Also today: Analysts scratch heads over stock markets plunge; BP mulls over next move on oil gusher; Hollywood braces for blockbuster summer season; JetBlue airline targets digital advertising arena.
Harrods sold to Qatar Holding
Mohamed al-Fayed, who had vowed not to dispose of London’s luxury department store Harrods, has signed a deal with sovereign wealth fund Qatar Holding, adding another well-known UK brand to the emirate’s investment portfolio. Al-Fayed, the father of the last consort of Britain’s Princess Diana, will now retire and become honorary chairman of Harrods, after Qatar Holding pledged to keep investing in the business and safeguard employee pensions. Qatar Holding is a sovereign wealth fund that has investments in real estate, a helicopter charter business, buildings in London’s financial district, stakes in British bank Barclays, and also the British supermarket chain Sainsbury’s and the London Stock Exchange. The Qataris paid more than $2 billion for Harrods, saying it makes good profits. Fayed bought Harrods in 1985, drawing celebrity clients and pledging to cater to all people, everywhere.
Photo: Mohamed al-Fayed gestures as he arrives at the inquest into the death of Princess Diana and al-Fayed’s son Dodi, at the High Court in London April 2, 2008. REUTERS/Stephen Hird
Analysts scratch heads over stock markets plunge
Major US stock exchanges no longer believe that a single large sell trade, such as that of Procter & Gamble shares, was the trigger of the brief stock market panic last week. Instead, they suspect a mismatch between the older New York Stock Exchange and newer electronic exchanges set off an uncontrollable sequence of events, saying it was an unintended consequence of a system built to place a brake on stocks in sharp decline. This probably means that computers flooded the market with sell orders that could not be matched to buyers and then, in seconds, stopped trading, possibly setting off a chain reaction that sent shares of many companies spiralling in 15 minutes of mayhem. Officials of the US securities and exchange commission and the heads of the nation’s four main exchanges will meet in Washington to discuss applying circuit breakers across all exchanges. At present, only the NYSE has circuit breakers on individual stocks. As to who won and lost in the chaos, that’s not yet clear.
BP mulls over next move on oil gusher
BP will soon try again to put a lid on an oil well spewing hundreds of thousands of litres of crude daily into the Gulf of Mexico, after a big, hastily-built metal and concrete containment box meant to siphon the sticky stuff to the surface became clogged in methane crystals. This stopped the flow of oil through the container. But the mission to cap the catastrophic pollution is now in serious doubt, as thick blobs of tar have started to wash up on the pristine coastline of Alabama. Reports say BP’s still not giving up hope that a second attempt using the same, or another, containment lid will cap the well, but in the meanwhile it’s drilling a relief well that’s expected to take at least two months to complete.
Hollywood braces for blockbuster summer season
Hollywood is hoping to garner a record $5 billion in North American ticket sales at the start of its summer season, by offering a slew of sequels, upping ticket prices and riding on the back of a boom in 3-D movies. “Iron Man 2” has already cashed nearly $135 million in domestic sales, putting it on par with blockbuster sequels such as “Pirates of the Caribbean: Dead Man’s Chest”. This means it could become one of the highest-grossing movies of the year. In its first few weeks abroad the film sold some $194 million in tickets, so the overall takings so far of some $330 million already exceed the $170 million it cost to make, along with an estimated global marketing budget of about $150 million. The movie was produced by Marvel Studios, a unit of Walt Disney, with Paramount Pictures distributing it for an 8% slice of the revenue.
JetBlue airline targets digital advertising arena
The airline JetBlue is pitching itself to existing and potential customers in a video-rich online marketing effort that it’s calling a digital brand experience, featuring clips from aboard its planes and in the carrier’s terminal at Kennedy International Airport. The company is seeking to convince consumers that travelling on JetBlue is the best of all airline experiences, hiring digital media agency Firstborn in New York to conjure up an experiential marketing campaign that’s a step-up from traditional advertising pitches using television commercials. The campaign aims to entice consumers with promises to entertain or educate them rather than saturate them with pitches that interrupt what they are watching or reading. JetBlue says people don’t trust what companies have to say about themselves anymore, but do trust what other people tell them. So the online video clips only feature satisfied customers extolling the virtues of the airline, rather than relying on Hollywood-style scripted ads for effect. The airline uses various agencies for its media campaigns, but is now putting more focus on interactive marketing presences in social media like Facebook and Twitter.
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