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City of Dreams Manila’s EBITDA rises 26% in Q4

THE operator of City of Dreams Manila reported a 26% increase in adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA), driven by the better performance across all gaming segments.
In a disclosure to the stock exchange on Wednesday, Melco Resorts and Entertainment (Philippines) Corp. (MRP) said adjusted EBITDA stood at $67.9 million in the fourth quarter of 2018, higher than the $53.8 million it posted in the same period a year ago.
However, MRP said City of Dreams Manila’s net revenues slumped 7% to $155.2 million in the fourth quarter from $167.5 million during the same period in 2017.
The results were disclosed in a financial report submitted by MRP’s controlling shareholder, Melco Resorts & Entertainment Limited (Melco), to the US Securities and Exchange Commission. Melco’s financial results were prepared in accordance with generally accepted accounting principles in the US, which are different from Philippine financial reporting standards.
“In the Philippines, City of Dreams Manila delivered another solid quarter underpinned by robust mass gaming revenue growth,” Melco Chairman and Chief Executive Officer Lawrence Ho said in the filing posted on the company website.
City of Dreams Manila’s rolling chip volume reached $2.4 billion during the October to December period, 17% lower than the same period a year ago’s record of $2.9 billion.
The company noted that win rate for the segment was higher at 3.7% against the fourth quarter of 2017’s 3.1%. This was also beyond the rolling chip win rate range of 2.7-3%.
For the mass gaming segment, mass market table games drop went up to $197.3 million, four percent higher year on year. Hold percentage for table games also improved to 31.4% during the quarter, versus 30.9% in the same period a year ago.
Gaming machine handle for the quarter surged by 18% to $933.6 million, as win rate slowed to 5.3% versus 5.5% in the same period last year.
Meanwhile, non-gaming revenues at the City of Dreams Manila slipped by six percent to $29.4 million, versus $31.4 million in the same period a year ago.
MRP has yet to disclose its own full-year 2018 financial results.
City of Dreams Manila is among the three integrated resort and casinos operating in the state-run Entertainment City in Parañaque City, with the others being Solaire Resort and Casino and Okada Manila.
The Philippine Stock Exchange, Inc. earlier said that MRP is “de facto delisted” from the local market, after it has made no commitments to increase its public float to reach the minimum requirement of 10%. Its public float currently stands at 2.06%.
MRP’s parent had conducted a tender offer for all shares held by the public last year, supposedly to consolidate its shareholdings in the company. Prior to that, the company sought to voluntarily exit the stock market as it cited it has no longer able to raise capital through the exchange, which is the company’s main reason for listing in the first place.
Shares in the company are priced at P7.25 each, based on its closing price last Dec. 10. — Arra B. Francia

NLEx Harbor Link to open on February 26

THE NORTH LUZON Expressway Harbor Link Segment 10 is scheduled to open on Feb. 26. — DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS

THE Department of Public Works and Highways (DPWH) said the North Luzon Expressway (NLEx) Harbor Link Segment 10 will officially open on Tuesday (Feb. 26).
After the final inspection of the 5.65-kilometer elevated toll road on Wednesday, Public Works Secretary Mark A. Villar said Harbor Link Segment 10 is ready for operations by next week.
Ito na po ang [This is the] final inspection in preparation for the opening this coming Tuesday,” he said, noting the government only needs to finalize the safety features of the toll road.
The NLEx Harbor Link Segment 10 is a P15.55-billion project with private concessionaire NLEX Corp. Aside from the main line connecting Karuhatan, Valenzuela City to C3, Caloocan City, the expressway will also have a 2.6-kilometer spur road from C3 to Radial Road 10 (R10), Navotas City, which will open by the end of the year.
Mr. Villar said they are looking at around a P9 increase in fees at the NLEx open system due to the new segment. At present, toll fees are P45 for Class 1 vehicles, P114 for Class 2 and P136 for Class 3.
But he noted that for at least two to three weeks from its opening, motorists can use Harbor Link for free.
Libre pa muna ’yung toll…. We’re still finalizing kung ilang weeks, but definitely for at least two to three weeks libre ’yung toll [The toll will be free at first… We’re still finalizing how many weeks it will be free, but definitely for at least two to three weeks the toll will be free),” Mr. Villar said.
NLEX Corp. Senior Vice-President for Communications and Stakeholder Management Romulo S. Quimbo, Jr. said construction of the toll road was completed about a week ago, but they’re still waiting for regulatory clearance from the government.
“There are required documentation that are sequential… We’re left with one more, the Toll Operation Permit (TOP),” he said.
Issued by the Toll Regulatory Board, the TOP allows toll road operations to begin, and indicates the allowable toll rates for its use.
“’Yung TOP na lang. Basta by Tuesday magagamit na yan, kasi wala pa namang toll pag Tuesday eh, libre pa naman [It’s just the TOP. By Tuesday it will be operational, because there will be no toll yet by then, it’s still free],” Mr. Villar said.
NLEx Harbor Link Segment 10 is expected to benefit 30,000 cars daily by reducing travel time from Karuhatan to C3 to just 10 minutes.
NLEX Corp. is under Metro Pacific Tollways Corp. (MPTC), the tollways unit of Metro Pacific Investments Corp. (MPIC). MPIC is one of three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. -— Denise A. Valdez

