Tag Archives: College Life

Why Lululemon is The Perfect Buy For Nike

Lululemon is an athletic-wear brand with a primary focus on yoga apparel.  Having captured the attention of young women, Lulu has become quite popular across the globe.  Lulu has been apparent in my own life because of my active mother and because of the [unfortunate] leggings trend that has nestled its way into the hearts of seemingly every woman.  Lulu has been so successful because of the balance it has struck, making it’s clothing sensible and stylish while still maintaining it’s athletic roots.

Over the past year, however, Lulu has seen a slight fall from grace.  In 2013, the company was under fire due to a recall for a line of yoga pants that were too sheer.  In response, the founder of Lululemon Athletica, Chip Wilson, stated that customer’s fat thighs were to blame for the yoga pants being see-through.  As a result, Wilson relinquished his chairman’s seat and Lulu’s CEO, Christine Day, stepped down.  The company has since wilted.  Considering Lululemon’s status in pop-culture and their current lack of direction, it is primed for acquisition by none other than the world’s leading athletic-wear brand, Nike.

Nike is no stranger to acquiring other brands, as it owns Converse and skateboarding company, Hurley (Nike also purchased Cole Haan in 1998 for $95 million and sold it in 2012 for $570 million).  Right now, Lulu lacks a sense of direction.  New CEO, Laurent Potdevin, has filled the holes with empty remarks on reclaiming the company’s creative destruction in the market, but the truth is Lulu is floundering.  Through Nike’s experience in operations and marketing, it would be able to right this ship.  Lulu would gain access to some of the best manufacturing plants and Nike’s rebranding of the company would bring back the positive image it lost hold of.

Financially, this purchase would make sense as well.  Lululemon is a direct competitor of Nike.  Buying the company would give The Swoosh increased market control and better pricing power.  Moreover, Lulu is trading at a relatively inexpensive share price.  In 2013, before the company ran into turmoil, Lulu was trading as high as $82 per share.  If Nike attempted to buy the brand at this time, it would not have been feasible, as Lulu’s valuation would have been way too high.  Since the debacle, though, Lulu is trading around $44 per share, making their valuation much more affordable.

As bad as Lululemon’s situation may seem, their immediate value to Nike would be tremendous.  In terms of revenue, Lulu has gone from annual sales of about $453 million in 2010 to $1.6 billion for 2014.  This indicates that Lulu is still growing and that it is still relatively popular.  Lastly, while Nike does a fantastic job of marketing their clothes for both athletic an street-wear use, there are just certain styles that other clothing company’s manufacture or market more effectively.  For example, on campus I never see girls wearing Nike leggings, but I always see them rocking Lululemon’s, recall or not.  Its not that Nike’s yoga pants are poor quality, its that Lulu’s ability to be trendy and different has made their yoga pants more attractive.  Adding their product to Nike’s line would only make Nike that much more profitable.

Maxwell

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When Life Gives You Lemons…Teach Children

One of the major programs that is integral to the George Washington University School of Business is Lemonade Day.  The program is designed to immerse first year business students (myself) in an environment with elementary school children where we literally teach them the proper tools necessary to make a lemonade stand.  The idea is that by learning about budgeting, accounting, profit and marketing, these fourth through eight graders will acquire the necessary tools to create and run a successful stand for the official Lemonade Day D.C.  This program, which was actually introduced to the metropolitan area by a current School of Business student, is exactly the type of development I was referring to in my Dare to Dream post where I stressed the importance of programs that foster out nation’s young entrepreneurial minds.  This past month, I was fortunate enough to try my hand at teaching these very principles.

I traveled to Roots Public Charter School, which educates first through eighth graders. The trek was about thirty to forty-five minutes in which I recognized absolutely nothing; this is either a testament to how insular GW is or to how little I get out. I expected to have children anxiously waiting for our arrival. I can remember how enamored I was with older kids at that age, so I was sure these children would be similar. I thought the students would be eager to learn about the primary business principles necessary to run a successful lemonade stand, and I certainly believed they would be willing to let me teach them.  I was wrong, no doubt.

