No blurry vision here. Target Corp.’s exclusive release of Justin Timberlake’s special edition “20/20 Experience” has been an unqualified success.
Though the retailer would not disclose specific figures, Target did say first week sales places it among the company’s top three best selling albums of the decade. JT also became Target’s best selling male artist since 2002. (He failed, however, to overtake Taylor Swift’s “Fearless” as Target’s best selling first week album of all time.)
Target certainly rolled out the red carpet for JT’s first album in six years. ABC aired a well received commercial created by Target immediately following JT’s performance at the Grammy Awards. Target also threw an elaborate party and concert in Los Angeles on the day of the album’s release last month.
But lost in the hoopla is the album’s content, specifically the hit single “Suit & Tie.” The song contains six references to a swear word that sounds like ship. Rapper mogul Jay-Z, who pops up in the middle of the song, contributes a derogatory word commonly associated with African Americans.
Here are some of the lyrics:
I be on my suit and tie, s*** tie, s***tie (Repeats several times)
D'usses on doubles, ain't looking for trouble
You just got good genes so a n*** trying to cuff you
This blogger is not personally offended by the lyrics. But what’s remarkable about “Suit & Tie” is how these words have slipped into mainstream America in recent years without barely a howl.
And it doesn't get any more mainstream than Target.
“Target’s approach is to support the creativity and artistry of our music partners and the way they choose to present their music,” Target spokeswoman Katie Boylan wrote in a statement.
“As we seek out partners, there are a number of things Target considers, including how the artist's music may resonate with Target's guests,” she said. “We also look at how their past albums have performed in the general market and at Target, as well as broader industry trends.”
It didn’t seem so long ago when Tipper Gore, who co-founded the Parents Music Resource Center, urged Congress to pass a law requiring record companies to slap warning labels on songs that contain “objectionable content.”
Today the record company and artist, working with the Recording Industry Association of America, ultimately decides whether an album requires a “Parental Advisory Warning.” (PAW)
Target said it defers to the industry for PAW warnings.
Wal-Mart, Target’s chief rival, outright bans any album with the PAW label. The retailer also said “it occasionally may refuse to stock music merchandise that may not seem appropriate.”
20/20 Experience does not carry a PAW label and both Target and Wal-Mart sell the album.
Part of the reason is context. “Suit & Tie” is a fairly benign song. And JT is a an artist with a clean cut reputation along the likes of other Target-affiliated artists like Tony Bennett, Swift, Beyonce (Jay-Z’s wife), and Michael Buble.
But then again, the pop band Maroon 5 is not exactly a hard core act. (Lead singer Adam Levine is a guest judge on NBC’s The Voice for Pete’s sake!) The group’s “Overexposed” album features a PAW label, mostly because of the F-bombs found in the song “Payphone.”
For the record, Target does sell the original version of Overexposed. Wal-Mart will only sell the edited version of Overexposed. So by these standards, s*** and n***a are acceptable but f*** is still out of bounds.
Believe it or not but Best Buy is one of the best performing stocks of the year.
Okay, so the year is not quite two months old but given Best Buy’s recent turmoil, we should acknowledge the achievement just the same.
Since Dec. 31, BBY has smoked the broader S&P 500 index and competitors like Amazon and Apple. In fact, the only company that has performed better than Best Buy is Netflix. And Best Buy doesn’t even produce original shows.
No doubt investors’ new enthusiasm for Best Buy orginates from the company’s rosier sales outlook, thanks in large part to CEO Hubert Joly's Renew Blue strategy. Best Buy reported flat comp sales in December, a relatively strong performance that surpassed Wall Street’s expectations, and all signs point towards a strong January as well.
But there may be another, less quantifiable explanation for the stock’s rise: the “Sharon McCollam Effect.”
The company has hired or promoted several executives in recent months, including U.S. retail chief Shawn Score and e-commerce chief Scott Durchslag, a former president of Expedia.
But from Wall Street's point of view, Joly's best move thus far was to hire McCollam as chief financial officer and chief administrative officer. As a top executive at Williams-Sonoma, McCollam already commanded respect and admiration from Wall Street.
Since McCollam joined Best Buy in November, that love fest has only grown. Some investors even think Best Buy hired its most credible CFO in over a decade.
“Every time someone meets Sharon McCollam, the stock goes up,” said Dave Strasser, an analyst with Janney Capital Management.
Even the often-prickly Michael Pachter, an analyst at WedBush Securities and longtime critic of Best Buy, had warm praise for McCollam.
