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Levi Strauss needs to capitalize on industrial vacancies, CEO says

Chip Bergh, CEO of Levi Strauss, said Thursday the jeans maker is buying more space as commercial rental offers have risen.

The San Francisco-based company plans to expand its 40 branches and 200 branches in the US to improve its direct customer business, the managing director said.

“This is a great opportunity, especially given the commercial real estate tsunami that is happening,” CNBC’s Bergh Jim Cramer said in a Mad Money interview. According to Moody’s Analytics, the vacancy rate in regional shopping centers rose to a record 11.4% in the first quarter from 10.5% in the fourth quarter.

“It gives us the opportunity to secure great locations with great leases, and we’re taking advantage of that,” he said.

Direct selling accounted for around 40% of Levi’s total sales last year, the company said in February. For this year Levi wants these sales to represent 60% of total sales.

Part of the launch of the new store is what the company calls NextGen Stores. These are smaller, just 2,500 square feet, and equipped with machine learning to help with inventory, Bergh said.

“These are really significant opportunities and we have announced that we will be led by DTC going forward,” he said. “It is really important for us to increase the gross margin and we are successful at it.”

Levi’s direct-to-consumer strategy encompasses the main and outlet stores, online operations, and department stores with which the company works. Sales in this category were down 26% in the most recent quarter, due to less foot traffic in the stores.

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NASA Industrial LEO Locations challenge for personal house stations

SpaceX’s crew Dragon Endeavor was docked with the International Space Station on July 1, 2020.

NASA

The National Aeronautics and Space Administration brought astronauts aboard the International Space Station for two decades last year. However, as the floating research laboratory ages, the space agency is turning to private companies to build and deploy new free-flying habitats in near-earth orbit.

Last week NASA presented the Commercial LEO Destinations (CLD) project. In the fourth quarter of 2021, a total of up to four companies are expected to receive up to $ 400 million to begin developing private space stations.

The agency is keen to replicate the success of its Commercial Cargo and Commercial Crew programs. In these programs, three companies took over NASA to send cargo and astronauts to the International Space Station.

NASA’s LEO commercial director Phil McAlister said he views the domain of low-earth orbit as three main activities: “cargo transportation, crew transportation, and destinations.” NASA has transferred responsibility for the two earlier activities to private companies. The agency pays SpaceX and Northrop Grumman to ship cargo spacecraft to the ISS and SpaceX and Boeing to launch astronauts. McAlister stressed that NASA had previously taken full ownership of all three activities.

“If it stayed that way, our near-earth orbit efforts would always be limited by the size of NASA’s budget,” McAlister said in a briefing Tuesday. “By bringing the private sector into these areas and into these areas as a supplier and user, you expand the pot and you have more people in low orbit.”

NASA will open the International Space Station to tourists with the first mission in 2020.

Stocktrek Pictures | Getty Images

NASA’s potential cost savings as a space station user, rather than as an owner and operator, is a major motivator for the CLD program. The International Space Station costs NASA about $ 4 billion a year to operate. In addition, it cost a total of $ 150 billion to develop and build the ISS, with NASA taking most of that bill, while Russia, Europe, Japan, and Canada each contributed.

NASA estimated last year that the commercial crew program alone saved the agency between $ 20 billion and $ 30 billion while funding the development of two, not just one, spacecraft. While Boeing has not yet completed development testing and has suffered a prolonged setback after the Starliner capsule’s initial launch failed due to multiple anomalies in December 2019, SpaceX’s Crew Dragon spacecraft is now operationally flying NASA astronauts.

Another motivator for starting the CLD program is the aging hardware of the ISS, as much of the space station’s core structures were made in the 1990s and the final print structure was added in 2011. Last year Russian cosmonauts were working to fix a small air leak in a room in a station module.

“The ISS is an amazing system, but unfortunately it won’t last forever,” said McAlister. “An unrecoverable anomaly can occur at any time.”

NASA sees the CLD program as a way to get multiple companies to develop and build new habitats over the next few years so that the agency has an overlap period before the ISS retires. McAlister noted that in addition to the CLD program, NASA awarded space specialist Axiom Space a $ 140 million contract to build modules to expand the ISS. When the ISS retires, Axiom plans to take its modules down and convert them into a free-flying space station.

“We’re making progress there and we’re really excited about it,” said McAlister. “We want to have competition in the utility sector, so that’s what we do [CLD]. It has always been part of our plan to have both modules installed and free leaflets. “

An Axiom spokesman said in a statement to CNBC that the company “broadly supports NASA’s vision of a multifaceted economy in LEO”.

