Morning Brew Daily - Bed Bath & Beyond Bankruptcy, Twitter verifies dead celebs & Bud Light Ad Drama

Episode Date: April 24, 2023

Episode 45: Neal and Toby explore the painful path that led to retail giant Bed Bath & Beyond to file for bankruptcy protection this past weekend. They also take a look at Twitter's verification process and why some celebrities are verified without even subscribing to Twitter Blue. Plus, Bud Light places two execs on leave and Toby and Neal share their weekend winners and loser. And here is what we are watching for the week ahead. Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Listen Here: https://link.chtbl.com/MBD Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning, Brew Daily Show. I am Neil Fryman. And I'm Toby Howell. Today on this Monday morning program will perform an autopsy on Bed Bath and Beyond, which went bankrupt yesterday, and we'll also do winners and losers from the weekend. Then we'll head to Twitter where Elon is playing God and verifying whoever he pleases, including dead people, and then check in on Bud Light and how it's doing after its most recent controversy. Neil, it's Monday, April 24th. Let's ride. Okay, everyone, time is ticking to use up your bed, bed, bath, and beyond. 20% of it. off coupons because after a long long stint on life support the home goods retailer finally filed for

bankruptcy yesterday in some cases you can file for bankruptcy do some financial engineering and save your company but in bed bath and beyond's case it's just going out of business it's going to close all 360 of its stores and 120 buy-by baby locations so to to toby toby toby tony i'm sorry you won't be able to go to your your usual sunday errands by june 30th if a last-minute rescue doesn't materialize and it doesn't look like that's going to happen. All right, Dr. Howell, what was the cause of death here? I mean, Neil, where do we start with Bed Bath and Beyond? They're kind of like the ideal example of, like, how not to succeed as a retailer in 2023.

First off, the death now for all modern retailers, they did not invest enough in its e-commerce operation. It did not modernize its business to live in the online era. They also, their inventory management was a mess. They had this thing where they would let store owners choose what, inventory to carry, which used to be innovative, but then became a master in COVID supply chain issues. And then finally, the private label debacle. So they embarked on this new game plan to release their own private label goods, and it just did not pan out how they expected.

So private label is when companies kind of make products for themselves and they don't, you know, outsource to third party brands. And this did not work for bedbath and beyond. This guy, Mark Triton, a former exec at Target, did it really well at Target. They launched dozens of private label brands where it was super successful. He got hired at Bed Bath and Beyond in 2019 and tried to do the same exact thing. He swapped out KitchenAid mixers and other brand names for Bed Bath and Beyond in-house brands. And I guess it just doesn't work for kitchen stuff. Like when I'm buying a fancy pot, like a La Crosette, I want a La Crosette.

And I'm not going to go for some Bed Bath and Beyond products that they're also. selling for me for a huge premium. Yeah, I also want to touch just a little bit on stimulus checks because for a while during the pandemic, it looked like Bed Bath and Beyond kind of was bouncing back. Like, they, sales were increasing, but it kind of was smoke and mirrors because stimulus checks injected a lot of spending power into consumers' pockets. So they got to kind of paper over some of its issues. Obviously, the meme stock madness happened as well, like Ryan Cohen, who is the investment.

who took a stake in GameStop. Also is from Chewy is seen as like this e-commerce whisperer. He helped drive Bed Bath and Beyond stock price up. So it has been a yo-yoing couple of years for Bedbath and Beyond. Yeah, but now it's 87% down this year. And I don't know why people worship Ryan Cohen. I feel like he's one in 10. He's got a worse record than age.

Yeah, he keeps buying stakes in these companies. And then the stock rises with all these retail traders coming in to, you know, invest. And then he sells. He sells at a gain. He made $60 million from his stake in Bedbath and Beyond, but he sold in last August, and then the stock has gone to below $1. Yeah.

