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Exclusive: The biggest mall owner in the U.S. hopes to create a new sales holiday as inflation surges

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David Simon, chairman and chief executive officer of Simon Property Group

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David Simon, the chief executive officer of the biggest shopping mall owner in the country, wants to create a new type of annual shopping extravaganza as consumers are increasingly feeling the pinch of inflation just about everywhere they go.

Think Amazon Prime Day, but for retail outlet centers.

This event, dubbed “National Outlet Shopping Day” by Simon Property Group, is meant for people seeking out deep discounts on everything from new clothes and sneakers to sunglasses and luggage, Simon told CNBC in a recent Zoom interview.

The first iteration runs this weekend at the real estate owner’s 90 premium outlets and Mills-branded outlet properties in the U.S. About 300 retailers from J.Crew to Banana Republic to Puma will be taking part by offering deals exclusively at those locations, according to Simon Property. It’s one way that the mall owner is working with its tenants to lure cash-strapped consumers out to shop as budgets are squeezed and retailers are more competitive for shoppers’ dollars.

Retailers from Target to Gap have seen their inventory levels balloon as backlogged merchandise arrives from overseas at the same time consumers are shifting their spending away from so-called pandemic categories such as sweatpants and office furniture.

CNBC spoke with Simon, as well as Gary Duncan, president of Simon Property’s Premium Outlets and its Mills business, and Mikael Thygesen, chief marketing officer, about this weekend’s event, the state of the retail industry and the American consumer.

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The conversation below has been edited down for clarity and brevity.

Simon Property Group’s Sawgrass Mills outlet center in Sunrise, Florida.

Source: Simon Property Group

Why did Simon Property Group create this shopping holiday and decide to run it over this weekend?

Simon: The idea was in the works in early 2019. And then we couldn’t quite get it all together. We were going to do it in 2020, and Covid killed our plan. So we’ve always wanted to do this.

The genesis really was to give back to the consumer in terms of our special promotions and deals. But also to reinforce the Simon outlets have great brands. And we want them to be top of mind. We’re going to do this annually — and with some of the inflationary pressures this couldn’t come at a better time.

Thygesen: We’ve timed it between the traditional promotional windows, so Memorial Day is over and back-to-school hasn’t started.

What has the reception been like from your retail tenants to participate with discounts and other incentives to lure people to come out and shop?

Simon: We have 300 retailers, but I hope next year we’ll have 1,000. We expect to build on it each and every year. And obviously it’s our day, but we welcome participation from any outlet owner that wants to participate.

How have your outlet centers been performing relative to Simon Property Group’s namesake shopping malls, particularly against this backdrop of red-hot inflation and with more consumers seeking out savings?

Simon: We’ve been really, really pleased with our full-price business. Our outlet business has been extremely steady and growing as well. We have outlets that are in major tourist markets — Desert Hills, Sawgrass Mills — and we’re starting to see them reach record [sales] again because we see more than domestic tourism coming back. I’m starting to see international tourism come back.

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Frankly, I think the U.S. is where the action is. We’ve got a lot of great things going on in this country. I think you’re going to see sourcing come back. Look at Intel, their commitment. Tesla. You go down the list, less reliance on China. And we’re seeing this from international retailers that want to grow in the U.S. and are saying this is the better place to be.

We’re seeing a lot of retailers figuring out how to manage extra inventory right now. Are you seeing any of them looking to offload those goods through their outlet businesses?

Duncan: What we saw earlier in the year and even for the better part of 2021 was that tenants didn’t have enough product because they had supply chain issues that were coming from Asia — in the apparel and footwear categories, certainly. And that has largely been eliminated.

Now, people are spending, but they’re cautious about where they’re spending and they want to have their money go further. The outlets are going to continue to be a very valuable resource for them and for us. But we have not heard anything about retailers having a big glut of inventory. We are doing some pop-up stores with certain guys that do have that problem, but I don’t see it being widespread.

Simon: I’ll reinforce what Gary says: It’s really selective here and there. And it’s more bets on what’s going on now. You see it from a lot mall retailers if you’re [in the business of] dressing up, jewelry, and have the event stuff, you’re doing really well. Remember when we thought the early 2020s were going to be for going out with friends? It didn’t quite happen. It’s happening this year.

If retailers have a little excess inventory — because as Gary said, the consumer is a little more cautious — that’s actually good for the outlet business. We’ll see if that really transpires, but it hasn’t been, by any means, widespread.

What other changing consumer behaviors are you observing?

Simon: We’re very sensitive to what the consumer is going through, and so we want to figure out how to stretch their dollars. There’s also a shift toward dressing up. We’re seeing really good demand on that front.

Clearly, the higher-income consumer hasn’t changed their behavior. The ones with low incomes are under pressure, and that’s what we’re focused on. That consumer is of concern, and we’re trying to figure out how to help.

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Exclusive: Ben & Jerry's sues parent company Unilever over sale of Israeli business – TalkOfNews.com

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A tub of Ben and Jerry’s ice cream, manufactured by Unilever Plc.

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Ben & Jerry’s is suing parent company Unilever to stop the sale of its Israeli business to a local licensee, a move the consumer products giant said would keep the ice cream products available in Israel and its occupied territories.

Ben & Jerry’s said in a lawsuit filed in federal court in New York Tuesday that Unilever’s decision was made without the approval of its independent board, which has the primary responsibility for safeguarding the integrity of its brand’s name.

A judge on Tuesday denied Ben & Jerry’s application for a temporary restraining order but ordered Unilever to show cause by July 14 for why a preliminary injunction should not be issued. 

