Is Apple’s PR Bruised?

April 25, 2013 by Leave a Comment

Is Apples PR Bruised?What to think of Apple? To hear stock analysts and business anchors talk, one would think Goliath had just taken a severe hit to the head. Apple has been the undisputed giant of tech for so long that the slightest waver on its feet has everyone talking about how the mighty may soon be falling.

True, profits are down – about 18 percent this quarter, and the first decline for Apple in a decade. Speculation that the company might slope downward following the demise of leader Steve Jobs didn’t come to pass immediately, but the birth of competitive, and cheaper, products are starting to pose a threat. And there are no new products coming from Apple, which is bad news for a company that caters to consumers mad for the latest in tech devices.

Another first for Apple is having to borrow money. The explanation? Rather than face taxes on bringing in offshore assets, Apple will take a loan to pay $100 billion to shareholders by 2015, which pleases some, but perplexes others. Bottom line: should Apple be in crisis mode or business as usual?

THE PR VERDICT: “C” (Distinctly OK) for Apple. The news isn’t good, but then again it isn’t all rotten.

THE PR TAKEAWAY: A company’s reputation can precede, and quiet, speculation. Apple may be wavering in its long-held number one slot, but one of the company’s priorities has been building a brand. People don’t speak of phones; they talk about iPhones and lead iLives. Consumers still see Apple products as cool and a cut above the rest despite their ubiquity.  While cheaper products may come around, it will take far more than that to put a dent in Apple’s brand loyalty. Apple’s PR should continue to polish its image and brand and let the stock price see-saw of its own accord. Apple’s upward unrelating share price climb had to come to an end at some point. Best thing is to pause and catch a PR breath.

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J.C. Penney: Everything Old is New Again

April 10, 2013 by 1 Comment
J.C. Penney: Everything Old is New Again

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.
(Pictured: ousted CEO Ron Johnson.)

Shareholders may be asking the board of J.C. Penney “Penny for your thoughts?” Or perhaps demanding it, after the startling news of a CEO switcheroo this past Monday. That CEO Ron Johnson was ousted is not a surprise. The real surprise came when the board announced Johnson’s replacement: his predecessor, Myron Ullman, who was fired by that same board in 2011.

When Johnson arrived he moved forward with a radical makeover for Penney: boutique stores under one roof. This idea included securing Martha Stewart, who assured Johnson she could step out of her exclusive contract with Macy’s. That plan blew up like a bad soufflé, with Johnson in court admitting he’d never read the fine print of Stewart’s contract with Macy’s, and thousands of Martha’s products being court-barred from shelves.

Now comes news that Johnson is being replaced by the very predecessor he took over from, ostensibly because the man wasn’t doing a bang-up job to begin with. JCP’s price tumbled 10.3 percent after a brief spike when Johnson’s termination was announced. Shareholders aren’t just calling for a replacement for him, but for the entire board. This is practically a textbook example of PR “dont’s.”

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.

THE PR TAKEAWAY: When playing poker, keep your hand facing in – no need to show all cards to the other players. A new CEO, a drastic new plan; where were the checkpoints along the way? With only one of the ten J.C. Penney board members having retail experience, no wonder the organization is in trouble. The board clearly realized that it needed to oust Johnson to stem the falling revenues and bad publicity, but the answer is rarely to go back in time. As Plan B is nothing more than a return to former issues, then it may be worth delaying until a more palatable alternative is found. If the board insists on reuniting with a former CEO, then coach the ill-chosen replacement not to admit that he was re-hired only last weekend and has no plan to speak of. Showing the losing hand is always a losing tactic and in this case, likely to cost JCP a pretty penny.

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A Sweeter Apple?

April 4, 2013 by Leave a Comment
A Sweeter Apple?

THE PR VERDICT: “C” (Distinctly OK) for Apple’s apology to Chinese customers.

