The daily business briefing: November 8, 2019
1.
Juul Labs said Thursday it would stop selling mint-flavored e-cigarettes as it faces a mounting backlash against vaping, particularly among young people. Juul took the step voluntarily shortly after new government research showed Juul was the leading vaping brand among high school teens, many of whom prefer mint flavored e-cigarettes. "These results are unacceptable," Juul CEO K.C. Crosthwaite said. Crosthwaite added that the company was working to "earn the trust of society" after the eruption of what public health officials have called a teen vaping epidemic. Dropping mint-flavored e-cigarettes was the latest in a series of concessions Juul has made, after halting the sale of fruit and dessert flavors, first in stores and recently online. It also has replaced its CEO and vowed to stop advertising. [The Associated Press]
2.
Gap shares plunged by 7 percent in after-hours trading on Thursday after the company announced CEO Art Peck would be stepping down. Peck announced in February that Gap would split into two companies in 2020, one with its fast-growing Old Navy brand and the other with Gap and Banana Republic, as well as other brands such as Athleta. Peck will be temporarily replaced by Robert Fisher, the company founder's son who currently serves as non-executive chairman and was interim CEO in 2007. The clothing retailer also lowered its guidance for the full year as sales fell at its three major brands in what the company called a "challenging quarter." [CNBC]
3.
U.S. stock index futures struggled early Friday as investors continue to watch developments on efforts to ease U.S.-China trade tensions. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all were down, but by less than 0.1 percent. China released data Friday showing imports and exports declined less than expected in October as the U.S. and China negotiated toward a deal to end a trade war that has included tit-for-tat tariffs. The Dow and the S&P 500 posted new record-high closes on Thursday after the market got a boost from a spokesperson for China's Ministry of Commerce, who said the two sides had agreed to roll back new tariffs if they reach a "phase one" trade deal. [CNBC, CNN]
4.
Transformco, the company that bought Sears and Kmart out of bankrupcy, announced plans to close another 96 stores, including 51 Sears locations and 45 Kmarts, in February. Going-out-of-business sales will begin at the stores on Dec. 2, after Thanksgiving and Black Friday sales. The company also said it had lined up $250 million in new financing as it tries to rebuild a sustainable business. Stores previously slated to close will not participate in the holiday sales. Sears and Kmart have shut down more than 3,500 stores in the last 15 years, eliminating about 250,000 jobs. After the latest closings are finalized, the company will be left with 182 stores. [USA Today]
5.
The Justice Department has issued civil subpoenas to four major automakers demanding information on their deal with California to continue following the state's strict vehicle emissions standards, Reuters reported via a source briefed on the matter. The Justice Department is conducting an antitrust investigation, the latest clash between the Trump administration and California on environmental issues and other matters. The Trump administration said in September that California could not set its own emission standards. Ford, Honda, BMW, and Volkswagen then agreed to voluntarily continue meeting California's standards. The Justice Department it is seeking details on how that agreement was reached. BMW confirmed receiving the subpoena, Ford and VW declined to comment, and Honda said it was cooperating with the Justice Department. [Reuters]
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