Singapore-based logistics tech firm upbeat on PHL e-commerce growth

SINGAPORE-BASED TECHNOLOGY company Anchanto Pte. Ltd. is bullish on the boom of e-commerce in the Philippines as it eyes to invest $2-3 million in the country in the next two years.
Anchanto Founder and Chief Executive Officer Vaibhav Dabhade said in a recent interview that the firm has grown to cater to close to a thousand online sellers, retailers and distributors connected to its platform in the country a year after it entered the Philippine market.
“We already invested quite a lot in the Philippines. If you look at our business plans, we’ll be investing close to $2-3 million for the next two years in the Philippines,” he said in a Jan. 18 phone interview.
Anchanto is a technology company that offers software and products for e-commerce firms which are used for selling operations and warehouse management. Mr. Dabhade said some of their biggest clients in the Philippines are Great Deals E-Commerce Corp., the Primer Group of Companies and SSI Group, Inc.
“In terms of the outlook for the market, we believe that Philippines is one of the sizeable in terms of population in Southeast Asia. We believe that Philippine e-commerce will grow substantially. As of now, we see that adoption is increasing very, very fast,” he said.
The Anchanto head noted that although the country is challenged by factors such as subpar internet connectivity and speed, the company continues to see growth in the adoption of its technology here.
“Even though there are challenges…, we see a growth in the Philippines… There will be more sales channels for online sellers, and there will be more channels for consumers also to buy products through digital commerce in the Philippines. That’s why we are also very, very upbeat about the Philippine market,” Mr. Dabhade said.
He added that the growing adoption of mobile wallets is likewise helping Anchanto’s business as the growth in digital transactions will keep the demand for its technology.
“We built our Philippine business by providing our customers a very, very local support… We invest to make sure that we localize our product…so that our customers never feel that they’re working with a foreign company, and they are operating on a different time zone, different language,” Mr. Dabhade noted.
Anchanto currently operates offices in Singapore, the Philippines, India, Malaysia and Indonesia. Mr. Dabhade said the company is also eyeing to expand into the Middle East and North Africa soon.
“Middle East and North Africa, that’s the region where we really want to (grow)… We are growing faster in those regions. So we want to be present there with more teams and more investments,” the Anchanto head said. — Denise A. Valdez

