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Claires has found a buyer just two weeks after filing for Chapter 11 bankruptcy protection. It announced on Wednesday, August 20, that it plans to sell its North America business and IP to Ames Watson, a private equity firm. Courts in the U.S. and Canada must approve the sale for it to proceed. The company began bankruptcy proceedings on August 6 with $690 million in debt. However, Claires hasnt disclosed the amount Ames Wilson would pay for the assets. It did state that the sale will significantly benefit its attempt to create value during restructuring. Finding a buyer has been a critical goal for Claires. At the time of filing, Claires CEO Chris Cramer said the company was in active discussions with potential strategic and financial partners to find alternatives to shutting down stores. Claires had claimed its North American stores would stay open during bankruptcy proceedings, but named 18 locations across the country that would likely close soon. It said another 1,236 stores could close by October 31 if the company didnt find a buyer in time. In light of the agreement, Claire’s has paused the liquidation process at a significant number of stores. The stores that will stay open could total as many as 950 in North America, though some stores in the region will continue with liquidation. We are pleased to have the opportunity to partner with Claire’s and support the next chapter for this iconic brand, Ames Watson CEO Lawrence Berger said in a statement. We are committed to investing in its future by preserving a significant retail footprint across North America, working closely with the Claire’s team to ensure a seamless transition and creating a renewed path to growth based on our deep experience working with consumer brands.
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E-Commerce
What if scientists could predict northern and southern lights like they could an eclipse? What if they could tell you where and when to be outside, within a narrow window, to see these vibrant displays? A new AI might make that possible. Today, IBM introduced Surya, an open-source foundational AI model that was developed in partnership with heliophysics scientists at NASA. Surya is like an AI telescope for the sun that can also look into the future, explained Juan Bernabe Moreno, director of IBM research in Europe, the U.K., and Ireland. Not only can Surya model what the sun looks like now, but it can also predict our stars future behavior. This is key for understanding solar flares, and whether they will produce coronal mass ejections (CMEs) and subsequent geomagnetic storms, which cause northern lights. That’s also important, as these can significantly disrupt life on Earth; a severe space weather risk scenario published by the London-based Lloyd’s insurance marketplace presented possible global economic losses of up to $9.1 trillion over a five-year period. Surya can model future active regions on the sun We are currently at or near solar maximum, which means our star is at the most active part of its 11-year cycle. This means increased sunspots, which are the source of large solar flares. These flares can subsequently trigger CMEs, whichwhen directed at Earthproduce geomagnetic storms. The increased aurora borealis (northern lights) activity over the past year has been the result of these geomagnetic storms. But these blasts of energetic particles, solar material, and magnetic fields can have negative effects as well. They disrupt communication, overload power transformers, interrupt GPS, present a threat to astronauts, and can even cause newly launched satellites to fall out of the sky. [Photo: IBM] Until now, scientists have struggled to predict solar flares. But Surya provides a visual AI model of the sun. Its a virtual telescope that can predict solar flares up to two hours before they occur, including the location, direction, and strength of the flare. Whats more, Surya provides active region emergence forecastingwhich can predict which regions of the sun will become active in the next 24 hoursand also gives a four-day lead time for the prediction of solar wind speed. Building an AI telescope Surya was trained on nine years’ worth of high-resolution images from NASAs Solar Dynamics Observatory. These are large (almost 4K resolution) images, in which every detail matters. That was a challenge. AI is lazy, Bernabe Moreno explained to Fast Company. Traditional AIif it sees many images and then sees a detail in one but in no othersit blurs the detail. But that wasnt an option with the sun, and so the team had to teach the model to include the details, rather than ignoring them. The key to Surya is that its not designed to be, say, a tool that predicts solar flares. All of these examples of what Surya can do are simply suggested use cases. It’s a foundational AI designed to model the sun in the present and future, which means the use cases for it are virtually limitless. The model is open-source and publicly available on Hugging Face for anyone to use, which the company hopes will foster scientific exploration. It has 366 million parameters; the smaller model size prioritizes performance and wide adoption. (For comparison, experts say ChatGPT-4 has as many as 1.8 trillion parameters.) IBM and NASA’s collaboration continues Theres more to come from the partnership between IBM and NASA. Surya is just one part of the IBM-NASA Prithvi foundational models, which aim to explore our planet and solar system. Prithvi uses Earth observation data to model weather and climate. NASA has identified five different science priorities, including astrophysics and planetary science, all of which eventually will have IBM-designed AI foundational models.
