J. Crew set to file for bankruptcy and CBS vet Gil Schwartz dies: Monday Wake-Up Call
Welcome to Ad Age’s Wake-Up Call, our daily roundup of advertising, marketing, media and digital news. If you're reading this online or in a forwarded email, here's the link to sign up for our Wake-Up Call newsletters.
J. Crew expected to file for bankruptcy
Good morning and welcome to another week of fast-moving news amid the pandemic. One of the big stories this Monday: Fashion retailer J. Crew looks likely to become one of the first big retail casualties of the coronavirus. The New York Times reports that the retailer is expected to file for bankruptcy protection as soon as today.
According to the Times, J. Crew "has been in negotiations with lenders on how to handle its debts for weeks, according to two people with knowledge of the situation, who spoke on the condition of anonymity because discussions were confidential.” The company has so far refused to comment.
Although J. Crew has a large debt burden following its leveraged buyout by two private-equity firms, TPG Capital and Leonard Green & Partners, in 2011, it had recently hired a new CEO, former Victoria’s Secret executive Jan Singer, and was planning an IPO for sister brand Madewell. And despite being hit hard by the coronavirus, the company had made some attempts at innovating during the pandemic; last week Ad Age reported it launched a line of face masks for consumers that sold out in a day.
RIP Gil Schwartz
Some sad news over the weekend: Gil Schwartz, the well-known CBS communications chief who retired in 2018, has passed away at the age of 68. As Ad Age’s Jeanine Poggi reports, Schwartz spent more than 20 years at the eye network. He also moonlighted as a Fortune columnist and as a novelist under the pen name Stanley Bing.
As Poggi writes, Schwartz also “became known for his singing, guitar playing and comedic riffs during CBS’s annual affiliate meetings, and his signature pigs in a blanket were always on hand during the company’s annual holiday press party.” While his passing was unexpected, he died of natural causes, according to an obituary sent by CBS.
Earnings reports reveal pandemic's impact on brands
The past few weeks have seen many companies report first-quarter corporate earnings, and today’s new issue of Ad Age takes a look at how the coronavirus pandemic affected their performance. Analyzing the data “offers the first real look at how much the coronavirus has overturned balance sheets for some of the world’s largest ad buyers and sellers.”
While some of the outcomes might have been predicted—surges for Amazon, Clorox and Lysol maker Reckitt Benckiser among them—others are perhaps more of a surprise. Mondelēz’s results reveal people crave Oreos in a lockdown, while others are saying it with flowers: 1-800-Flowers.com has seen demand increase “significantly” as people turn to floral bouquets to connect with others.
Companies that have been hit hard include Coca-Cola, suffering from shuttered entertainment venues; Comcast, which has been affected by theme park closures; and cosmetics brands including L’Oreal and Estee Lauder, as people take a break from makeup while WFH. Other big advertisers, including McDonald’s, Molson Coors and Kraft Heinz, have seen their figures hold steady so far.
Virtual travel lifts off
As coronavirus continues to slam the travel industry, travel brands are turning to virtual experiences to keep their businesses afloat. Virtual travel “is being deployed in novel ways to market brands during the pandemic,” writes Ad Age’s Adrianne Pasquarelli, who takes a look in this week's issue at how the sector is coping.
Some examples: Airbnb is selling classes and workouts that consumers can do from their own living room couches; high-end hotels are finding wellness partners to host yoga sessions; and destinations including the Florida Keys are encouraging people to post vacation memories on social media. There can even be big money in it: Napa Valley vineyard Larkmead reports that a recent virtual tasting resulted in more than $10,000 in revenue as tasters bought different bottles.
‘Corngate’ ruling: Anheuser-Busch InBev has scored a major victory in its long-running legal dispute with Molson Coors over Bud Light ads that mocked Miller Lite and Coors Light for using corn syrup, writes Ad Age’s E.J. Schultz. According to a federal appeals court ruling: “If Molson Coors does not like the sneering tone of Anheuser-Busch’s ads, it can mock Bud Light in return.”
More agency layoffs: In the latest blows for agency land, Johannes Leonardo and R/GA are some of the latest agencies to announce layoffs and furloughs, while strategic advisory firm MediaLink has also confirmed cuts. Keep up-to-date on the news on Ad Age’s regularly updated blog.
Creative under quarantine: Danni Venne, exec VP-group creative director and lead producer at global sonic branding studio Man Made Music, is Ad Age’s latest Creative Under Quarantine diarist. Lockdown life in Brooklyn for Venne, who identifies as trans-feminine and queer, includes dealing with the Easter bunny, ceiling leaks and tense forays outside with face masks, all while fielding calls from composers and homeschooling her two daughters as a single parent. Read her account here.
Corona creativity of the weekend: The Kentucky Derby should have taken place this weekend, but with the event postponed until September, one brand created a bittersweet campaign for race fans. As Ad Age’s E.J. Schultz writes, Woodford Reserve made use of Churchill Downs' unusual solitude in a spot that features a stirring rendition of “My Old Kentucky Home” played at the racetrack on a cello. The ad, by Energy BBDO, ran on Saturday during NBC’s re-airing of the 2015 Derby. To comply with social distancing rules, some of the aerial footage it includes was shot using drones.
That does it for today’s Wake-Up Call, thanks for reading and we hope you are all staying safe and well. For more industry news and insight, follow us on Twitter:@adage.
From CMO Strategy to the Ad Age Datacenter Weekly, we’ve got newsletters galore. See them all here.
Subscribers make the difference. Individual, group and corporate subscriptions are available—including access to our Ad Age Datacenter. Find options atAdAge.com/membership.