Ray Albano: Homo ludens, a playful man


By Sam L. Marcelo, Associate Editor
RAYMUNDO “RAY” ALBANO is described by those who knew him as a “homunculus,” a “deformed clubfoot who walked with a limp.” The words aren’t meant to be cruel. They are said with affection, fond memory. Even Mr. Albano poked fun at his scoliosis, calling himself the “Quasimodo of CCP” — that is, the Cultural Center of the Philippines, where he succeeded Roberto Chabet as museum director in 1970. It was a post that Mr. Albano held until he died in 1985 at the age of 38.
Judy Freya Sibayan, a conceptual artist who is curating a special exhibition on Albano for Art Fair Philippines 2019, was in her early 20s and fresh out of college when she worked as one of Albano’s curatorial assistants in the 1970s. “One thing I really appreciate about Ray is that he was very playful. He was a Homo ludens — a playful man,” she said. (“Homo ludens” is a term borrowed from Dutch historian Johan Huizinga who wrote a book of the same title in 1938, in which he tackled play as a “cultural factor in life.”)
An offshoot of her autobiographical installation art performance in Calle Wright in 2018, the show mounted by Ms. Sibayan focuses on Albano as a graphic designer who worked hands-on with the printing press, just one of the many, many, many hats he wore in his brief but brilliant lifetime (“brilliant” is a word that comes up several times in the conversation).
Around 60 posters designed by Mr. Albano, selected from Ms. Sibayan’s archive, will be exhibited along with a reinstallation of Step on the Sand and Make Footprints, a work which, for all its simplicity, was awarded an honorable mention at the 9th International Biennial Exhibition of Prints in Tokyo, held from 1974 to 1975 at the National Museum of Modern Art in Tokyo and Kyoto.
Step on the Sand and Make Footprints, in this iteration, consists of about three inches of sand in a space measuring six by six meters. It is an adult-sized sandbox meant to be stepped on. As Mr. Albano said when talking about the piece: “A foot print is… a print.” Part smart-alecky joke, part amazing, Step on the Sand and Make Footprints is the perfect introduction to Mr. Albano’s mind.
“It’s the most brilliant work in terms of printmaking,” said Ms. Sibayan. “To make a footprint is the most simple definition of making a print. At the same time, the work was a performance, it was collaborative, it was participative performance. The playfulness of the work showed the ludic aspect of Ray Albano’s artmaking.”
The posters, on the other hand, demonstrate the spontaneity of Albano’s graphic design. Ms. Sibayan remembers the time Albano waltzed into their office and picked up a bouquet of baby’s breath that had been languishing on an office desk. Off to the printing press he went, turning the flowers into a photogram, the space between idea and execution almost nonexistent. “It was yellow-green — a hard color to work with — but it came out as luscious avocado” she said of the baby’s breath poster, which, sadly, is not part of the collection of prints on display at the fair. “He understood color. He understood photography. He understood how image and text worked together.”
Experimentation was a key part of Mr. Albano’s pedagogy. He brought his team to Romulo Olazo’s studio, where they spent afternoons tearing things apart, and reconstituting bits and bobs of stuff into collages, which would then serve as collagraph plates for inking and printing. The gung-ho attitude perpetuated by Albano sustained Ms. Sibayan and her cohorts during exhibition installations at the CCP, when nights ran long and no one slept because work needed to get done. Albano, who practically lived in the CCP, would play “American Pie” on the piano in the Main Theater to keep spirits from flagging.
From those experiences, Ms. Sibayan learned one great lesson from Albano. “To problematize is to create. Therefore, there are no problems that can stop you from doing things because problematizing a work is itself the work. A problem is not a problem: it is the work. There is just the freedom to look at something and say, okay, how do we figure this out?,” she said. “That made us fearless. Ideas were a dime a dozen. If one didn’t work, we moved on to the next.”
‘A KNOT IN THE MESHWORK OF THE PHILIPPINE CONTEMPORARY’
Mr. Albano’s contributions are also being kept alive by Patrick D. Flores, curator of the Jorge B. Vargas Museum and Filipiniana Research Center at the University of the Philippines Diliman. There was A Time to Unlearn, an exhibition curated in 2016 by Mr. Flores at The Metropolitan Museum of Manila, which featured the breadth Albano’s creativity through examples of his writing, whether poetic or critical, and his art, which took many forms.
Mr. Flores also included Mr. Albano — through the publication Raymundo Albano: Texts, an anthology of Mr. Albano’s textual works — in the inaugural project of the Philippine Contemporary Art Network (PCAN), an organization that aims to “coordinate a range of interventions in contemporary art in the Philippines and to cast a sharper profile for it on an inter-local and trans-regional scale.”
A note on PCAN’s project: Albano was part of an ensemble that included Jess Ayco, Junyee, Abdulmari Imao, and Santiago Bose. Raymundo Albano: Texts is a wonderful collection that showcases how lucid Mr. Albano’s writing was. Here is an excerpt from his essay on modern art: “A painting should teach us to see, even if it strains the eyes sometimes. It should make us aware of similar signals in our day-to-day existence and only abstraction — its necessary meaninglessness — provide the pure experience.”
This conversational tone, so different from the epistaxis-inducing register of International Art English, suffuses the publications he launched, among them Marks, a unicorn of a magazine that had only three issues, and Philippine Art Supplement, a bi-monthly journal that served as an important intellectual platform during its run.
In an e-mail interview with BusinessWorld, Mr. Flores wrote: “Albano was a knot in the meshwork of the Philippine contemporary. And he was an important one, because he did not only cause things to turn, his practice in itself performed the turning. He did art, he wrote, he curated, he administered an arts space, he lectured, he programmed activities, among others.”
At various international summits and conferences attended by his peers, Mr. Flores has been speaking of Mr. Albano’s practice and his place in art history. To shortcut the process of understanding Mr. Albano’s impact and to map its reverberations, one is tempted to resort to the written equivalent of an elevator pitch: If Chabet is “arguably the Father of Conceptual Art,” is Mr. Albano, at the very least, arguably its co-parent? It was a reductive question that merited a slap on the wrist from Mr. Flores, who replied: “I stay away from this project of fathers. It is retrograde and no thoughtful art history can dignify the gesture; it is a statement best left to fan clubs and groupies. It distorts and corrupts art history and only financializes those who benefit from the privilege to proclaim through the circulation of objects and careers in the market of commodities and recognitions. One day it is archive; the next day it is auction… On the whole, Albano’s contributions lay in his practice at CCP in which he internalized the bureaucracy to co-produce the contemporary and to reflect on it with intelligence. Surely, not everything or everyone was included in this conception of the contemporary, but he tried to probe the materiality of possibilities. It was through the material that the political and the social would find presence. Having said that, some expressions of the social and the political could simply not be absorbed in this metabolism. Albano was aware of the limit; he tried to complicate the threshold.”
Hovering in the background of this conversation is the fact that Albano worked at the CCP during the Marcos years. Mr. Flores, at a conference titled “The Roles and Responsibilities of Museums in Civil Society” organized by the International Committee for Museums and Collections of Modern Art (CIMAM) in Singapore in 2017, addressed Mr. Albano’s role, at the height of Martial Law, in a state-sponsored art institution — the pet project of Imelda Marcos that manifested itself as a Brutalist building dedicated to the First Lady’s love for “the good, the true, and the beautiful”: “I will not use the word ‘complicit’; instead, I would say he was ‘co-implicated,’” Mr. Flores said.
He elaborated in his e-mail to BusinessWorld: “We have to rethink the way we conceptualize concepts like critique or freedom of expression by analyzing the kind of power that operates and the kind of agency that responds to it. We have to realize that the CCP was a complex organism. That it was Imelda’s playground is a caricature from which these binaries seem to stem.”
These are big thoughts — thoughts that a casual visitor to Art Fair Philippines might not have time to process while stepping on the sand, making footprints. Let us remember, then, Albano’s playfulness: he who was Homo ludens, the hunchback of CCP.
According to Mr. Flores, it is important that the general art-loving public should know that Mr. Albano “understood what it meant to be so many things at once and was generous enough to work with others.” He continued: “It was this sympathy and intelligence that made him generate interesting work. He was not just a partisan of an ideology, a minion in a cult, or personnel from government. That said, he was intensely engaged with how things could be instrumentalized by ideology, cult, or government. The very reason he did what he had to do: to enhance the immunity of the material.”
The Ray Albano Special Exhibition, curated by Judy Freya Sibayan and co-presented by Silverlens Galleries, is on view at Booth SE2, Level 5, of Art Fair Philippines 2019, which is open to the general public from Feb. 22 to 24 at The Link, Ayala Center, Makati. There will also be a lecture — “Nonon Padilla and Judy Freya Sibayan in Conversation on the Art Practive of Ray Albano on Feb. 24, 2-4 p.m., Level 5 of The Link. Tickets to the art fair are P350 each. Visit artfairphilippines.com for more information.

