fortune--2020-04-17--Why ‘Mrs. America’ and the 1970s fight over the Equal Rights Amendment are more relevant than ever

Dahvi Waller couldn’t have had better timing. The former Mad Men writer was working on a new TV show that she thought would dramatize a half-century-old political fight. But before the show premiered this week, that fight came roaring back.
Waller’s new show, Mrs. America, follows the 1970s battle between feminists and anti-feminists over the ratification of the Equal Rights Amendment. (Spoiler: The anti-feminists won.) But the ERA, a constitutional amendment that would guarantee equality between the sexes, found a surprising second wind last year, with several states that had been holdouts during the period depicted in the show now voting to approve the measure. In January, the newly Democratic state legislature in Virginia made the state the 38th to vote for the ERA—the milestone required to ratify such an amendment.
But despite the new support, the original deadline for ratification expired in 1982, so another fight looms over whether those 38 state votes will be enough to get the ERA over the finish line. Waller, whose show premiered Wednesday, talked to Fortune about writing and filming Mrs. America—which stars Cate Blanchett as anti-ERA activist Phyllis Schlafly—at a moment when similar themes are still playing themselves out in modern politics.
This interview has been edited and condensed.
Fortune: Why did you want to make this show? Why was the battle over the ERA the story you wanted to tell?
Waller: I really wanted to do a show centered on women and politics. I’ve watched so many political dramas centered on men. Our producer pitched this idea about Phyllis Schlafly and her campaign against the Equal Rights Amendment; it seemed like a great idea for exploring the roles for women in the ’70s. The fact that the amendment didn’t pass seemed emblematic of what happened to the feminist movement by the end of the decade. It seemed like a great backbone to a series about the broader issues of our culture wars and different definitions of womanhood.
What reaction did you get from gatekeepers in the entertainment industry when pitching this idea—and how did that reception change in the five years you’ve been working on the show?
The studio bought the show in the room. They seemed to get it and why this was such an interesting story. It helped that the world seemed to catch up with the themes we were exploring. When a story resonates today, it seems like a better bet as far as historical dramas go. It wasn’t until [Cate Blanchett] signed on as our lead that it became inevitable.
What was different about the experience of writing or filming the scenes featuring the feminists and the anti-feminist activists?
I knew from the beginning I wanted to dramatize these two worlds and the contrast in how they feel visually and how they sound. We talked a lot about how to differentiate these worlds—the color palette, their clothing, hairstyles, sets. Even though it all takes place in the ’70s, you feel like you’re in a very different kind of ’70s when you’re with the feminists than when you’re with Phyllis in her hometown.
When you have two very different worlds, for a scene in Phyllis Schlafly’s home, in Gloria Steinem’s apartment or Bella Abzug’s office, you just get a different vibe on set. It does end up seeping through everyone’s psyche. There’s just a different tone on set.
What were the pressures of building the world of these feminist icons, whose work and style is closer to what viewers associate with the 1970s, compared with the pressures of building Phyllis Schlafly’s world?
The trick for portraying the feminists—the way they dress, the way they talk, the way they design their apartments feels more like the ’70s we know—so the pressures there were to make sure it never veered into caricature or clichés. In Phyllis’s world, the pressures and challenges were to capture the ways that world felt stuck in the past, while still feeling like it was the ’70s. One example was that I wrote in the script that Phyllis’s beehive is straight out of the ’50s, but I was corrected by our hair design team, who said her hairstyle is actually accurate to the late ’60s or early ’70s, but the fact that it’s an updo feels conservative.
As you were filming, how did that timeline overlap with the 2020 presidential race? The episode featuring Shirley Chisholm and her 1972 run for President—and the pressure on her from fellow Democrats to drop out—shared many themes with our current politics.
We opened the writers’ room in June 2018, before the primaries began in earnest. We wondered, how will we get this complicated terminology of presidential politics across to the audience? Is anyone going to know what a delegate is? Once we got into the edit room, these conversations were happening in our own politics this year. Everyone knew the pressures on Elizabeth Warren to drop out. Everyone’s going to relate to that.
By 2017, the ERA had come back to life. It was ratified in Nevada, in Phyllis’s home state of Illinois, and just a few months ago in Virginia. It was wild to have this ERA, which had been dormant for 40 years, suddenly spring to life in the middle of production.
You always hope people will watch the show you’re putting out there. It gives people one more reason to watch and one more reason why it’s a relevant piece of history to reexamine.
Is it frustrating, in a way, to be confronted with how long these issues have been debated with little progress? Elizabeth Warren started her presidential campaign with a plan for universal childcare, and you show how that issue was a central part of feminist activists’ platforms in the early 1970s.
It was frustrating for us. We would joke that our tagline should be, “Mrs. America: Women can’t win.” Issues that were being fought for back in the ’70s, we’re still fighting for them, and we haven’t gotten very far. Gloria Steinem had a “tot lot” where you could bring your children to work at Ms. magazine in 1970, but that’s still not a feature of offices today. It’s frustrating to wonder—how long is it going to take for us to have a female President? The feminist leaders back then argued that 1972 may be too soon, but certainly by ’76 or ’80 we’ll have our first female President. They really believed that, and it’s kind of depressing to be here in 2020 and we still don’t have hopes for a female President before 2024.
In the episode about Shirley Chisholm’s run for President, many other feminist leaders, like Bella Abzug, argue that she should drop out of the race, saying that her campaign is symbolic, and that the movement should be more concerned about getting policy through than electing a woman. Then, when Chisholm appears onstage at the Democratic National Convention, those same activists are moved to tears. What were you hoping to say about representation?
Representation is essential in every industry and certainly in Hollywood. What came through in making the show is that women, women of color, and men of color need to be able to tell their stories. There are so many more untold stories. We’ve only scratched the surface of this era—there are so many more women who were involved in the women’s movement. When Shirley Chisholm was running for President, some women dismissed her campaign as symbolic. It can be said about her campaign—and about the Equal Rights Amendment—that symbols are important. Symbols matter, and representation matters. It’s an essential part of making progress in this country.
Another episode follows Jill Ruckelshaus, a former White House aide who advocated for the ERA. Her story focuses a lot on her marriage and the compromises she may have had to make for her husband’s career, also in Republican politics. What were you hoping to say with her story?
Before I worked on this project, I did not know there were Republican feminist leaders back then. I was really fascinated by Jill Ruckelshaus and her role in the women’s movement in the ’70s. What resonated was that she was married to a very prominent politician; her husband was head of the EPA under Nixon and then was deputy attorney general who resigned during the Saturday Night Massacre. It felt like a two-career marriage where you’re both in the same industry—who’s going to get to shine, and who’s going to stay home with the kids? It felt like such a modern story. What do you do if your career could stand in the way of your partner’s career?
What do you hope viewers will take away from this series? Both for younger viewers who don’t know this history and for those who watched it unfold?
What I took away from making the series is that this is a story about grass-roots activism. It’s a story about change, disruption, and the uncertainty and anxiety that triggers within us. I learned that it’s important to keep fighting for what you believe in and never get complacent. You can never rest—you have to keep fighting. All these rights that were so hard won, all these opportunities that women fought for—they are tenuous. They have to continue to be shored up.
The grass-roots activism you mentioned—is that something viewers will see from the feminist side of the show or the anti-ERA activists working with Phyllis Schlafly?
It’s a combination. One of the reasons I wanted to tell this story with Phyllis Schlafly’s story incorporated is that I don’t think you can understand what happened to the women’s movement at the end of decade without the context of this backlash. Every time we take a step forward as a society, there invariably is some backlash or some counterrevolution. With the ERA, there were many factors fueling the backlash, from special interest groups, to insurance lobbies, to homemakers who were anxious about sudden changes.
When the feminist leaders of the 1970s were fighting to pass the ERA, it was already 50 years old. Now, it’s been almost another 50 years. How does it feel to be so immersed in this fight a century later?
Alice Paul introduced the ERA in 1923, and it took 50 years just to get it to the House floor for a vote. It’s frustrating how slow progress is. You have to hope, in 50 years, we’re fighting for new things.
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fortune--2020-04-18--Georgia’s staple cheesy bread is more than Instagram bait. It’s an economic indicator

Coronavirus lockdown diets look the same the world over : Bread , beans , and comfort food