Quickly, just on its stock, stock buybacks have been part of the story of this as well. Bed Bath & Beyond has spent $11.7 billion dollars buying back almost three quarters of its own stock. The problem is they spent an average of 15 times the current. share price, so they're buying it back at a premium. And, like, honestly, stock buybacks on a whole usually aren't bad for a company because the idea is you take some of the shares outstanding off the market, which increases the value for the shares that shareholders own. So on the surface, stock buybacks are okay. But say you're a struggling retailer who needs cash, probably not a good idea to spend $11.7 billion on stock buybacks. That wasn't even at a good price.

So the big takeaway from Bedbeth and Beyond is that it's not inevitable if you're a big box retailer to go bankrupt. You can't just blame e-commerce and Amazon anymore. I don't think you can because there are plenty of stores that are doing really well, Walmart, Target, Home Depot, all of them. You can't just say that Amazon has eaten your lunch. There are a series of mistakes that management has made and at other big box retailers that went bankrupt that led you to this position. You can't just say, oh, we missed e-commerce. Yeah. Go spend your big blue coupons.

Yes, you have two days. Two more days. So go get a blender. Today and tomorrow. In a toaster. If not, though, I think they're going to become collector's items. Yeah, we've already seen them being sold on eBay. It's pretty cool.

Okay, Neil, let's jump to Twitter. We have some more news on the Twitter verification front to report. This time, Elon is catching heat from all directions for verifying prominent people who have died, like Chadwick Boseman, Barbara Walters, and Anthony Bourdain. The controversial part is not just that he's verifying them. Honestly, that's probably a good idea to ward off. off some impersonators. But there's also a note on each person's page that says they pay for the $8 a month

Twitter Blue subscription. And it's not even just people that have passed away. Elon is seemingly doing this to other random users, verifying them like Stephen King and LeBron James, even though they didn't pay for Twitter Blue themselves. So it's kind of opened up this can of worms of like, is this illegal to say that someone is paying for something that they're not? Is it like an illegal implicit endorsement? it's kind of crazy how quickly

verification on Twitter went from the status symbol to an anti-status symbol. Yeah, for many people he's basically turned the blue check mark from a badge of honor into something embarrassing. And the problem is he's trying to get people to pay for one. So he's selling deodorant that smells like a hockey locker room right now. And no one wants to buy it. But this is key to his turnaround, whatever,

turnaround plan for Twitter to get much needed revenue that he bought this company. company for $44 billion and it was staked on this subscription revenue program and now he's created such a toxic atmosphere where such a small percentage of people want to buy it and the power users don't see it as this you know shameful thing to have this. Yeah, scarlet letter. Yeah, a scarlet letter. So I mean, this is just like the worst thing you could do for your business. Right. And if we want to check in on how the Twitter Blue subscription has been doing. So censor tower and tech crunch kind of did a little investigation. This was back in March. So take it with a great assault. But they determined that they've only picked up around 11 million in mobile subscriptions from Twitter Blue, which is just not where you need to be. Like, Elon was trying to verify or get 50 million people to pay for Twitter Blue. He's under a million right now. So it's truly, he's got 49 million people to go before he can like really turn this into the moneymaker that he expected or wanted.

So, and there, there's also another report, like, we have to take this with a grain of salt because their methodology was a little, I don't know if we can fully trust the methodology, but Ben Collins, who's a reporter from NBC News, did this little analysis and found that after 420, which was the date that all legacy blue check marks were removed, they found that just 28 people converted from legacy to a paid subscription. That's not 2,800 people. That is 28 accounts. So even if that number is remotely close, we're seeing that the conversion is not happening at the pace that Elon kind of wants it to. All right. So what's happening here is Elon Musk is recreating the legacy verification system that he sought to destroy.