ABS-CBN says sales of TVplus units reach 7M

ABS-CBN CORP. said the sales of its digital terrestrial television (DTT) units reached 7 million in February, four years after it was launched.
In a statement on Wednesday, the media giant said the continued shift of Filipino viewers to digital television is driving the sales of its ABS-CBN TVplus devices.
“The robust sales has been steadily growing in the past years as more and more Filipinos patronize the country’s pioneering DTT product,” it said.
ABS-CBN first introduced its ABS-CBN TVplus units in February 2015.
“ABS-CBN, which is rapidly transitioning into an agile digital company, is the first media and entertainment company in the country to make the historic switch from analog to digital terrestrial television to transform the TV viewing experience of Filipinos,” the Lopez-led firm said.
Citing a Kantar Media report in the fourth quarter of 2018, ABS-CBN said its exclusive TVplus channels CineMo and YeY ranked third and fourth among the most watched channels in DTT households nationwide. Jeepney TV, Movie Central and Asianovela Channel likewise landed the fifth, sixth and eighth spots, respectively.
The Department of Information and Communications Technology (DICT) intends to migrate all analog televisions to digital by 2023. ABS-CBN said it wants to keep expanding its digital signal coverage in line with the government’s timetable.
At present, ABS-CBN has TVplus coverage in Metro Manila, Bulacan, Nueva Ecija, Pangasinan, Rizal, Laguna, Pampanga, Tarlac, Benguet, Cavite, Metro Cebu, Cagayan De Oro, Iloilo, Bacolod, Davao and Batangas. — Denise A. Valdez

Fujifilm launches instax SQUARE SQ20

FUJIFILM CORP. has released an update to its hybrid square-format instant film camera featuring new functions and color variations.
The instax SQUARE SQ20, which is an update to the earlier SQ10, is the latest addition to Fujifilm’s instant camera line. The digital-analog or hybrid film camera allows users to preview and edit photos before printing them out and store images via its built-in memory, which is expandable via a microSD card.
The SQ20 features new functions such as Motion Mode, which lets users take a video up to 15 seconds long and grab a single frame to print out.
The Time Shift Collage feature, meanwhile, combines four sequential images in one shot, with the time difference between the frames adjustable from 0.2 to two seconds.
The Split and Collage options also let users combine multiple images in one frame. The Split function offers four segmentation options — namely vertically halved, horizontally divided in three, divided in quarters, and divided in nine — while the Collage feature allows user to divide images randomly.
The SQ20 likewise offers the first digital zoom function in the instax series and is equipped with a selfie mirror. The camera is also equipped with a wider range of filters for stills and videos.
The camera has a 1/5-inch sensor, a focal length of 33.4 mm (35-mm format equivalent), and an aperture of f2.4. It has a maximum shutter speed of 1/7500 of a second and a minimum of 1/2 of a second, and a maximum of 10 seconds in Bulb mode.
The instax SQ20 is currently available in matte black and beige at an SRP of P12,999 at Fujifilm authorized dealers nationwide.