In February, before the current global lockdown to curb the spread of COVID-19, the Khachapuri Index hit an all-time high.
The index, an unofficial economic marker for the country of Georgia, doesn’t have to do with popularity: It monitors the cost of making the country’s staple food—khachapuri literally means “cheese bread”—at home and uses it as an economic indicator—not unlike similar annual calculations done in the U.S. for Thanksgiving dinner, or the Big Mac Index, an informal comparison by The Economist on purchasing power parity using the price of McDonald’s flagship burger.
But with restaurants closed indefinitely, and going to the grocery store solely to analyze prices no longer acceptable, the International School of Economics at Tbilisi State University couldn’t monitor the price of yeast, eggs, flour, butter, milk, and cheese (along with energy costs) to make its monthly calculation for March. Instead, the index has been conducted through crowdsourcing the information, asking residents to tell economists what they paid in order to analyze the prices. Because while restaurants might not be able to welcome diners, the khachapuri goes on: After all, it is the perfect food for staying home and craving comfort.
Georgians already knew that, but there’s no time like the pandemic for Americans to learn it. The same things that make khachapuri so essential to daily life in Georgia have made it appealing to Americans—though mostly in restaurants, so far.
“It’s bread, cheese, egg, butter; all the most beautiful things put together,” says Rose Previte of Washington D.C.’s Compass Rose. “There’s nothing not to like.”
Georgian khachapuri, a boat-shaped cheese-filled bread, at Compass Rose in Washington, D.C. Greg Powers—The Washington Post/Getty Images
Google searches for the Georgian staple khachapuri are 50% more common now than they were two years ago and twice as popular as four years ago. Instagram brims with photos of the eye-catching Adjaruli version, and prior to the shelter-in-place orders, Georgian restaurants sprang up like wildflowers around the country.
Food writer Polina Chesnakova—whose cookbook, Hot Cheese: Over 50 Gooey, Oozy, Melty Recipes, comes out in September (with a khachapuri recipe, naturally), notes the universal appeal of the ingredients, particularly the melty, gooey filling: “It gives a moment of suspense, a setting of the stage, when a big Adjaruli khachapuri comes out of the oven.”
The khachapuri style with the big pizza-like crust and sunshine yellow yolk in the center—originating from Batumi, on the Black Sea—is the type most commonly served in the United States. But the more common version served daily on tables in Tbilisi—and used in the index—is the simple stuffed pita-like kind called Imeruli. “Georgia has a rich dairy culture,” explains Chesnakova of her homeland, “and it shows its love for cheese with khachapuri.” Megruli khachapuri adds a layer of cheese on top of the Imeruli, while the Achma variation is layered like lasagna, and, an easy version, Penovani, uses puff pastry for the bread portion.
Any conversation with a Georgian or restaurateur making Georgian food eventually comes back to this huge variety: While the eye-catching Adjaruli khachapuri owns Instagram and draws diners in the U.S., the food is less about a special occasion and more a simple, no-frills, everyday staple dish. “It’s not pizza,” says Sergey Zdorodetstkiy, a partner in a recently opened Georgian café in Seattle called Skalka. “You can’t open the fridge and see what else can go on top, it’s just two ingredients.”
That minimalism speaks to people. “Georgian cuisine is to Russia is as Mexican food is in the U.S.,” Previte says—an adopted favorite served at neighborhood restaurants and considered a quintessential comfort food. Though Skalka usually serves a variety of breakfast foods, the downtown café has focused on Georgian cuisine while limited to takeout and delivery, particularly khachapuri, which it started offering via drive-thru after it had to shutter its seating. While logistics have stymied Skalka for the moment, it was wildly popular. “We want to do what we love and make what people love,” says Zdorodetstkiy.
Making Adjarian khachapuri in a tandoor oven at the Georgian restaurant Mama Gochi in Moscow. Sergei Fadeichev—TASS/Getty Images
That attitude embodies what makes khachapuri so much more than an everyday staple. When Previte first moved to Moscow with her journalist husband, she says, “Western food was expensive, and Russian food not great.” It wasn’t until a neighbor cooked her a Georgian meal that she finally felt at home. “The experience of living in Moscow was of loving Georgian food,” in part because of the nature of the country’s cuisine, she says. “Georgia is so welcoming.” It’s what inspired her to feature the cuisine and its star dish at her restaurant. But she also highlighted Georgian culture: “The food,” she says, “goes hand in hand with hospitality.”
Though it’s unlikely you’re hosting anyone else right now, you can show that same welcome to yourself by making khachapuri at home. “In Batumi, people wait two hours in line for their khachapuri,” says Zdorodetstkiy. But the simplicity of the dish means that in the same amount of time, you could cook it yourself.
“We’ve got more time than ever to stretch our culinary muscles and try out new recipes and kitchen projects,” Chesnakova says, underscoring a comfort food “whose novelty takes you out of your kitchen and transports you to a different world—even if just for a few bites.”
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fortune--2020-04-18--Coronavirus lockdown diets look the same the world over: Bread, beans, and comfort food

The SBA gave fintech companies the green light too late , leaving the smallest of businesses without PPP loans

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When it comes to eating through a crisis, it turns out humans are remarkably similar.
Since lockdown measures moved from Asia to the rest of the world last month, the food trends seen in the U.S.—stockpiling, a return to comfort foods, even a sudden obsession with baking bread—have in fact appeared worldwide, shifting global supply chains in the process, according to the early reports on the impact of the COVID-19 crisis from the U.S. Department of Agriculture’s Foreign Agriculture Service.
While the habits picked up during lockdowns may not last after they’re lifted—after all, everyone has a restaurant dish they miss, and maybe you’re already sick of beans—the harmonized response is actually the continuation of a decades-long, global trend. When it comes to food, more than ever, we’re all eating from the same menu.
The great flour and yeast run
As lockdowns have been announced globally, people have fallen into similar patterns, according to early anecdotal reports. (It’s too early for much conclusive data.) From Colombia to Bulgaria, people have stockpiled dried and canned beans, grains and potatoes—and started baking bread, producing runs on yeast and flour the world over, according to country-specific reports from the USDA.
Runs on flour and other staples have prompted national governments from Kazakhstan to Cambodia to Algeria to restrict or ban exports of locally produced basics. Meanwhile, logistical delays at some ports and borders, paired with currency fluctuations and job losses, have in many places made imported food more unaffordable—and turned buyers back to basic foods, grown locally, according to USDA reports. And for those who can afford it, online grocery shopping and delivery is now booming worldwide.
With tourism grinding to a halt and restaurants closed, demand for meat—especially more premium cuts—is also down in many parts of the world. In Japan, that means plunging demand for marbled wagyu beef, while in Spain, that’s hitting sales of the country’s famous Iberico ham—prompting shortages of storage space and pleas for government help. In Asia, where countries have been grappling with lockdowns and closures since January, the evaporation of tourism and special-nights-out has produced a demand fall to rival oil prices; with people less inclined to deep-fry at home, the need for vegetable oil has dropped.
Barcelona, deli meats, sausages, Iberian ham display in store in 2019, before the coronavirus pandemic dented demand for such specialties. Wire photography: Jeffrey Greenberg—Universal Images Group via Getty Images Jeffrey Greenberg—Universal Images Group via Getty Images
Meanwhile, people appear to be turning to foods that are comforting to staunch their anxiety, and fill the time. In Italy, that means returning to cooking pizzas from scratch. In the U.S., it seems to mean stocking up on ready meals and guilty pleasure snacks—the kinds of processed food that, until the coronavirus crisis, were struggling to hold sway against the rising popularity of healthy eating. Either way, carbs are popular.
“Some people will find comfort in eating,” says Fatima Hachem, the senior nutrition officer at the UN’s Food and Agriculture Organization in Rome. “We are assuming this is a behavior people have in times of crises.”
A monotonous menu
It’s simply too early to see what the long term affects on food supply chains and diets will be, says Hachem. The FAO does not yet have data on how diets are changing, although she notes that they, too, know anecdotally that cans of beans—in general, legumes—are now a major food group around the globe.
(That’s not a bad thing, notes Hachem: getting unprocessed food out of cans is a perfectly valid way to eat, especially now—and the FAO thinks we should all be getting more of our protein from beans, anyways.)
But it shouldn’t be so surprising that, in a time of crisis, we all seem to be eating more or less the same things.
Even before the COVID-19 crisis, “diets around the world were going into a harmonized diet,” says Hachem. “And diversity was at risk. We’re relying on mostly a few types of staples, meat, poultry, and even fruits and vegetables are becoming more similar.”
There are many reasons for this, she points out. Globalization has merged food cultures, as have urbanization and changing tastes among young people. The diversity of the labor force is a factor too. Women have increasingly entered the workforce, globally, and they now bear the double brunt of labor inside and outside the home, putting more time pressure on cooking and preparing food.
But our diets have also become more monotonous due to declining biodiversity in our food systems, the byproduct of increasingly industrialized agriculture, rapid urbanization and our love affair with monocultures.
Of the 6,000 plant species that have been cultivated by humans, just nine of them account for 66% of cultivated crops, according to the FAO’s 2019 report from the Commission on Genetic Resources for Food and Agriculture. Of the 7,774 local breeds of livestock worldwide, 26% are in danger of becoming extinct.
That poses dangers for the robustness of the environment, the safety of our food supply chain, and even our potential exposure to pandemics, due to diseases that jump from animals to humans. It also makes our food less nutritious, less interesting—and less unique.
The COVID-19 crisis could offer a chance to reassess the way we eat—to revamp the diversity of our diets and our food systems, revisiting local and forgotten foods, particularly when it comes to fruits and vegetables.
It would make us healthier—and less prone to infection, Hachem points out.
But she’s not optimistic that this crisis will be the one that forces us to permanently shift how we eat. After all, “comfort food” doesn’t imply change.
“Changing diets will take a very long time, and this is a very slow process,” she says. “Once we are out of lockdown, I think people will go back to their old habits.”
Right now, she says, “we are just coping.”
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fortune--2020-04-18--The SBA gave fintech companies the green light too late, leaving the smallest of businesses without

