It’s been a Sizzling week in Boston for sports. The Red Sox are still in the lead to capture the AL East (sorry, Os fans — the money is on the Red Sox), and the Patriots won their home opener without Mr. Brady. We are counting our sports Sizzles here in Beantown.
Speaking of Sizzles…
iPhone 7 sales
Word has it that iPhone 7 sales are breaking all kinds of records and that the snazzy, all-black version and the iPhone 7 Plus are sold out. Apple broke with tradition and said that it will no longer publish first weekend sales, but it didn’t have to spill the beans to let the world know how well it's doing. The carriers sort of let the iPhone 7 sales cat out of the bag. Sprint said that pre-orders are up four times over last year, and T-Mobile and AT&T said they have had similar experiences. As a result, Apple’s stock price has surged, having its best four days since 2014. It helps that your competition is, literally, blowing up, but still, the iPhone 7 appears to be a big Sizzle for Apple.
Counterfeit Card Fraud
EMV generally doesn’t seem like the type of thing that merchants may reflexively point to as a Sizzle, but its impact on counterfeit fraud may give them a reason to start. Nearly one year after the Oct. 1 liability shift date, fraud by way of counterfeit cards has dropped 54 percent at those retailers who have or are close to implementing EMV. Some merchants who have gone through the process have, literally, seen their counterfeit fraud drop by 90 percent overnight.
Talk about an ecosystem. SAP just plowed another $1 billion into Sapphire, the venture fund that both doles out the dough and then connects startups with at least $5 million in revenue to SAP customers. This brings the total under management to $2.4 billion. Over the years, Sapphire has backed 38 companies that have gone on to much greener — emphasis on the word "green" — pastures, such as Box, Fitbit and Apigee, which Google just acquired for a cool $625 million. Sapphire’s GM said that Sapphire made more than 200 introductions to SAP customers last year and that it typically writes a $10 million–$25 million check, in what is typically a B round or later. Nice double Sizzle.
Samsung Galaxy Note 7
Yikes. Just when you think that things couldn’t possibly get much worse, they have possibly gotten worse. It’s pretty bad when a company tells its consumers to return a product. It goes from bad to worse when flight attendants and gate agents tell passengers over the loudspeaker that no way, no how can they bring a Galaxy Note 7 phone that’s powered on onto the plane, and if you have it in your checked luggage, remove it. Then, it goes from worse to much worse when the U.S. Product and Safety Commission says, "Cut the crap, we are issuing a full recall." It claims to have received 92 reports of batteries catching fire and apparently is not satisfied with the pace with which Samsung’s own recall efforts are moving. The message from the U.S. government: Consumers run as fast as you can back to wherever you got your phone and turn it in. Consumers are given the option to request a replacement, a new battery or a refund. Our money is on the refund.
Big Business And Cybercrime
A new report suggests that a single incident of cybercrime can cost a large company, on average, $861K. It is one of the reasons that New York Governor Andrew Cuomo is requiring banks and insurance companies in NY to adopt new cybersecurity guidelines. The Gov says these new regulations are a first, and NY is a natural place to start given the large number of banks and insurance companies that operate in the city. Five principles are designed to protect consumer data and financial systems from attack by those cyberwarriors who wish them harm and big businesses from having to open their checkbooks and write the really big ones they seem to be writing today.
In just the week since this story broke, we saw Wells Fargo apologize for its sales shenanigans yet admit no wrongdoing, learned that the exec who ran the department of shenanigans there was paid $125 million for doing a great job and heard the CEO say, “H***L no, I won’t go.” Later in the week, we heard that activist investors are calling for change and that the Fed has launched a probe into what happened. The shame of this massive Fizzle is that the cross-selling that all businesses do to drive new sales has been turned into something that now has a slime factor built into it. Thanks a lot, Wells. We’d rather you keep your Fizzle to yourself.
Nasty Gal: The Sizzle/Fizzle Split Decision
Usually, when it comes time to hand out the Sizzles and the Fizzles in any given week, it’s a pretty clear job.
There is no way to argue that the iPhone 7 isn't a Sizzle, despite all the grousing. Goodbye headphone jack; thank you for playing. Now, please take your place in Apple’s tech graveyard with the 3.5-inch floppy and DVD drive.
