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On November 30, 2017, CN commented on Associated British Foods: Mmmmm…Brexit :

Dan, I enjoyed reading your thoughts on ABF and also share in the belief that drastic measures have to be taken to combat the potential impact of Brexit. However, I wanted to point out that a “direct to consumer model” likely will not improve margins. In fact, most ecommerce businesses, including the retail operations of Amazon, are actually unprofitable ( While you are definitely correct in reasoning that ecommerce businesses save money by cutting out the retailer’s share in the margins, the fulfillment and delivery aspects of these businesses are prohibitively expensive. Especially in the EU post Brexit, if ABF needs to ship products internationally, delivery costs can mount up very quickly. In fact, some direct to consumer stores such as Warby Parker are trying to grow margins by opening brick and mortar stores. A brick and mortar store purchase is actually more profitable than an e-commerce order, as factors like shipping and handling charges, and the costs associated with increased returns, eat into margins (

This is a great post, Francois, and one that unfortunately hits close to home as a recent article by the Financial Times ( ) showed that U.S business schools have now seen a drop in MBA applications from overseas students. The article mentions that only 32% of US business schools reported an increase in international candidates for their masters programs in 2017, down from 49% in 2016. A big part of the blame is on Donald Trump, whom we can say more than half of this nation’s electoral votes went to. An important factor that you didn’t mention in your suggestions for mitigating the impact of isolationist policies on declining university application rates is making the work immigration visa process easier for international students. A lot of students go to a country to study in hopes of staying after graduation but the current immigration policies, at least here in the U.S., are not very favorable. As an international student who attended both college and now graduate school in the U.S., I have encountered so many barriers in the visa application process for staying in the U.S. after graduation. I was lucky enough to get a lottery for the H1-B visa, the first step in obtaining permanent residency status, but several of my fellow international college friends had to physically leave the country. Even now, with summer internship searches, there are so few opportunities for international students outside of traditional consulting and banking. I believe the greatest cause to the decline in applications following the rise of protectionist movements in the U.K and the U.S. stems from concerns about employment visa sponsorship post-graduation. The most effective way to solve this problem would be for institutions of higher learning to work with the government and create a new class of work visas that allow qualified international students an easier path to gaining permanent residency status. Without some sort of assurance of an equal chance at landing a target job as other students post graduation, international students have little incentive to apply to universities in countries that have isolationist policies.

On November 30, 2017, CN commented on Magazine Luiza 4.0: the Brazilian Amazon? :

Fc, you bring up a very interesting topic – Amazon’s competitive threat to the emerging markets. While I agree its potential entry into any country is worrisome for incumbent local retailers, I am doubtful that Amazon’s international retail expansion strategy will be as successful as its domestic dominance. Firstly, Amazon’s ecommerce business has been and continues to be largely unprofitable – the company’s performance is driven, for the most part, by the booming AWS cloud business. In fact, in 2016, AWS’s operating income was 150 percent of Amazon’s total operating income, which help offset a $541 million operating loss in the company’s international segment. [1] As such, if I were CEO Jeff Bezos, I’d be focusing much more of my attention on the cloud business than on entering markets in which I have no operating leverage or existing infrastructure and which are not likely to be profitable in the foreseeable future. Secondly, Amazon’s international presence is actually not as large as some might think. In fact, the company only fully operates its website in 13 other countries outside of the U.S. Amazon even decided to leave China given the unfavorable competitive environment, which is dominated by already established ecommerce players like Alibaba. [2]



On November 30, 2017, CN commented on Climate Change and H&M: Is Sustainability the Answer? :

I absolutely love the solution you proposed of having H&M start its own clothing rental/ shared clothing program! I wanted to highlight some additional statistics and facts in support of the sustainability impacts of such a solution. According to a PBS article (, people in the U.S throw away 13 million tons of textiles , which translates into  about 85% of their clothes each year. This accounts for 9 percent of total non-recycled waste. In the same article, the Environmental Protection Agency estimates that, in terms of carbon emissions, the amount of worn clothing already recycled each year into new apparel is equivalent to taking one million cars off the road! You can bet that a lot, if not the majority, of the clothing that ends up in the landfills are from the cheaper, fast fashion brands like H&M. Furthermore, start-up companies like Le Tote, which I’m an avid fan of, have already began efforts to make everyday casual clothing available for rent. Le Tote sells subscriptions to unlimited totes of 5 casual articles of clothing and accessories at a time. The good reception of such services have already created a market that should make an entry by H&M or another fast fashion retail brand into the space very welcoming!

On November 30, 2017, CN commented on Can Macy’s Stay Competitive? :

You proposed some excellent turnaround strategies for Macy’s going forward, especially investing more in digital technologies to improve the in-store and omnichannel experiences. However, I think an important solution that merits more discussion is Macy’s need to focus and invest more into its own ecommerce platforms. According to a recent Business Insider article (, the company announced it saw double-digit annual revenue growth from both its and sites in 2016. As such, to help fuel further online growth, Macy’s should inject more capital into initiatives such as a mobile commerce app to drive traffic. Going forward, it would also be very useful for Macy’s to invest more in data analytics platforms for its website, including potential apparel recommendation technology that capitalize on the popularity in personalized styling services, which has made offerings like StitchFix very popular among millennials. Furthermore, global expansion into geographies where Amazon hasn’t yet taken huge online market share, such as in China, can be a smart move. In fact, just last year, Macy’s launched its own Chinese ecommerce portal ( after initial success on a storefront on Tmall Global, a web shopping site for imported products operated by Alibaba Group.

I’m a huge proponent of indoor farming for many of the well thought out reasons mentioned above such as a controlled growing environment unaffected by climate change and decreased carbon emissions due to proximity of the customer base. However, I think an even more effective agricultural innovation than vertical farming to hedge against climate change is underground farming. To me, the latter is superior for a few reasons. First, underground farming takes up even less real estate since it leverages underground space that would otherwise be left unused. Secondly, underground farms can be located right beneath urban centers, making the food source a few hundred feet of its customer base. Last but perhaps more important, underground farms can be grown more sustainably than vertical farms. One underground farm, Growing Underground, in London, uses hydroponics, a system whereby plants can be grown without soil, using low-energy LED lights instead. Furthermore, a technologically advanced irrigation system allows the water that is needed to grow the plants to be treated on-site and recirculated, recycling and conserving water in the process.