The SBA gave fintech companies the green light too late, leaving the smallest of businesses without PPP loans

On Tuesday evening, several fintech companies finally received the green light they’d been waiting for: The U.S. Small Business Administration approved them to make loans through the Paycheck Protection Program, part of the government’s $2 trillion stimulus package. Those companies, however, never got the chance to lend—by Thursday morning, the PPP funding had run dry.
That’s left thousands of small businesses seeking PPP loans from fintech firms—which specialize in lending to the smallest of employers, including mom-and-pop shops and local operators, which are typically perceived as too insignificant and risky to borrow from traditional banks—out in the cold, with no avenue to borrow money at a time when they most need it to stay afloat during the coronavirus pandemic.
Funding Circle, a UK-based small business lender, for one, had pre-processed several millions of dollars in loan applications from thousands of small businesses, but by the time it received SBA approval late Tuesday, it was too late.
“As soon as we received the approval, the funds ran out,” says Ryan Metcalf, head of U.S. regulatory affairs for Funding Circle, which was among the first non-bank lenders to be approved to participate in the Paycheck Protection Program. It received approval this week along with OnDeck Capital and BlueVine, following PayPal, Intuit’s QuickBooks, and Square, which were approved last Friday. “Unfortunately, the funds for the program were exhausted prior to us being able to accept applications,” says a spokesperson for OnDeck, a top online small business lender.
Meanwhile, at least five other fintech lenders have applied to the SBA but are still awaiting approval, according to the Innovative Lending Platform Association (ILPA), a trade group representing lending startups.
It’s a disappointing outcome for financial technology companies known as non-bank lenders, which have been officially allowed by the SBA to make government-guaranteed small business loans for the first time in history through the PPP stimulus package—but are now in danger of being left out entirely. “We’re certainly frustrated,” says Scott Stewart, CEO of the ILPA. “I don’t think any fintechs actually did any lending directly to the PPP.”
In March, treasury secretary Steven Mnuchin explicitly specified that fintech companies would be able to participate in distributing the stimulus funds along with banks, saying that “any fintech lender will be authorized to make these loans.” In practice, though, fintech lenders were the last round of financial institutions approved by the SBA to make PPP loans, meaning traditional banks got at least a week’s head start on disbursing the funds—and that the money was almost gone by the time the fintech firms were allowed to lend. Conventional banks and credit unions “had first dibs from the get-go,” adds Metcalf. “We were the very last of the three waves.”
As hard as it was for small businesses to navigate the PPP loan application process, fintech lenders themselves also struggled to sort through the confusion. Non-bank lenders interested in applying to distribute PPP loans were originally told to email a government official, but no company that Fortune spoke with ever received a response. Instead, they waited for the government to release an application form for non-bank lenders—and waited. When the Treasury Department finally posted the application online around 9 p.m. ET on April 8, six days after banks began making PPP loans, fintech lenders received no notification. “I hate to say it; I was refreshing the website every 10 to 15 minutes for well over a week,” says Metcalf.
While lenders expected Congress to approve more PPP funding as soon as the initial $349 billion was spoken for—within two weeks of the program’s launch—Washington has yet to release more money.
Now, lenders are urging Congress to allocate additional funding for small businesses worth as much as triple the amount that’s been distributed so far. In a letter sent Friday to lawmakers including senators Marco Rubio and Ben Cardin and seen by Fortune, groups representing the lending industry wrote that the “program total needs to be north of $1 trillion to ensure all small businesses and independent contractors are served.”
By the time the PPP funding ran out, fewer than 1.7 million small businesses had been approved for the loans, less than 6% of the total 30 million small businesses in the U.S.
“The reality is this program has not met the needs of the grand majority of true small businesses, Main Street small business,” says Eyal Lifshitz, CEO of BlueVine, which received its SBA approval Tuesday but not the credentials it needed to obtain loans directly from the agency before the funding ran out. (It was still able to process tens of millions of dollars in loan applications but only through its banking partner.) “It’s like somebody sent you a text to join this Zoom call, except there’s no link to join the Zoom call,” says Stewart.
The average size of loans BlueVine and several of its lending peers have processed is just $50,000—a relatively small amount that’s a vital lifeline for the smallest of businesses. “They have two or three weeks left of runway,” adds Lifshitz. “These are guys who are living on fumes.”
An analysis of SBA data by Plaid, a fintech company that’s providing software to some of the non-bank lenders, found that nearly half of the PPP funding so far has gone to just 4% of small business applicants. That means a handful of small businesses received larger loans accounting for a bigger portion of the PPP pie, according to John Pitts, head of policy for Plaid. “I think had the fintech lenders gotten in earlier into this program, you wouldn’t see nearly that much of a skew,” he says.
Some fintech lenders have experienced firsthand the way the PPP system seemed to prioritize small businesses big enough to borrow from banks over the smallest end of the business spectrum. Kathryn Petralia, co-founder of Kabbage, an online small business lender, said when the PPP program was announced, she logged into the company’s business account with Bank of America to apply for a loan. “Because we didn’t have a borrowing relationship with Bank of America, we weren’t eligible to apply,” she says.
As Congress considers additional PPP funding for small businesses, with a decision expected next week, some lawmakers are pushing to earmark some $100 billion of the money exclusively for small loans of $50,000 and less—the size in which fintech lenders tend to specialize.
“The rising tide does lift all the ships,” adds Petralia, “And we really believe that for every small business that gets access to capital right now, we’re all better off.”
Update: A previous version of this article misstated the amount of PPP loan applications Funding Circle has pre-processed.
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fortune--2020-04-18--Buying time: How watches are finding new homes online