Fashion’s ‘creative genius’ Karl Lagerfeld dies at 85

PARIS — Haute-couture designer Karl Lagerfeld, artistic director at Chanel and an icon of the fashion industry with his extravagant outfits and striking catwalks, has died aged 85.
Instantly recognizable in his dark suits, pony-tailed white hair, and sunglasses, Mr. Lagerfeld was best known for his association with Chanel but delivered collections for LVMH’s Fendi and his own eponymous label.
Rumors of Mr. Lagerfeld’s ill-health had swirled after he failed to show up at Chanel’s January show in Paris for his customary bow.
Chanel Chief Executive Officer (CEO) Alain Wertheimer recalled how he had given carte blanche to Lagerfeld in the 1980s to reinvent the brand, from the Chanel jacket to its tweeds and two-tone shoes.
“Thanks to his creative genius, generosity and exceptional intuition, Karl Lagerfeld was ahead of his time, which widely contributed to the House of Chanel’s success throughout the world,” Mr. Wertheimer said in a statement.
A craftsman who combined artistic instinct, business acumen and commensurate ego, Mr. Lagerfeld was known for his strikingly visual fashion show displays.
LVMH Chairman and CEO Bernard Arnault said the fashion world had lost a creative genius who helped make Paris the fashion capital of the world, and Fendi one of the most innovative Italian houses.
“I will always remember his immense imagination, his ability to conceive new trends for every season, his inexhaustible energy, the virtuosity of his drawings, his carefully guarded independence, his encyclopedic culture and his unique wit and eloquence,” Arnault said.
Chanel said Virginie Viard, director of the house’s creative studio, would take over creative work for the brand’s collections. Several sources told Reuters the appointment was transitional and that Mr. Lagerfeld’s successor would be announced after the mourning period.
Born in Hamburg in 1933, Mr. Lagerfeld made his debut with designer Pierre Balmain as an apprentice before moving on to Patou and Chloe and then Fendi.
“He was one of the most influential and celebrated designers of the 21st century and an iconic, universal symbol of style,” his own Karl Lagerfeld brand wrote on Instagram.
“He leaves behind an extraordinary legacy as one of the greatest designers of our time.”
Fendi said it would go ahead as planned with a Milan fashion show of Mr. Lagerfeld’s latest line for the brand on Thursday.
“The House of Fendi is in deep mourning following the death of Karl Lagerfeld, who left his mark and genius with us for more than five decades,” it said.
“Now is not the time to discuss his succession. We intend to take the time to honor his life and pay him the tribute he deserves.”
‘KAISER KARL’
It was after he joined French fashion house Chanel in 1983 that Mr. Lagerfeld gained rock-star status, credited with helping jazz up the label founded by Coco Chanel in 1910 and attracting younger clients.
He was known for staging lavish shows, building Chanel catwalks amid replicas of a supermarket, casino and even an airport terminal.
On Jan. 22, Chanel hosted guests in a mocked-up Mediterranean garden for its haute-couture show. In a collection inspired by Mr. Lagerfeld’s favorite period, the 18th century, feathers adorned new twists on the brand’s classic tweed suits, which came with ankle length or fishtail skirts.
Tributes poured in from around the world for the man affectionately nicknamed “Kaiser Karl” and “Fashion Meister.”
Britain’s Victoria Beckham wrote on Instagram: “So incredibly sad to hear this. Karl was a genius and always so kind and generous to me both personally and professionally.”
Italian fashion designer Donatella Versace, sister of the late Gianni Versace, wrote: “Karl your genius touched the lives of so many, especially Gianni and I. We will never forget your incredible talent and endless inspiration. We were always learning from you.”
Italian designer Giorgio Armani described Mr. Lagerfeld as “an extraordinary man, both for his professional talent and his life, which he blended and turned into a unique art: the Lagerfeld way of being.”
Actress Keira Knightley, who starred in the campaign for Chanel’s Coco Mademoiselle perfume, described him as “a legend both as a man and a creative force.”
French celebrity online magazine Purepeople said Mr. Lagerfeld died on Tuesday after being taken to hospital in Neuilly-sur-Seine outside Paris the night before.
“He has inspired generations and, above all, he gave us the possibility to dream, with his capability to embrace the present and invent the future,” Carlo Capasa, chairman of Italy’s national fashion association CNMI, said. — Reuters

