Healthy fod for babies Tiffany Sues Luxury Giant LVMH Over $16 Billion Deal Delay: Live Updates

Healthy fod for babies

Credit…Chang W. Lee/The New York Times

J.C. Penney reached an agreement to sell its retail business to the mall operators Simon Property Group and Brookfield Property Partners, averting a liquidation that would have represented a significant failure in the retail industry.

Simon and Brookfield will pay about $300 million in cash and assume $500 million in debt to buy J.C. Penney, lawyers for J.C. Penney said at a bankruptcy court hearing on Wednesday. A certain portion of the company’s stores and distribution centers will become two separate property companies, according to the hearing. In all, the deal values J.C. Penney at $1.75 billion, including the funds committed to support its business after it emerges from bankruptcy.

“We are in a position to do exactly what we set out to do at the very beginning of these cases and that is to preserve 70,000 jobs, a tenant for landlords, a vendor partner and a company that has been around for more than a century,” Joshua Sussberg, a lawyer at Kirkland & Ellis, which has been representing J.C. Penney, said at the hearing.

The future of the department store chain, which filed for Chapter 11 bankruptcy protection in May, had been unsettled, with liquidation being floated as a possibility earlier this month. That would have represented a major collapse. J.C. Penney, which traces its roots to 1902, is the biggest retailer to file for bankruptcy during the pandemic, entering proceedings with nearly 850 stores and about 85,000 employees.

Simon and Brookfield were thought to be its most likely buyers because the loss of J.C. Penney stores would deliver a significant blow to their shopping centers.

J.C. Penney’s creditors had envisioned carving out some of the chain’s best properties into a real estate investment trust and separately selling the retail business. But they had clashed with potential buyers over the value of the retail business and the rights around redeveloping mall space. If the creditors lost redevelopment rights, any real estate investment trust would be less valuable.

Lawyers for J.C. Penney were focusing on a new bid for the retail business from creditors while leaving the door open for buyers like Simon and Brookfield, according to a court hearing this month. The company had until Thursday to either strike a deal with creditors, find a buyer or opt to liquidate.

Credit…Lucid Motors, via Associated Press

A decade ago, Peter Rawlinson led the Tesla team that created the Model S, the luxury sedan that helped bolster the carmaker’s reputation and create a mass market for electric cars. Now, he hopes to do the same at the helm of Lucid Motors.

During an event Wednesday, Lucid unveiled its luxury electric sedan, the Lucid Air, after teasing the car for weeks with claims that it can drive faster and farther than the Model S. It will take a lot to convince people that the Air can live up to those promises, but Mr. Rawlinson, the company’s chief executive and chief technology officer, said he was determined to prove himself again.

“Ten years ago, nobody believed me when I was chief engineer of the Model S,” he said in an interview last week. “I’m going to show the world again. I’m going to shock everyone with how good Lucid Air is.”

Lucid plans to make four versions of the Air. The high-end version, the Dream Edition, can consistently travel a quarter-mile in a whip-fast 9.9 seconds, the company said last week, beating a recent 10.4-second time set in a Model S. The Air Grand Touring, one step down from the Dream, can drive 517 miles on a full charge, the company said. The cars will not be cheap — prices will range from less than $80,000 to $169,000. The first vehicles will be sold in the spring, though the lowest-cost version will not be available until 2022. Lucid will make the cars at a factory it is building near Phoenix.

In recent test drives arranged by the company, reporters with Bloomberg and Car and Driver confirmed that a prototype Air traveled more than 450 miles on a charge, lapping a concurrently driven Model S by more than 100 miles and Porsche’s electric Taycan Turbo S by more than 200 miles.

Jessica Caldwell, executive director of insights at Edmunds, said the Lucid held promise. “Between the company’s very wealthy backers and a leader who worked on the Model S himself, Lucid might finally bring the pedigree required to challenge Elon Musk and team,” she said in a statement, referring to Tesla’s chief executive.

Saudi Arabia’s sovereign wealth fund invested more than $1 billion in Lucid last year.

  • Stocks on Wall Street jumped on Wednesday, rebounding from a three-day rout that had pulled the S&P 500 down 7 percent from its record high.

  • The S&P 500’s gain of more than 2 percent on Wednesday was its biggest single-day jump since early June. The tech-heavy Nasdaq composite — which had dropped 10 percent over just three days — rose 2.7 percent as shares of semiconductor makers like Nvidia and Qualcomm rallied.

  • European indexes were broadly higher. Asian markets finished lower.

  • Oil futures were also higher. Brent crude rose more than 2 percent to over $40 a barrel. West Texas Intermediate crude rose 3.5 percent.

  • AstraZeneca, the British pharmaceutical company that announced it would pause trials of a coronavirus vaccine because of a participant’s unexpected adverse reaction, slipped. The British government, responding to a surge in infections, was expected to announce tightened restrictions on social gatherings, limiting get-togethers to six people.