Last July, Ben Clymer sold 100 watches for just shy of $1 million in under 10 minutes. The timepieces—a version of Blancpain’s Fifty Fathoms diver’s watch—were scooped up by collectors, and a few speculators, all fervently refreshing a web page at 10 a.m. on a Wednesday to drop $9,900 on a limited-edition watch. Those in the know need fast fingers to score such a rarity from Clymer’s company, Hodinkee, and its collaborations with some of the world’s top watch brands, including TAG Heuer, Vacheron Constantin, and Omega, among others.
But Hodinkee isn’t a jewelry store, nor is it the type of watch retailer you’re used to. It’s the flag bearer for a revival of interest in mechanical watches—new and old—and has spawned a small but vibrant ecosystem of businesses bringing vintage watches to new buyers.
The New York City–based company began life as a Tumblr blog in 2009 while Clymer was working as a consultant at UBS. “It was after the financial crisis, and I was effectively told to look busy in my cubicle,” says Clymer. And so he began filling those idle hours by writing about watches, starting with an Omega Speedmaster chronograph gifted to him by his maternal grandfather. (The name of his blog—and later, company—comes from the Czech word for wristwatch: hodinky.) The blog soon caught on and won over watch enthusiasts including, notably, musician John Mayer, who would go on to write for the site, become an angel investor, and appear in videos showing off his collection of heavy-hitter timepieces.
Clockwise: Omega Speedmaster Hodinkee Limited Edition, inspired by Clymer’s grandfather’s watch, $6,500. Swatch Sistem51 x Hodinkee Generation 1986, $170. Fifty Fathoms Blancpain for Hodinkee diving watch, $9,900. TAG Heuer Carrera Skipper for Hodinkee, $5,900. Courtesy of Hodinkee
Eleven years later, Hodinkee is more than one man’s musings. It’s the world’s foremost news source for all things watches and watch culture, with 13 editors between its North American and Japanese websites publishing articles, reviews, videos, and podcasts on all things horological.
It’s a tastemaker—invariably increasing the value of vintage watches it blesses and creating, or at least codifying, a new breed of vintage watch collector, one who might rock a 1940s Longines with a pair of Nikes. That influence extends to bringing forgotten brands back to the fore. “[Ben] single-handedly ignited interest in Universal Genève watches, effectively a defunct brand,” says Florida-based vintage watch dealer Eric Wind. “The strength in prices for those watches can really be credited to him.”
Hodinkee is a magazine publisher as well: Its biannual coffee-table tome is just as likely to feature a story on vintage Alfa Romeo sports cars as it is one about Patek Philippe perpetual calendars.
Hodinkee is a tastemaker, creating, or at least codifying, a new breed of vintage watch collector; one who might rock a 1940s Longines with a pair of Nikes.
But it’s making its biggest splash as a retailer, selling new and vintage watches, watch straps, accessories, and the various trappings that might appeal to a well-heeled collector, such as Leica cameras and $1,600 cigarette lighters by S.T. Dupont.
That retail operation began with Clymer and early employees packing watch straps in Clymer’s West Village apartment. It is now headed up by chief commercial officer Russell Kelly, whom Clymer lured away from his position as U.S. brand manager of Rolex sister brand Tudor. (“You don’t just leave Rolex,” one industry insider tells Fortune, speaking to the significance of that hire.) In 2019, the company’s revenue increased by 85% to north of $20 million, and the number of brands it sells has grown from 10 to 18, adding huge names like Omega, Blancpain, Breitling, and soon Apple Watch.
The limited editions, released a handful of times a year, are what really set Hodinkee apart from the average watch retailer. The company’s in-house design team works with the brands to create unique timepieces or reissue beloved watches from their archives. “We have data on what our readers and customers have in their collections,” says Clymer. “We know the kinds of things they’re into.” One example: A re-creation of a yachting chronograph from the archives of TAG Heuer, known as the “Skipper,” currently resells for more than double its original retail price of $5,990.
Inside Crown & Caliber’s watch shop, where employees inspect and refurbish pre-owned timepieces. Courtesy of Jonathan McWhorter/Crown & Caliber
After testing the waters with a number of pop-up shops, the company is set to open its first brick-and-mortar store later this year, in premises left vacant by the Supreme streetwear brand in New York’s SoHo. Don’t expect the white gloves and starched collars you’ll find in the boutiques of Madison Avenue. The space has been specced with slouchy leather couches, a podcast studio, and a watchmaker’s bench. “We wanted to give it a clubhouse feel,” says Kelly.
One of the more innovative businesses to emerge from the wave of attention Hodinkee brought to vintage watches is Manhattan-based Analog/Shift, founded by longtime watch enthusiast James Lamdin in 2012. In contrast to the buyer-beware shopping experience at a pawnshop or diamond district storefront, Lamdin’s approach is one of transparency and education. Every nick and scratch, every blemish of its pieces is photographed in high contrast—“often to our detriment,” says Lamdin. And accompanying each beautifully shot timepiece is a short story, practically an essay, explaining what the watch is, and why it’s cool. “I really enjoy storytelling,” says Lamdin. “I want to share our knowledge with our customers and anyone who comes across our site or Instagram.”
Instagram, which launched the year after Hodinkee, has had a massive impact on the world of watch collecting and his business in particular, says Lamdin: “Before Instagram and Hodinkee, watch collectors on the Internet were nerds on forums. Instagram made it cool for people to share their collections.” Analog/Shift uses Instagram as both a marketing tool and as a way to observe what the larger community of collectors is buying.
Buying watches on the Internet is one part of the equation—but what about selling them? A collector could turn to eBay or a watch forum, but they’re not without risks. And you know you’re probably not going to get the best deal at your local watch dealer or pawnbroker.
A Rolex GMT Master, circa 1968, from Analog/Shift’s inventory. Courtesy of Analog/Shift
Georgia-native Hamilton Powell thought there was a better way. Using his experience in private equity, Powell created Crown & Caliber: an online marketplace that uses data analysis of the watch market so collectors can buy and sell their watches at a fair price.
Someone looking to sell a neglected watch, or looking to fund their next watch purchase, can go to Crown & Caliber’s website, enter details on the piece and receive an instant offer for the watch based on market trends. The seller then sends the watch in a prepaid shipping box to the company’s Atlanta headquarters, where it’s verified by a team of experts, serviced and cleaned if necessary, and offered up for sale with a one-year warranty backed by the company. Retailers like Neiman Marcus, and even watch brand Breitling, use Crown & Caliber to facilitate their trade-in programs.
“Every year $5 billion worth of watches are sold in the U.S., and we estimate $100 billion worth are on people’s wrists or sitting in drawers and closets,” says Powell, “We’ve done more than 70,000 transactions and have been growing 60% every year. We think there’s a huge unaddressed market.”
Technology has always disrupted the way we keep time. Sundials replaced standing stones. The wristwatch replaced the pocket watch. But in an age when few of us need to wear a mechanical watch, it’s the community of enthusiasts on the Internet that is keeping them alive.
How to buy a watch online
Buy the seller
It has become commonplace for unscrupulous dealers to misrepresent the watches they are selling, especially online. Buy from one who points out a watch’s flaws and will take the purchase back if you’re not satisfied.
Buy the best quality
You’ll pay a premium for the best vintage watches—but they’ll also hold their value. There’s a false economy ]in trying to save a few thousand dollars buying a beat-up version.
Buy something you like
Watch collecting is about having fun and expressing your own personal taste. Don’t buy something purely as an investment. Despite record auction prices in recent years, the watch market can be fickle. It’s better to have something you’ll enjoy on your wrist when the market takes a dip.
A version of this article appears in the May 2020 issue of Fortune with the headline “Buying time.”
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—How Fortune 500 companies are stepping up during the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
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fortune--2020-04-18--Prescription drug costs are spiraling, but price controls are the wrong solution

Congress is considering two plans to reduce high drug prices. Senators Ron Wyden (D-Ore.) and Chuck Grassley (R-Iowa) have spent the past several months promoting their Prescription Drug Pricing Reduction Act. Meanwhile, Sen. Mike Crapo (R-Idaho) is pushing his alternative, the Lower Costs, More Cures Act.
Both measures would certainly cut drug prices—but they’d do so in vastly different ways. The Wyden-Grassley bill embraces heavy-handed government price-setting, which would cripple biotech businesses and their vendors across the country.
By contrast, Crapo’s bill would ease patients’ pain at the pharmacy counter—without hamstringing the private sector and innovation. At a time when the world needs a new treatment for the coronavirus, his proposal offers the best way forward for drug consumers, innovation, investment, and the business environment in general.
As a 25-year advocate for entrepreneurs and small businesses, I’ve long been wary of government encroachment on free enterprise. The organization I run, the Small Business & Entrepreneurship Council, has lobbied against price controls on drugs and other products for the past 25 years, including the Elijah E. Cummings Lower Drug Costs Now Act, which passed the House late last year.
I have good reason for my opposition to the Wyden-Grassley legislation. Unfortunately, there are too many instances where government command-and-control “solutions” have gone horribly wrong, especially with price controls. The Wyden-Grassley proposal offers a massive expansion of government power. The bill would slap de facto price controls on drug manufacturers by forcing companies to pay Medicare back for price increases past the rate of inflation. That could drain the industry of a staggering $50 billion over the next decade if it becomes law, according to a Congressional Budget Office score.
We’ve already seen what government price-setting has done to research companies in Europe. Half a century ago, European labs invented the vast majority of medicines, according to a Milken Institute study. That is not the case currently. European governments have imposed ever-stricter price controls over the course of time, which has contributed to the decline of R&D in Europe. The U.S., by contrast, has largely maintained its market-based approach.
That very approach is why companies in America are leading the way on a COVID-19 treatment. Moderna, a small biotech based in Massachusetts, entered human trials for its COVID-19 vaccine only 10 weeks after the virus’s genetic code was sequenced, according to a Guardian report.
Thanks to the U.S.’s robust intellectual property protections for innovative therapies, as well as how highly valued they are in the marketplace, American scientists are able to attract significant private capital for the development of new medicines. As a result, two in three new medicines are developed in the U.S.
Unfortunately, the Wyden-Grassley blunt force approach would impact more than innovative cures and U.S. drug leadership. In 2017 alone, biopharmaceutical firms directly employed over 811,000 people and supported 3.2 million additional jobs, per a report from PhRMA and TEConomy Partners. The industry could potentially see large job losses as a result of the legislation. That’s the last thing these firms need when small businesses are suffering under the economic impacts of COVID-19, with many expected to go under and at rates that will surely shock us once the damage is totaled.
A little over half of pharmaceutical firms have fewer than 20 workers, and about four in five have fewer than 100, according to census data analyzed by the Small Business & Entrepreneurship Council. Drug innovation as we know it depends on small, entrepreneurial businesses that bring life-saving drugs to the market. They need certainty, and a policy ecosystem that encourages risk taking and investment.
These businesses would flounder if the Wyden-Grassley bill became law. The less money companies have to spend on research, the fewer people they can employ. Nearly half of drug firms say that reductions in research and development spending could lead to layoffs and facility closures, according to a survey of PhRMA members.
Fortunately, Crapo has proposed a strong alternative. The Lower Costs, More Cures Act would cap out-of-pocket spending for Medicare beneficiaries at $3,100 a year. The bill would also allow patients to pay their drug bills in monthly installments, rather than all at once. This approach would make a big difference to patients facing costly copays or other out-of-pocket liabilities.
Most importantly, unlike the Wyden-Grassley bill, Crapo’s proposal would not resort to statist price-setting. That’s good news for American business. Unsurprisingly, the U.S. Chamber of Commerce has strongly endorsed this bill.
High out-of-pocket drug costs are a serious problem. But mimicking Europe’s failed policies by resorting to price controls is not the answer.
Karen Kerrigan is president and CEO of the Small Business & Entrepreneurship Council.
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fortune--2020-04-18--Can you get a refund on your gym membership?

