that are normally inefficient to install for a pop-up but can be transformative in terms of learnings.”

Macerich is the first major mall operator to announce plans to roll out a concept like this at a large scale, and one that’s been incubated from within the company. Rival Simon has been testing a rotating pop-up exhibit called “The Edit” at Roosevelt Field mall in Garden City, New York, but has yet to open other locations.

Research contact: @laurenthomasx3

Is Gwyneth Paltrow’s ‘Goop’ duping readers by giving them the wrong ‘poop’ on products?

October 30, 2018

Goop, the lifestyle brand—and blog—created by actress Gwyneth Paltrow, has been reported to the U.K.’s trading standards and advertising watchdogs over allegations that it makes misleading claims about its products, CNBC reported on October 29.

The Good Thinking Society, a non-profit charity that campaigns against pseudoscience, confirmed to CNBC that it had submitted the complaint about Goop to the U.K.’s National Trading Standards and Advertising Standards Authority. The news was first reported by The Sunday Times newspaper on October 28.

The complaint, seen by CNBC, alleges that Goop’s “wellness” products are advertised misleadingly and make “potentially harmful” claims. It also holds that Goop’s advertising could encourage customers to “use products which could cause direct harm” and that some of the firm’s health claims about its supplement products are “unauthorized.”

Paltrow’s firm was founded in the United States in 2008, and opened its first pop-up store in the U.K. in September. The charity listed 113 examples of Goop’s advertising that it says are in breach of the law.

One of Goop’s products, called The Mother Load—A $90, 30-day regimen of vitamins for pregnant and post-pregnant women—promises to deliver 110% of the “daily value” of vitamin A for adults and children aged four and above, and 69% of the daily value for pregnant women.

That may seem promising—however, Britain’s National Health Service and the World Health Organization both recommend against taking supplements containing vitamin A during pregnancy. Indeed, the NHS website recommends that pregnant women “avoid taking supplements that contain vitamin A.”

Dr, Susan Beck, SVP of Science and Research at Goop, told The Huffington Post on October 28, “When used as recommended, goop’s the Mother Load supplements are safe during pregnancy. The Mother Load contains a very moderate 450 mcg (micrograms),” or 1500 IU (international units), “of vitamin A (preformed vitamin A as retinyl palmitate), which is less than the recommended daily intake of 600 mcg per day (per NHS).”

Beck added: “The Mother Load package contains a warning that pregnant women should not consume more than 10,000 IU vitamin A daily due to risk of birth defects. To provide you with more context — all pregnant women need vitamin A.”

Laura Thomason, project manager at the Good Thinking Society, said in a statement that she emailed to CNBC: “It is shocking to see the sheer volume of unproven claims made by Gwyneth Paltrow’s Goop about their products—especially given that some of their health advice is potentially dangerous.”

Thomason added: “Gwyneth Paltrow may well have good intentions, but she and her company sell products with claims that could clearly mislead customers. Just because Gwyneth has an Academy Award, it does not mean that Goop should be given an easy ride compared to other big corporations.”

This is not the first time—even this year—that Paltrow’s Goop has been the target of legal action. The blog settled a $145,000 lawsuit with California prosecutors last month over the advertising of a jade and rose quartz egg which it claimed could balance hormones and regulate menstrual cycles.

Research contact: @Ryane_Browne_