  • Tesla recovered on Wednesday after plunging 21 percent the previous day, capping a recent downturn in the company’s stock. The tumble started after Tesla announced on Sept. 1 that it would raise up to $5 billion in capital by selling new shares “from time to time” at market prices. Then, on Friday, Tesla was bypassed when the S&P 500 components were shuffled. The stock was up more than 10 percent.

Credit…Katherine Marks for The New York Times

The $16.2 billion deal that would have brought together LVMH Moët Hennessy Louis Vuitton and Tiffany & Company, which would have been the biggest acquisition ever in the luxury sector, is cratering.

On Wednesday LVMH said it was withdrawing its offer to buy Tiffany, while Tiffany said it had filed a lawsuit to force the luxury giant to move forward with its offer.

There has been concern for months that LVMH would seek to renegotiate the deal, which was announced last November, in light of the stress the pandemic has put on the jewelry business. LVMH said in a statement Wednesday that it couldn’t complete the deal “as it stands,” citing a request from the French government to delay the deal beyond Jan. 6, 2021, because of the threat of U.S. tariffs on French goods.

In a filing with the securities exchange commission, Tiffany said that while LVMH had informed the jeweler that it had received a letter from the French government to delay the deal, the company had not yet seen a copy of that letter.

Tiffany’s lawsuit, filed in the Delaware Court of Chancery on Wednesday, claims that LVMH is in breach of its contract relating to obtaining antitrust clearance. It rejects the idea that LVMH can avoid the deal by claiming that Tiffany has undergone a “material adverse effect” that would have breached its deal obligations. The lawsuit also says that LVMH cannot avoid completing the deal because it is inconsistent with its patriotic duties as a French company.

Credit…Ruth Fremson/The New York Times

Amazon said Wednesday that it has 33,000 salaried job openings across its business, from cloud computing engineers to managers in its warehouses, the strongest sign yet that the pandemic created a surge in e-commerce that accelerated Amazon’s already rapid growth.

The company is offering to have 20,000 prospective employees meet with Amazon recruiters on Sept. 16 at a national job fair, which will be held virtually this year.

The new jobs are separate from the hourly warehouse jobs Amazon often announces in advance of the holiday shopping season.

Amazon reported record sales and profits last quarter, as the number of products it sold jumped by 57 percent compared to the year earlier. It spent more than $9 billion on capital expenses and leases, largely to build facilities in its logistics network that would open this quarter. The managers, safety staff and human resources employees who run the new warehouses would be part of the new hiring blitz, which is not limited to its logistics operations.

While the pandemic has wreaked havoc with traditional retailers, Amazon’s growth has accelerated, with consumers shopping online and companies with remote work turning to cloud computing. Around this time last year, Amazon announced a similar hiring milestone, with 30,000 open roles.

Last month, Amazon said in the next few years it would hire 3,500 white-collar employees at several tech hubs across the country, including 2,000 in New York, a sign the company was not abandoning the corporate growth plans it had in place before the pandemic. Last quarter, Amazon had 876,800 employees globally.

Credit…Vincent Tullo for The New York Times

Even as the coronavirus pandemic appears to recede in New York, corporations have been reluctant to call their workers back to their skyscrapers and are showing even more reticence about committing to the city long term.

According to a new survey:

  • Fewer than 10 percent of the New York’s office workers had returned as of last month.

  • Only a quarter of major employers expect to bring their people back by the end of the year.

  • Only 54 percent of these companies say they will return by July 2021.

Lease signings in the first eight months of the year were about half of what they were a year earlier. That is putting the office market on track for a 20-year low for the full year. When companies do sign, many are opting for short-term contracts.

At stake is New York’s financial health and its status as the world’s corporate headquarters. There is more square feet of work space in the city than in London and San Francisco combined, according to Cushman & Wakefield, a real estate brokerage firm. Office work makes up the cornerstone of New York’s economy and property taxes from office buildings account for nearly 10 percent of the city’s total annual tax revenue.

What is most unnerving is that a recovery could unfold much more slowly than it did after the Sept. 11 attacks and the financial crisis of 2008. That’s largely because the pandemic has prompted companies to fundamentally rethink their real estate needs.

“When it comes to making decisions about office leases, the words are postpone, adjourn and delay,” said Ruth Colp-Haber, the chief executive of Wharton Property Advisors, a real estate brokerage firm.

Elected officials, real estate tycoons and even Jerry Seinfeld have issued paeans to New York’s resilience, arguing that city has a history of bouncing back. But pessimists see dark days ahead. They contend that companies will tell most employees to stay away until a vaccine is widely distributed and perhaps for much longer.

“I think the New York office market is going to be generally challenged for the next three to five years,” said Jonathan Litt, the founder of hedge fund Land & Buildings.