What a difference a CEO makes. The change in Apple Inc.’s executive suite was evident this week when the company posted a fulsome apology from CEO Tim Cook on the Apple China web site. Apple, it seems, was not properly responding to complaints about its warranty and repair programs, prompting the Chinese government and state-run media to launch a fortnight of blistering criticism. In Cook’s mea culpa, which ran 12,000 Chinese characters (about 800 words), he apologized for appearing arrogant and outlined several changes the company will be making in China.

This is the second time in recent months that Cook has taken the higher road. Last September, he acknowledged the failure of Apple Maps, a cartographic catastrophe so inaccurate it stranded several iPhone users in an Australian desert wasteland with no food or water for more than 24 hours.

The softer approach is a departure from that of Apple co-founder and longtime leader Steve Jobs, who was called egotistical as often as brilliant. When customers complained in 2010 that holding the iPhone at a certain angle obliterated reception, Jobs snapped “Just avoid holding it that way” before eventually, begrudgingly, apologizing and giving away free cases.

Apple’s most recent apology seems to be smart. China is Apple’s second biggest market today and, as Cook told state-run Xinhua news agency in January, he believes it will become its first. All the more reason to keep customers extremely happy.

THE PR VERDICT:  “C” (Distinctly OK) for Apple. While the apology was the right move, it came two weeks into a negative PR blitz. It will be interesting to see if Apple sales in China have been affected.

THE PR TAKEAWAY: Markets change, and so must marketing strategies. Part of Apple’s early allure was that its groundbreaking technologies and higher pricetags created an air of exclusivity; the attitude that occasionally exuded from leadership contributed to the appeal. Today, however, the competitive landscape is much more crowded, and Apple can’t afford to alienate buyers in such fertile ground as China. An apology today helps pave the way for a bigger footprint tomorrow.

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Lululemon Bends Over Backwards After Yoga Pants Recall

March 20, 2013 by Leave a Comment
Lululemon Bends Over Backwards After Yoga Pants Recall

THE PR VERDICT: “D” (PR Problematic) for yoga apparel company Lululemon.

Yoga outfitter Lululemon has found itself in a compromising position. The company, a fast-rising star in the competitive world of athletic apparel, had to recall its signature black Luon yoga pants after they were found to be “too sheer” causing embarrassment for yoginis showing off more than a good downward dog.

The recall generated widespread coverage in the business and general press, not only because it gave rise to some great headlines but because there is stiff competition in the world of yoga apparel. Lululemon after all, is well known for keeping stocks deliberately lo, to create buying fervour. Well-known yoga instructors are enlisted as “Lululemon ambassadors.” One does not merely buy clothes at Lululemon; the company is known for its cult-like following and creation of a lifestyle brand.

Lululemon’s stock took an 8 percent hit on the news of the recall and as the company looks to expand beyond it current 200 stores in Canada and the US, there are signs of ongoing growing pains. See-through pants and non-colorfast tops have led to questions about management and some worrying financials: a $20 million loss in first quarter sales, and stock price that is down 18 percent for 2013. The company’s plans for future expansion look like they could be running into trouble.

THE PR VERDICT: “D” (PR Problematic) for Lululemon and the stresses it has placed on yogini brand loyalty.

THE PR TAKEAWAY: Own up, take action, and restore quality quickly. When  a company positions its brand as a “friend” it must bend over backwards to avoid making  enemies and in this crisis Lululemon didn’t hesitate to apologize, clear shelves of the sheer pants, and offer refunds. But as Lululemon’s yoga pants retail for $98 a pair; fans are buying the promise of high quality and when that fails, watch the cult-like following turn and buy the competitors’ less expensive apparel. What’s needed now after the refunds and recalls are completed,  is to assure yoginis and stockholders, that a review of suppliers and management controls is taking place and permanent changes have been made. In other words, strike a pose of action.