For starters, Roots is a tiny little school off the corner of a busy street. As I walked in, my immediate thought was how little funding the school must have. Not to say the school could not provide for its students, but the classroom seemed to double as a cafeteria/ recreational space and it was cramped.  Furthermore, the primarily African American students appeared to have no real interests in the fact that several college students were standing before them.  They continued to giggle and play around like any elementary school kids would do, and realistically, I should have expected this.  Knowing myself, a reserved and shy character, I knew handling these kids and keeping them on task would be a bit difficult.

When we were introduced to the array of students, it was not clear whether they had known we were coming or had prepared for our arrival. About six tables were set up throughout the room.  We helped the students grab chairs from the closet and we proceeded to form small groups so each of us could teach the lessons to a more intimate audience.  Fortunately, I sat down with two students, Jalaw and Nikai, both fourth graders who were very much interested in the project.

Jalaw and Nikai were great. Like any fourth grader, when I mentioned the idea of a lemonade stand, their imaginations went one thousand miles per hour thinking of creative themes and designs for their storefront (Nikai wanted to make the lemon on their poster look like a diamond). Their eagerness and excitement definitely helped me because it made my job of asking them questions a lot easier. It was not hard to get them thinking about logistics, supplies, budgeting, etc. because I made the ideas tangible and relevant.

For example, when talking about logistics, Nikai wanted to know how much their lemonade should cost. I didn’t answer, I asked the question right back.  He said, “Well, last time I had a lemonade stand we charged people three dollars and I made a lot of money.” While I tried to remain encouraging and positive, I attempted to steer him away from that price, as it was clearly too high given the amount of cups they were trying to sell. Instead, because they had been talking about playing music at their lemonade stand, I told them this, “Let’s put it like this: Who do you plan to sell to? Probably every day people like you and me, right? Especially if you’re going to be selling lemonade outside of a library, do you think normal people are going to pay such a high price for lemonade? If Jay Z came walking down the street, then I’d be with you guys…we could probably charge him $100,000 for lemonade!” By relating a business principle to something they could easily grasp and easily resonate with, they were able to laugh and understand that their price would most likely be too high. This made my time maneuvering in and out of topics much easier and a lot more entertaining.

The best part about Lemonade Day, though, was how I could see the light bulbs turning on in their heads. This was evident with Jalaw. As I continued to teach the two, the way Jalaw was picking up on things that I was saying and then responding back with relevant questions of his own suggested that the wheels in his head were turning. When we reached the point to talk about profit, I did not have to go through it with them step-by-step because Jalaw was working through it by himself with the information we created together. This was reward enough for my Lemonade Day experience. I realized (A) that any person can grasp these principles given the right opportunities, and (B) my skill of being a developer is real. As I taught Jalaw and Nikai, I realized that I do enjoy bringing out the potential in others. I created a stimulating and challenging environment for someone and I saw him improve because of it. If I received nothing else from Lemonade Day, at least I know I want to have more gratifying feelings similar to that.

I cannot stress enough the importance of this program.  While it was definitely a foreign experience for me and the rest of the students, I believe it had a greater, more lasting effect on the children.  I can remember back to my middle school days in which I attended a private school.  We didn’t have any programs that gave us a hands-on experience with any real-life scenarios, like business.  Honestly, I had no idea what budgeting was, but clearly, how hard could it have been to learn?  Jalaw and Nikai now have a head start on thousands of kids across the United States.  They had the opportunity to practice these important aspects of the business world early on and now their wildest aspirations of making a soda company and t-shirt line are more real than when I was ten years old and dreaming of creating a newspaper.  Imagination is a powerful tool that should always be accessible no matter what age, but when it is paired with knowledge the combination is creatively destructive.  Kids like Jalaw and Nikai, who can dream while remaining pragmatic, are the future of our nation’s innovation and financial prosperity.

By the way, the two surpassed their financial goal by making $149.

Maxwell

 

J. Crew Going Public Once Again?

J. Crew, a brand that is one of Michelle Obama’s favorites, a brand that is defined by utility; contemporary style and an essence of preppiness has been rumored to be in talks with financial giants, such as Bank of America and Goldman Sachs, to refinance their debt and possibly become a publicly traded company, once again.  Just several years ago, J. Crew went private in a $3 billion deal with investment partners, TPG Capital and Leonard Green & Partners.  The reason being for such a departure from the trading floor was a decrease in sales.  During that year’s third quarter, net income had fallen by 14% due to weaker women’s clothing sales (J. Crew must certainly be grateful for our First Lady’s endorsement).  Moreover, stores that were open for at least one year saw their revenue fall by 1%.  In terms of the financial sector of the retail industry, J. Crew has been inconsistent; perhaps this is due to the constant shuffling of chairs in the New York based offices.

