Why The Next Ben & Jerry’s Failed
Today’s highlights: The Warby Parker of medical uniforms gets sued. Why Black-owned beauty brands face backlash. And can By Chloe do business without Chloe?
MANAGEMENT
They had Oprah and Disney and dreams of being the next Ben & Jerry’s, but Ample Hills failed anyway: “It had nothing to do with the pandemic: Even as annual sales had grown, reaching nearly $10.7 million at their peak, so had the losses. Over 2018 and 2019, the company lost about $13 million. In June 2020, Ample Hills sold for just $1 million to perhaps the unlikeliest of buyers — Schmitt, an Oregon manufacturing company that makes laser scanners and sensors for propane tanks. What happened to the ice cream company the New York Times dubbed ‘Brooklyn’s Most Beloved’?”
“Interviews with [founders] Smith and Cuscuna, along with more than a dozen employees, from scoopers to executives, reveal the perils of what can happen when a hot startup puts growth ahead of business fundamentals.”
“Disney’s interest also helped the company attract investors, he says, which created ‘a runaway train of raising and raising and growth and growth.’”
“It was a fairy tale,” says Greg O’Connell, one of Ample Hills’ biggest investors. “They were kind of living in a dream world because their marketing was so great.” READ MORE
STARTUP
A new app, AllCart, aims to help customers grocery shop in a post-Covid world: “When the AllCart mobile app launched on iTunes and Google Play this week, it became one of the first of its kind to help consumers find the best grocery deals in a post-Covid world. AllCart detects the locations of opted-in users and shows supermarkets nearby, along with price range averages for inventory and information about which stores are offering the best sales. The app also provides users with price charts that show additional charges from Instacart, Shipt, Peapod, and other delivery services, including Amazon, Target, and Walmart.”
“AllCart Founder and CEO Stash Harrison says his team is focused on delivering an app that will save its users money, but time savings is important, too.”
“Like some competitors on the app marketplace, AllCart includes features like a built-in shopping list that people can use to see where the items they need to purchase are currently on sale.” READ MORE
BUSINESS TRAVEL
You may soon need a vaccine passport to travel: “A vaccination pass or passport is documentation proving that you have been vaccinated against Covid-19. Some versions will also allow people to show that they have tested negative for the virus, and therefore can more easily travel. The versions being worked on now by airlines, industry groups, nonprofits and technology companies will be something you can pull up on your mobile phone as an app or part of your digital wallet.”
“IBM has been developing its own Digital Health Pass that would enable individuals to present proof of vaccination or a negative test to gain access to a public location, such as a sports stadium, airplane, university or workplace.”
“The pass, built on IBM’s blockchain technology, can utilize multiple data types, including temperature checks, virus exposure notifications, test results and vaccine status.”
The World Economic Forum and the Commons Project Foundation, a Swiss nonprofit group, have been testing a digital health passport called CommonPass, which would allow travelers to access testing or vaccination information.” READ MORE
FINANCE
Black-owned beauty brands face backlash when their owners sell to non-Black investors: “Lisa Price, president and founder of Carol’s Daughter, which she sold to L'Oréal in 2014, puts it plainly: ‘Unfortunately, in our community, if an African American person builds something and sells it to another company that isn’t [owned by other] African Americans, they’re viewed as selling out and abandoning the community, when that may not actually be what is occurring.’ She points out a hard truth — that investment for brand expansion is less available from Black investors.”
“‘When Unilever acquired Sundial Brands, we created together the New Voices Fund, a $100 million initiative to invest in and empower Black women entrepreneurs,’ says current Sundial Brands CEO Cara Sabin.”
“Sabin, who is Black, also notes that Shea Moisture is run by a majority Black executive team.” READ MORE
MARKETING
A startup, Figs, that considers itself the Warby Parker of medical uniforms and uses aggressive advertising to sell form-fitting scrubs directly to nurses and doctors is being sued: “It is battling a lawsuit that takes aim at its flashy marketing and could sow doubt with customers drawn to its distinctive styles. The litigation is a particularly contentious example of the legal pushback startups face from legacy companies—increasingly the norm over the past decade for disruptive new businesses from Uber to Airbnb, experts said.”
“Careismatic Brands, a leader in medical apparel with brands of scrubs like Cherokee and Dickies, has pursued litigation against Figs since 2019, saying the smaller company has misled health-care workers with boasts about how its products help keep them safe.”
“Figs’s advertising and social-media presence look more like those of a fashion brand than a medical-apparel maker, including sometimes irreverent videos and images of people wearing Figs while getting out of helicopters, skiing and skateboarding.”