Representatives for Unilever and Ben & Jerry’s did not immediately respond to requests for comment.

The suit marks the latest development in a controversy that was set off last year when Ben & Jerry’s said it would stop sales in the West Bank territory occupied by Israel since the Six Day war in 1967.

Israel’s government sees the occupied territories as part of its economy and any efforts to boycott business in the areas are seen as applying to the country. Stopping sales of the ice cream in the occupied territories would have ended sales throughout Israel.

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In its suit, Ben & Jerry’s said that its brand is “synonymous with social activism” and that as part of its deal to be acquired by Unilever in 2000, it had reserved the “primary responsibility for safeguarding the integrity” of the Ben & Jerry’s brand through its independent board.

It said that Unilever had publicly recognized the brand’s right to make decisions about its social mission. But then last week, Ben & Jerry’s said Unilever “abruptly reversed course.” 

Unilever announced last week that it sold the Israeli branch of its Ben & Jerry’s business to American Quality Products, which licenses the ice cream products in Israel. American Quality said it would continue selling Ben & Jerry’s under Hebrew and Arabic names throughout Israel and its occupied territories. 

Despite the right of Ben & Jerry’s independent board to make decisions about the brand’s social mission, Unilever said in announcing the sale that it had the right to enter into the agreement because it had reserved primary responsibility for financial and operational decisions.

After Unilever announced the sale, Ben & Jerry’s said in its lawsuit that its board held a special meeting on Friday and voted to sue over the decision.

In an interview with CNBC after last week’s move by Unilever the Israeli licensor, Avi Zinger of American Quality Products, said any potential lawsuit would be “between Unilever and Ben & Jerry’s. I already have a deal.”

— CNBC’s Candice Choi contributed to this report.

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Exclusive: Manufacturing a better way to reduce waste – TalkOfNews.com

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The post Manufacturing a better way to reduce waste appeared first on Sage Advice United Kingdom.

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Exclusive: 3 Home Improvement Stocks That Can Renovate Your Portfolio – TalkOfNews.com

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3 Home Improvement Stocks That Can Renovate Your Portfolio

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During a bear market, home improvement stocks have historically been solid defensive plays

The housing sector is slowing down. Rising mortgage rates are having the predictable effect of cooling down demand.



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Or are they? While homeowners may not be able to get the same premium they could command just one year ago, there is still an ample supply of homes on the market. And once these homes change hands, new homeowners will be ready to make their new house their own.

However, that’s not the only catalyst for home improvement stocks. Homeowners who are deciding to “love it” rather than “list it” are likely to put some money into one of their largest investments as they wait for the housing pendulum to swing back in their favor.

In this article, I’ll give you three home improvement companies that continue to generate strong revenue and earnings. And two of these companies are also members of the exclusive Dividend Aristocrat club. These are companies that have increased their dividend for at least 25 consecutive years.

If that’s the kind of balance of growth and income that appeals to you, it may be time for you to consider these three home improvement stocks.

Lowe’s (LOW)

Lowe’s (NYSE: LOW) stock is down about 30% in 2022. That’s larger than the broader market. But in the last month, the stock is showing signs of forming a bottom. And with the stock near its 52-week low, it may be time for investors to take a closer look at the stock.

The driving force for that sentiment may be the company’s earnings. In May, Lowe’s closed out its fiscal year. Revenue growth came in at an uninspiring 1% growth. But earnings were up 19%. Even if companies are heading into an earnings recession, a P/E ratio that is slightly below the sector average means it’s likely that Lowe’s will be able to post growth, albeit perhaps slower growth, in its next fiscal year.

And Lowe’s offers investors a rock-solid dividend that it has increased in each of the last 48 years. The current payout is $3.20 per share on an annual basis, and the company has averaged 17% dividend growth over the past three years.

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Home Depot (HD)

Just as investors can debate Coca-Cola (NYSE: KO) versus Pepsi (NASDAQ: PEP) among consumer discretionary stocks, they can frequently plant their flag with Lowe’s or Home Depot (NYSE: HD) when it comes to home improvement stocks.

To be fair, neither of these stocks looks like a bad selection for investors who are concerned about a recession. Home Depot delivered a strong earnings report in May 2022. Revenue was up 3.8% and earnings per share were up 5.8%. The company delivered strong same-store sales growth that was due in large part to its relationship with professional contractors.

Of the three stocks in this article, Home Depot has the largest dividend yield (2.68%) as well as the largest payout ($7.60). And while it’s not a dividend aristocrat the company has increased its dividend in each of the last 14 years.

Sherwin Williams (SHW)

Paint is one of the most cost-effective ways to give a house a refreshing update. And as we move into the fall, homeowners attention turns to finding that perfect swatch of paint to transform a room. That’s enough to put Sherwin-Williams (NYSE: SHW) on my radar and perhaps yours as well. Historically the current quarter and the following quarter are the company’s strongest in terms of revenue.

But the skeptics will point to the fact that earnings have been a mixed bag. The company has missed analysts’ expectations in two of last four quarters and in the other two the gains were on the tepid side. And I’ll concede that a mixed earnings outlook will probably bring current price targets down from their 30% upside.

That being said, SHW stock offers both growth and income which is appealing in this volatile market. Sherwin Williams dividend yield of 1% isn’t likely to make income investors swoon. But the company does payout $2.40 on an annualized basis. The company also sports a three-year dividend growth of 24.26% and has increased its dividend in each of the last 44 years.

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