Robinsons forms new unit

ROBINSONS Land Corp. (RLC) has established a new property unit, it told the stock exchange on Wednesday.
The Gokongwei-led property developer said in a disclosure that the Securities and Exchange Commission has approved the incorporation of Bonifacio Property Ventures, Inc. The newly formed unit will be fully owned by RLC.
“We created the subsidiary to engage in real estate projects,” a company representative said when sought for comment.
RLC has several residential projects in Bonifacio Global City, including the Trion Towers, Fifth Avenue Place, McKinley Park Residences, and The Fort Residences.
It operates five business segments, namely commercial centers, residential, office buildings, hotels, and infrastructure and integrated development.
This year, RLC plans to further increase its GLA to 1.61 million sq.m., with the opening of Robinsons Place in San Pedro and Antipolo, in addition to the expansion of Robinsons Magnolia in Quezon City.
On a nine-month basis, RLC’s attributable profit climbed 43% to P6.55 billion. Revenues, meanwhile, stood at P21.8 billion, 31% higher year on year.
Incorporated in 1980, RLC serves as the real estate investment arm of JG Summit Holdings, Inc., which also has investments in food, agro-industrial and commodities, air transportation, banking, and petrochemicals.
Shares in RLC dropped by 2.69% or 65 centavos to close at P23.50 each at the stock exchange on Wednesday. — Arra B. Francia

Morgan Stanley expects investors to pay less for video games

AS THE video game model evolves, Morgan Stanley expects the market to pay less for publishers until they develop a better sense of what works.
The success of free-to-play games like Fortnite by Epic Games and recently released Apex Legends by Electronic Arts Inc. are changing player behavior, as gamers may not see the utility of paying $60 for something they can get for free, analyst Brian Nowak wrote. And there’s a trend of players enjoying the best games for longer, so success relies on offering the best content throughout the life of a game, he said.
“There is more uncertainty,” Nowak said. “We expect the market to pay a lower multiple for these assets compared to recent history until it can get a sense of more consistent execution.”
The way Nowak sees it, there are no more ‘B’ titles: gaming is now a world of ‘As’ and ‘Ds.’ Take-Two Interactive Software Inc. and Activision Blizzard Inc. need to prove that Rockstar and Blizzard still belong in the “best in class” bucket.
Meanwhile, Jefferies analyst Timothy O’Shea said the No. 1 question from investors is what is the impact of big free games like Fortnite. Business models may be evolving faster than investors appreciate and it’s inevitable more free games will arrive.
Last week, Activision Blizzard announced it planned to eliminate 8% of its workers as part of a restructuring. Management noted that sales of key games such as Call of Duty have been disappointing. And one key area of weakness is in-game purchases — critical in an era when many titles are free to play and companies look to generate revenue by selling virtual outfits, tools and other content.
During the conference call, Chief Operating Officer Collister Johnson said that as the company increasingly brings Activision and Blizzard IP to the mobile space, investors will see the game publisher deploy more free-to-play models.
“We need to be able to move more quickly and we need to be able to rapidly evolve with the demands of our players in the market,” Johnson said on the call.
Morgan Stanley’s Nowak said publishers should strive to invest and experiment across all models, platforms and screens. “The success of Fortnite, strong early traction from Apex Legends, and positive results out of Zynga’s mobile properties speak to the importance of product diversification,” he wrote. — Bloomberg

