Get smarter than your boss in 5 minutes with today's business news.
🚩Woolies flags a $220 million cost blowout
🌳CBA lands a $200 million green deal
👟Nike acquires NFT studio RTFKT
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Here's everything you need to know today - in under 3 minutes.
🚩Woolies flags a $220 million cost blowout
🌳CBA lands a $200 million green deal
👟Nike acquires NFT studio RTFKT
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Background: Woolies have been one of the biggest winners from the pandemic (kudos to panic buying toilet paper). We're talking a 78% increase in net profits for the full-year to August.
What happened: Fast-forward to the first-half of the new financial year, and Woolies is singing a different (more solemn) tune. They've announced a $220 million cost blowout.
What else: It's all thanks to the ol' supply chain and COVID disruptions. On top of that, the company had to fork out for direct COVID-safe costs and indirect costs like higher fuel prices.
💡Direct and indirect costs are the two major kinds of expenses that companies can incur.
💡We've got:
💡So, personal protective equipment for production staff is a direct cost that Woolies incurred, while higher fuel prices is an indirect cost.
Background: IFM Investors are an investment company slash fund manager that started around 25 years ago. And this crew invest money on behalf of more than 550 institutions worldwide - and lots of these are Aussie industry super funds.
What happened: Now, IFM have committed to deposit $200 million into a term deposit with CommBank - Australia's biggest bank.
What else: But there's a 'lil caveat on this one. CBA can't dish this cash out willy nilly - it can only be used to fund sustainability-linked loans.
💡When a bank receives money from you (let's say $10k), they will lend that money out to someone else. That's how they make money. They could lend to someone looking for a personal loan, or a mining company looking to fund its next big project.
💡But in this case, it's a little different. The IFM term deposit means the bank will exclusively allocate their funds to sustainability-linked loans.
💡Sustainability-linked loans are loans that offer corporate borrowers cheaper loans in exchange for hitting non-financial targets (this could be environmental targets, Indigenous employment or gender diversity).
Background: Nike are the sportswear OGs - and they reckon they're very forward-thinking. This crew are already in Fortnite games, the ~metaverse~ and all over augmented reality.
What happened: Now, Nike are taking a massive leap into the crypto world by acquiring NFT studio RTFKT (pronounced artefact, for all you acronym noobs).
What else: RTFKT have already dabbled in creating virtual shoes, so it's a nice fit. While the terms of the deal haven't been disclosed, the company was valued at US$33.3 million back in May.
💡A business model is a strategic plan that a business creates to earn money. But the world is constantly changing and these business models need to adapt.
💡Nike started out in the early 60s as a company that sold Japanese running shoes. Then it began manufacturing its own shoes...and later clothing.
💡 It brought Air Jordans to the digital world via Fortnite...invested in the metaverse..and now, bought an NFT studio.
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