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E-Commerce
Target CEO Brian Cornell, who helped reenergize the company but has struggled to turn around weak sales in a more competitive retail landscape since the COVID pandemic, plans to step down Feb. 1.Minneapolis-based Target Corp. said Wednesday that Chief Operating Officer Michael Fiddelke, a 20-year company veteran, will succeed Cornell. Cornell will transition to be executive chair of the board.Cornell, 66, took the helm at Target in August 2014. In September 2022, the board extended his contract for three more years and eliminated a policy requiring its chief executives to retire at age 65.Cornell said the appointment followed several years of board vetting of both internal and external candidates. Fiddelke has overhauled Target’s supply network and expanded the company’s stores and digital services while cutting costs.“Mike was the right candidate to lead our business back to growth,” Cornell told reporters. “As I arrived at Target, I consistently relied on Michael’s strategic insights and sound judgment when making decisions. Michael has developed a deeper knowledge of our business than anyone I know.”Fiddelke told reporters he’s stepping into the role with “urgency” to reclaim the company’s merchandising authority.“When we’re leading with swagger in our merchandising authority, when we have swagger in our marketing, and we’re setting the trend for retail, those are some of the moments I think that Target has been at its highest in my 20 years,” he said.In May, Target announced that Fiddelke would lead a new office focused on faster decision-making to help accelerate sales growth.The change in leadership was announced Wednesday at the same time that Target reported another quarter of sluggish results. The company’s stock was down more than 8% in pre-market trading.Target reported a 21% drop in net income in the quarter ended Aug. 2. Sales were down slightly and the company reported a 1.9% dip in comparable sales those from established physical stores and online channels. Target has seen flat or declining comparable sales in eight out of the past 10 quarters including the latest period.Target, which has about 1,980 U.S. stores, has been the focus of consumer boycotts since late January, when it joined rival Walmart and a number of other prominent American brands in scaling back corporate diversity, equity and inclusion initiatives.Target’s sales also have languished as customers defect to Walmart and off-price department store chains like TJ Maxx in search of lower prices. But many analysts think Target is stumbling because consumers no longer consider it the place to go for affordable but stylish products, a niche that long ago earned the retailer the jokingly posh nickname “Tarzhay.”In fact, out of 35 merchandise categories that Target tracks, it gained or maintaining market share in only 14 during the latest quarter, Fiddelke told reporters Tuesday.Meanwhile, Walmart gained market share among households with incomes over $100,000 as U.S. inflation caused consumer prices to rise rapidly. Lower-income shoppers have driven customer growth at Target, suggesting it may have lost appeal with wealthier customers, according to market research firm Consumer Edge.“It’s probably not the best sign, especially because higher-income consumers continue to hold up a little bit better” during times of economic uncertainty, said Consumer Edge Head of Insights Michael Gunther.In March, members of Target’s executive team told investors they planned to regain the chain’s reputation for selling stylish goods at budget prices by expanding Target’s lineup of store label brands and shortening the time it took to get new items from the idea stage to store shelves. The moves would help the company stay close to trends, executives said.“In a world where we operate today, our guests are looking for Tarzhay,” Cornell told investors. “Consumers coined that term decades ago to define how we elevate the everything everyday to something special, how we had unexpected fun in the shopping that would be otherwise routine.”Before joining Target, Cornell spent more than 30 years in leadership positions at retail and consumer-product companies, including as chief marketing officer at Safeway Inc. and CEO at Michaels, Walmart’s Sam’s Club and PepsiCo America Foods. He came to Target when the company was facing a different set of challenges.Cornell replaced former CEO Gregg Steinhafel, who stepped down nearly five months after Target disclosed a huge data breach in which hackers stole millions of customers’ credit- and debit-card records. The theft badly damaged the chain’s reputation and profits.Cornell reenergized sales by having his team rev up Target’s store brands. It now has 40 private label brands in its portfolio. And even before the pandemic, Cornell spearheaded the company’s mission to transform its stores into delivery hubs to cut down on costs and speed up deliveries.Target’s 2017 acquisition of Shipt helped bolster the discounter’s same-day, store-based fulfillment services. Cornell also focused on making its stores better tailored to the local community.The coronavirus pandemic delivered outsized sales for Target as well as its peers as people stayed home and bought pajamas, furnishings and kitchen items. And it continued to see a surge in sales as shoppers emerged from their homes and went to stores. But the spending sprees eventually subsided.As inflation started to spike, Target reported a 52% drop in profits during its 2022 first quarter compared with a year earlier. Purchases of big TVs and appliances that Americans loaded up on during the pandemic faded, leaving the retailer with excess inventory that had to be sold off.In July 2023, as shoppers feeling pinched by inflation curtailed their spending, Target said its comparable sales declined for the first time in six years.Moreover, Target started losing its edge as an authority on style by focusing too much on home furnishings basics, and not enough trendy items, Fiddelke said.A customer backlash over the annual line of LGBTQ+ Pride merchandise Target stores carried that year further cut into sales.Although Walmart retreated from its diversity initiatives first, Target has been the focus of more concerted consumer boycotts. Organizers have said they viewed Target’s action as a greater betrayal because the company previously had held itself out as a champion of inclusion. Anne D’Innocenzio, AP Business Writer
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E-Commerce
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