Lagerfeld’s passing hands Chanel biggest test since Coco

THE PASSING of Karl Lagerfeld presents Chanel with its biggest creative challenge since the death of its iconic founder almost half a century ago.
Since 1983, Mr. Lagerfeld reigned over Chanel with indisputable authority, helping turn a storied haute-couture fashion house into a global megabrand with $9.6 billion in annual sales. His death, at the age of 85, has left long-time creative deputy Virginie Viard in charge of the collections.
Crucial to the future of the closely held brand is whether Ms. Viard can emerge from Mr. Lagerfeld’s shadow and impose a convincing vision, or whether Chanel will seek an established outsider such as Phoebe Philo, who left LVMH’s Celine last year after a decade, or Alber Elbaz, formerly of Lanvin.
“They will look for a high-profile chief creative officer, and in the meantime they have got incredibly capable people in their team,” said Mario Ortelli, who runs a London-based advisory firm on luxury strategy. “Any designer in the world would be more than delighted to work with Chanel.”
‘CREATIVE GENIUS’
Mr. Lagerfeld oversaw as many as eight Chanel collections a year: spring, fall, skiwear, haute couture, and more. One of fashion’s most prolific couturiers, he also produced outfits for Italy’s Fendi SpA and his own label. Recognizable for his high-collared shirts, white ponytail, dark sunglasses, and black fingerless gloves, Mr. Lagerfeld had a client list that featured stars of the stage and screen, including actress Cate Blanchett and singer Pharrell Williams.
“We have lost a creative genius who helped to make Paris the fashion capital of the world,’’ Bernard Arnault, the chairman and chief executive officer of luxury giant LVMH Moet Hennessy Louis Vuitton, said in a statement.
When Chanel last month said the designer was too tired to appear at his spring-summer haute couture show in Paris, his absence made more news than the hand-stitched floral gowns, sequined tweed suits, and feather capes on the catwalk. Conversation quickly turned to what Chanel planned to do next.
The fashion house said that Ms. Viard, his “closest collaborator for more than 30 years,” has been entrusted with the creative work on the collections, “so that the legacy of Gabrielle Chanel and Karl Lagerfeld can live on.”
Fashion house Fendi said it’s too soon to discuss Mr. Lagerfeld’s succession. “We intend to take the time to honor his life and pay him the tribute he deserves,” the Italian firm said in a statement. Fendi will present the latest collection designed by Mr. Lagerfeld on Thursday, as scheduled.
‘SIGN OF DEFEAT’
The sharp-tongued Mr. Lagerfeld — known for lines such as “wearing sweatpants is a sign of defeat” — was brought in to revamp the brand in 1983. Founder Coco Chanel had died 12 years earlier, and in the interim the company had muddled through, propped up by apparel licenses and sales of its No. 5 perfume.
Seeking to rejuvenate Chanel, its owners, the brothers Alain and Gérard Wertheimer, turned to Mr. Lagerfeld, a Hamburg native who’d won the prestigious Woolmark Prize for design at age 21 and by 1965 had become creative director of both Parisian fashion house Chloé and Roman furmaker Fendi.
At Chanel, Mr. Lagerfeld quickly sexed up the brand’s iconic tweed skirt suits with more feminine tailoring and boosted use of pearls, chains, and the double “C” logo. While Chanel fiercely guards its image by crafting $15,000 gowns and $5,000 quilted-leather handbags, it’s managed to maintain a broader appeal with lipstick that can come in below $30 and perfumes for less than $100 a bottle.
Lagerfeld was “a marketing genius,” Elodie Nowinski, a professor of fashion studies at EM Lyon Business School, said before his death. “He knows how to take this elite vocabulary from haute couture and make it desirable to the masses.”
FRANCE’S RICHEST
The combination of mass-market appeal and high-end exclusivity helped Chanel grow into a colossus with beauty counters and boutiques worldwide, 20,000 employees, and operating profit of $2.7 billion in 2017.
BNP Paribas estimated the brand’s value at more than $50 billion, making the Wertheimers among France’s wealthiest citizens. With other holdings such as Bordeaux vineyards, a thoroughbred horse stable, and paintings by 20th century masters, each brother has a net worth of almost $21 billion, according to the Bloomberg Billionaires Index.
Mr. Lagerfeld himself amassed a personal fortune of about €400 million ($453 million), according to the latest annual rich-list compiled by Germany’s Manager Magazin.
‘DESIRABLE ASSET’
While the Wertheimers, both around 70, haven’t revealed any succession plan, they’re clearly thinking of the future. They’ve named independent board members and regrouped Chanel and dozens of subsidiaries — including suppliers of embroidery, feathers, leather gloves, and watch components acquired over the years — in a single holding company registered in London.
Long an e-commerce holdout, the company revamped its website last summer, adding sunglasses to offerings of makeup and perfume, and finally started publishing prices for its fashions and accessories online. A year ago, Chanel took a stake in the e-commerce platform Farfetch, which is helping develop digital tools for the brand’s stores.
Chanel has denied it’s planning for an initial public offering or sale, but speculation has grown as the Wertheimers have reshaped the company’s structure.
Luxury conglomerates like LVMH and Gucci-owner Kering SA are seeking to consolidate the industry while American challengers like Coach-owner Tapestry and Michael Kors Plc, private equity funds, and Chinese groups Fosun and Shandong Ruyi are also looking for increased exposure to the luxury market. But targets are few: family shareholders have continued to keep the likes of Chanel, Prada, Ferragamo, and Chopard off the market, while high valuations have deterred would-be suitors of Burberry Plc.
Chanel is “definitely a very desirable asset that is so far not open for sale,” Morningstar analyst Jelena Sokolova wrote in response to a Bloomberg query. Lagerfeld’s passing is unlikely to change the status quo for now, she said. — Bloomberg

