Latest / What the Flux / Zip Co forced to change its name | Temple & Webster pulls back discounts | On x Zendaya

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Zip Co forced to change its name | Temple & Webster pulls back discounts | On x Zendaya · What the Flux

• 0:05
  Speaker 1: This is what the Flux. I'm Brett and I'm Justin
• 0:07
  Speaker 1: and it's Monday, the eighteenth of May. Josie Boy.
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  Speaker 2: The RBA's cash rate hike earlier this month not great
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  Speaker 2: news for mortgage holders. But today we bring some positive
• 0:15
  Speaker 2: news for Ossie's traveling overseas. Get this one. The Australian
• 0:18
  Speaker 2: dollar has hit a four year high wow over seventy
• 0:21
  Speaker 2: two and a half US sinse late last week and
• 0:23
  Speaker 2: is expected to continue increasing. So if you're traveling over
• 0:26
  Speaker 2: the next month, it slightly softens the increased mortgage repayment
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  Speaker 2: below fox Am.
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  Speaker 1: It is the middle of May, which means it is
• 0:32
  Speaker 1: the perfect time to be checking your credit score for
• 0:34
  Speaker 1: the month. Has it gone off, has it gone down?
• 0:36
  Speaker 1: Have there been changes to your score based on your activity? Well,
• 0:39
  Speaker 1: if you don't know, the Flex Credit Score tool is
• 0:41
  Speaker 1: the perfect place to check. If you want to see
• 0:42
  Speaker 1: what the banks can see about you, make sure it
• 0:44
  Speaker 1: download the Flux out check out your credit score.
• 0:45
  Speaker 2: Three massive stories today, Jussie Boy, Let's do it for
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  Speaker 2: our first. Zipco has lost a decade long High Court
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  Speaker 2: battle over its name and will be forced to rebrand
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  Speaker 2: its entire Australian business.
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  Speaker 1: Company just had a court tell them their name doesn't
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  Speaker 1: belong to them all right.
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  Speaker 2: So Zipco is one of Australia's biggest buy now, pay
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  Speaker 2: later companies, founded in twenty thirteen.
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  Speaker 1: Yep, it's now where three billion dollars over six point
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  Speaker 1: six million customers across Australia, the US and New Zealand.
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  Speaker 2: Here's the problem with Jazie boy. A Brisbane mortgage lender
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  Speaker 2: named First Mac had already registered the Zip trademark back
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  Speaker 2: in two thousand and four, full.
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  Speaker 1: Nine years before Zipco even existed.
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  Speaker 2: Now, Zipco applied for the trademark, not knocked back, and
• 1:23
  Speaker 2: then it just kept going anyway.
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  Speaker 1: And be man. It gets better than that. The founder
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  Speaker 1: sent a calendar invite to staff titled attack First Mac
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  Speaker 1: Trademark ZIP.
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  Speaker 2: Yep, that became court evidence.
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  Speaker 1: Yeah, and Zip admitted it was infringing First Max trademark,
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  Speaker 1: but it argued it was an honest concurrent user.
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  Speaker 2: Basically we didn't mean any harm.
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  Speaker 1: The High Court said absolutely not. So now zip has
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  Speaker 1: to rebrand its entire Australian operation, though it's US business
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  Speaker 1: can keep the name and be man. This whole fight
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  Speaker 1: is a timely reminder of how valuable brand equity can
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  Speaker 1: be and how costly it can be to lose.
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  Speaker 2: Yeah, well, so what's the key learning here?
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  Speaker 1: Brand equity is the dollar value that a name carries.
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  Speaker 2: What customers associate with, the trust about it, and then
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  Speaker 2: a name that makes it easier to acquire new customers.
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  Speaker 1: Zipp is sped over a decade building that recognition in Australia,
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  Speaker 1: but now kind of has to start from scratch locally again.
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  Speaker 2: And the financial hit isn't just the creative work around that.
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  Speaker 1: Now it's customer confusion, it's lost SEO, it's reprinted materials,
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  Speaker 1: rewritten contracts.