There also isn’t any way to argue Wells Fargo’s epic fail(s) over the last week were a Sizzle by any definition of the term. Well, it was sort of a Sizzle for the CFPB since, going forward, Director Richard Cordray will get to answer any and all questions about his organization’s legitimacy or tactics with the phrase, “Hey, remember that time we caught Wells Fargo opening 2 million fake accounts?" But for Wells Fargo, its executive team, its customers and perhaps even all big banks, definitely a Fizzle.
But every once in a while, the rarest of special little snowflakes drifts into our view — a company and innovator who have somehow managed the simultaneous Sizzle/Fizzle. It’s not easy to have things go both wrong and right at the same time, but some have managed to master that craft.
And this week, that special honor goes to edgy retailer Nasty Gal and its meme-generating founder, Sophia Amoruso. Nasty Gal is having some difficulties, it seems, and is flirting with a Fizzle if it can’t find itself a buyer. And while, normally, having the brand one founded Fizzling would be something of a problem for the #Girlboss who founded it, somehow the issues facing the firm she founded don’t seem to be holding Amoruso down.
So, how’d Nasty Gal manage the 7-10 split?
Nasty Gal's Rough Year
The news broke this week that Nasty Gal is looking for a buyer and that, so far, Revolve is the leading candidate to be said buyer. Those reports come care of Women’s Wear Daily, which spoke to multiple anonymous sources within the firm that all seemed to concur that Nasty Gal is critically low on funds, unable to raise additional funding and in need of a buyer.
Neither Nasty Gal nor Revolve have any official comment at this time.
About a year ago, Nasty Gal was the hottest of the hot retail startups. The firm snapped up $16 million in Series C funding in a round led by one-time Apple retail sage Ron Johnson. The firm’s next big expansion into physical stores was on the horizon. Amoruso was no longer running the brand. Amoruso's second-in-command Sheree Waterson has been officially manning the helm since 2014 when the founding CEO left to become the full-time head of the #Girlboss movement.
But more on that in one second.
This year has not been quite as kind to Nasty Gal as 2015 was. A 90s-inspired collection co-headlined with Courtney Love met to a chilly reception, revenues have been down and layoffs have been happening. All of that "strategic restructuring” has equated to 10 percent staff cuts and attempts to drop overhead in response to also-edgy fast-fashion players with lots of scale and the ability to react to changing trends in fashion in real time — usually at a lower cost for shoppers.
Plus, all of that #Girlboss goodwill took a hit since Nasty Gal has been been beset with repeated accusations that it cheated employees of benefits. The main benefit the house that the girl boss built is accused of skimping on?
Nasty Gal did manage to get two physical stores opened in California, but it looks like expansion turned out to be a much more expensive add-on than NG was expecting. And it looks like any plans for further physical growth are on hold for when and if the firm finds a buyer.
So, definitely Fizzle territory, right?
Sure — for Nasty Gal the brand.
Sizzling Like A (Girl) Boss
Amoruso hasn’t been involved in the day-to-day of Nasty Gal since 2014, when her book "#Girlboss" became a bestseller and she decided her talents were needed elsewhere — namely, in leading the empowerment movement for women everywhere.
She now hosts the Girlboss podcast, is the author of two bestselling books (the other one is "Nasty Galaxy"), is rumored to be constructing a two-person TED Talk with Lena Dunham and is the headliner in this month’s Success magazine.
Her tagline: "Sophia Amoruso will help change your life."
Sure, she’s getting divorced, but apparently, she signed a very robust prenup so her personal fortune of $280 or so million is safe with her (according to Forbes, Amoruso is among the richest self-made women on Earth; she is also the second-youngest — only Taylor Swift is both richer and younger). A fortune, we should note, that will soon be quite a bit larger because Netflix is making a show about her life.
Called — shockingly — "Girlboss," the Netflix series will follow Amoruso’s tale of how she went from being a dumpster diver who rejected capitalism to being, well, the person who built a fashion brand that, at its height, brought in $300 million a year in revenue.
These things all argue for a Sizzle.
So, hats off to the Nasty Gal team for being one of the week’s better Sizzles and Fizzles. A rare treat, but then, what would we expect from a Girlboss?