However, with the revitalization of J. Crew by CEO Millard Drexler and President Jenna Lyons, we are seeing an increase in sales and popularity.  Sales last year rose 9%, which was more than publicly traded brands, like Gap and Ralph Lauren.  I believe more time is necessary to see the true growth of J. Crew, but if it were to go public, the company would look to mirror the successes of similar brands that are ruling pop culture, such as Michael Kors (trading at $98) and Vince, a newcomer to the public market in 2013 seeing its stock rise 43% in its debut.

Further indicators of a public offering shall be debated with news surfacing about Japan based Fast Retailing Company’s Tadashi Yanai (chairman, president and CEO) wanting to acquire the J. Crew brand.  This would align Uniqlo, one of Japan’s largest clothing purveyors and one of my personal favorite shops, and J. Crew under one umbrella, making it an immediate giant in the fashion industry.  The $5 billion deal would enable the ambitious Yanai to attract more customers in the U.S. market to the rapidly expanding Uniqlo stores.  As J. Crew weighs the option of an IPO, stay tuned for more news on this potential acquisition.

As a prospective investor, pay attention to companies such as these, as their audience is global and quickly growing.  I’m certainly a novice when it comes to the financial sector, but I would suggest to invest in what you know.  Why would you financially concern yourself with corporations that you yourself are not personally involved with?  I love clothing.  J. Crew is a staple in my wardrobe and when I walk around my campus I can see its increased popularity.  If I were to invest in such a company, I wouldn’t just monitor its daily position in the market.  Since J. Crew is a part of my wardrobe, because I like to shop there and because the college style is very much catered to the J. Crew look, I would be able to observe my investment in a much more profound way.  Much like the clothing brands I mentioned above, J. Crew is a chic, urban brand while remaining relatively affordable for their followers.  I find this especially important for the college crowd, which is why J. Crew’s audience has room to expand.  Whether J. Crew is actually seeking to release an initial public offering remains to be seen.  The company may not even be a suitable long-term investment option, but for new, young investors and short-term stock options, J. Crew may be viable.

Maxwell

The College Budget: Tips to a Healthy Wallet

High school seniors (I, too, came down with the self-diagnosed ‘senioritis’) and you college freshmen who think you’ve got a grip on the whole college experience after several months of your new found freedom, keep reading.  This is the Young Economics guide to making sure you don’t break the bank (or mommy and daddy’s) buying booze for the lovely sorority ladies down the hall from your dorm room.

I go to The George Washington University, a city school, so its no secret that the temptations for me to spend money everyday on shopping at the local Nike store, eating at delicious restaurants, and traveling by cab  are all too real.  When I first arrived on campus, I gave in to these temptations.  I had a new found freedom, a fat wallet due to my summer job, and an irresistible impulse to walk just a few short blocks to one of America’s most luxurious shopping centers, Georgetown.  I controlled myself, a little bit, but if I knew what I know now, my urges would have definitely been tamed.  Trust me, I know how you college students in New York City feel, although I’m sure your wallet might be hurting a bit more than mine considering how expensive the costs of living are in the Concrete Jungle.  Like me, I bet you could’ve used some tips to help combat the lust of the city.

1. At the beginning of the year, suffer through it, ACCOUNT for all of your SPENDING BIG and SMALL.  After a couple of months, you’ll be able to know exactly how much you spend per month.  Also, depending on this and your level of discretionary income, you’ll be able to craft a budget and refine it as necessary.

2. If you feel as though you want/need more money, GET A JOB!  Other than making that one and only call home to mom and dad, this is honestly the fastest and most reliable way to acquire the cream.  I feel like people dread the process of actually finding a job, but in actuality colleges are creating much easier ways to help you find one.  Check your college’s career website, they most likely have a job postings tab.  If you received a Federal Work Study grant, all the less stressful and time consuming.  If both of these options are a no-go, ask around.  I’m sure the local coffee shops, restaurants or retail stores are hiring…they usually do at the beginning of the school year.