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
In the midst of a pandemic, fiscal fitness is more important than physical fitness.
With gyms closed nationwide due to the COVID-19 coronavirus outbreak, members are eager to get their money back as they work out at home. But that’s not an easy process.
Because there are so many gyms around the country—some major chains and some smaller operations—the refund policies vary wildly.
Your best bet for privately held gyms is to contact the owner. If you’re a member of a national chain, though, here’s what several are offering their members right now:
24 Hour Fitness
No refunds, but the chain will suspend all membership billings effective April 16. And any membership billings charged from March 17–April 15, will result in additional days of access to clubs that are equal to the number of days paid for while clubs were closed.
Anytime Fitness
Most locations are offering a freeze on memberships while clubs are temporarily closed. Members will receive the time credited to the end of their memberships.
Gold’s Gym
Company-owned gyms are freezing membership dues until the facilities are able to reopen. Many franchise gyms are offering freeze options as well. Cancellations will be handled by individual gym locations.
LA Fitness
Membership billings are suspended, like many other chains, but when one or more clubs in your market reopens, you’ll start paying once again, even if it’s not the location you usually go to. Memberships paid in full will be extended to cover the time of the closure and personal training sessions will rollover to after the pandemic passes. Cancellation requests are being handled online.
Planet Fitness
All accounts are currently suspended, but if you were billed somehow before that freeze went into effect for a closed gym, the company says it will make an adjustment on the next billing cycle once it reopens. Pre-paid memberships will be extended by the length of the closure.
More must-read retail coverage from Fortune:
—Costco’s big March sales jump isn’t such good news for other big box retailers
—How the on-demand liquor delivery business changed overnight
—Cannabis companies get a big bump in sales and not just from the wake-and-bake set
—How Fortune 500 companies are stepping up during the pandemic
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Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-04-18--How one country set a course to totally eliminate the COVID-19 virus

When historians assess how countries approached the coronavirus pandemic, New Zealand is sure to stand out.
The South Pacific nation is alone among its western peers in explicitly attempting to eradicate the virus. It adopted one of the strictest lockdowns in the world before a single death was reported, and has isolated infections to keep the disease from spreading out of control.
The early signs are promising. The rate of new infections has dwindled to the lowest in weeks, and the death toll — at 11 — is one of the lowest among developed nations. The prime minister, Jacinda Ardern, will decide on Monday whether to start easing a quarantine that requires everyone but essential workers to stay at home.
“We have the opportunity to do something no other country has achieved — elimination of the virus,” Ardern told reporters Thursday in Wellington, as she cautioned against relaxing restrictions too quickly.
The island nation’s lofty goal of elimination is not without critics, who say it’s unrealistic and comes at a devastating economic cost. Even if New Zealand succeeds, its borders will have to remain closed to much of the world for a considerable period to keep the virus out. That will decimate the tourism industry, its largest source of foreign exchange earnings.
Central to New Zealand’s approach is a scientific fact that most western leaders appear to have ignored, according to Michael Baker, a professor at the University of Otago’s Department of Public Health in Wellington who sits on the government’s Covid-19 Technical Advisory Group. That is that the virus usually has an incubation period of five to six days, twice as long as influenza.
“That means that when someone gets sick, if you isolate them quickly and round up their contacts, you can quarantine those people and interrupt that chain of transmission,” said Baker. “With influenza you can’t really do that because by the time you’ve found their contacts it’s too late, they’ve infected other people.”
And yet most countries treated Covid-19 as if it were influenza, he said, trying to slow its advance rather than eradicate it. Nations including the U.K. and the U.S. opted for such mitigation and suppression efforts after they found themselves overwhelmed by cases.
Changing Tactics
New Zealand’s initial response took that approach too. In the early stages of the outbreak, Ardern spoke of “flattening the curve” of the virus’s spread to ensure the health system could cope.
That all changed on March 23, when she announced a four-week nationwide lockdown would commence two days later, saying modeling showed that without the measures “tens of thousands of New Zealanders could die.”Play Video
Industries were shuttered, schools were closed, and the only shops allowed to stay open were supermarkets, some corner stores and pharmacies. At that stage, New Zealand had only 102 cases and no deaths. Most countries resorted to such measures only after fatalities soared. When the U.K. announced its lockdown, also on March 23, it had 6,650 Covid-19 cases and 335 people had already died.
Exit Strategy
The theory is that imposing tough restrictions early halts the spread of the pathogen and eventually allows an exit strategy to crystallize. The economic hit may be worse upfront, but activity can resume sooner. The alternatives of mitigation or suppression may require restrictions to stay in place for many months, prolonging the economic pain.
New Zealand’s strategy, which requires extensive testing and contact-tracing capabilities, is supported by the statistics. While total cases have risen to 1,409, it has avoided the exponential growth seen in Europe and the U.S. Just eight new infections were reported Friday, the lowest number in four weeks.
The island nation, with 5 million residents, has a similar population to Ireland, which has seen more than 13,000 infections and almost 500 deaths. And while New Zealand’s 11 fatalities compare with 10 in Singapore, that Southeast Asian country is now struggling with a wave of infections from dormitories housing low-wage foreign workers.
A comparison with neighboring Australia is more complicated. Australia has far more cases, at 6,468, and deaths have climbed to 63. But the infection rate comes out to 254 per million people, less than New Zealand’s 292 per million.
Australia’s Approach
Australia’s results have come despite less stringent restrictions. It has allowed more industries to continue operating, such as construction, and consumers can still get a haircut or buy a takeaway meal, keeping many workers on lower incomes employed.
“Australia is doing better than New Zealand without going to that extreme,” said Peter Collignon, an infectious diseases physician at Canberra Hospital who advises the Australian government.
Collignon questions whether New Zealand’s eradication strategy is realistic.
“The reality is this virus is everywhere, it’s all around the world,” he said. “So even if you’re successful for a short period of time, how long do you do this for? Six months? Two years? Invariably, you’re going to get the virus re-introduced.”
One concern is the phenomenon of asymptomatic transmission. The possibility that people can pass along the disease even though they show no symptoms underscores the challenge of containing the pandemic.
‘Nirvana’ Scenario
Brendan Murphy, Australia’s chief medical officer, told a New Zealand parliamentary committee April 14 that eradicating the virus is a “nirvana” scenario.
“We are pursuing a very aggressive suppression strategy,” he said. “Obviously we would like to achieve elimination (but) we’re pretty doubtful that could be maintained for the long-term given the incredible border measures you would need to have.”
For Baker, there are benefits in trying to eliminate the virus, as well as evidence it can be done — China, for example, appears to have succeeded in stopping the Wuhan epidemic and preventing wider transmission within its borders.
He believes more countries, including Australia, could yet adopt elimination strategies and eventually form an “eastern hemisphere bloc” with nations like China, Hong Kong, Singapore and South Korea within which travel will be possible.
“Maybe it’s a bit optimistic, but at least we have an exit strategy and a plan,” Baker said. “That seems a lot more appealing than the mess that Europe and North America are going to be in for the foreseeable future.”
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fortune--2020-04-19--These dry ciders are made like wine and packaged like beer

Why China will recover faster from the coronavirus pandemic than the U.S .

