Victoria's Secret's New Plan For Stores: "Fewer, Better People"

“I’m imagining in a couple of years, virtually every sales associate is looking for a career in retailing and 10-20% will be store managers somewhere in the world in a year,” L Brands’ CEO said yesterday.

John Sciulli / Getty Images

L Brands, which abolished erratic on-call shifts at its Victoria's Secret and Bath & Body Works chains earlier this year, has more changes planned for its workers, including a shift to more full-time staffers, higher wages and better training.

"My fundamental belief is that fewer, better people will do better, and that's in our customer's interest," L Brands CEO Les Wexner said at the company's annual investor meeting Tuesday. "We think paying people $20 an hour would probably attract better people than if we're paying $8.50. Now we're trying to prove that and we're getting some traction, really some traction."

"This relates then to how we train people, the pipeline of people," he continued. "I'm imagining in a couple of years, virtually every sales associate is looking for a career in retailing and 10-20% will be store managers somewhere in the world in a year. They can literally go from $40,000 to $100,000 a year in compensation."

The emphasis on staffing its stores with a smaller pool of better paid people bucks the overall trend in the retail industry, where chains have become heavily reliant on low-wage hourly workers. Stuart Burgdoerfer, the L Brands finance chief, said such staffing takes its toll on customer service.

"How well can they really know your business, how invested are they in us, are we in them, if they're only working a few hours per week and their turnover rate is very high?" he said at the meeting. "So we see the opportunity to have a more knowledgable, a more engaged or effective and productive associate when she's typically working more hours per week."

The company estimates investments in its "store selling initiative" could boost revenue by 10% to 15% in the next few years — a substantial increase for a company that most recently brought in $11.5 billion in annual sales.

L Brands is considered a leader in the retail industry, with Wexner playing a role in the development of popular mall chains from Abercrombie & Fitch to Express and Lane Bryant. Its stock recently shot up to $100 a share and is up 35% over the last 12 months. L Brands employed almost 60,000 part-time associates as of Jan. 31 and 80,100 associates overall.

L Brands and 12 other U.S. retailers were part of a probe into on-call scheduling earlier this year by the New York State attorney general's office, while Victoria's Secret was sued over the practice in California. Call-in shifts, which can save millions in staffing costs for retailers, usually appear alongside regular shifts on store workers' schedules, but require them to phone in before start-time — sometimes as little as two hours before — to find out if they're needed. If not, they go unpaid.

L Brands, Gap, J.Crew, Urban Outfitters and Abercrombie have all also announced plans to end the practice in recent months.

The company has roughly 3,000 stores worldwide, including PINK, La Senza and Henri Bendel locations.

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With $2.9 Billion In Sales This Year, OfferUp Is Coming Out Of Stealth Mode

OfferUp co-founders Arean van Veelen and Nick Huzar.

OfferUp

Craigslist is the crocodile of the tech industry — a perfectly evolved beast that has outlived competitors trying to buy into it, decimated an entire industry, and withstood the rise of mobile. It did all that while looking more or less exactly the same as it did when it launched in 1996. What can appear on the surface to be a lack of attention to the principles of modern design or underinvestment in product development is really just a predator operating at its evolutionary endpoint.

But in the era of the unicorn, never underestimate the urge to fight a crocodile. Why shouldn't Craigslist be overtaken by an easy-to-use, mobile-friendly marketplace for people who want to buy and sell things?

Investors have now put $90 million into one company trying to do just that. OfferUp, founded in Seattle in 2011, is far from a household name and has had little publicity, but its founders say the service has quietly become a significant player in e-commerce. They say $2.9 billion has been transacted over their marketplace so far this year, a big number for anybody in the industry. In comparison, Etsy's marketplace had $1.93 billion in sales in all of 2014, while industry giant eBay had $19.6 billion flow through its system in its most recent quarter.

