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Demand for Hermes bags is booming despite the pandemic

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Demand for Hermes bags is booming despite the pandemic

The pandemic may have shut down galas, fancy restaurants and Caribbean vacation spots — but it hasn’t come between shoppers and their Birkin bags.

French handbag maker Hermes said Friday that its classic Birkin and Kelly bags — which sell for $20,000 each on average — were hot accessories during the holidays, helping fuel a 12.3 percent increase in fourth-quarter sales to 2.1 billion euros, or $2.54 billion.

That’s despite the fact that customers have been sorely deprived of places to show off their pricey accessories. Indeed, some analysts say handbags are benefiting as well-heeled consumers now have fewer places to spend their cash.

In a topsy-turvy shopping season, 184-year-old Hermes appears to be having a moment. Despite the coronavirus shuttering boutiques worldwide in 2020, Hermes said its sales dropped just 6 percent on a currency-adjusted basis. That’s versus 16-percent sales drops at Kering, the owner of Gucci; and LVMH, whose billionaire boss Bernard Arnault failed in a 2017 attempt to acquire Hermes in a hostile takeover.

“Gucci was having the most incredible fashion moment when people were out and about, there were events, openings, premieres to go to,” said luxury expert Michele Ateyeh.

While the iconic Italian label is known for its flashy colors and bold statement pieces, Ateyeh said Hermes bags that have sold well during the pandemic are “classics that don’t go out of style and that retain and even gain value in the resale market.”

Indeed, the hottest sellers have been classic colors including gray, black, gold, off-white and caramel, according to Judy Taylor, owner of Madison Avenue Couture. The boutique sold 30-percent more Hermes bags last year than in 2019, fueling the best year in its 11-year history.

“From Mother’s Day on, our business was soaring,” Taylor said.

Even a 10- to 20-percent price increase for the retailer’s Hermes bags didn’t dampen demand. The average price for an Hermes bag cracked the $20,000 mark for the first time last year, Taylor said.

Hermes also benefitted from some free marketing as well, with rapper Cardi B. showing off her closet full of Hermes bags on Instagram in October and a post over the summer in which she gave her two year-old daughter Kulture an $8,000 Birkin bag.

Actor Michael B. Jordan also revealed that on Valentine’s Day he gave his girlfriend Lori Harvey shares in Hermes.

Hermes shares on Friday rose 3 percent to close at $116.51.

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Boeing CEO waived pay but got compensation worth $21 million

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Boeing CEO waived pay but got compensation worth $21 million

Boeing CEO David Calhoun declined a salary and performance bonus for most of last year but still received stock benefits that pushed the estimated value of his compensation to more than $21 million, according to a regulatory filing Friday.

The aerospace giant struggled last year with the continuing fallout from two deadly crashes involving its 737 Max jetliner and a downturn in demand for planes because of the pandemic. Boeing lost nearly $12 billion and announced plans to cut about 30,000 jobs through layoffs and attrition.

Calhoun, who became CEO in January 2020, received $269,231 in salary for the period before he disavowed his salary in March. He also got $289,715 in other compensation, mostly perks such as the use of company planes, retirement benefits and home-security expenses.

The company said Calhoun gave up about $3.6 million by declining most of his salary and a $2.5 million bonus.

But most of Calhoun’s compensation — valued by Boeing at more than $20 million — came in the form of stock benefits that will vest in the next few years, assuming he remains CEO.

Those grants include $7 million worth of stock for returning the Max to service after it was grounded in 2019, $10 million worth of shares to compensate for pay he left behind at his previous job at The Blackstone Group, and $3.5 million in long-term incentive awards. All would vest over the next three years.

Calhoun, 63, was a longtime Boeing board member before being named CEO after the firing of Dennis Muilenburg in December 2019.

The Chicago-based company filed its proxy statement ahead of its April 20 annual shareholder meeting, which will be conducted online.

Shareholders will elect 10 directors. Pension funds in New York and Colorado are suing current and former board members and executives, including Calhoun and Muilenburg, in a Delaware state court. The funds accuse directors of lax safety oversight during the development of the 737 Max and after the first of two crashes that killed 346 people.

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Tech rebound pulls stocks out of a slump and to weekly gain

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Tech rebound pulls stocks out of a slump and to weekly gain

Wall Street ended sharply higher after a volatile session Friday, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10 percent from its previous record high.

All three main indexes bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound.

Microsoft rallied 2.15 percent, boosting the S&P 500 more than any other stock, with gains in Alphabet, Apple and Oracle also lifting the index.

The benchmark 10-year U.S. Treasury yields hit a new one-year high of 1.626 percent after nonfarm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters.

Focus is also on a $1.9 trillion coronavirus aid bill as a sharply divided U.S. Senate began what was expected to be a long debate over a slew of amendments on how that money would be spent.

The Nasdaq logged its third straight weekly decline after a recent spike in Treasury yields dented demand for high-flying technology stocks.

Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.

The tech-heavy Nasdaq is around 8 percent below its Feb. 12 closing high.

Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, said his firm in recent days has bought shares in a handful of growth companies whose prices have been pummeled in the recent selloff.

“Next week, I would expect volatility to continue, with pockets of opportunity, with certain things that sold off potentially rebounding,” Dollarhide said.

The Dow Jones Industrial Average rose 1.85 percent to end at 31,496.3 points, while the S&P 500 gained 1.95 percent to 3,841.94.

The Nasdaq Composite climbed 1.55 percent to 12,920.15.

In a busy session, volume on U.S. exchanges was 17.4 billion shares, compared with the 15.3 billion average for the full session over the last 20 trading days.

For the week, the S&P 500 rose 0.8 percent, the Dow added 1.8 percent and the Nasdaq lost 2.1 percent.

In Friday’s session, the S&P 500 energy sector index surged 3.9 percent to over a one year high as oil prices soared.

Oracle jumped more than 6 percent after Barclays upgraded the business software maker to “overweight” expecting improvement in the IT spending environment.

Advancing issues outnumbered declining ones on the NYSE by a 2.86-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored advancers.

The S&P 500 posted 55 new 52-week highs and no new lows; the Nasdaq Composite recorded 225 new highs and 134 new lows.

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Goldman Sachs reportedly set to make $200M off Texas storm

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Goldman Sachs reportedly set to make $200M off Texas storm

Traders at Goldman Sachs may reap huge profits from the winter storm last month that left many across Texas and other Southern states without electricity, clean water and heat, Bloomberg News reported Friday.

The Wall Street bank could make up to $200 million from the physical sale of power and natural gas and from financial hedges after spot prices jumped, the report said, citing people familiar with the matter.

Goldman did not immediately respond to a Reuters request for comment.

Bloomberg reported that while the bank could make $200 million on paper, the actual profits collected are likely to be less, as regulators and consumers intervene with legal challenges in the aftermath of the energy crisis and some companies go bankrupt.

Bank of America also stands to make hundreds of millions of dollars from trades related to Texas’ energy market, the Financial Times reported Friday.

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