Subway Brand Closes More Stores than Opened in 2016

In 2016, Subway closed more stores than it opened. It now has 26,744 stores in America which means it is still the most ubiquitous restaurant chain in the U.S. It closed 359 U.S. locations last year.

The company, in an e-mailed statement, said, “We will continue to relocate some shops to better locations and look for new sites- both traditional and non-traditional.”
Subway’s U.S. home market is no longer a key market for Subway’s future expansion.

Sales in 2016 dropped by 1.7% to $11.3 billion, down from $11.5 billion in 2015.

According to MillerPulse data, industry-wide, same-store sales has dropped 0.6% for the fourth straight month of decreases. U.S. restaurants are also affected as lower grocery prices have led to people choosing to cook at home. Also, minimum wage increases have pushed restaurants to increase menu prices.

To revive its reputation as a place to get healthy food, it is eliminating antibiotics from its chickens and is switching to cage-free eggs. Also, the company is now providing deliveries. It also revamped its logo into a more contemporary look.

Globally, it still has more than 40,000 shops, the most than any fast food chain. Sales outside America increased by 3.7% to $5.8 billion as it continues to expand operations.

The company, in a statement, said, “Sales for 2016 reflect our focus on international growth. We are undertaking an exciting transformation that includes introducing new and improved products, creating an even greater customer experience, refining operations, and positioning Subway franchisees for continued success.”

It recently innovated by allowing usage of Facebook Messenger ordering through Masterpass-enabled bots. 

Recently, Subways hired former McDonald’s executive Karlin Linhardt to head its marketing division for their U.S. and Canada stores which are over 30,000. He was previously a senior consultant for Accenture. He also spent a decade with McDonald’s and another decade with Anheuser-Busch. He also was on the board of directors for Perkins & Marie Callender’s Restaurants.

Subway CMO Joe Tripodi, said, “Karlin will be a critical member of our leadership team as we strengthen our brand and grow in a way that best supports our North American franchisees. Karlin strategically and operationally understands our business and the challenges our franchisees face every day. He will be an impact player as we transform Subway at every consumer touchpoint in North America.”

In 2016, the company hired Katie Coleman to lead global public relations. Subway was involved in a scandal wherein their former spokesman Jared Fogle was sent to prison for child pornography charges.

Competition from fast-casual competitors like Sweetgreen and Panera has made it difficult for Subways. The market has gotten quite crowded with companies like Little Caesars, Chipotle and niche players Arby’s.

Even McDonald reported a drop in same-store sales in the 4th quarter of 2016. This was despite to have many stores operate 24/7.

Subway was founded 52 years ago by Fred DeLuca and Peter Buck. When DeLuca died in 2015, his younger sister Suzanne Greco took over and became chief executive officer. The company does not have company-owned restaurants. Franchisees own all.

Subway is privately owned by Doctor’s Associates Inc.

Stocks Slump As Investors Exploit Quarter Gains

The stronger results for the latest quarter have encouraged the investors to take advantage of the market to lock in the profits. As a result, the global stock market slumped on Friday. The investors are unsure about the corporate earnings forecast as the market is speculated to enjoy lofty gains. The S&P index trades 18 times greater than the earnings estimate for the upcoming months while the average is 15.

The S&P index gained 5.5% at the end of the first quarter. This is the best quarterly performance since 2013 and investors wanted to make sure that they make profits. The valuations are quite stretchy as the market hopes for a huge boost in the economy. The economic boost may not always be supported by inflation and the corporate companies have to increase their earnings rapidly to provide gains for the investors. Investment analysts predict that the market would plummet if the earnings don’t increase as expected.

Experts predicted that S&P index growth will be capped at 2% by the end of 2017. On Friday, Dow Jones Industrial Average was at 20,663.22 and S&P 500 index lost 0.23%. Similarly, Nasdaq Composite also lost 0.04%. This is mainly due to the sudden rush of the investors to lock in their profits.

The oil prices closed higher on Friday. However, the quarterly results show a 5.7% loss. It is one of the worst quarters for oil since 2015. Brent oil was trading at $52.83 per barrel and US Crude was trading at $50.60. The oil futures lost 7% since the last quarter. When OPEC deal was expected to increase the oil prices, the futures took a downward turn and there is no room for redemption anytime soon. While the production cuts by the leading oil producers are effective, the balance in the market is threatened by the increase in US oil production.

The US treasury yields that have been rallying since the election of Donald Trump has also faced a decline in the past few days. The interest rate hikes support the yields, but the Fed’s comments have made the investors cautious about the market. The Federal Reserve commented that there is no need to increase interest rates at a faster rate because the inflation is controlled and economic growth is modest at its best. The experts predict that there will be more interest rate hikes in the upcoming months, but the Fed is taking the wait and see approach before announcing another hike.

The rally of the dollar has also flattened as the dollar index didn’t change a great deal. Greenback was gaining against global currencies a few months ago, but it has lost 1.7% in the first quarter, showing a worst performance in a year. Dollar was trading at 14-year highs in the beginning of 2017 mainly because Trump had promised economic reforms. The industry has now understood that it will take a long time for the economic reforms to be introduced because of the political risks involved.