Phoenix inks LPG distribution deal with retailer

A UNIT of Phoenix Petroleum Philippines, Inc. has tied up with Grainsmart Corp. to exclusively market, distribute and sell the independent oil company’s liquefied petroleum gas (LPG) products in the rice retailers’ stores nationwide.
In a disclosure to the stock exchange, the listed company said a memorandum of agreement between Phoenix LPG Philippines, Inc. and Grainsmart Corp. was signed on Wednesday.
The Phoenix Super LPG products will be available in Grainsmart stores “soon,” the company said.
“Our combined network will benefit the most those who are already using and those who would like to try our brand but does not have easy access to it yet,” said Julgin Anthony G. Villanueva, Phoenix LPG general manager for Luzon.
Phoenix Petroleum, the listed independent oil company led by Davao City businessman Dennis A. Uy, described Grainsmart as “the leading special rice grains retail chain store in the Philippines with over 300 stores nationwide.”
The partnership with Grainsmart is expected “to further amplify the availability and accessibility of Phoenix SUPER LPG in the country.”
Start-up business owners who are interested in adding complementary products in their portfolio may avail of the “4-in-1” package to be offered by Grainsmart that will include the Phoenix Super LPG and Posible, a digital transaction device, along with their rice and water product offerings.
“The partnership with Grainsmart will provide our business partners a new option on how they can grow their businesses, expand their reach, and provide Filipinos with complementary products at the best value,” Phoenix Petroleum Chief Operating Officer Henry Albert R. Fadullon said.
Phoenix Petroleum said since last year, Phoenix Super LPG has been aggressively expanding its foothold nationwide by opening Phoenix Super Hub, which it called a “stand-alone community-focused store.”
The store offers Phoenix Super LPG cylinders available for pickup and delivery as well as product installation and handling assistance for clients. The expansion includes forging strategic partnerships with industries that use LPG as an alternative power source.
Phoenix Super LPG is “the improved and re-branded” Gas Petronas, the new addition to Phoenix Petroleum’s portfolio that was acquired in 2017.
Sought to comment on the arrangement with Grainsmart store owners, Phoenix Petroleum Vice-President for External Affairs Raymond T. Zorrilla said: “Grainsmart does not carry any other LPG or payment center brands. Phoenix is Grainsmart’s only and exclusive partner.”
Grainsmart is owned by Benjamin B. Batac, who is also the company’s chief executive officer.
Phoenix Petroleum has previously acquired the Japanese convenience store chain FamilyMart. It has also ventured into the asphalt business with PhilAsphalt Development Corp. and Thailand’s Tipco Asphalt Public Co. Ltd.
The company has ongoing talks on a potential liquefied natural gas (LNG) business in the country with China National Offshore Oil Corp. (CNOOC) Gas and Power Group Co. Ltd.
On Wednesday, shares in Phoenix Petroleum were unchanged at P11.80 each. — Victor V. Saulon

As Amazon scraps New York, Alphabet’s Toronto ambitions swell

SIDEWALK LABS LLC’s ambitions to build a futuristic city on Toronto’s waterfront have gotten a whole lot bigger — and perhaps more controversial.
The urban innovation unit of Alphabet Inc. and sister company to Google is proposing to speed up its plans to redevelop 350 derelict acres on the city’s waterfront in return for a cut of property taxes, development charges and increased land values.
New York-based Sidewalk is offering to finance the infrastructure required to get the project off the ground, including a light-rail line, in return for a slice of the proceeds, which it estimates could be about C$6 billion ($4.5 billion) over the next 30 years.
The proposal, which includes a new Google campus, builds on Sidewalk’s 2017 plan for a 12-acre redevelopment that envisioned a mecca of green energy, self-driving technology and 3,000 housing units all connected by digital sensors.
Sidewalk Chief Executive Officer Dan Doctoroff said the project needs to be bigger for infrastructure investments like utility lines and public transit to make sense. The new financing model would allow the waterfront rail link to be built “years, if not decades, sooner than it would otherwise,” he said in a blog post.
PRIVACY CONCERNS
The proposal to build a city from scratch is the most wide-ranging since Sidewalk was selected to oversee the development. While greeted with enthusiasm when first unveiled, the project has become embroiled in controversy.
Privacy advocates are concerned about how data will be used by Alphabet, though the company has since committed to putting it all into public trust and not using it for advertising. Having money flow to Sidewalk that would normally go to city coffers might only inflame more controversy.
At the core of the debate is a question about whether tech giants like Google should have such a big impact on how cities are shaped. Amazon.com Inc. pulled out of a plan to build a large new campus in New York City after pressure from some residents and local politicians.
The project has yet to be approved by Sidewalk Labs and Waterfront Toronto, the government organization overseeing the project and various levels of government, and it may be years before it’s realized.
Dan Doctoroff was CEO of Bloomberg LP and deputy mayor of New York City under Michael Bloomberg, Bloomberg’s founder. — Bloomberg

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