And while this guy may have built the most valuable automaker in the world and the world's most powerful rocket, he is so bad at running a social media company. That is just objectively true. That is true at this point. All right. Let's go to Bud Light. the culture wars have come to Flipcup. Bud Light is shaking up its marketing department

after some conservatives called to boycott it over its marketing partnership with a transgender influencer. Yesterday, the brand confirmed that it was placing two marketing execs on leave, including Alyssa Heinershide, who became the first VP, the first woman VP of marketing at Bud Light

for the first time in its history last June. So what was this campaign? Social media trans influencer Dylan Mulvaney promoted Bud Lights, March Mass. Madness giveaway on April 1st with a personalized can she had been sent. This enraged some conservatives, and they said that Bud Light was going woke and called for a boycott. Got to film yourself destroying some cans. So Kid Rock even filmed himself shooting 12 packs of Bud Lights and some other country music stars

that remove the branding. So now Bud Light is making some changes showing that it wasn't so happy with how this whole thing went down. Yeah. Honestly, whenever we see headlines like this, we do like to dig in and figure out, okay, is this actually affecting sales or like what is happening on the business front of things? And so Bud Light truly has been in a bit of a decline, not just this year, but for the past couple years, the last five years or so. So I actually went back, read some articles from like 2018 that had very similar headlines in it. And basically what they've been saying is that Budweiser sales have been declining because at the time it was talking about how craft brewers were like eating into its market share. And then like as articles progressed into 2019, 2020, that headline changed from Seltzers are now eating into Bud Light's market share. And then we saw a headline yesterday that was this time it's not just selters.

It's also wines and spirits that are eating into its market share. So obviously Bud Light, bud light in kind of like this big American beer has been facing these attacks from different like, sectors of the beverage industry and it's kind of been backed in the corner and like we got to appeal to a different audience so they obviously swung for the fences and tried a different sort of marketing campaign yeah this VP went on uh the one who's now placed on leave went on the podcast earlier this year and basically said exactly what you're saying she said i had a clear i had a really clear job to do when i took over bud light it was this brand is in a in decline it's been in decline for a

really long time. And if we do not attract younger drinkers to come and drink this brand, there will be no future for Bud Light. So that's kind of her strategy was we need to appeal to young people. We need to appeal to women who are maybe drinking a bunch of other stuff because we have not marketed to them in the past. David, I mean, I'm just thinking about dilly, dilly, like everything is associated with football and masculinity. And this was the attempt to expand the audience because that just equates to more sales. Right. It was definitely a rock in a hard place because yeah, you're a marketing execs, staring in the face of declining sales. The logical thing is to open the beer up to new markets, but then if you do that at the expense

of maybe like the core market, then you might be shooting yourself in the foot. So it's definitely like, I mean, it's tough being a marketing exact, obviously. And clearly though, it is affecting sales a little bit. So we beer business daily reporter that Bud Light sales fell 10.7% in the week between April 8th, and then that Molson Corps, one of its main rivals, actually boosted. So there was, again, we'd like to look and see if there's actually some data showing that sales were affected by this,

and it does look like they were affected. Right. For the most part, these boycats don't seem to have any long-term significant impact. I'm just thinking about Colin Kaepernick's Nike campaign when people were lighting, you know, Nike sucks on fire. And in the months after that, sales actually spiked. So this is not happening here, but all of the analysts we're reading,

we're saying, look, this is probably just going to blow over. Budlight might take like a tiny percentage lick for a few weeks, and then people kind of forget about this. For sure. Okay, before we jump into our next story, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills,

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Book on Hilton.com or the Hilton app and save up to 20% to get the stay you expected. When you want savings, not surprises. It matters where you stay. Hilton, for the stay. All right, Neil, it's time for our Monday segment, winners and losers of the weekend, where we check in on somebody or something that won the weekend,

and then also bring you a couple of losers who didn't have such a good week. So Neil, I'm putting you on the spot. You're up first. Who is your winner from the weekend? This one was so easy. And I know either of us could have done it, but I have to go with Rexum. Ryan Reynolds and Rob McElheny bought a little-known Welsh football team in 2021 with the goal of getting it promoted to the next tier of English soccer. And on Saturday, mission accomplished. Rexham won its game and will return to the fourth tier of English soccer for the first time in 15 years. and we're showing video of these fans storming the field and hugging and crying, and it may be tough for us to understand just how much this means to the people there,

but it is kind of tremendous that in two years how much publicity and on the field success that these two Hollywood guys have given to this little corner of whales. They crushed it. They called their shot and they did it. It's pretty amazing, too, honestly. This was not an easy task by any means. And I know we were talking, like, obviously they have some unfair advantages, like, they have a little deeper checkbook.