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  Speaker 2: And the pr cost of explaining why you're suddenly called
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  Speaker 2: something else.
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  Speaker 1: Yeah, and be man. Remember when the World Wrestling Federation,
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  Speaker 1: the home of Stone Cold, Steve Boston and the Rock,
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  Speaker 1: was forced to change its name back in two thousand
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  Speaker 1: and two.
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  Speaker 2: Yes, I do WWF was trademarked by the World Wildlife Fund.
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  Speaker 1: And this rebrand costs the former ww thirty five million
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  Speaker 1: pounds back then to rebrand to WWEIGHT.
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  Speaker 2: The silver lining for Zip eighty percent of their earnings
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  Speaker 2: now come from the US.
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  Speaker 1: So the Australian rebrand, as painful as it is, won't
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  Speaker 1: actually got the core of the branding and the business.
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  Speaker 2: But it's a very expensive reminder that the name you
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  Speaker 2: build on needs to be legally yours from day one.
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  Speaker 1: For our second story, Temple and Webster has raised its
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  Speaker 1: prices and pulled back on promotions after warning its earnings
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  Speaker 1: will be thirty percent below market expectation.
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  Speaker 2: Temple and Webster going through a bit of a flat
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  Speaker 2: pack melt down. Here tell me more.
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  Speaker 1: The Temple and Webster was founded in twenty eleven, listed
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  Speaker 1: on the ASEX in twenty fifteen for just seventy five
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  Speaker 1: cents a.
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  Speaker 2: Share, and at their peak last August, they were trading
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  Speaker 2: close to thirty bucks per year.
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  Speaker 1: Today they're under five dollars b man.
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  Speaker 2: And the reason their share price has plummeted nearly seventy
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  Speaker 2: five percent in the past twelve months is because of
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  Speaker 2: slowing consumer sentiment, and.
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  Speaker 1: As of last week, it have also been hit with
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  Speaker 1: a profit warning that blindsided investors.
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  Speaker 2: Investors nearly fell off their Temple and Webster designer inspired
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  Speaker 2: dining chairs.
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  Speaker 1: Yeah. Last week, templan Webster CEO told investors to expect
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  Speaker 1: earnings of just twenty to twenty two mil for the
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  Speaker 1: full year, which was a thirty percent miss Juzzy Boy
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  Speaker 1: on its previous guidance, So be man at what we're wrong.
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  Speaker 2: Well, the CEO is pointing squarely at consumer sentiment. He
• 3:44
  Speaker 2: says people are spooked middle as conflict. Fuel prices are up,
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  Speaker 2: wallets are shut. Not exactly prime couch shopping conditions.
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  Speaker 1: But here's the juicy part. Just three months ago, the
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  Speaker 1: CEO said they would continue to push their heavy promotions,
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  Speaker 1: and now he's done a four poet eighty. Yeah, they've
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  Speaker 1: repriced their entire product range, They've wound back discounting and
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  Speaker 1: move people out of the executive team.
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  Speaker 2: Oh and it's all tied to strengthening their margins through
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  Speaker 2: less promotions and discount So what is the key learning here?
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  Speaker 2: Running promotions to chase growth sound smart until the promotions
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  Speaker 2: become the only reason anyone is buying from you.
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  Speaker 1: Yeah, Templar webstarts spit the last year going hard on
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  Speaker 1: discounts to grab market chair.
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  Speaker 2: The logic is pretty simple. Your slash prices, you steal
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  Speaker 2: customers from Harvey Norman and Ikea, then you.
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  Speaker 1: Build scale and pull back the discounts later off.
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  Speaker 2: The problem is discounting has effectively become Templar Webster's identity,
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  Speaker 2: so customers only shop when there's a sale line.
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  Speaker 1: Yeah, their revenue looks healthy, but the profit they keep
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  Speaker 1: on every dollar shrinks dangerously.
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  Speaker 2: And last month, the Westpac Consumer Sentiment Index posted its
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  Speaker 2: biggest monthly fall since the pandemic.