OfferUp "is among the fastest growing marketplaces we have ever seen," Jeff Jordan, a partner at Andreesen Horowitz and board member at OfferUp, said in a statement. The venture capital firm first invested in OfferUp in May 2014, Jordan wrote in a blog post today, "but kept that information under wraps—at the company’s request—as they methodically rolled out to new cities." (Andreesen Horowitz is also an investor in BuzzFeed.)

When you first open OfferUp, you see an Instagram-like grid of photos of stuff available near you. I live in North Brooklyn, so I saw some knit goods, iPhones, formerly expensive jeans, cars, and hoverboards. You can also search for specific items.

Matthew Zeitlin

So far, so good. But the founders say their real innovations are on the seller side, and in features that give buyers and sellers confidence in interacting with each other, even though most purchases are still done in cash. Buyers and sellers each have ratings, and can chat over the app without giving up a phone number or email address.

The two founders — Nick Huzar, the chief executive, and Arean van Veelen, the chief technology officer — said when surveys asked why people didn't buy or sell items online, many women said they were concerned about safety. To address that, they allowed third party ID verification. Buyers and sellers "have to go through the process to be verified to know they are the person they say they are," van Veelen said.

Another peace-of-mind feature is something users of dating apps and sites will be familiar with: letting users see mutual Facebook Facebook friends, or what OfferUp calls "trusted connections."

Building an app that women feel comfortable using is a priority, and the two male founders point to prominent women leading the business: A woman leads OfferUp's engineering team, and a woman is responsible for trust and safety features on the product team.

OfferUp raised $73 million earlier this year, and has raised a total of $90 million. While the company won't disclose a valuation, the Wall Street Journal reported in October that it had been valued "around" $800 million in a March funding round. "I wouldn't say that number is accurate," Huzar said. "What I would say is that we’ve 5X’d our growth since January, we’re a way bigger company than we were back then."

One metric that hasn't grown in the last year is revenue, which remains at the tidy figure of zero. "Today we’re not monetizing as a business," Huzar said. Hence all the cash the company has raised. With no revenues, it has grown from 15 to over 60 people employees in a year, and includes former employees of Amazon, eBay, and Airbnb.

Do Huzar and his team have any plans to get some money coming in? Advertising, perhaps, or taking a cut from sellers or charging for certain listings? If there's a plan, the company is keeping things vague for now. "There are existing models we could look to and potentially adopt and there are new things we could do," he said.

OfferUp is backed by big-name investors like Andreesen Horowitz, the hedge fund Coatue, and asset manager T. Rowe Price. "If you think about the market we’re going after, it’s a massive market," Huzar said. "Our investors are super excited by how fast we’re growing."

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Groupon And Zynga Shake Up Executive Ranks Amid Struggles

Mark Lennihan / AP

Two beleaguered tech companies are shaking up their executive ranks, in separate moves that highlight their deep challenges.

Groupon said on Tuesday it had replaced its CEO, Eric Lefkofsky, with Rich Williams, the daily deal company's chief operating officer. At the same time, game maker Zynga said its chief financial officer, David Lee, would resign, to be replaced on an interim basis by Michelle Quejado, its chief accounting officer.

The two announcements, while unrelated, highlighted the struggles of Groupon and Zynga, both onetime darlings of the tech industry. Each has lost steam in recent years, and while neither company is more than 10 years old, financial results they released on Tuesday did little to change the narrative that both are struggling.

Groupon's results showed a mixed picture. The company reported $713.6 million in revenue for the third quarter, roughly flat from the same period a year earlier and a little short of Wall Street expectations of $733 million in revenue. Earnings, adjusted to exclude certain expenses, amounted to 5 cents a share, exceeding analysts' expectations of 2 cents a share. (Without those adjustments, Groupon reported a loss of 4 cents a share.)

Zynga's results were slightly more upbeat, at least when judged against analysts' expectations. The company reported $195.7 million of third-quarter revenue, an 11% increase from the same period a year earlier, and a shade better than analysts' expectations of $188.3 million.

Zynga also exceeded analysts' expectations for profit — but not by actually making one: The company broke even for the quarter, while Wall Street had expected a loss.