They have the influence that they command, but you can't just buy your way into the next league. You have to construct an actual team that can handle it. And it was just, it was awesome. I actually did a little bit of digging into the numbers of how much more they were paying their players because some people in the National League were grumbling, like, oh, they're kind of ruining the competitive integrity.

So the average National League players weekly wage, which is how they calculate it in football, is around 1,000 pounds a week. and their top player, Paul Mullen, who's like best player, Rexum's top player, was earning right around 4,500 pounds per week. These are rumored numbers. So it's a little like three and a half times, four and a half times what the weekly average salary is.

So it's not crazy, though. That comes out to $294,000 US dollars a year. So it's not like a crazy big salary, but for the league, I guess it's rather large. All right. So Rexum's in the fourth tier now. and there's four spots to get to the third tier. And so Man City, they're coming for you. They're coming for them.

Okay, Neil, my winner of the weekend also revolves around sports. So there was another major marathon on Sunday, the London Marathon. So on the men's side, Kelvin Kiptham ran the second fastest time ever. So almost broke the world record crazy. But that's not even my winner from the weekend. My winner is Sifon Hassan, who the women's race was even crazier. and she's making the claim for the greatest distance runner of all time. So just some background on who Saffon is.

In the 2021 Olympics, she ran the 1500, the 5,000, and the 10,000. She won the 5,000 and 10,000. Just an absurd lineup to race. Like no one does that racing lineup. So already, just a crazy resume. And then this year, she decided to train for the marathon. This was her first ever marathon. And kind of halfway through it, it wasn't looking too good.

she stopped to stretch twice. The camera caught her stopping, grabbing her quad, stretching, and everyone's like, ah, marathon gets you, like it's really tough to jump up to this distance. She came back twice, caught the pack, and in the sprint finish, actually won the marathon at the end. It was absolutely electric. For someone stopping twice and still winning the marathon,

I couldn't see enough of these highlights. I would need to stretch, too, more than twice. Absolutely. And then I wouldn't finish. And then she also, she tried. trained during Ramadan for this too. So she didn't eat or drink from during daylight hours. Yeah, crazy. That is amazing. She's a beast. All right. So I don't even know why we have to do, you know, losers after that. I'm on such a high, but we should do losers. And my loser is

Maleficent, the 40-foot tall, the 40-foot-tall, animatronic dragon at Disneyland. So during a phantasmic show at Disneyland Saturday night, great, great show, there was an explosion and the dragon got a taste of its own medicine by bursting into flames. People had to be evacuated from the show, and firefighters had to put out the fire. In the show, I think Mickey is supposed to defeat Maleficent and save the day, but not sure it was supposed to go like this. Yeah, it's, we're watching the video right now. It must be a little traumatic for some child who is watching a dragon just blow up and

be engulfed in flames. And then this, obviously, Disney's not very happy about this. No, they try to keep everything. Think about Disney World and Disneyland. They keep everything in order. There's nothing out of line. Everyone's smiling. There's no garbage.

There's, you know, sewer systems and garbage systems all underground to make sure that you have, you know, the time of your life and don't see anything going wrong. And then to have your animatronic dragon go viral all everywhere because it burst into flames. I mean, there's going to be some really, really stressful media this morning. Not a great look. Okay. And then my loser of the weekend is Lyft. Lyft is riding the struggle bust right now. They are laying off 30% of their workforce, which is around 1,200 jobs.