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  Speaker 1: And let's be honest, when consumer sentiment is low, nobody
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  Speaker 1: urgently needs a new dining table.
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  Speaker 2: Nap so temple and Webster is repositioning itself now for
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  Speaker 2: a future with less discounting and maybe less revenue, but
• 4:52
  Speaker 2: much better margins. For our third and final story, Swiss
• 4:56
  Speaker 2: sneaker brand On has raised its profit forecast after clocking
• 4:59
  Speaker 2: a twin twenty six percent sales surge, but it's us
• 5:02
  Speaker 2: growth might be starting to untie itself.
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  Speaker 1: The goat Roger Federer set this brand up from benid Man,
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  Speaker 1: so tell me more, all right.
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  Speaker 2: So On was founded by a former professional triathlete who
• 5:11
  Speaker 2: wanted a shoe that felt like running on clouds, hence
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  Speaker 2: the name.
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  Speaker 1: And their secret weapon for a long time was the
• 5:16
  Speaker 1: goat Roger Federer, who became a co owner and invested.
• 5:19
  Speaker 1: Back in twenty nineteen.
• 5:20
  Speaker 2: So Q one sales grew twenty six point four percent
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  Speaker 2: to over one billion US dollars and yes, that beat
• 5:25
  Speaker 2: analyst expectations and.
• 5:26
  Speaker 1: Then man, they've also upgraded their profit margin guidance for
• 5:29
  Speaker 1: twenty twenty.
• 5:29
  Speaker 2: Six as well, and Jazi boy Fetti is not their
• 5:32
  Speaker 2: only big name brand ambassador these days. They've also signed
• 5:35
  Speaker 2: up US actress and singer Zendeya.
• 5:37
  Speaker 1: Yeah, the actress in Euphoria is launching a new clothing
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  Speaker 1: range with On that will target younger female consumers.
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  Speaker 2: But despite all the momentum, on US sales grew only
• 5:46
  Speaker 2: seventeen percent this quarter.
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  Speaker 1: Which is down from twenty eight percent last year.
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  Speaker 2: So the growth is slowing, if you can call it
• 5:51
  Speaker 2: slowing that much in their biggest market.
• 5:53
  Speaker 1: Which is why their share price actually fell four percent
• 5:56
  Speaker 1: on the day of these results.
• 5:57
  Speaker 2: But if On gets their brand ambassadorship with Zendea, it
• 6:00
  Speaker 2: could open up a whole new fashion channel for the brand.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: The right brand ambassador doesn't just sell a product, They
• 6:07
  Speaker 2: can completely transform how the world sees the company.
• 6:10
  Speaker 1: Yeah, Zendaia has already been out and about wearing the
• 6:12
  Speaker 1: On gear, posting on socials, appearing in campaigns.
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  Speaker 2: And uz why it sounds simple, but the right ambassador
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  Speaker 2: can completely redefine who a brand is for.
• 6:20
  Speaker 1: On's playbook's being pretty deliberate so far. Betty gave them
• 6:23
  Speaker 1: the credibility with serious athletes.
• 6:25
  Speaker 2: And Zendeia is now pivoting them toward younger, fashion conscious consumers.
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  Speaker 1: Get this one. According to Nielsen report, sixty nine percent
• 6:32
  Speaker 1: of consumers say they trust recommendations from influencers and celebrities
• 6:35
  Speaker 1: when making purchase decisions. So, b man, this is a
• 6:37
  Speaker 1: bet for On, but when it lands, it can change everything.
• 6:40
  Speaker 1: Fox Am, did you know your credit score is one
• 6:42
  Speaker 1: of the most important metrics that a bank looks at
• 6:44
  Speaker 1: when you're applying for a new load. If you don't
• 6:45
  Speaker 1: know your credit score, the Flex app can help you
• 6:47
  Speaker 1: understand it and see what the banks see about you.
• 6:49
  Speaker 1: So make sure to download the Flux app and check
• 6:51
  Speaker 1: out your credit scord this month.
• 6:52
  Speaker 2: Thanks for listening, and we'll see you on Wednesday.