On sunny fall mornings, Sam Fitz takes his mild-mannered, 100-pound pitbull named Lexi for a walk in downtown Washington, D.C. When he finds a crab apple tree, Fitz ties her leash to the tree’s trunk, and climbs up to shake the ruby-hued fruit off branches, where they hang like swollen, elongated cherries. He uses the foraged apples to make micro-batches of minimalist, bone-dry cider. Fitz, along with his sister, Rachel Fitz, Cooper Sheehan, and Jason Burnett are the partners behind Anxo (pronounced AHN-choh), D.C.’s first cider house. And they’re doing things differently than most cider makers.
These small batches made with city-grown apples are only a small part of the story; the vast majority of Anxo’s cider is made using fruit sourced from nearby, family-run farms. In fact, the cider’s only flavorful ingredient is apple—in 2019, they used 35 different apple varietals—with either native yeast or wine yeast, making each cider naturally dry, gluten-free, and sugar-free. (The fructose burns off in the fermentation process.)
Since launching Anxo in 2016, Fitz has amassed an encyclopedic knowledge of apples, including varieties, harvest seasons, and growers. He has 16 apple trees in his own tiny backyard—a mix of Harrison and Campfield (in the Colonial era, these were known to make the best cider when combined), plus a Redfield and a Dolgo. Instead of using the fruit from the eight Harrison trees, he cuts 200 pieces of budwood off the trees each year, sending them to a farm in Virginia to be grafted onto old trees, which will bear fruit Anxo will eventually use for cider. (There are currently about 1,000 trees on the farm, and they should start fruiting next year.) Fitz buzzes when discussing his bounty of backyard apple trees. “Last year, my Redfield gave me three gigantic, red-fleshed apples, and this year it has about 200 bud sets,” he gushes. “The flowers were neon red, and it was possibly the prettiest blossoming tree I have ever seen.”
Anxo Cider is based in Washington, D.C., and sold nationally. Courtesy of Anxo
But Fitz wasn’t always so singularly focused on the fruit. The 36-year-old started his career in the craft beer industry, working at revered D.C. institutions like Meridian Pint and ChurchKey. A desire to build his own business, coupled with a fortuitously timed vacation with Sheehan through the Basque Country of Spain—touring wineries and cideries and falling in love with the food and drink culture, propelled them to focus on cider. They opened Anxo—named after a bigfoot-like creature from Basque mythology—four years ago, starting with a restaurant in D.C.’s Truxton Circle neighborhood, serving a lineup of artisanal ciders. Less than a year later, the team expanded with a cidery and tasting room in Brightwood Park, where they make ciders like the Cidre Blanc, with Goldrush apples from Virginia and Pennsylvania and Sauvignon Blanc yeast, or the Rosé, a blend of Washington red-fleshed and Virginia Goldrush apples with Rhône Valley rosé wine yeast.
Anxo’s business operates with the concept of “make wine, sell beer.” Cider maker Greg Johnson crafts each cider in a process similar to that of natural wine. (In fact, when Anxo first opened, it was the city’s first licensed winery since Prohibition, a classification that applies since the product is made by fermenting fruit.) The minimalist method involves taking the juice, fermenting dry, tasting it for quality, and packaging it. Also like wine, the ciders showcase the fruit from which they came—the nuanced flavors of apples, varying by size, taste, and flesh color.
But because beer has a bigger market share than wine, the product crafted like wine is merchandised like beer. Instead of packaging into wine’s typical 750-milliliter bottles, Anxo is packaged in cans and kegs. Marketing includes vibrant, beautifully designed labels, plus coasters, stickers, tap handles, and glassware—all common in beer culture. “We’re taking a product that was never meant for the beer world, and sneaking it in because the market is so much bigger,” Fitz says.
The concept isn’t totally new—mass-produced brands were tapping into the beer market 20 to 30 years ago. But most of the early brands—England’s Strongbow and Woodchuck, from Vermont—specialize in ciders that are sweet and highly carbonated, and often flavored with other ingredients like pear, grapefruit, or hops. While Fitz is quick to say that he’s a supporter of all ciders, he’s drawn on his background as a beverage director in craft beer bars to educate customers on what cider can be: “We want Anxo to be a place where people can explore and learn about the cider world.”
Anxo’s cider makers use only apples from local farms as well as wine and native yeasts. Courtesy of Anxo
The cider they’re making is the antithesis of the mass-produced brands, pleasantly, but not overly, effervescent, minimalist, and bone-dry, with plenty of structure and nuance. Fitz says they start off angular, and after they age a little, become round, with shifting flavors, much like wine. “There’s also an austerity to it that I can’t quite explain, that I think comes from our methodology,” he adds. “It’s just really different from what most other people are doing.”
Also something most people probably aren’t doing: For the past two years, a now 100-year-old woman living in downtown D.C. has let the team come and gather apples from the 35-foot Dolgo crab apple tree in her backyard. She made jam from the apples for 30-some years before she was physically no longer able to harvest them, and now the team ground-harvests to make a small batch, called D.C. Estate, for their taproom.
“There’s this hint of Anxo character that people can pick up,” Fitz says. “It’s not just that they’re dry. It’s not just that they’re sugar-free. It’s not just that they’re apples only. We have this house character that comes from our fermentation ideology.” Arguably, part of that house character comes from how Anxo passionately taps into its home city to craft ciders bursting with character.
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fortune--2020-04-19--For airlines in freefall, the return route will be long and bumpy

This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
This past January, as word of a deadly new virus began filtering out of China, the business lounge at Hamad International Airport in Doha, Qatar, was teeming with people, coming and going from almost every point on the planet. Facing a long layover on a reporting trip, I poured some tea and sank into an armchair. Nothing, it seemed, could disturb such serenity. Ten days later, our family took a weekend trip from Paris to Kraków, Poland. Why not? The taxi to the airport cost more than the tickets on low-cost airline EasyJet—the ninth carrier I had flown in 12 months.
Today that seems like a lost world—and it will not be simple to find a way back to it. The ambient-lit Doha business lounge, with its hot showers and solicitous concierges, is a lot quieter these days, like the rest of the world’s travel hubs. Now the question is, What kind of airline industry will emerge once the pandemic and the lockdowns have finally passed?
As the outlines of the answer begin to come into focus, it looks like a screeching halt to the past decade’s travel boom. Last year, passenger trips on U.S. carriers hit an all-time peak of 925 million, with occupancy also at a record high of 84.6%. Those figures are long gone. “You will see airlines as smaller versions of themselves, with fewer airplanes operating fewer routes,” says Henry Harteveldt, president of the Atmosphere Research Group in San Francisco. “Perhaps where there were 10 flights a day, now there will be six to eight flights a day,” he says.
Meanwhile, there is a growing debate, especially in the U.S., about why taxpayers should be on the hook to bail out major carriers. According to the calculations of Washington Post columnist Allan Sloan, the four major U.S. airlines spent about 90% of their profits during the roaring 2010s on stock buybacks, even while earning billions on fees for soggy sandwiches, seat assignments, and checked luggage. “They have done almost everything possible to tell the public, ‘We don’t give a damn about you,’ ” Harteveldt says. Fewer than half of consumers surveyed by Fortune in March said airlines deserved a bailout. Yet the $2.2 trillion U.S. coronavirus relief fund includes $61 billion for the shell-shocked aviation industry. And a host of U.S. airlines, including American, Delta, Southwest, and United, have applied for help.
By April, the airlines had already drastically cut their fleets, in moves that will likely far outlive COVID-19. American is opting to retire more than 100 of its 900 planes, and Delta says it is considering early retirement of older aircraft. Manufacturers are also bracing for tough times. GE Aviation cut 10% of its staff in March and furloughed half the others until May. In April, Boeing offered all employees voluntary buyouts.
That is just the start. Leaner and poorer, airlines will tread with extreme caution in putting planes back in service, unless they are sure passengers will fill them. In interviews, most analysts believe the industry’s recovery could take at least until 2022. Meanwhile, travelers will feel the difference, as routes and flights shrink. “There have been too many airlines in the world,” says John Grant, vice president of aviation analytics company OAG in Luton, England. “The industry would broadly agree with that.”
The overcapacity is especially acute in Europe, where about 120 companies compete for business, compared with the U.S., which has just four major airlines and a handful of smaller regional carriers. European governments have rushed to rescue flagship airlines, with Germany offering loans to Lufthansa, and Italy’s government taking control of Alitalia. Even the most glittering heavy hitters will not escape pain. “We will be permanently affected, with questions about changes in travelers’ behavior,” Air France CEO Anne Rigail said on April 7.
Indeed, the airlines’ losses are epic. Brian Pearce, chief economist of the industry group IATA, estimates the carriers will lose about $252 billion in revenues this year and that without government help, several “might not be able to last” until next year.
In fact, dozens of airlines—especially low-cost tourist carriers—face shaky prospects for survival. Some, like EasyJet, have enjoyed years of profitability. But Britain’s budget regional airline FlyBe collapsed in March as passengers vanished. And others could find it difficult convincing governments that their survival is essential. “Is it essential to have 9 pound ($11) flights to Majorca, or nine flights a day to Lisbon?” says Daniel Röska, senior airlines analyst at Bernstein Research in London.
925 million number of passenger trips FLOWN ON U.S. CARRIERS in 2019, an all-time high, with a record 84.6% occupancy rate
The problem airlines face is that their ability to recover will most likely rest on two factors, both of which are completely out of their control: how long it might take before people feel comfortable boarding planes and how much corporations will cut their travel budgets.
Start with the first challenge. Being sealed in an aircraft with dozens of strangers, whose health status is unknown, may still feel like a high-risk act even months after the pandemic wanes. “There are very few economic activities where people experience such crowding as air travel,” says Joseph Schwieterman, a transportation expert and professor at DePaul University in Chicago. People will want to travel again, he says. But true ease, where people again fly carefree, will likely require much more solid assurance. “It will take medical breakthroughs,” he says.
That will take time. And until vaccines and drug treatments are developed, the second factor—corporate travel—could determine when airlines might recover. The two are closely linked: So long as there is some risk to travelers, companies might hesitate to dispatch their employees, especially while trying to cut costs in a recession.
The 2008 financial crisis and Europe’s debt crisis of the 2010s bear that out. Companies cut travel spending—at first temporarily, and then more permanently. “That never really came back,” Röska says. “Companies adapted to a different spending policy, with 20% less travel a year.” The tourism surge cushioned the blow.
A decade on, the impact could be even deeper, for one reason: better technology. Since whole countries began locking down in March, countless corporate meetings, and even the leaders of the G7 nations and OPEC, have convened online. Such meetings are not quite as vibrant as the real-life ones, but neither have they been too disappointing. “Everyone is becoming virtual, Zooming,” says Mark Manduca, managing director covering airlines at Citi in London. “This has to be a long-term effect.”
No matter how good your Wi-Fi may be, spending hours on Zoom Video doesn’t quite measure up to the easy days before COVID-19—just a few months ago—when business lounges were packed and low-cost weekend getaways seemed knitted into our lives. But for the airline industry, the return route will be especially long and challenging.
A version of this article appears in the May 2020 issue of Fortune with the headline “Carriers plot a new trajectory post-pandemic.”
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—22 million lost their jobs in the past month—real unemployment rate likely near 18%
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched “Get My Payment” portal for tracking your stimulus check status
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Military experts: We need to fight coronavirus like we fight insurgents on the battlefield
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-19--Why China will recover faster from the coronavirus pandemic than the U.S.