It’s hard to say how much of this goodwill comes from McCollam’s reputation, communication skills, or actual deeds. After all, she has only been on the job for three months or so.
But McCollam’s fingerprints have appeared on at least a couple of recent decisions. In January, Best Buy said that it made changes to the way it calculated the costs from its inventory. The move reduced Best Buy’s free cash flow estimate for fiscal 2013 but, in Wall Street’s eyes, demonstrated the company’s commitment to transparency and sensible accounting.
Best Buy also recently announced it will close 15 underperforming stores in Canada. As part of her large portfolio of duties, McCollam is in charge of “rationalizing” the company’s square footage, or in normal parlance, deciding which stores to close, which stores to relocate, and which stores to remodel.
This is a big responsibility. Barclays retail analyst Alan Rifkin estimates the company can save $125 million and add 25 cents a share to earnings if it reduces square footage over the next three years.
“We are encouraged that McCollam will manage the company’s real estate portfolio and believe that she will make positive changes given her highly successful tenure at Williams Sonoma,” Rifkin wrote.
For someone who has worked both sides of the Atlantic, Best Buy CEO Hubert Joly seems quite skeptical about exporting the company to the rest of the world.
“Retail is not the most global of businesses by any stretch of the imagination,” Joly told investors in New York last fall. “China [for example] is not a goal unto itself. If we can’t find a way to make business successful, then we shouldn’t be in China.”
True to his word, Best Buy last month said it will close 15 stores in Canada, including seven branded big boxes and eight Future Shop locations, its local banner. The move follows another bad month for Best Buy International: same-store sales fell 6.4 percent in December compared a decline of 3.1 percent during the same month in 2011.
International’s struggles has fueled speculation that Best Buy will soon end its European joint venture with British phone giant Carphone Warehouse (CPW) in Best Buy Europe, which includes Geek Squad and 2,393 smaller format Carphone Warehouse and the Phone House stores. The continent, in particular, has been a particularly tough market for Best Buy as the economic turmoil has weighed heavily on consumers. Best Buy has already closed its branded big box stores in the United Kingdom and Turkey.
But Joly does not seem to be in a hurry to end the 50/50 joint venture—and for good reason. Beginning in 2015, Best Buy can buy out CPW’s 50 percent stake for a price 10 percent less than the joint venture’s fair market value, according to SEC documents. If Best Buy declines the option, CPW can purchase Best Buy’s stake under the same terms.
That gives Joly about two years to decide the fate of Best Buy Europe. By that time, Europe’s economy may have recovered to the point where the company may want to keep the business.
Best Buy Europe already shows signs of improvement. For the 13 weeks ended Dec. 29, revenue grew 7.8 percent on a constant currency basis to $1.7 billion.
But like with most things with Best Buy these days, things are not that simple. According to British news reports, should founder Richard Schulze succeed in acquiring Best Buy, CPW can purchase Best Buy’s 50 percent stake at a price 10 percent lower than fair market value, which some analysts estimate at $838 million. Since Best Buy spent $2.1 billion to acquire that stake, that means the retailer would absorb a significant loss.
The so-called change in control clause gives CPW the right to exercise its option “if any party acquires a Controlling Interest in Best Buy (save for Richard Schulze, either alone or with Brian Dunn and any of their connected persons and in each case through a genuine and good faith structure through which he or they hold a Controlling Interest themselves).”
In order words, it seems the agreement specifically excludes a Schulze buyout as an event that could trigger a CPW buyout. But it depends on how you interpret “connected persons” since Schulze has enlisted a trio of outside private equity firms to finance the bid.
Of course, nothing precludes Best Buy and CPW just rewriting their agreement. Best Buy, after all, paid CPW a hefty $1.2 billion fee to end their alliance on Best Buy Mobile. Best Buy could presumably just pay CPW another fee to significantly alter or perhaps scrap the joint venture.
But then again, Best Buy does not currently have the financial firepower to do anything that drastic. The company recently lowered its free cash estimate for fiscal 2013 to $500 million from an earlier estimate of $850 million to $1 billion. Best Buy appears to be investing that cash on matching competitors’ prices in the United States and remodeling stores.
So perhaps Joly’s best move on the joint venture is to continue his current strategy: sit back and see how things play out.
If you're spending time this weekend making charitable contributions online or mailing checks by Dec. 31 to get a 2012 tax deduction, you can check a charity-rating service to see how wisely the charity is spending your money.