Shares of Groupon rose less than 1% in trading after the market closed. Zynga's stock rose around 2% in after-hours trading, bouncing up after an initial decline. Over the last year, shares in both companies have languished. Both are trading at valuations significantly lower than when they each went public in late 2011.

Each company is facing its own set of challenges.

Groupon has been fighting a long battle to revive excitement around daily deals, a trend that seems to be fizzling. Fundamentally, the company simply struggles to attract more customers, a point Williams acknowledged in a statement on Tuesday.

The appointment of Williams is Groupon's second major CEO change in the last three years. In early 2013, the company fired co-founder Andrew Mason from his CEO job, replacing him with Lefkofsky. After the latest change, Lefkofsky will be chair of the board.

Zynga, similarly, needs to get more people playing its games. While the company rocketed to prominence with FarmVille, it hasn't had as much success with other titles, and its financial results have suffered.

Zynga said it had 75 million monthly active users in the third quarter, a 27% decline from the period a year earlier.

For its popular Words With Friends game, Zynga boasted that it was able to get customers to spend more money within the game, despite a decline in the number of players.

Lee, the outgoing finance chief, is stepping down immediately but will stay with the company until Dec. 11, Zynga said. The company also announced it would spend up to $200 million to buy back its stock, helping support the share price.

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Chris Sacca On Investing In Women-Led Startups: "It’s Not Affirmative Action, It’s A Good Life"

Neilson Barnard / Getty Images

"Our companies are almost entirely run by white guys and our boards are white guys," said Chris Sacca, the male head of Lowercase Capital and an early and sizable investor in male-founded and male-run Uber and Twitter, in conversation with two other men in front of the largely male crowd at the New York Times DealBook conference in Manhattan on Tuesday.

He was asked about Silicon Valley's lack of gender diversity by Andrew Ross Sorkin, the male head of DealBook, the finance section of the New York Times, which is edited by a man, whose business is run by a man and whose publisher is a man who will likely appoint one of his three male relatives to be his successor.

The problem, Sacca told the audience, is the users of many tech products look nothing at all like the upper management and boards that run them. "Look at the user base of Twitter: You have black users over-indexed on Twitter, but you don't have any representation of that audience in the upper management of the company. That's weird," he said. "We're guiding things we can't address."

Twitter said earlier this year that 87% of its tech employees were male, along with 78% of its leadership. Two percent are black. Leslie Miley, one of Twitter's few black engineers, recently left the company, publishing a blog post lamenting "how and why a company whose product has been used as an agent of revolutionary social change did not reflect the diversity of thought, conversation, and people in its ranks."

"Twitter’s issues with growth and engagement and the issues with internal diversity are somewhat related," Miley wrote. "There was very little diversity in thought and almost no diversity in action."

Sitting beside Sacca at the conference was Peter Thiel, the venture capitalist who, along with several other men, co-founded PayPal and made a ton of money investing in a startup run by a man named Mark Zuckerberg. Thiel has also written an essay arguing that giving voting rights to women "rendered the notion of 'capitalist democracy' into an oxymoron."

This divergence between the people using internet services and the people who own and manage them has been a problem in Sacca's own business — investing in startups. When he first met the founder of StyleSeat, which does online booking for hairstylists and beauticians, he was unsure how lucrative the market was.

"I had no idea what someone would pay for her hair; I didn't know black women would pay for extensions and weaves," he said. After Sacca said this, two black women working at the conference registration desk laughed out loud while everyone else in the mainly white audience awkwardly tittered.

Sacca pays $19 to get his dark auburn mane shorn at Supercuts, although he presumably spends much more on his extensive collection of cowboy shirts.

But Sacca said he enjoys working with women-led companies more these days. "Companies run by women are nicer to visit and the board meetings are better to go to — discussions are more patient; there’s less drama," he said. "I’m starting to over-index that way — it’s not affirmative action, it’s a good life." The crowd applauded.