For airlines in freefall , the return route will be long and bumpy

The coronavirus has brought the world’s two largest economies to their knees, as two grim statistics released this past week attest.
On Thursday, the U.S. Labor Department reported that the number of Americans filing for unemployment benefits in the last four weeks topped 22 million—more jobs than the U.S. economy has created in the last nine years. On Friday, China’s National Bureau of Statistics announced that between January and March, that nation’s economy shrank 6.8%, the sharpest quarterly contraction since the tumult of Mao’s Cultural Revolution.
And yet, just as some patients infected with the virus get back on their feet more rapidly than others, the U.S. and Chinese economies likely will recover at different rates. Going into the crisis, the U.S. economy was strong—growth was steady, consumer confidence was high, unemployment neared all-time lows—while China’s economy was slowing. President Donald Trump has promised that the U.S. economy will take off “like a rocketship” once the virus is contained.
Many economists, however, expect slow to negative growth in the U.S. through the rest of this year, even as China bounces back in the second half.
“I think clearly the U.S. has a tougher time because it reacted later [to the outbreak] than China and had a less comprehensive lockdown,” says Arthur Kroeber, an economist at GaveKal Dragonomics.
Among private economists, there is a growing consensus that China’s economy will turn the corner in the current quarter. Few are predicting a V-shaped recovery in which growth snaps back as suddenly as it disappeared. But some think the country could gradually return to a pre-crisis growth rate of close to 6% in the last three months of the year.
Andy Rothman, an investment strategist at Matthews Asia argues March data from China—which show slower declines in retail sales, electricity consumption, and fixed asset investment and a sharp uptick in auto sales compared to January and February—signal China already is “on the road to recovery.”
Another sign of China’s brighter outlook: French luxury giant LVMH says sales in Louis Vuitton’s mainland stores jumped 50% the last three weeks compared to the same period a year ago. L’Oreal chief executive officer Jean-Paul Agon said Thursday that sales in China turned positive in March and will likely gain 5% to 10% this month.
On April 15, the International Monetary Fund forecasted China’s GDP for 2020 would rise by 1.2% over last year, then gain 9.2% in 2021. The Fund predicted the U.S. economy will contract by 5.9% in 2020 before rising 4.7% in 2021. Rothman says he considers the IMF’s projections for both economies “too high, but I agree with the overall trend.”
The crisis has wiped out millions of jobs in both countries, but the employment toll appears to be much greater in the U.S. China said its urban jobless rate, which has remained about 5% for years, rose to a record 6.2% in February. (It should be noted that those figures don’t capture the plight of the millions of migrant laborers unable to return to work after China’s Lunar New Year because of nationwide quarantines and factory closures.) Goldman Sachs expects the U.S. jobless rate to exceed 15% this year, up from just 3.5% at the end of 2019. The Congressional Budget Office projects unemployment to remain at 9% through 2021.
One reason it’s easier for China to jumpstart growth versus the U.S. is that a higher percentage of Chinese workers are employed in the manufacturing sector, which accounts for about 40% of China’s GDP compared to about 11% in the U.S. “It’s much easier to restart factories than to get consumers back in the habit of going out and spending,” says Kroeber.
For leaders in both nations, the timing and trajectory of recovery pose political challenges. China’s ruling Communist Party had set an official growth target of 6% for 2020. It will be impossible for President Xi Jinping, who has asserted increasing authority over China’s economy since he came to power in 2013, to completely disavow responsibility for failure to achieve that threshold. The first quarter’s sharp decline also may force the party to abandon its pledge to double annual GDP between 2010 and 2020.
At least Xi doesn’t need to worry about re-election. For Trump, the risk is that, come voting day in November, America will be mired in a recession even as China, where the virus originated, is visibly on the mend.
If the U.S. economy flounders while China’s comes back strong, there will be geopolitical implications as well. Divergent recoveries will place greater strain on an already frayed U.S.-China relationship and undermine U.S. claims to global leadership. In recent weeks the two countries have squabbled over who’s to blame for the pandemic and jostled for influence over the World Health Organization.
Trump has called China “secretive” and sought to highlight Beijing’s failure to acknowledge the outbreak early in January when reports of the illness first surfaced in Wuhan. Chinese diplomats retorted that as China imposed an unprecedented lockdown to contain the disease, the U.S. “wasted precious time” it should have used to prepare.
However belated, China’s draconian quarantine of 60 million people in Wuhan and surrounding Hubei province appears to have succeeded in flattening the curve of new infections at a much earlier stage than in the U.S. In Wuhan, a strictly enforced lockdown lasted from January 23 to April 8. But in much of the rest of the country, restrictions were eased as early as mid-February. Rothman, in a note to clients, observes that “across most of China, life began slowly returning to normal in the second half of March.”
By mid-April, the 15-day average of new infections per day in China had dropped to around 50, down from nearly 4,000 at the peak of the outbreak in mid-February. In the U.S., the 15-day average for the period ending April 15 showed signs of slowing, but exceeded 30,000. By early Sunday, China had reported roughly 84,000 total infections with 4,700 deaths, while the U.S. had some 735,000 cases with 39,000 deaths.
So far Xi has shown no inclination to repeat the kind of massive stimulus measures his predecessors used to bolster growth after the Global Financial Crisis. Policies China has announced in response to the pandemic account for only about 3% of GDP, according to Bloomberg Economics, compared to 10% and 20% for Washington and Tokyo, respectively. That earlier spending spree pushed China’s debt-to-GDP ratio to more than 300%.
But even without such budget-busting, China remains the “world’s best consumer story,” according to Rothman, and likely to remain an attractive designation for multinationals and global investors.
More coronavirus coverage from Fortune:
—Saving a city: How Seattle’s corporate giants banded together to flatten the curve
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—Researchers working on “contact tracing” say they welcome Apple and Google’s help
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Looking for a travel refund? Here’s what airlines, hotels, and theme parks are offering
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s forthcoming Eastworld newsletter for expert insight on what’s dominating business in Asia.


fortune--2020-04-19--What refunds are due to you? Here’s how industries are handling things