They already laid off around 11% of the workforce a couple months ago. So Lyft is definitely trying to regain a foothold in the rider's share market. Their new CEO has honestly said that price is a place where they want to compete with Uber. And this weekend, we were actually in New Jersey. We were trying to catch a Lyft back to the city. We compared the prices, and Lyft was more expensive than Uber, which is not something you see very often. No, I think the only way it can compete is on price. Lyft tried to be a single ride-hailing company while Uber tried to be this multi-purpose

transportation platform with food delivery and other things. And Uber's kind of eating us lunch right now. If Lyft is not cheaper, then it has nothing. Right. Exactly. So that's my loser of the weekend. Okay. Let's get into a little preview of the week ahead for our final segment.

tomorrow, President Biden may announce his re-election bid via video. And if he's elected to another four-year term, he would be 86 by the end of his White House tenure, older than any other president in history. And he could face a rematch with Trump. And kind of no one wants that. There's a new NBC news poll out that 60% of Americans think Trump shouldn't run and 70% of Americans think Biden shouldn't run. So we may end up with those two. sequels, man. We've been talking about it. We're stuck culture. We're stuck culture and sequels. We're about to run it back. Go Biden's six. Yeah. We also have a stuffed earnings week. Okay. It might be

easier to list who isn't reporting earnings than saying who is, but we have the tech giants, Microsoft Apple, Microsoft, Alphabet, Amazon, and meta, and then Boeing, ExxonMobil, Spotify, McDonald's, Coca-Cola. We just reported this morning. Chipotle, are there any that stand out to you? Well, Chipotle, obviously, because we've been, it's the year, it's burrito season. So we always like checking in on Chipotle during burrito season. But honestly, I'm just excited as a host of a daily news podcast. The headlines that are going to come out of this week are going to populate the show. So thank you.

I want meta. I'm interested in meta because I'm curious to see how many times Zuck actually mentions the Metaverse and how much time he actually mentions AI. Yeah. That's the most fun thing I do is like people count how many times he mentions it. and like compares it to each other. Because why the heck, if you're trying to jit up support from your investors right now, which is kind of what earnings are for and show, you know, a bullish outlook on the future.

And if you talk about the Metaverse, people are going to say, ah, do not invest in that. Invest in chat GPT rivals. That's what you should be doing. Over under is 20. Over under what? Metaverse or AI? AI. We'll take a poll before.

All right. We also have a debt ceiling vote. There's time ticking for the government to raise the debt ceiling and avoid an economic catastrophe this summer. The House is expected to vote on a Republican bill that would raise the debt ceiling this week. It is stuffed with a thing that Democrats do not approve of. So it's just going to be the starting point for negotiations. But I just remember we were talking about this in January and we're like, well, it's, you know, it's kind of in the future. And it's crunch time right now because if we don't get a debt ceiling bill passed, we will default on our debts. And if you think

markets collapsed during COVID, it's going to be bad. It would not be pretty. I need to raise my debt ceiling after playing golf this weekend. Two times. I need to renegotiate with myself and get that bumped up. Me too. We also have a movie adaptation of Judy Blum's Are You There God? It's me, Margaret, will be released on Friday. Have you read that book? I have read some of it actually in the library because I was curious as to what it was all about. Yeah. Judy Blume legend, though. I'm glad she's getting some adaptations. Girls don't have cooties, Toby. That's what I learned. I learned that too. Then we have the NFL draft beginning on Thursday.

Carolina Panthers have the number one draft pick. Worst television event that is hyped up as the best television event ever. I know. Toby and I are huge sports fans. And then when it comes to NFL draft, I could not just get my adrenaline going at all. Yeah. Anyway, go Eagles. That is our show for our Monday, April 24th.

You can always reach us at Morningbrewdaily at Morningbrew.com. Huge shout out to the amazing people in our control. room. There's so many of them today. I hope you're having a good time. The show's producer and editor is Emily Milliron. Our supervising producer is Bryce Belloff. Our technical director is Yuchinawa Ogoo. It's Samantha Velez's first day as our associate producer. Welcome, Sam. Any message, Toby? I'm just happy to have. We've been having a rotating cast of characters there. I'm glad we only have one name now. Hope she enjoys getting up at the sunrise. Raymond Lou is our other AP. Billy Minina is on audio. Dan Bousa is our VP of Technical and Production Operations.

Hair and makeup got promoted to the fourth tier of podcasting. Yeah, we're still in the fifth year. Devin Emery is our chief content officer. Our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination

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