Credit…Mark Sommerfeld for The New York Times

For Jamie Salter and David Simon, the pandemic has been a time of great opportunity.

Mr. Salter is the founder and chief executive of the Authentic Brands Group, a company known for buying the intellectual property of famous brands at discount prices and then striking licensing deals with other companies that want to stick those well-known names on their products.

Mr. Simon is the chief executive of the Simon Property Group, the largest mall operator in the United States.

Last week, they closed a deal to buy the bankrupt Brooks Brothers, the 202-year-old American fashion brand and retailer, for $325 million. Last month, they acquired Lucky Brand denim, and in February, they bought Forever 21.

Sapna Maheshwari and Vanessa Friedman explain the logic behind the partnership.

  • Mr. Simon gets assurance that bankrupt chains and other tenants will remain in his shopping centers. Mr. Salter gets a friendly landlord for his brands at a time when rent costs are crushing retailers, plus the chance to earn money by licensing the well-known names. Together, they own and operate 1,500 stores.

  • Mr. Salter’s brands have “variable rent” contracts with Mr. Simon’s malls, meaning their rent goes up and down with their sales and, in a lucrative arrangement, most don’t have minimums. Mr. Simon also receives a percentage of royalties from sales associated with the brand names.

Authentic Brands’ purchase of the Sports Illustrated brand last year is viewed as a prime example of the company’s bottom-line approach to licensing. It sold the rights to operate the magazine and website to another company, which gutted the staff, while simultaneously putting the Sports Illustrated name on protein powder, CBD cream and swimsuits.

Mr. Salter is looking to grow his business to $20 billion. “If I could buy anything, I’d buy Reebok,” he said. “Hanna Barbera. I like the Flintstones, Yogi Bear. Got big ideas for Yogi Bear.”

  • United Airlines and its pilot’s union have reached an agreement in principle to avoid the furlough of nearly 3,000 pilot next month, when a protection against sweeping job cuts, a condition of federal aid, is lifted. In a message to its members, the union, the United Master Executive Council, said it would be “premature” to release details about the agreement because it remained tentative.

  • UPS plans to hire 100,000 seasonal workers — the same number as in 2019 and 2018 — ahead of what it expects to be a record holiday season, with package volumes picking up from October through January. UPS said Wednesday that over the past three years, nearly one-third of seasonal workers moved on to permanent jobs with the company.

  • The pharmaceutical company AstraZeneca halted global trials of its coronavirus vaccine on Tuesday because of a serious and unexpected adverse reaction in a participant, the company said. How long the hold will last is unclear, but it will allow the British-Swedish company to conduct a safety review. In a statement, the company described the halt as a “routine action which has to happen whenever there is a potentially unexplained illness in one of the trials, while it is investigated, ensuring we maintain the integrity of the trials.”

  • Lululemon, the athletic apparel retailer known for its $100 yoga pants, managed to eke out an increase in sales during a grim environment for clothing companies. The retailer said on Tuesday that net revenue in the three months that ended Aug. 2 rose 2 percent to $903 million, from the same period the year before, even as sales at company-operated stores plummeted by about 51 percent. Direct-to-consumer revenue more than doubled in the second quarter, helping Lululemon post a net profit of about $87 million. Net revenue had declined 17 percent in the first quarter, as the company grappled with temporary store closures.

Credit…via Ralph Santillan

The maximum length of a seafarer’s contract is 11 months. But with many countries refusing to let sailors disembark, many of them are approaching 18 months on their ships.

Last month, the International Transport Workers’ Federation, a seafarers’ union, estimated that 300,000 of the 1.2 million crew members at sea were essentially stranded on their ships, working past the expiration of their original contracts and fighting isolation, uncertainty and fatigue.

“This floating population, many of which have been at sea for over a year, are reaching the end of their tether,” Guy Platten, secretary general of the International Chamber of Shipping, which represents shipowners, said on Friday. “If governments do not act quickly and decisively to facilitate the transfer of crews and ease restrictions around air travel, we face the very real situation of a slowdown in global trade.”

Some crew members have begun refusing to work, forcing ships to stay in port. And many in the shipping industry fear that the stress and exhaustion will lead to accidents, perhaps disastrous ones.

“Owners made their contract so short for a reason,” said Joost Mes, the director of Avior Marine, a maritime recruitment agency in Manila. “The consequences are coming closer, and the margins of safety are getting less.”

Seafarers have to stay vigilant. Standing in the wrong spot on deck, or missing a step on a long, narrow ladder, could mean injury or death. A distracted watch officer could miss an approaching vessel until it is too late.

“I can see the fatigue and stress in their faces,” Mr. Santillan said in July from his ship, referring to the five men who worked with him on the deck. “I’m sure they can see it on my face.” He said they sometimes worked 23-hour days to meet their schedules.

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