Brand Moves for Monday July 20
Twenty-one weeks ago, when the gravity of the situation became clear, we started daily reporting on how brands were dealing with the COVID-19 crisis. What’s now becoming clear is that the current climate is one of near-perpetual disruption. So we made the decision to keep on telling the stories of inspiring brand leadership and strategy amid the latest crises in an anxious world. Our goal remains the same: to provide an up-to-the-minute source of information, inspiration and insight on brand moves as they happen.
Some of America’s biggest mall owners are increasingly looking to do deals to salvage retailers which have been pushed to the brink and filed for bankruptcy during the coronavirus pandemic; apparel brands like J.Crew, Brooks Brothers and New York & Co. parent company RTW Retailwinds, department store chains Neiman Marcus, J.C. Penney and Stage Stores, health chain GNC and kitchen supplies company Sur la Table. In many instances these bankrupt retailers are major tenants in malls, with sprawling store counts. Meanwhile, some of the biggest retail real estate owners in the country, like Simon Property Group, are sitting on roughly $8.5 billion of liquidity on its balance sheet, including about $3.5 billion of cash on hand. In one of its latest deals, Simon, the biggest U.S. mall owner by number of malls, has teamed up with apparel-licensing firm Authentic Brands Group to supply financing to carry Brooks Brothers through bankruptcy. ABG and Simon have also put up a stalking-horse bid of $191 million for the bankrupt denim maker Lucky Brand’s assets. And a trio of ABG, Simon and mall owner Brookfield Properties have also explored acquiring department store chain Penney out of bankruptcy. ABG already owns a slew of other once-defunct retailers including Barneys New York, Nautica, Nine West and Juicy Couture. “I think this is an opportunity for the Simons of the world,” said Scott Stuart, CEO of the Turnaround Management Association. “They’re acting like their own private-equity firms. They are sitting on a lot of cash and they are testing the waters.” In 2016, Simon and the mall owner General Growth Properties, which is now owned by Brookfield, teamed up with ABG to rescue embattled teen apparel retailer Aeropostale. The three won an auction to buy the Aeropostale brand out of bankruptcy court, salvaging hundreds of stores, for a price tag of $243.3 million. Brookfield is seemingly looking to do more deals; the company said it had created a new fund and was targeting spending as much as $5 billion to help struggling retailers. “The view is, these are good brands that need to be preserved,” said Byron Carlock, the head of PwC’s U.S. Real Estate practice. “Now, is there a new normal that better manages the financial risk of being in retail?” he said, referring to real estate companies versus private-equity firms.
Mediapro, which produces Spain’s La Liga competition for broadcasters, has borrowed some ideas from working with FIFA video game owner EA Sports, using sound clips of match situations recorded at different stadiums to bring more ambiance to the televised matches of the league that’s home to Real Madrid and Barcelona. A sound engineer present at each match inserts crowd reaction clips, originally recorded for the video game. If the home team scores, the technician selects the noise of the home crowd celebrating from a previous match, as quickly as it takes an actual fan to react, according to Oscar Lago, who oversees match-day production. The realism has strict limits: Mediapro draws the line at anything negative that could be construed as editorializing. So there’s none of the booing and whistling that are common at matches, even from a team’s own supporters. You also won’t hear insults against referees and heckling of players who dive after a hard tackle. The next challenge was to fill the stadiums with virtual crowds that are more realistic than the cardboard cutouts used in some closed-door matches. Mediapro tried several approaches, such as editing in shots of the stands drawn from old games. It decided on software-generated images of crowds that can be placed behind the action on the pitch. Viewers still have the option to see games without the enhancements. “There was a risk audiences wouldn’t accept this, but they have,” said Lago.
The popular Calm meditation app, which is designed to make you fall asleep while using it, will be adapted into a star-studded television show… that’s designed to make you fall asleep while watching it. In a statement, HBO Max announced that the new series, called A World of Calm, will be a “totally new type of television experience that combines mesmeric imagery with narration by A-list stars including Mahershala Ali, Idris Elba, Oscar Isaac, Nicole Kidman, Zoë Kravitz, Lucy Liu, Cillian Murphy, and Keanu Reeves.” Furthermore, the series “has been entirely created during quarantine,” according to executive producer Jane Root. Ten half-hour episodes based on the app’s “bedtime stories for grown-ups” will have celebrity narrators transport viewers into tranquility “through scientifically engineered narratives, enchanting music, and astounding footage, to naturally calm your body and soothe the mind.”
Disney-owned streaming service Hulu is lowering the barrier to entry for smaller advertisers. The service is testing a self-serve ad buying tool called Hulu Ad Manager that’s currently aimed at small- and medium-sized businesses. Not only does Hulu Ad Manager enable advertisers to buy ads without going through Hulu’s sales team, but it also only requires them to spend a minimum of $500 to do so. “One of the things we’ve heard is it’s really difficult to advertise on TV or too expensive. We thought this would be a great way to help change that,” said Faye Trapani, director of self-service platform sales at Hulu. Hulu is the second major company to launch a self-serve ads platform this month: Last week, TikTok officially opened up a self-serve ad platform that lets companies buy and manage ad campaigns directly. The company also said it would be providing $100 million in advertising credits to small businesses, which it said “are uniquely at risk as local economies ceased activity in efforts to protect public health.” Major online advertising platforms like Google and Facebook have allowed small businesses to buy directly for years. Snap last year attributed the opening of its own self-serve ad platform, which it launched in 2017, as a factor in its accelerating revenue growth as the company saw increased engagement.
Another education technology company is flourishing amid the coronavirus pandemic, as people stuck at home flock to online classes. Coursera, the global online learning platform founded by prominent artificial intelligence researcher Andrew Ng, has raised $130 million in funding, the company confirmed. The pandemic has given a huge boost to virtual learning providers. Coursera’s enrollments have quintupled year over year, says CEO Jeff Maggioncalda. “The global market for higher ed is worth $2 trillion,” he says. “It’s just massive and it was already moving online. With Covid, it’s being forced online.” When the pandemic hit, Maggioncalda says he wanted to help students who were suddenly forced to learn virtually. In June, he launched the Coursera Campus Response Initiative, which offers courses free to students enrolled in universities around the world. Some 1.4 million students have signed up, he says. The free higher ed program has been a boon for students and it has also served as a great marketing tool. In September, Coursera will start charging between $250 and $400 per student subscription. Schools scrambling to provide online classes are already signing on, including Manipal Academy of Higher Education in southern India, which has an enrollment of 20,000. Coursera’s enterprise business, which markets continuing ed courses to 2,500 companies like Novartis and Adobe, has grown 70% year over year, says Maggioncalda, and now accounts for a quarter of Coursera’s revenue.