Three Things (4/3)

AT&T data breach

AT&T reported that personal data from 73 million current and former users was leaked on the dark web. Data leaked could have included information like emails, phone numbers, social security numbers, and AT&T account passwords. The company reset all passcodes for the associated users shortly after the breach. On March 30th, AT&T was sued with a class action lawsuit for recklessly maintaining customers’ personal information.

A public data breach like this one can create ill will with customers and often messy lawsuits. Data is becoming a fast growing commodity in the world of AI but data security continues to be a p0 task for businesses across all sectors. Those that invest in infrastructure early and often will undoubtedly have a competitive advantage moving forward.

Saks Fifth Avenue appraisal

Saks Fifth Avenue recently had their flagship location in New York City appraised, and the valuation jumped from $1.6 billion in 2019 to $3.6 billion in 2024. The appraisal is said to be prompted by plans to refinance for a possible purchase of Neiman Marcus, a deal that has been rumored for many months. The appraisal, however, brought to light greater demand for New York’s commercial real estate, which has suffered severely since the pandemic, especially department stores.

It’s a surprising result since news coverage has often highlighted the struggling commercial real estate market as a risk for market stability. Department store real estate has been challenged by changing consumer behaviors, but recently, a few luxury retailers have made significant real estate investments on Fifth Avenue, such as Gucci’s parent company and Prada. Saks Fifth Avenue’s striking valuation creates an exciting tailwind for growth potential within Class A commercial real estate.

Chocolate prices skyrocket

Cocoa prices have skyrocketed due to high temperatures and unfavorable weather conditions that have damaged crops in West Africa. The region’s weather has created supply shortages, affecting major chocolate manufacturers like Nestle, Hershey, and Lindt. The spike in cocoa prices has highlighted the reliance of chocolate retailers on West African cocoa production.

This is a classic supply and demand story. Chocolate retailers are left with a few options: raise prices, shrink pack sizes, cut costs, make products with less cocoa, or take a profit hit. So far many are cautiously raising prices, as they know consumers are already wary of inflation uncertainty. As a result, they have seen higher prices in stores weigh on demand. If challenges persist for cocoa farmers in the coming years, it is possible that dramatic changes will have to be made to the supply chain.

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