“Its online-sales model, aimed at selling directly to medical professionals, contrasts with Careismatic’s heavy reliance on bricks-and-mortar retailers.” READ MORE
OFFICE SPACE
Yelp is listing its entire San Francisco headquarters for lease: “Yelp appears to be leaving its South of Market corporate headquarters at 140 New Montgomery St., becoming the latest tech company to re-examine its space needs in the city. All 14 stories it occupies at the 26-story historic art deco skyscraper — a total of 161,876 square feet — were listed as available for lease Wednesday. Pembroke, a privately held real estate investment company, owns the building. CBRE is marketing the Yelp space along with a ground-floor retail space previously occupied by Trou Normand and four additional stories as ‘potentially over 200,000 square feet of headquarters space,’ according to a marketing brochure I obtained.”
“In a statement to the San Francisco Business Times, a Yelp spokesperson confirmed the online review company is reducing its real estate footprint.”
“‘With more employees working remotely we’re reducing some of our footprint in San Francisco, but we will still maintain our HQ office there,’ the spokesperson said, adding that the company plans to continue to operate with ‘a significant portion of our team working remotely on a full-time basis, or for part of the week.’” READ MORE
INTELLECTUAL PROPERTY
Celebrity chef Chloe Coscarelli is fighting the bankrupt parent company of plant-based restaurant chain By Chloe over the brand’s trademark: “Ms. Coscarelli and her company, Chef Chloe LLC, agreed to a court hearing later this month so that a bankruptcy judge could determine the ownership of the trademark of By Chloe, the fast-casual chain she co-founded but left behind after a dispute. Representatives for By Chloe’s owner BC Hospitality Group argued during a virtual hearing Wednesday that Ms. Coscarelli is trying to take away the company’s rights over the trademark, one of the most valuable assets of the estate.”
“BC Hospitality Group filed for chapter 11 bankruptcy protection in December to ease a sale of the restaurant business, which has about a dozen corporate-owned locations, after it faced a cash crunch brought on by the coronavirus pandemic.”
Patrick Arenz, a lawyer representing Ms. Coscarelli, who gained fame after winning on the Food Network show ‘Cupcake Wars’ in 2010, said his client is questioning whether someone can do business using her name without her consent.”
“Ms. Coscarelli, the company’s largest unsecured creditor, has signaled she was exploring a bid to acquire the chain herself.” READ MORE
THE COVID ECONOMY
The European Union is confronting a double-dip recession: “Europe is now likely to suffer continued economic contraction over the first three months of 2021 and perhaps into the early part of the next quarter, as governments are forced to maintain restrictions on commercial life, according to a report released Tuesday by Oxford Economics in London. ‘There is definitely a risk that vaccine distribution continues to be disappointing,’ said Tomas Dvorak, a eurozone economist with Oxford Economics. ‘There is risk that the second quarter will also get quite bad.’”
“Previously, Oxford and other economists had forecast stagnation for the first quarter of the year, followed by a marked improvement in the spring.”
“That view was guided by the assumption that vaccines would be distributed widely, allowing authorities to lift restrictions imposed to choke off the spread of the coronavirus.” READ MORE
REAL ESTATE
Branden and Rayni Williams, renowned Beverly Hills real estate agents, have started their own agency: “For 10 years, Mr. and Mrs. Williams hustled for Hilton & Hyland, the storied real estate firm for which they amassed $700 million in sales in 2019 alone. In November, they quit to strike out on their own. While their brokerage, the Beverly Hills Estates, has deep roots in the rarefied 90210 ZIP code, it also embodies a way of life whose allure, they feel, no pandemic or 13.3-percent state income tax rate can dim.”
“Bruce Makowsky, a developer, called the couple ‘without a doubt, the two best brokers in Los Angeles.’”
“He enlisted the Williamses in 2017 to sell a 12-bedroom Bel Air mansion with a Louis Vuitton-branded bowling alley for $250 million, making it, at the time, the most expensive home in America.”
“After three years, the Williamses sold it to a local businessman for $94 million, an outcome that, given the circumstances, suited Mr. Makowsky just fine. ‘They sell the dream of living in California,’ he said.” READ MORE
THE 21 HATS PODCAST
Episode 47: Optimism in D Minor: This week, William Vanderbloemen tells Karen Clark Cole and Dana White that he’s cautiously optimistic about 2021 because his clients are cautiously optimistic and because he’s expecting lots of turnover as the pandemic recedes. William explains how he uses a “Frankenstein” customer relations system to track what his clients read on his website and to sense when those clients are getting ready to make a hire. The system then prompts the Vanderbloemen team to give the client a call. We also talk about why Karen is tired of being a best-kept secret and how Dana handles customers who have to be fired. Plus: there’s a new tax credit you should know about that William calls “pretty incredible” but that seems to be getting lost in the PPP shuffle.
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