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SAC Capital and the Art of Halting an Investor Stampede

December 4, 2012 by Leave a Comment
SAC Capital and the Art of Halting an Investor Stampede

The PR Verdict: “A” (PR Perfect) for SAC Capital. (Pictured: Steven Cohen)

The clock is ticking for SAC Capital Advisors, the hedge fund run by Steven Cohen, now linked to an insider trading case that the government is touting as one the largest of its kind. As regulators are said to be “closing in” on the fund, SAC clients, whose money is managed by the firm, now have 90 days to decide if they’ve had enough and want their money back. Should they redeem, or keep their money there?

SAC, which manages over $14 billion, recently confirmed to investors that the firm might face civil charges over the alleged insider trading scheme that has already led to the arrest of a former employee. Normally, news like this would have investors rushing for the exits, provoking a disastrous run on the fund. But if the firm intends to emerge from its latest legal worries with an ongoing business, reassuring investors while being transparent about its legal woes is the immediate PR challenge.

Not all investors are happy; some have indicated they want to redeem. One French bank has reportedly cashed in its chips already. But other large investors are on the record as saying they will reserve judgment and keep their money with SAC, reiterating their faith in the firm and its management. To SAC investors wavering about what to do, public confirmation from co-investors that their money is staying put is just the sort of signal they’re looking for. At the moment, some clever PR is calming a situation that could otherwise become very risky.

The PR Verdict: “A” (PR Perfect) for SAC Capital. Endorsement from others is always better than tooting your own horn.

The PR Takeaway: If you want the message about you to be heard, let your friends say it. SAC ‘s recent coverage contains a surprising number of reputable and well-known investors confirming that they are sticking with the firm – at least, for the moment. For SAC management seeking to reassure investors, it’s the best sort of message, and one that it couldn’t deliver itself.

To read more, click here.

 

 

 

Filed Under: Companies & Markets, Featured News Stories, Finance, Highest Graded, Legal, Regulatory Matters Tagged With: , , , , , , , , ,

Ask (and Pay) An Expert

November 27, 2012 by Leave a Comment
Ask (and Pay) An Expert

The PR Verdict: “D” (PR Problematic) for the “expert network” industry.

When in doubt, consult an expert, goes the familiar refrain. But in the case of hedge fund SAC Capital Advisers, seeking the advice of experts is proving to complicate matters, particularly when it comes to allegations of insider trading. The infamous hedge fund run by the notorious Stevie Cohen is under the media and regulatory glare as prosecutors claim to be “closing in” on a multi-year investigation.

At the heart of the current case filed last week is the role of “expert network” firms, i.e. consultancies that match money managers like SAC with experts in particular industries for research and information gathering purposes. Two former SAC employees have already admitted to insider trading, citing information gleaned from expert network firms. In SAC’s most recent woes, a professor of neurology, overseeing clinical trials for a new Alzheimer’s drug, was also contracted by an expert network firm to give SAC his professional insights.

As the case goes to trial, the PR dilemma will be how to characterize what was being paid for. Given that the retained fees were high (in this case, over $100K), the understandable assumption will be that the information flow amounted to more than just general insights. Expert firms are going to have a tough time explaining to a skeptical public what sort of advice their fees provide.

The PR Verdict: “D” (PR Problematic) for the “expert network” industry. There’s trouble ahead.

The PR Takeaway: Money and freely-available public information don’t mix. The PR dilemma is how to explain why hedge funds are paying substantial fees for insights that the experts claims are non–privileged and already publicly available. When in-house experts are moonlighting from the public companies that they work for, then the suggestion of insider information inevitably raises its head. So far, the traditional PR answer has been to characterize the information flow as insights, not hard information. But as insider trading cases continue to mount, that distinction is going to seem less and less believable. In this case, clever wording won’t be enough to save the day.

Filed Under: Companies & Markets, Crisis Communictions, Featured News Stories, Finance, Lowest Graded, Marketing and PR, Regulatory Matters Tagged With: , , , , , , , , ,

Martha Stewart Cooks Up a New Image

November 26, 2012 by Leave a Comment
Martha Stewart Cooks Up a New Image

The PR Verdict: “A” (Gold Star!) for Martha Stewart.