Thiel said he "didn't have all the answers" to what to do to make Silicon Valley friendlier to women, but said the "level on which the problem has to be solved is on the level of the founders, because that sets the tone."

Sacca, who has three daughters, said "we don’t have a culture that teaches girls business literacy, we have a princess industrial complex." Sacca is trying to change that, turning his household into a business school for tots. Before he reads to his daughters, he makes them negotiate how many books he'll read that night.

"Guys are taught from an early age to bluff, pitch, and sell," Sacca said — three behaviors his own career has been heavy on. According to Forbes, when Sacca worked at Google he "crashed every meeting he could and then wouldn't shut up."

Later on, his constant presence at Twitter, drove the company "to pass a rule...barring non-employees from showing up at all-staff meetings." He built up his large stake in Twitter by purchasing stock owned by current and former employees, using money he raised from wealthy outside investors.

"When the positions became known, other investors were ticked off to see Sacca’s camp had accumulated the largest outside position in Twitter right under their noses," Forbes reported.

But he doesn't see many women encouraged to behave this way. "It's part of courtship and dating and sports and women are not raised that way," he said.

The deck is stacked so heavily against women in tech that even pitch meetings come with a heavy bias, he said. Men who raise their inflection at the end of a sentence sound like professors, they have a "Silicon Valley accent," Sacca said. "When a woman does that, you laugh her out of the room and don't give her the time of day."

"It's going to take decades to unravel this."

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Vice's First TV Channel Will Launch Early Next Year

Vice co-founder Shane Smith

Charles Sykes / AP

Vice will launch its own cable TV channel in early 2016, tentatively named Viceland, the company said today. Its entry to the lucrative world of cable TV — long a dream of the company's co-founder Shane Smith — will come via a takeover of the H2 channel currently owned by A+E Networks, which owns 10% of Vice.

The channel will reach about 70 million U.S. homes, the companies said.

Spike Jonze, Vice's creative director, is overseeing the new channel. "We wanted Viceland to be different, to feel like everything on there has a reason to exist and a strong point of view," he said. "If it doesn't have a strong point of view then it shouldn't be on this channel."

Jonze has directed films including Being John Malkovich and Academy Award winner Her and was the co-creator of Jackass. Viceland will debut with prime time shows including Gaycation, a travel show hosted by actress Ellen Page, and Huang's World with celebrity chef Eddie Huang.

And to celebrate the company's entry into the big-money world of cable TV, Disney is reportedly set to invest another $200 million into Vice, adding to the more than $500 million it has already raised from investors. A+E, a joint-venture between Disney and Hearst, bought a 10% stake in Vice last year for $250 million. The Wall Street Journal, which reported the new investment yesterday, said Vice will transfer another 7% of its equity to A+E as part of the new deal.

The Brooklyn-based media company has been wildly successful in producing branded promotional videos for its advertisers, and seems set on taking the same approach with its cable channel. Viceland will "re-imagine the nature of the television commercial," the company said, "making the commercial time a valuable extension of the entertainment programming itself"

Vice co-founder Shane Smith said the new channel was "the next step in the evolution of our brand and the first step in our global roll-out of networks around the world." And for those who might worry Vice is selling out to the Man in its dealings with Disney, fear not. Smith said the channel will run things that "challenge the accepted norms of current TV viewing."

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Shell Accused Of "Blatantly False" Claims Over Oil Spill Clean-Ups

A new report from Amnesty International has accused Shell of failing to clean up multiple oil spills in the Niger Delta.

Oil continues to contaminate water around the Bomu Manifold in Nigeria in August 2015, Amnesty International said, three years after Shell said they had cleaned the area.

Amnesty International

The oil giant Shell has been accused by Amnesty International of repeatedly failing to clean up the results of oil spills from its infrastructure in Nigeria.

Some of the spills where researchers for the charity found continued contamination dated back as much as 45 years, while others showed apparent oil pollution despite having been certified as clean by the Nigerian government within the last year.