“We are raising private funding to design and develop our world’s first commercial target to demonstrate that true commercial leadership can advance the LEO economy. Building the Axiom Station as an extension of the International Space Station will expand the work that at station in the near future and at best allow a timely and seamless transition when the ISS reaches the end of its life, “said Axiom.

A NASA list of organizations registered for the briefing revealed a wide variety of aerospace companies including: Airbus US, Blue Origin, Boeing, Collins Aerospace, Firefly Aerospace, General Dynamics, Ispace, Lockheed Martin, Moog, Nanoracks , Northrop Grumman, Raytheon, Redwire Space, RUAG Space, Sierra Nevada Corporation, SpaceX, Virgin Galactic, Virgin Orbit, Voyager Space Holdings, and York Space Systems.

One of these companies has already announced that it will soon announce its plan for a free-flying space station. Sierra Nevada Corporation (SNC) announced that it will host a virtual press conference on March 31st to unveil the design of the “SNC Space Station”.

NASA will release a final announcement for CLD proposals in May. The first phase of the promotional awards is expected between October and December. NASA’s Johnson Space Center will manage the CLD program through its commercial LEO development office.

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Business

United returns Boeing 737 Max to business service after grounding

A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport in Burlingame, California on March 13, 2019.

Justin Sullivan | Getty Images

United Airlines put the Boeing 737 Max back into service on Thursday. The second U.S. airline to return the plane after two fatal crashes resulted in a global landing in 2019.

The Federal Aviation Administration suspended its 20-month landing of the aircraft in November after Boeing made software and other safety changes to its bestseller. The resumption of deliveries last year was a relief for Boeing. Grounding planes starved money, a crisis compounded by the impact of the Covid-19 pandemic on jetliner demand.

United Flight 1864, the airline’s first Max passenger flight since landing, took off from its Denver hub and arrived in Houston at 11:23 a.m. local time. United has about 550 flights on the Max this month and about 2,000 scheduled for March. The Chicago-based airline expects to deliver 24 Max aircraft this year and had 14 in its fleet at the time of landing in March 2019.

American Airlines became the first US airline in December to return aircraft to commercial service with flights from its Miami hub. The Brazilian airline Gol was the first airline in the world to resume flights with the Max last year. Southwest Airlines and Alaska Airlines plan to fly Max planes next month.

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Uber Eats, Chipotle Rise as Tremendous Bowl Business Newcomers

The 30 percent capacity game from Raymond James Stadium in Tampa, Florida features Patrick Mahomes of the Kansas City Chiefs, the defending champions, against Tom Brady, who is playing in his 10th Super Bowl this time, a new Tampa Bay star Buccaneers. Although Tampa and Kansas City are midsize television markets and NFL ratings have dropped this season, some TV executives believe the quarterback matchup could draw 100 million or more viewers. Last year’s game had a television audience of 99.9 million.

Fox, which aired the 2020 competition, sold all of its Super Bowl ad space before Thanksgiving 2019 and generated $ 448.7 million in ad revenue – a record, according to research firm Kantar. Sales have been slower this year and CBS only filled its 70 or so slots last week.

The attention generated by Super Bowl advertisements extends beyond the game. Twice as many people could see the commercials on social media sites as they did during the broadcast, said Jonah Berger, a marketing professor at the University of Pennsylvania’s Wharton School. Brands also hope their ads are distinctive or dramatic enough to cause a stir after the final whistle.

“But this echo effect, which many brands are banking on, will not be so great this year,” said Berger. “Fewer people will speak in the office on Monday morning because they won’t be in the office.”

These days, commercials are only part of the Super Bowl marketing for many companies. Verizon’s plan is to sponsor game sessions on Twitch, a Verizon-branded virtual stadium in the online video game Fortnite, and a livestream post-game concert featuring Alicia Keys and Miley Cyrus. The company’s traditional TV commercial “was the easiest thing we do,” said Diego Scotti, Verizon’s chief marketing officer.

Matt Manning, the executive director of the MKTG agency, said the Super Bowl was “probably the premier meeting event” for the advertising industry in a typical year, adding that his colleagues often had trouble getting a hotel room within 20 miles book stadium. He said he’s not going this year because of the pandemic.

It is also the first time in 15 years that Jeremy Carey, CEO of Optimum Sports, has not participated in the game. He said his company, the sports marketing division of advertising firm Omnicom Media Group, handles up to 20 percent of Super Bowl advertisers. Even at some distance from the field, he expects to feel tense on Sunday.

“It’s different from anything,” said Mr. Carey. “When you look at the top performing programs, nothing comes close. There are nervous nervousnesses that go with it – but if you didn’t have that as a Super Bowl marketer, I’d question your humanity. “

John Koblin contributed to the coverage.