Food: Starbucks CEO steps down, but not away
Howard Schultz is stepping down as Starbucks CEO to work on the company’s “new superpremium brand and chain of high-end stores,” said Andrew Ross Sorkin in The New York Times. Schultz, who built the now ubiquitous chain from a few local shops into the world’s largest coffee business, will remain at the company as executive chairman while also heading up Starbucks Reserve. The new chain of coffee bars will sell pricier premium drinks in a move Schultz likens to Ralph Lauren’s introduction of its luxury label Purple. Kevin Johnson, the company’s current president and Schultz’s handpicked successor, will take over as CEO in April.
Starbucks is betting that customers are willing to pay “as much as $12 for 12 ounces of coffee,” said Julie Jargon in The Wall Street Journal. The company plans to open 20 to 30 large Starbucks Reserve Roastery and Tasting Rooms around the world, including in New York City, Shanghai, and Tokyo, as well as up to 1,000 smaller stores that sell craft cocktails and rare beans roasted in small batches. Starbucks wants to avoid being stuck in “the middle of the market,” with independent coffee shops increasingly claiming discerning java customers and Dunkin’ Donuts and McDonald’s offering espresso on the cheap.
Tech: Samsung wins Supreme Court fight with Apple
Samsung scored a “much-needed victory” this week in its five-year legal battle with Apple, said Richard Wolf in USA Today. The Supreme Court reversed a lower court’s decision that demanded Samsung pay Apple $399 million for violating three of Apple’s design patents “on the iPhone’s shape and colorful icons.” In a complex ruling, the justices ordered the lower court to decide if only parts of the iPhone were infringed upon, not the entire product. “While Samsung still could pay a hefty penalty, the decision may ease the risk for manufacturers who mimic other products.”
Health: Johnson & Johnson’s legal losing streak
Johnson & Johnson has been ordered to pay more than $1 billion in damages to patients who received faulty hip implants, said Jef Feeley and Tom Korosec in Bloomberg.com. A Texas jury concluded last week that J&J’s DePuy unit knew that its Pinnacle-brand artificial hip implants were defective, “but failed to properly warn doctors and patients about the risk they would fail.” It’s the latest in a string of highprofile court losses for the company. “Six of the seven largest productdefect verdicts in the U.S. this year have been against J&J units.”
Retail: Ikea becomes paid-leave pioneer
Ikea is importing its generous family leave policies to the U.S., said Jena McGregor in The Washington Post. Beginning in January, the Swedish furniture giant will offer up to four months of paid time off to new parents, including foster and adoptive parents, who work in its U.S. stores or corporate offices. The policy, which covers both full- and part-time workers, is an “unusually expansive” policy for the retail sector. Just 7 percent of private-sector workers in service jobs are eligible to receive paid family leave, according to the Bureau of Labor Statistics.
Economy: Strong dollar upends transatlantic business
“The dollar is on a tear, and that is shaping corporate strategy on both sides of the Atlantic,” said Theo Francis and Eric Sylvers in The Wall Street Journal. The U.S. currency’s value is up 4.3 percent since the presidential election, on expectations of a Fed rate hike, future tax cuts, and increased infrastructure spending, with no signs of easing up. The surge is putting pressure on U.S. exporters, whose goods “are suddenly more expensive in many places” while their foreign earnings are simultaneously worth less. European exporters, however, stand to benefit from being able to sell their goods cheaply in the U.S.