Two Men Arrested In Ticket Ponzi Scheme For Hamilton And Adele Shows

Two men, Joseph Meli from Manhattan and Steven Simmons from Connecticut were arrested on Friday for cheating wealthy investors through ticket Ponzi schemes. The accused men allegedly made the wealthy investors believe that they are investing in ticket businesses for several popular shows such as Adele concerts and Broadway fame Hamilton. Wealthy individuals from several states were encouraged to invest in the business so that they can make huge profits. The multi-million dollar investment Ponzi scheme came to an end when the perpetrators couldn’t manage the Ponzi business anymore.

According to the civil complaint launched by the Securities and Exchange Commission, the cheaters ran a Ponzi scheme where they generated $81 million dollar investment. Investors from 13 states are encouraged to enter into the ticket business. The investors were made to believe that the business involves buying huge blocks of tickets for important concerts and musicals. The individuals were promised huge money when the tickets were sold later at a higher price.

Out of the $81 million investment, about $1 million is used for personal expenses of the accused men and also to pay off the investors. Simmons and Meli were charged with criminal charges related to wire fraud, securities fraud and conspiracy. Meli was additionally included in the civil complaint. While the prosecutor requested that the accused must be held without any bail, the US Magistrate judge them to go free with a $1 million bail each.

Simmons didn’t provide any comment, but his attorneys said that their client doesn’t have a criminal record. The attorneys of Meli claimed that all the accusations are false. John H. Kim, deputy US Attorney said that Simmons and Meli ran an effective Ponzi scheme luring wealthy individuals claiming that their business is legitimate. Allegedly, Meli made some deals with the investors claiming that he can sell the Broadway tickets later for a good profit. However, Meli was stealing money from one investor to pay the others. The defendants called the entire scheme as a ‘Shell game’.

In the Ponzi schemes, the fraudsters hope to escape with the money from the investors, but they run out of money and get caught in the act. Both the men engaged in fraudulent activities starting from November 2015 and they were in a tight spot when the investors asked for their money. In the complaint, it was mentioned that Meli owns a luxury car dealership worth $200,000. Simmons allegedly told an FBI agent after the arrest that ‘Meli would hopefully put two slugs in the back of the cooperator’s head’.

Attorney representing Simmons said that Simmons made an ill-advised comment, but he has no criminal history. Meli also drained his bank account and got hold of his passport and valuables. His attorneys said that Meli used the money to pay for the law firm and his valuables are with the law firm. Michael Bowen, Meli’s attorney said that they will fight against the false criminal charges and complaints.

Tech Companies Unhappy With Trump’s Order To Ban Muslim Nationals For 90 Days

President Donald Trump issued an executive order on Friday banning and canceling visas for 90-days for the nationals from Muslim countries. People living in seven Islam dominated countries are severely affected by this order. The technology industry is especially affected by this new order as these companies heavily rely on foreign talent to continue providing services. Tech giants such as Apple, Google and Uber have expressed their unhappiness quite plainly.

The CEO of Google, Sundar Pichai has issued a memo to his staff condemning the new order that causes a lot of pain to the Google employees. He has also urged the employees living abroad to contact the global security team to help them. He also mentioned that Google has publicly remarked on immigration issues. The new order will enforce numerous restrictions on Google employees and their families. He also added that it can create new barriers to bring talented workforce from outside the United States.

The CEO of Apple, Tim Cook also responded to the order saying that Apple doesn’t support the new policy. He added that Apple knows the importance of immigration both to the nation and to the company. Tim Cook discussed the technology and tax policies with the lawmakers on Friday at Capitol Hill. He also dined with Jared Kushner and Ivanka Trump on Thursday.

Mark Zuckerberg, the CEO of facebook wrote a public facebook post criticizing Trump’s outlook on immigration policies. He said in his post that he shares the concerns of others regarding the recent executive order. Mark added that he will try his best to protect the employees and their families in this situation.

Satya Nadella, CEO of Microsoft is an immigrant and he shared his views on LinkedIn. In his post, he mentioned that he knows the positive impact of immigration on the country and the company. Diane J. Gherson, Senior Vice president of IBM also assured the IMBers that the company will provide all sorts of assistance to those who are affected by this new order. He has asked the IBM employees to contact the company officials for any questions on this issue. The CEO of IBM, Ginni Rometty is a part of the advisory board for Donald Trump for the Strategic and Policy Forum. Travis Kalanick, Uber CEO and Elon Musk, Tesla CEO who are also advisers expressed their unhappiness with the blanket entry ban. Kalanick has promised his employees that he will talk about the issue with Donald Trump on the first advisory group meeting on Monday.

Airbnb, a popular home sharing app announced that travelers affected by the executive order can claim free housing for now. Jack Dorsey, CEO of Twitter mentioned that 11% of the Syrian immigrants own businesses in the US and this is three times more than the performance of US-born entrepreneurs. The tech companies that wanted to extend a supporting hand to the President are unhappy with the new administration policies. The legal immigrant employees would be affected by this ban as they won’t be able to return to their families or jobs in the US.