Sounds like a good idea but it's not as easy as it sounds. Only about 7,500 of the 1 million charities in the U.S. are evaluated by three popular review agencies such as Charity Watch, Charity Navigator and the Better Business Bureau's Wise Giving Alliance, said Ken Berger, CEO of Charity Navigator.
Making matters more complicated, the ratings, which can be a letter grade, one to four stars or a simple "yes" or "no" seal of accreditation depending on the source, vary widely among the reviewers. The Humane Society of the United States, for example, is given a "D" rating from Charity Watch, 4 stars from Charity Navigator and the BBB Accreditation Seal.
Conflicting ratings means more work for conscientious givers, and may make some givers avoid the ratings all together. But if you're giving to a charity for the first time, it can still be helpful to check some of the ratings at Charity Watch, Charity Navigator, Give Well or the BBB's Wise Giving Alliance.
If a charity isn't listed by any ratings services, Charity Navigator offers some guidelines for performing your own due diligence.
Probably not the start Best Buy had hoped for.
The initial sales numbers for Windows 8 devices are out and they don’t look good. Since Microsoft debuted its latest operating system on Oct. 26, Windows device sales have fallen 21 percent compared to the same period a year ago, according to the NPD Group.
Windows 8 has captured only 58 percent of Windows unit device sales, far less than the 83 percent for Windows 7. NPD says Windows 8 tablet sales have been “non existent,” accounting for less than one percent of all Windows 8 device sales.
“You would like to see some kind of acceleration,” said NPD analyst Stephen Baker. “We didn’t see any impact.”
So why does this matter to Best Buy? The consumer electronics retailer, the country’s largest seller of PCs, typically gets a big sale lift from the release of a next generation Windows operating system. Best Buy especially hoped Windows 8 would give a sizable boost to the key holiday shopping period. At a recent investors conference in New York, top executives noted the retailer carries 45 Windows products that are exclusive to Best Buy, including 28 touch screen devices.
Best Buy spokeswoman Amy Von Walter said Windows 8 is such a unique system that it will take time for consumers to digest it.
"We always knew that Windows 8 was going to be a long term proposition," she said. "Unlike other new devices, Windows 8 will be rolled out over several months."
True enough. But will Windows 8 make a meaningful impact on Best Buy's holiday sales?
Baker said weak initial sales doesn’t necessarily mean a bad holiday season. For one thing, sales of more expensive Windows 8 notebooks with touch screens have been strong, helping Microsoft to establish a foothold in the premium segment normally dominated by Apple.
“The most expensive [Windows 8] products did the best,” Baker said.
In fact, Best Buy said sales of Lenovo's Yoga laptop have been strong, said company spokesman Jeff Haydock.
"Overall, we are pleased with Windows 8," Haydock said. The devices "have performed within our expectations of the launch. We have also seen increased computing traffic to our stores and online."
With its radically designed interface, Windows 8 may also offer Best Buy the chance to do what it normally does best: explain complicated technology to consumers. Von Walter said the company devoted 50,000 hours training Blue Shirts on the new technology.
Nonetheless, Windows 8’s disappointing debut can’t please Best Buy. There’s nothing necessarily wrong with Windows 8, Baker said. It’s just that Windows 8 has so far failed to reverse in any small way the continuing decline in PCs and notebooks, he said, which make up a big chunk of Best Buy overall sales.
“Windows 8 is not the problem,” Baker said. “Computers are the problem.”
We can all use a little extra cash during the holidays or just after the holidays when bills start arriving. One of the easiest sources of found money in the next week lies in any flat screen TVs, computer monitors, or laptops you purchased between January 1999 and December 2006.
Because companies such as Hitachi, LG, Sharp, Samsung and Toshiba were found guilty of price fixing, consumers can get a minimum of $25 to $100. But amounts could easily rise to $250 per LCD screen, depending on the number of people who file a claim, said Alison Buckneberg, communication specialist at Gray Plant Mooty in Minneapolis, one of a dozen law firms that managed the $1.1 billion settlement in a San Francisco U.S. District Court.
This settlement is considered one of the most consumer friendly settlements ever because claimants do not have to show proof of purchase or even identify the manufacturer or model number. Even better, consumers are eligible for cash rewards, not a rebate on a future purchase.
So far 18,000 Minnesotans have requested a claim, which is among the highest number of claims of any state, exceeded only by California and Wisconsin. Twenty-four states are included in the settlement.
Buckneberg expects people who file claims to receive checks early in 2013.
To file a claim, go to LCDclass or call 1-855-225-1886 by Dec. 6.