There were plenty of winners and losers this week, with a popular pizza chain introducing a new pie that raises the bar on outrageous and a once-popular mall chain deciding to close down stores and shave its HQ payroll.
Fitbit (FIT) — Winner
It was a healthy debut for fitness tracker Fitbit. The pioneer of fitness trackers priced at the high end of its expected range, hitting the market on Thursday at $20. It was originally expecting to price its offering as low as $14 a share. It wasn’t enough: The stock opened at $30.40. That uphill climb will give your Fitbit bracelet quite the workout!
Fitbit’s rolling these days. It’s profitable, and revenue last year nearly tripled to $754.4 million. There are plenty of tech giants eyeing the wearable tech space, but Fitbit’s positioned well as a pioneer in a market that’s been very receptive to strong consumer brands.
Starbucks (SBUX) — Loser
The baron of baristas announced this week that it would be shutting down all 23 locations of the La Boulange pastry shop that it acquired just three years ago.
Buying a business to shut it down is common in the tech world. They call it “acqui-hire” when a company is hired for its key executives or technology. In this particular case, Starbucks may have gotten what it wanted out of La Boulange. It’s been able to upgrade the food offerings at its namesake coffee shops. However, by shutting down the nearly two dozen stores that bear the La Boulange name, it’s also shutting down the brand’s tradition.
Pizza Hut — Winner
Yes, the very notion of a “hot dog pizza” with a crust of pigs in a blanket is a ludicrous notion. Yum Brands’ (YUM) Pizza Hut introduced the new frank-fortified pie on Thursday at an introductory price of just $11.99.
The pizza may seem outrageous, but it has generated plenty of free publicity for Pizza Hut at a time when rival chains are also trying to stand out.
Gap (GPS) — Loser
The once-thriving apparel retailer that fitted folks with denim and khaki a generation ago is struggling to regain its relevance, so Gap is retreating. The mall icon announced that it would close 175 stores. It will also be trimming its payroll at headquarters by 250 employees.
It’s true that Gap will be able to shave its overhead, and closing underperforming stores isn’t necessarily a bad thing. However, any retreat is going to be a morale buster at a company that has seen its namesake concept struggle while its sister concept Old Navy holds up well with cost-conscious shoppers.
Microsoft (MSFT) — Winner
The world’s largest software company wowed attendees at the annual E3 powwow for video game enthusiasts. The star of the conference by some accounts was the demo of HoloLens, the Microsoft headset that offers augmented reality, blending goggle-projected images with physical objects in the real-world environment.
A high point at E3 was a HoloLens demo of “Minecraft,” the popular community game that Microsoft acquired last year. There were some glitches, but Microsoft appears to be leading the charge for the next generation of gaming.
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