Good morning.
Those of you who believe brick-and-mortar retail is dying should take a close look at Target’s results, out yesterday. They killed it. Biggest comparable year-over-year sales gain in 13 years–up 6.5%. And that included not only a stunning jump in digital sales–up 41%–but also a solid increase in same store sales–up 5%. The lesson, says Fortune retail guru Phil Wahba, is that e-commerce and stores can “enhance one another, rather than eat into each other’s business.”
No doubt some of the growth reflects the overall strength of the economy, which the Fed Reserve’s minutes touted yesterday. But Target’s sales growth beat that of rivals such as Walmart and Kohl’s. I give credit to CEO Brian Cornell, whose data-driven approach to retailing appears to be paying off. The company also has been helped by the launch of a dozen new brands in the last 18 months, giving shoppers a fresh reason to come to its stores.
Speaking of bricks and mortar, ServiceChannel CEO Tom Buiocchi was by the Fortune offices yesterday. The company, funded by Accel, has created a technology platform that helps retailers source repair and maintenance contractors in multiple locations from a single dashboard. It’s one more example of how technology is transforming even the most mundane aspects of earthbound businesses.
More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
China Tariffs
A new phase of the U.S.-China trade war kicked in today, with the U.S. slapping tariffs on $16 billion worth of Chinese imports and Beijing retaliating with equivalent taxes on American goods such as cars, steel products, fuel and medical equipment. As China experts note, neither side looks likely to give in, so expect further escalation. Bloomberg
Apple vs. Facebook
Apple has booted a Facebook-owned app from its iOS platform. The Onavo Protect app provides a virtual private network (VPN) that lets people protect their traffic from prying eyes—except those of Facebook, as it sends users' traffic to the social network's servers, reportedly giving Facebook a way to track people's use of rival companies' apps. Apple told Facebook the app violated its rules on the collection of data by developers. Facebook apparently agreed to take it down. Wall Street Journal
Bitcoin ETFs
The SEC has nixed more proposals for a Bitcoin exchange-traded fund (ETF) from outfits such as ProShares, GraniteShares and Direxion. The regulator previously turned down the Winklevoss twins' plans for a Bitcoin ETF. Essentially, the SEC's issue is that the applications didn't outline enough protections against fraud and market manipulation, and didn't demonstrate that Bitcoin futures markets would be sufficiently large. CNBC
Saudi Aramco
Saudi Arabia has denied ditching its plans to float national oil firm Saudi Aramco, which it was reported to have done. Riyadh now says the IPO will go ahead "at a time of its own choosing, when conditions are optimum." The Financial Times reports that the Saudis are also looking at alternatives for filling up its sovereign wealth fund, which was the point of the exercise. FT
Around the Water Cooler
Mystery Cohen Link
Which tech company did erstwhile Trump lawyer/fixer Michael Cohen pay $50,000 in connection with the now-president's election campaign? According to legal documents, in 2016 Cohen paid out the sum for work "solicited from a technology company during and in connection with the campaign." Per CNBC, "the way that Cohen reported the $50,000 expense to the Trump Organization in January 2017 suggests the money may not have been paid out through traditional financial channels." CNBC
Verizon Throttling
One of the big fears when the FCC rolled back the U.S.'s net neutrality rules was that operators would start cutting certain services' connection speeds for commercial reasons. Now, Verizon has admitted throttling the connections of firefighters in California, as they were battling a record-breaking blaze. However, the operator has denied doing so because of the net neutrality rollback, saying instead that it was a customer service mistake. When the firefighters noticed their connection speeds were down, they complained only to have a Verizon rep tell them they needed a more expensive data plan. NBC
Germany on America
German Foreign Minister Heiko Maas yesterday raised eyebrows by proposing that Europe should stop depending on the U.S. so much, in particular, by developing a financial transaction system that's free from U.S. control—the SWIFT payment network may be based in Belgium, but payments go through U.S. clearing houses, which is why the U.S. can block transactions between the EU and Iran. However, Chancellor Angela Merkel then said Maas hadn't cleared his diatribe with her beforehand, and she shot down his payment network plan. Politico
Uber Grows Up
Marketing professor Tim J. Smith writes for Fortune that Uber is finally growing up under the leadership of Dara Khosrowshahi, in a variety of ways: it is respecting regulators, co-opting competitors, and ditching its "brogrammer" culture. Smith: "Along with cultural change, Khosrowshahi has also cleansed the executive ranks. The chief of human resources, chief product officer, and several others departed in the last year. Overall, of the 16 executives running Uber when Kalanick left, only seven remain at the company." Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
