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 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.
The 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.
Tiffany decided to sue LVMH over frustration that 10 months after the deal, it had not yet filed for deal approval in the European Union, a person familiar with the deal said.
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.
European markets showed broad gains on Wednesday, as investors looked beyond a rough day on Wall Street led by a tech selloff, and the suspension of one of the major coronavirus vaccine trials because of an unexplained illness.
European indexes were higher, with the benchmark Euro Stoxx 600 gaining 0.6 percent and Germany’s Dax climbing 0.9 percent. Asian markets finished lower. Futures on Wall Street suggested a gain when trading begins later in the morning.
Oil futures turned around after falling as much as 7 percent on Tuesday over concerns of weakening demand. Brent crude rose about $40 a barrel, up 1.3 percent, and West Texas Intermediate crude rose 1.8 percent. The yield on 10-year Treasury notes rose slightly.
The rebound in stocks signaled that investors were ready to resume taking on some risk after tech stocks led Wall Street lower on Tuesday. The Nasdaq fell more than 4 percent, while the S&P 500 lost 2.8 percent. It was the third consecutive daily decline, led by another sharp sell-off in the same giant tech companies that had led the market back into record territory last month.
Shares in AstraZeneca, the British pharmaceutical company that announced it would pause trials of a coronavirus vaccine because of a participant’s unexpected adverse reaction, fell 1.3 percent. The British government, responding to a surge in infections, was expected to announce tightened restrictions on social gatherings, limiting get-togethers to six people.
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.
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.”
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.
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. The trial’s halt will allow the British-Swedish company to conduct a safety review. How long the hold will last is unclear. 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.
Under Armour said in a filing on Tuesday that it planned to lay off about 600 employees, mostly in its global corporate work force, as the athletic apparel company grapples with fallout from the pandemic. The retailer said its board recently approved an increase to a restructuring plan that it announced in April, which includes charges tied to severance, contract terminations and “facility and lease termination costs.”
The board for Luby’s Inc., which owns the Luby’s Cafeteria and the Fuddruckers restaurant chains, said Tuesday that it had approved a plan to liquidate its business and distribute the proceeds to shareholders, after sales dropped during the pandemic. Luby’s could distribute $92 million to $123 million to its stockholders, assuming its businesses assets are sold, and would then dissolve the company. The company had announced in June a plan to sell the company, and said it might still pursue a sale if a compelling offer were made.
Lyft’s business has continued to recover somewhat from the steep downturn caused by the coronavirus pandemic, with rides down recently about 50 percent from the same period last year, the company said Tuesday in a regulatory filing. Rides down as much as 75 percent from a year prior when ridership plummeted in April as global travel declined and commuters began working from home. If the recovery continues, Lyft said it expected its third quarter losses would be less than $265 million.