3. SIDE HUSTLING is a thing!  Find a way to make your childhood hobby into a money-maker.  I’ve seen people take their love of graphic design to designing posters for certain events and organizations around campus, I’ve heard of students offering to take other students’ trash out after late Friday and Saturday nights (you’ll know what I’m talking about), and I personally cut hair.  This was easily one of the best decisions I’ve made my first year here.  I charge $5 a cut (I’m not a professional, why charge like one?), I’m 50+ haircuts into the venture and it funded my Christmas purchases.

4. GET A CREDIT CARD.  This tip may seem unrealistic for folks, but its really not and it can help your prosperity ten-fold in the future.  Plenty of credit card companies offer special deals to new prospective students (if you received financial aid, you’re probably receiving mail from these companies now) and since you don’t have a credit score, it is quite easy to apply for one.  You may pay the bill each month or your lovely parents may take care of it, but discretion is a must.  You do not want to get carried away with your spending right off the bat.  Having a credit card and paying the bills ON TIME establishes a good credit score, so when you graduate and its time to buy a car or maybe even a house, your bank will be able to see you have a long standing history of paying off your debt in a timely fashion.

5. SAVE.  Maybe you don’t go out to eat tonight or maybe you choose to go shopping when your parents come to visit in the spring, decisions like these could be the difference between having $500 in your bank account or $1000.  Which would you rather have?

I understand, college is a time where you have all the freedom in the world and no responsibilities, but if you become disciplined with your finances now, you’ll be rewarded in the long-run.

Maxwell

I’m Shmacked: It’s a Movement

So, I know I’m now among the many bloggers, news anchors, and college students to talk about I’m Shmacked, but how could you not?

“It’s a movement.”

I’m Shmacked in itself is a business entity, founded by Arya Toufanian and Yofray Ray (college dropouts ironically enough), that tangibly showcases the all-American, fraternity/sorority-loving, Animal House portrayed college life right to your iPhone, iPad, or any other electronic viewing device.  Established in 2011, the two marketing geniuses (yes, I think they’re qualified) began filming the one side of college that you always try to imagine, or remember for you older folks…and I guess you college students who got so drunk that you’re unable to recollect what happened the night before.  Partying.  Through short four minute YouTube videos (the I’m Shmacked channel now has over 62,000 subscribers), viewers can live vicariously through the care-free college kids taking shots, ripping massive bong hits, and shouting the famous phrase that embodies a generation, “I’m Shmacked!” indicating they are inebriated beyond belief.  Check out the campuses they’ve graced in their 2013 Fall Semester Tour Recap below:

How did you make your college decision?  Or for those of you still in high school, how are you deciding on which college to attend?  Of course you want to think about how academically stimulating the environment is (at least make sure your parents think that its a part of your criteria), the enrollment, and maybe the geographical landscape of the campus, but how about the social scene?  I’m Shmacked is making social life more relevant than its ever been before in the realm of college decisions.  On their Twitter page you can see countless retweets of kids saying they’re choosing which college to attend based off of how insane their I’m Shmacked feature is.  In one video, two college students from Ireland state that they specifically chose The Louisiana State University because of the I’m Shmacked video they saw for it.  That, my friends, is being influential.  You see, I’m Shmacked is extremely marketable and cool right now.  If you’re a college administrator denouncing the I’m Shmacked crew from hosting a party on your campus, well, you’re clearly a buffoon.

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Recently valued at $5 million after their first round of drumming up venture capital, I’m Shmacked legitimately provides something that University admissions officers cannot: the coolness factor.  Venture Capitalists and investors see the potential in this brand; I don’t understand why administrators have to be so backwards.  Your schools are popular because of I’m Shmacked!  What more could you want?

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Yes, I’m Shmacked has been receiving negative publicity in the news because of their controversial videos, but among the people who truly matter, the droves of college students buying tickets to their parties, I’m Shmacked is extremely relatable and primed to make a large profit.  Think about the licensing deals that could spawn from their brand and even possible TV shows or movies.  Who wouldn’t want to relive their glory days by watching Dave Franco and Jennifer Lawrence do ridiculously illegal and sexual things that are only acceptable for four special years of your life?  One can only dream, hell, I’m Shmacked.

Maxwell