Payday Loan Caps May be Helping Loan Sharks

In 2014, the Financial Conduct Authority (FCA) went all in when it came to reining in the payday loan industry and imposing new rules, regulations and practices. This initiative was meant to ensure consumer protections were in place and to shield the most vulnerable and low-income households from being taken advantage of. It was a success as a majority of loan applications were rejected last year.

At the time, however, the payday loan industry warned that any new stringent measures would prompt impoverished and desperate consumers turn to the unregulated side of the industry: loan sharks.

Most people who were in favor of installing new rules and regulations scoffed at the notion, and dismissed it as fear mongering in order for the Alaska payday loans industry in the United States to operate in a sort of wild west.

But new reports suggest that the payday loan representatives may have been right after all.

The British financial watchdog has initiated a review in order to determine if capped interest rates on payday loans are driving consumers into borrowing funds from unregulated and illegal loan sharks.

Officials concur that the cap has provided major improvements for consumers because they will not be required to pay back more than double the amount borrowed. This also means that Britons will not be involved in a debt trap, and the numbers show that fewer are falling into arrears because of these caps in place.

What about the consumers who were unable to get short-term loans? Where did they go to for money?

“We have to be careful that we do not create a market which encourages illegal lending,” FCA Chief Executive Andrew Bailey said in a blog for MoneySavingExpert.com, a consumer campaign body. “Going to illegal money lenders, or loan sharks, means that you are not protected if you find yourself unable to pay.”

Moreover, it isn’t just payday loans that have fallen under the consumer watchdog’s microscope. The agency is also looking at catalog credit, rent-to-own lending, guarantor loans and pawn brokers. In addition, financial institutions are being scrutinized as part of the FCA’s latest investigation as well.

“The FCA will look in more detail at overdrafts from a consumer protection as well as a competition perspective, using its full range of powers,” the FCA said.

In the meantime, payday loan businesses will generate the greatest amount of scrutiny. With nearly one million fewer consumers being approved for payday loans and 40 percent of lenders leaving the market altogether, the researchers will attempt to find out just where exactly they have turned to for their pecuniary needs.

Ultimately, if they have utilized loan sharks then this would be the unintended consequence that so many people, both analysts and trade representatives, warned about prior to the regulations.

A similar argument is happening in North America so the results of the FCA’s investigations may provide some officials a great deal of evidence to give pause and reexamine their numerous proposals to stop payday lenders from operating in cities or restricting their expansion plans.

The organization’s findings will be published in the middle of next year.

Theresa May Promises To Reveal Brexit Plan Details Soon

The Brexit vote in June has taken the world by storm. Britain’s decision to leave the European Union has repercussions all over the world. The tension continued to increase as the Prime Minister Theresa May had no clear plans about Brexit negotiations. However, she has promised that there will be more clarity regarding the Brexit plan and it will be shared during her speech later this month.

After the people of UK voted in favor of Britain leaving the European Union, the Article 50 of the Lisbon Treaty must be formally invoked to commence the negotiations with Brussels regarding leaving the European Union. Theresa May is expected to reveal the Brexit plans in a speech at least two months prior to this move. The Supreme Court now has to determine whether the Parliament can have an opinion on the invocation of the Article 50. It is expected that the Supreme Court will rule against the government, emphasizing that Parliament should be given some power. The officials from both the houses believe that the lawmakers won’t be against the result of the Brexit referendum.

Theresa May is facing a major burden that has not been experienced before. There is bitterness in the country and in the government regarding the whole Brexit referendum. The Prime Minister had been elusive on this topic so far because she fears that Britain will lose its power when the details of the Brexit negotiations are known to Brussels before the formal process. Her speech and the details it reveals will have a major impact both inside and outside the country.

Ivan Rogers, Ambassador of Britain to the European Union resigned suddenly to everyone’s amusement. In a rather bitter email to his staff, he expressed his anguish about the government’s muddled thinking. He said that the government has not considered the opinions of other 27 nations in the bloc regarding the Brexit negotiation. Mr. Rogers was a close associate of the former Prime Minister David Cameron who failed in his attempt to form a new arrangement between Brussels and Britain. Mr. Rogers’ opinion did not sit well with the political advisers Nick Timothy and Fiona Hill. The opinions of Mr. Rogers notoriously presented itself to the public’s eye. He was seen condemning the government for its unpreparedness and optimism regarding striking a positive deal.

The media had a field day discussing the efficiency of May’s leadership and the apparent loss of Mr. Rogers. However, those who are in favor of Brexit were happy as they felt that Rogers’ quitting decision is inevitable in the present scenario. David Davis, head of Department of Exiting the EU tried to downgrade the power of the ambassador. However, his efforts were thwarted and Tim Barrow is now appointed as the ambassador. The plans of Theresa May are under extreme scrutiny because she herself is an opponent of Brexit but she has promised to fulfill the wishes of the British people.

Britain hopes to create a new trade deal associated with goods and services and a transitional deal to allow Britain to preserve the free trade. If Britain loses access to the single market, it can affect its integrity in many ways.