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
As stay-at-home orders continue to stretch out, more and more Americans are taking a look at their recurring expenses (and some canceled plans) and pressuring those companies to issue refunds on their premiums and subscriptions.
It seems simple enough: Plans were canceled or services were unavailable due to the coronavirus pandemic, so you shouldn’t have to pay for those—or should at least receive a partial refund. It’s not always so cut and dried, though. While some companies have been proactive in offering financial recompensation, others have been reluctant to do so.
Curious where things stand on aspects of your day-to-day life? Here’s a look at how some industries and events promoters are handling things:
Are daycare facilities offering refunds?
It’s very hit or miss when it comes to childcare, since the majority of daycare facilities are privately owned.
While many have stopped billing parents, there are several reports around the country of daycare centers that continue to charge parents full or partial payments despite not providing services at present.
Contracts between parents and the schools vary and some may be within their legal rights to continue charging parents, even if they’re closed. And, unless they’ve increased rates, it normally wouldn’t fall under price gouging laws.
“If you have a contract with your families, review it to see what its terms are,” the Child Care Law Center suggests to daycare owners. But a leading attorney who focuses on child care notes, “Your contract probably says that parents must pay even if they don’t bring their child to your care. However, once you are closed you are not able to fulfill your part of the contract, so you can’t expect parents to pay you.”
Daycare centers have largely been shut down, along with schools nationwide, but some continue to operate under a pandemic license to assist parents of essential worker positions.
Can I get a refund on my mass transit pass if I’m staying home?
In general, you can’t get a refund on your train or bus pass, since those continue to operate in most cities.
In Chicago, however, the City Transit Authority announced on March 24 a one-time credit for remaining days on a 7- or 30-day pass. That will be added to the rider’s Ventra account and can be used for future pass purchases. And South Shore Line passengers can use their March monthly pass through April.
During this difficult time, CTA will be offering a one-time credit for any remaining days left on an active 7- or 30-day pass to help ease the burden for our riders. To learn more and see if you are eligible visit https://t.co/3J5EIwRSea. — Ventra Chicago (@VentraChicago) March 24, 2020
UPDATE 3.17 March/April Monthly Ticket: pic.twitter.com/p2ubFldA4n — South Shore Line (@southshoreline) March 17, 2020
Philadelphia’s SEPTA, meanwhile, is offering credits for unused and partially used passed for March and April.
What if the concert, play, or event I was planning to attend was canceled?
Policies, of course, will vary depending on where you bought your ticket. Ticketmaster will automatically refund your money, but Eventbrite requires customers to proactively request the refund to any event canceled between March 15 and May 15. (Read more about concert and event refunds here.)
What if I bought my tickets to that event via a secondary marketplace?
If you’ve used a secondary service to get tickets to a sold-out event, your odds of getting cash back are notably lower. Many services are offering credits that are slightly higher than what customers paid. (Read more about concert and event refunds here.)
Can I get a refund on my gym membership?
Because gyms and fitness centers aren’t as consolidated as some other industries, refund policies will vary wildly. In general, most have frozen membership billing, but the way major chains are going about it differs from location to location. (Learn more about what Gold’s Gym, Planet Fitness, LA Fitness, and more are doing.)
Can I get refunds on my MLB, NBA, or MHL tickets?
Short answer? No. Not yet at least. (Read more about concert and event refunds here.)
Is Disney World refunding tickets? What about other theme parks?
If your summer vacation plans have been changed because of the pandemic, getting your money back is not a sure thing. It may well come down to which theme park you were planning to visit. Disney’s policy is much different than Sea World’s, for example. (Find out more about travel refunds here.)
When will I get my car insurance refund?
With stay-at-home orders in place in many cities and states across the country, cars are largely sitting in driveways and garages, not going anywhere. Most major insurance companies are offering either refunds or credits to your account. Find out the actions yours is taking here.
Will my airline refund my ticket price?
Don’t count on a refund, but you can likely change the flight without having to pay a fee, which usually runs several hundred dollars. There are a few things to be aware of, though, when rebooking a flight.
How about hotels? Are they offering refunds?
Most major hotel chains are being fairly straightforward when it comes to refunds. There are subtle differences in their change and cancellation policies, though. Find out how each of the top hotel chains is handling refunds here.
What is Airbnb’s refund policy?
Guests were told on March 11 they could cancel reservations made through May 31 and receive a full refund. But any bookings made after March 14 will not receive refunds and will be handled according to the listing’s normal cancellation policy.
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—What to do if you can’t pay your bills this month
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—Everything you need to know about furloughs—and what they mean for workers
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—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
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Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-19--COVID-19 will change the entire notion of offices: Companies eye rental savings after working from h

COVID-19 will change the entire notion of offices: Companies eye rental savings after working from home

Even as the U.S. and Europe begin discussing how to reopen businesses, company leaders themselves say the coronavirus has jolted them into thinking about more permanent changes in how we all work—shifts that will last much longer than this crisis and could forever reconfigure the entire notion of offices.
In interviews this week, executives at global companies say COVID-19 has hurled them at warp speed into a future that they had envisioned unfolding slowly over many years. And to their astonishment, their online-only operations have worked well—raising the possibility of continuing much of the lockdown’s online-first work that has dominated since early March.
“We’re trying things in 24 hours, and then just rolling it out,” David Kenny, CEO of the global data analytics company Nielsen, says. “I hate this pandemic. But the velocity of experimenting with new things, I love that. I think some of that will stay.”
For tech veterans, the Zooming and online collaboration have been nothing new, and they have watched for weeks as the world races to catch up to them. Some predict a profound shift in working habits. “In some ways you can create something more efficient and better than what was there before,” Bill Gates said on a LinkedIn podcast on April 11.
Companies have begun realizing that, too. Take, for example, the daily commute to the office—a hugely time-consuming task that now seems fruitless, not to mention ravaging to the environment.
“What this has shown us is that there are a lot of unnecessary meetings and trips, and that is not going to happen anymore,” says Robert Walters, CEO of the Robert Walters Group, a recruitment agency headquartered in London, with about 4,500 staff in 31 countries. “Cramming yourself on a train every morning at eight o’clock? You don’t need it all the time.”
The needless commuting has led executives to ask an obvious question about life after COVID-19: Why pay rent for commercial space, if employees do not need to come to the office every workday? Walters predicts that once employees are allowed to return to work, they will come to the office only about half the week, and the rest of the time work from home—as all of them have now proved they can do.
“We could look at a 25% reduction in office space, as leases expire,” he says.
The same calculations are playing out at other companies, as they begin preparing to reopen.
“If this is working well, and we’ve been doing virtual work for five years, do we need as much floor space?” Michael Fraccaro, chief people officer of Mastercard, asks. The company, headquartered in Purchase, N.Y., has about 20,000 employees in 78 countries, almost all of whom are currently working from home. “Do we need as much office space if work can be done virtually?”
If companies truly begin shifting away from offices, it would be a radical change. Until COVID-19 emptied offices, only about 3.6% of U.S. employees worked from home at least half the workweek, according to San Diego firm Global Workplace Analytics, citing U.S. Census data. That figure could surge to between 25% and 30% by the end of next year, according to a blog post the company’s president, Kate Lister, wrote earlier this month. “The genie is out of the bottle, and it is not likely to go back in,” she wrote.
Mastercard’s Fraccaro says that during the five weeks since the crisis in the U.S. began, the company has drastically rethought the range of work that can be done online. “This has a major structural and society shift in the way we think about work,” he says. “There is a long-term impact on how we think about this: Do we really need to travel on a jet, or can we do this in a different way?”
Three-month internships at Mastercard—slated to begin in early May—have been transformed into four-week online programs, with interns still being paid full-rate. Other corporate events—including presentations at conferences and weeklong management training programs scheduled to take place in South Africa and Costa Rica during March and April—were canceled. Fraccaro says there is no clear idea when they will resume: It will depend on when staff feel comfortable attending such gatherings, as well as when managers feel it is safe enough to dispatch them on business trips.
Likewise, Kenny says Nielsen has already begun a drastic rethink of how to use its pricey Manhattan office space once employees are allowed to return to work. The company has about 47,000 employees in 31 countries, including 3,000 people in New York City.
The most obvious change would be allowing employees to come into the office when it’s necessary, and to work from home when it’s not.
Teamwork and face-to-face collaboration is still hugely enriching, Kenny says. But clocking in at the office every morning suddenly seems absurd. He says the company has not yet calculated the amount it might save—likely millions—and he envisions investing some of that savings into ramping up the staff’s home offices and technology.
“I certainly think this will change real estate,” he says.
Other costs also seem unnecessary now, thanks to COVID-19. Take, for example, flying directors in for quarterly board meetings. On Friday, Walters was preparing for a shareholders’ meeting—entirely on Zoom. He admits a remote gathering is not quite as good as the in-person version, but it’s a viable substitute.
“You cannot see the whites of their eyes, and there will always be a need for human contact,” he says. “But you could say every other board meeting can be virtual.”
Kenny, who previously headed IBM’s Watson A.I. research division, says he spent years preparing for a steady transition to automated, less face-to-face business operations. When he was appointed to run Nielsen in 2018, he focused on slowly automating some of the company’s vast data-collection processes. He imagined the transition would unfold over the coming years.
Instead, it has taken weeks, in the wake of COVID-19. Almost as soon as Nielsen realized it could manage to operate well under the lockdown, it began discussing how to keep certain aspects as permanent features of the company. Kenny says that, to his astonishment, Nielsen has released daily products since the lockdown began, without slowing down any of its scheduled operations.
In some ways, he says, work is being done better than before. Meetings—held on Google Hangout—are speedy, focused, and devoid of time-wasting chitchat or diversions.
“We have found we can still make decisions, execute, and implement, quite well,” he says. “It has forced people to be smarter about how we make decisions.” Those work habits, he believes, are here to stay.
More coronavirus coverage from Fortune:
—22 million lost their jobs in the past month—real unemployment rate likely near 18%
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched “Get My Payment” portal for tracking your stimulus check status
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Military experts: We need to fight the coronavirus like we fight insurgents on the battlefield
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.


fortune--2020-04-20--These countries’ stock markets have been hit the hardest by the coronavirus

No country’s stock market has been immune to the global selloff spurred by the coronavirus pandemic. To get a snapshot of where investors have been hit hardest, we examined 100 of the largest and most heavily traded markets tracked by Bloomberg. The graphic above shows how far primary stock indexes in each have fallen this year—from their peak to their lowest point. Thus far, stocks in the world’s biggest economies have fared relatively well. The U.S., despite the most cases and deaths from the virus of any country, didn’t plunge nearly as far as, for example, energy-dependent Russia. And though the pandemic originated in China, Beijing’s success in managing the health crisis has translated to the market. Chinese stocks have yet to hit bear territory.