Martha Stewart was very busy over the Thanksgiving – and not just cooking up a feast. The guru of home entertaining was featured in both The New York Times and The Financial Times. Both  articles were presumably designed to calm investor nerves about her company, Martha Stewart Living Omnimedia, which recently announced layoffs and financial losses.

The NYT glowingly described Martha as the new “patron saint” of the hipster entrepreneurial class while the FT gave Ms. Stewart multiple opportunities to talk about planned and current business initiatives (good for the stock price). And neither failed to mention her time in the clink.

Martha gave the FT passing acknowledgment of her prison sentence for lying to prosecutors about a stock sale, while the NYT asked her fan base for its opinion. Luckily, the responses were consistently positive. One fan, who referred to Martha as “The Jesus of the craft world,” said, “I heard that she just took some bad advice. Anybody can make mistakes.” Martha, from what she told the FT, takes a similar view.

The PR Verdict: “A” (Gold Star!) to Martha Stewart for putting a tough period behind her. It’s even given her street cred!

The PR Takeaway: Set the tone, and others will follow. While prison time might have theoretically ruined the image of the perfect homemaker, Martha Stewart has been able to successfully move on. Parting with the traditional PR strategy of public atonement, Martha instead describes her prison time as “a hole I fell into; luckily it wasn’t a very deep hole,” while adding that the experience didn’t teach her much. From the outset she has been unrepentant, and now her new followers are taking the same line of indifference. In the age of labored public apologies, this is one strategy that  is breaking the mold. And Martha’s expanded fan base seems to like it.

Click here for Martha’s FT interview and New York TImes feature.

What’s your opinion of Martha Stewart’s strategy? Give us your PR Verdict!

Filed Under: Advertising and PR, Branding, Celebrity, Companies & Markets, Featured News Stories, Highest Graded, Marketing and PR Tagged With: , , , , , , , , , ,

How Sorry Are You, Barclays?

June 29, 2012 by 4 Comments
How Sorry Are You, Barclays?

The PR Verdict: “D” (It’s a Dud) for Barclays. (Pictured: Barclays CEO Bob Diamond)

Isn’t it nice to know that Barclays PLC and its subsidiaries have agreed to pay more than $450 million to settle charges that it attempted to manipulate key global interest rates? The announcement of the largest-ever fine was accompanied by much huffing and puffing about market integrity. Everyone agrees; terrible business. Why, even Bob Diamond, Barclays CEO, and his three chief lieutenants waived their bonuses in recognition of the seriousness of the issue.

Barclays said all the right things on the day. It humbly acknowledged the actions “fell well short of the standards to which Barclays aspires.” This was a mea culpa, albeit somewhat measured, given that the Department of Justice is continuing with its criminal probe. This could get uglier, no doubt.

But was that it? Was there a lost paragraph to the announcement? Yes, investigations are continuing, yes other firms are involved, and yes, Barclays has been assisting every regulator it possibly can. Fair enough, but the key question remained unanswered in Barclays’ formal statement. Has ANYONE lost their job or been suspended? Has there been a clearing of the decks?

The PR Verdict: “D” (It’s a Dud) for Barclays for avoiding disclosure of the most important piece of news: Is anyone’s head going to roll?

PR Takeaway: One way to draw a line over bad behavior is to draw a line over bad employees. If the bank is committed to turning a new page in ethics, why not update stakeholders about who was, or will be, fired? Even if previously disclosed, say it again. Waiving a bonus counts for something, but making it clear to inside and outside stakeholders that certain behaviors will not be tolerated goes further. This was an odd omission in a statement that went to lengths to make it clear that these issues won’t happen again.

Did Barclays go far enough by apologising and waiving bonuses, or should heads have rolled? Give us your PR Verdict, below.

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