Friday Finance Weekly 85th Edition

Greetings folks and a warm welcome to the 85TH Edition of Friday Finance Weekly. We have finally transitioned to a new system so I hope you like it. After having a month of sunshine it looks like the rains are back, but at least you won’t have to water the garden over the long weekend.

The biggest retail news this week was that Saks is going to be purchased by the Hudson Bay Company. Yes, a Canadian retailer is purchasing an American one. The offer is for a total of $2.4B. The Bay had to do something to fend off Nordstrom’s launch into Canada and what better brand than Saks. In Canada, a total of 6 – 7 Saks stores will be opening by way of new construction and conversions of existing stores. In addition, twenty five Saks Off 5TH stores are planned as well. The brands will operate as two entities and as a result, the management of Saks will remain in New York. In general Saks hasn’t performed well compared with Neiman Marcus and Nordstrom as it has been burdened by underperforming stores. The company has gone through some cost cutting and now runs 41 stores compared with 54 in early 2007. Overall good move, especially for the Bay, but I think Nordstrom is going to come out on top. In my opinion there is a real gap in friendly, high-end fashion retailers and this is a clear differentiator for Nordstrom. Saks is more of the same, maybe a little more traditional than Holt Renfrew. The markets have reacted well to the HBC take over and the shares are up 6.12% for the week. All things considered, I don’t think the selection in Canada was the issue, it was always price. Hey at least it will boost up Canada’s employment figures. (Source: Bloomberg)

Alternative currencies are all the rage and if you need help understanding some of the major ones a recent TED talk provided a good perspective. Please find the top 5 biggest/most interesting (in my opinion) below:

  •  Bitcoin: The world’s best-performing currency, according to Kemp-Robertson, Bitcoin’s value is tied to the performance of a computer network. It’s “completely decentralized—that’s the sort of scary thing about this—which is why it’s so popular,” Kemp-Robertson says. “It’s private, it’s anonymous, it’s fast, and it’s cheap.” Bitcoin is a case study in the increasing desire to place trust in technology over traditional institutions like banks.
  • Litecoins: A virtual currency based on the Bitcoin model, Litecoins have a higher limit: “The number of coins that can be mined is capped at 21 million Bitcoins and 84 million Litecoins,” explained a recent Wall Street Journal post, which also noted that Bitcoins are worth more and currently accepted more widely.
  • Tide detergent: This is a barter system that’s about as far from government-backed as you could get: in 2011, it was discovered that across the US, thieves had been stealing 150-ounce bottles of Tide detergent to trade for $5 cash or $10 worth of weed or crack cocaine. An article in New York Magazine from earlier this year details the fascinating story and what it says about Tide’s super-successful branding. Link to the article: http://nym.ag/Uzhrb6
  • Linden Dollars: Linden Dollars, usable within the online community Second Life, can be bought with traditional currency or earned by selling goods or offering services to other Second Life residents. Many people earn actual Linden salaries—some to the tune of a million Linden Dollars. Don’t get too excited though 1M Linden Dollars is around $3,950 USD at the moment.
  • Starbucks Stars: Use of Starbucks’ Stars is limited not to a particular geographic locality, but to the corporate ecosystem that is Starbucks. Once you get a Starbucks Card, you can earn Stars—which buy drinks and food—by paying with the card, using the Starbucks app, or entering Star codes from various grocery store products. According to Kemp-Robertson, 30 percent of transactions at Starbucks are made using Stars.

If you have time over the long weekend and wanted to explore the other currencies please refer to the original article: http://bit.ly/16ed4CZ To be honest all these alternative currencies are a bit of a blur to me and now when someone says, “I am a millionaire”, you actually have to ask, “what kind”? Imagine a complication of filling out a personal net worth statement at a bank? (Source: TED Talks)

America is still the world’s biggest source of capital, but a tightening of their immigration system is making it harder and harder for entrepreneurs to set up shop. So what’s the solution? A company in the US has come up with a novel way of approaching this issue. They are building a cruise ship 12 nautical miles from the coast of San Francisco (international waters) that will house 380 startups. Companies will have to give up equity in addition to $1,200 – $3,000 a month. There will be a ferry that goes directly into San Francisco and work permits won’t be required. Residents on the boat will only require visitor visas that are considerably cheaper to obtain. Great idea, but the company is still in fundraise mode. Also, small matters such as policing need to be considered. In my opinion this seems too much like a modern day version of Alcatraz. (Source: Blueseed.co)

The low-price air carrier GoAir of New Delhi announced in June that in the future it would hire only females for the cabin crew — because they weigh less than men (and expects eventually to save the equivalent of $4 million annually in fuel based on average weights). I am sure saving fuel was the only reason. (Source: The Times of India)

Have a fantastic long weekend folks and please don’t hesitate to forward this newsletter. Many thanks,

Sam