Shell has reported around 200 spills a year in Nigeria for each of the last five years. The company blames attempts to steal oil from pipes as a large contributor to the high number of spills, but Amnesty International said ageing infrastructure is also a major factor.

Strict rules in the country require visible oil in water to be gone within 60 days of a spill, but photographs obtained by researchers from Amnesty International and the Centre for Human Rights and Development appear to show visible oil in multiple sites even years after spills.

The charity timed the launch of its new report to mark the 20th anniversary of the execution by the Nigerian government of nine Ogoni tribal leaders who had campaigned against oil extraction on their territory.

Relatives of those killed had accused Shell of "collusion" in the deaths. In 2009, Shell settled a civil claim from the families for $15.5 million, without admission of liability.

A disused flow station in the Bomu Manifold. Amnesty claims much of the oil infrastructure in Nigeria is badly outdated, contributing to spills.

Mike Uwemedimo / Amnesty International

The oldest spill for which researchers found oil still present dated back to a 1970 fire and subsequent spill near Boobanabe, where researchers found "waterlogged areas with an oily sheen" and "soil was black and encrusted with oil".

This was despite, Amnesty said, the site having been declared cleaned-up in 1975 and again in 2012.

Researchers also found "soil soaked with crude oil" around the Bomu Manifold – where several Shell oil routes coincide – dating from a large fire in 2009, declared clean in 2012; further south in the Barabeedom swamp, which was declared clean by regulators a year ago; and in Ogale, which was declared clean in 2012.

Amnesty International said in its report researchers had then cross-checked the areas against Shell's database of leaks to make sure the contimation they reported could not have been caused by more recent spills.

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Google, Apple, And Amazon Are Forming A Financial Services Lobby

financialinnovationnow.org

Tech companies have been throwing their weight around Silicon Valley for decades, and now they're looking to set the agenda in the nation’s capital as well.

In a display of Silicon Valley’s maturing relationship with Washington, five tech companies have formed an advocacy group to push for business-friendly rules in the emerging market for tech-fueled financial services.

The group, known as Financial Innovation Now, comprises founding members Google, Apple, Amazon, PayPal, and Intuit.

“These five companies are coming together because innovation is coming to financial services,” Brian Peters, the group’s executive director, told BuzzFeed News. “And they believe that technological transformation will make these services more accessible, more affordable, and more secure.”

Whether through products like Google Wallet, Amazon Payments, and Apple Pay, acquisitions like PayPal’s purchase of mobile payment startup Venmo, or investments like Google's in peer-to-peer lending outfit Lending Club, the group’s founding companies all have a stake in the evolving industry and its regulation.

“The goal here is to serve as the voice of technology and innovators,” Peters said. “Because honestly the banking policy conversations in Washington have not had that voice historically.”

The coalition isn't yet pursuing any specific laws or regulations, but in a statement it noted several issues of interest, including speeding up the processing time of bank transfers, increasing access to loans by small businesses, pushing for open standards in authentication systems, and encouraging the use of mobile and app-based banking.

“Education is going to be our first job,” Peters said, referring to the group’s primary challenge of explaining to lawmakers how their financial tech platforms work and what their customers have been clamoring for. Financial Innovation Now will concentrate its advocacy work at the federal level, lobbying members of Congress and federal agencies.

“The coalition members believe in the power of technology to help solve some of the challenges that the country has faced since the financial crises, both before and after,” Peters said.

“We believe that if you look at the amount of investment happening in the fintech startup space, which is off the charts right now, there are a lot really smart people working on these challenges and technology is going to be the solution.”

Peters hopes the group will capitalize on young people's dissatisfaction toward traditional brick-and-mortar bank branches and the trust they have for customer-friendly technology companies. Financial Innovation Now also aims to push novel mobile and cloud-based services, with an eye for the tens of millions of “unbanked” Americans who lack access to savings accounts and credit cards. “The companies believe that technology is going to help solve the financial inclusion challenge, which a lot of policymakers are focused on,” Peters said.

Peters is a member of the Franklin Square Group, a Washington, D.C., tech lobbying firm.

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