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Nike, Adidas, ? – here’s the next big player

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Nike and Adidas dominate the gym wear market, but there is a young UK company that is rivalling the global giants with strong sales and leading social media presence

Mat Cole form ACT Capital Partners says Adidas and Nike are the major players but there could be a third.

Say hello to UK gym wear company Gymshark

https://twitter.com/tickerNEWSco/status/1425974838871609349

Who are they? Founded by teenager Ben Francis from his parents’ garage in 2012, Gymshark has grown an engaged fan base of millions followers on Instagram,  thanks to its ability to leverage the power of social media and influencer marketing.

“It’s the three C’s, it’s community content, and then commerce and they nailed it,”

Mat Cole told ticker news

Cole says they built a really engaged community around the gym.

“People wanted, you know, comfortable, good looking now effective apparel, to wear to the gym, it was probably a really small niche when they started in terms of the serviceability of that entire suite of products from a Nike or an Adidas, and they saw that opportunity.”

The founder started in the back of his parents house packing the gear, shoving it in a box, driving it to the post office himself with an old waggon.

“He did a phenomenal job and, and he stayed in touch with his consumer. He stayed in touch with the influences. He stayed in touch with his community. And that’s the way that we’re able to iterate the products out that people wanted. They understood the products and the demand of their consumers. They built this really fast model to deliver products that people wanted really quickly,” Cole says on founder Ben Francis.

How is Gym Shark at an advantage over major players?

Cole says from day one, they don’t have big incumbent systems like a Reebok or like a Nike, so that’s a real advantage for them.

“I think there’s this huge amount of growth in their business,” he said.

“So direct to consumer, great influence and marketing campaigns, or young CEOs or young founders of startup, handing it over to a more mature CEO to really grow the brand. While he did an apprenticeship. He’s now taken back over as the CEO of Gym Shark.”

The company is based in Birmingham in the UK, it’s got over a billion dollar valuation.

“So it’s one of the first to emerge in that really sort of duopoly market, between Nike and Adidas”

Adidas offloading Reebok?

German sportswear giant Adidas has agreed to sell the struggling Reebok brand after buying the company in 2006.

The new owner is US company Authentic Brands Group who bought the Reebok brand for 2.1 billion euros ($US2.5 billion).

In February this year Adidas announced that it would offload the brand after struggling to lift its fortunes.

Adidas CEO said “Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind it have made to our company,”

Authentic Brands Group owns a number of well known names including Fashion retailers JCPenney, Forever21 and Brooks Brothers, as well as the publication Sports Illustrated.

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Money

Boeing CEO to depart with lucrative exit package despite chaos

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Boeing CEO Dave Calhoun is set to step down from his position at the end of the year, walking away with a substantial payout despite challenges faced during his tenure.

Here are the key points:

  • Massive Payout: Despite Boeing’s stock price plummeting by 43% since Calhoun took over as CEO in 2020, he is poised to receive a $24 million payment upon his departure.

  • Additional Compensation: Calhoun holds options that could potentially earn him an additional $45.5 million if his successor manages to boost Boeing’s share price by 37%.

  • Comparative Compensation: Calhoun’s compensation during his tenure exceeds that of CEOs in similar industries, despite Boeing’s stock underperforming in comparison.

Boeing CEO Dave Calhoun’s impending departure at the end of the year has sparked controversy as he stands to walk away with a substantial payout, despite the company’s tumultuous journey under his leadership.

READ MORE: Boeing CEO to step down

Despite inheriting a company reeling from the aftermath of two deadly 737 Max crashes, Calhoun’s tenure has been marred by further setbacks, including the recent Alaska Airlines door blowout incident that further tarnished Boeing’s reputation.

Boeing offers CEO $5.3 million incentive to stay through recovery …

With Boeing’s stock price plummeting by 43% during Calhoun’s time at the helm, questions arise about the correlation between executive compensation and company performance, especially in the face of such significant challenges.

‘Raised eyebrows’

Calhoun’s lucrative exit package, valued at $24 million, has raised eyebrows among shareholders and industry observers alike.

Additionally, the potential for Calhoun to earn an additional $45.5 million based on the future performance of Boeing’s shares has intensified scrutiny over executive compensation practices.

This sizable payout contrasts starkly with Boeing’s stock performance, which has significantly underperformed compared to both industry peers and broader market indices, highlighting the dissonance between executive rewards and shareholder value creation.

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Money

It’s been a record year for CEO compensation

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In 2023, Broadcom’s CEO Hock Tan was granted a stock award worth $161 million, propelling him into the realm of highest-paid CEOs.

However, as the company’s share price surged, the value of Tan’s award skyrocketed to approximately $1.3 billion, outpacing even the shareholders’ annual returns.

Tan’s compensation reflects a broader trend among top executives in the tech sector, where awards of restricted stock and stock options surged in value alongside company share prices.

Notably, CEOs like Charles Robbins of Cisco Systems and Shantanu Narayen of Adobe also saw substantial increases in their compensation, doubling in some cases.

The disclosure of such equity growth in executive compensation is a new requirement by the Securities and Exchange Commission (SEC), providing shareholders with insights into the changing value of executives’ awards throughout the year.

CEO pay is on the rise.

New heights

Overall, CEO pay at major S&P 500 companies reached new heights in 2023, rebounding from slower growth in the previous year. The median pay for these CEOs rose to $15.6 million, up from $14.1 million in 2022, reflecting a surge in equity awards.

Broadcom clarified that Tan’s stock award is designed to span five years, with no plans for additional equity grants or cash bonuses during that period.

Tan’s compensation, which amounts to approximately $33 million annually over five years, is contingent upon his continued tenure and specific share price targets.

While the initial valuation of Tan’s restricted shares stood at $160.5 million, the surge in Broadcom’s share price prompted the company to reassess the likelihood of meeting vesting conditions.

This reassessment suggests that Tan may not receive all the shares initially granted.

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Money

Market forecast: weather whirlwinds influencing investments

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Prime conditions for commodity investments arise from global weather shifts, geological tensions, and rising interest rates.

With global weather patterns causing disruptions in traditional supply chains, coupled with geopolitical tensions over natural resource access, and the anticipation of higher interest rates impacting financial markets, the conditions for commodity investments have reached exceptional levels.

Amidst this backdrop, Farrer Capital has emerged as a standout player, leveraging its unique ‘blue ocean’ approach to capitalize on price dislocations and scarce competition in the market.

Mark Wyld from MW Wealth joins the show to share his insights on the inclement weather impacting the market.

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