Hits & Misses
(Business 2.0) – [HIT] MyGirl. Think social networking is a big waste of time? It's becoming the road to fame and fortune for Christine Dolce, a.k.a. Forbidden, a 23-year-old cosmetician who's now cashing in on her MySpace fan base of nearly 900,000 "friends." Her online celebrity led to spokesmodel gigs for Axe body spray and Zippo lighters. Then she inadvertently started a clothing line by posting a picture of herself in ripped-up jeans; after fielding thousands of requests, she launched Destroyed Denim, which sells mutilated jeans for $100 a pop. Next up: a newly launched website selling Forbidden posters, shirts, and gear. "You watch," says her manager, Keith Ruby. "Within months she'll be a seven-figure brand."
[MISS] Wailing Wal. If they can make you, they can break you. That's the lesson from a spate of earnings reports in which companies blamed subpar results on Wal-Mart's push to reduce inventory levels (though none dared to cite it by name). Playtex Products, which does about a quarter of its sales at Wal-Mart, ascribed its modest revenue growth to "inventory destocking programs by certain ... retail customers." Likewise, $2.4 billion Spectrum Brands said "inventory management initiatives by some of our largest retail customers had a negative effect on Q2." Even Procter & Gamble saw its sales nicked by "higher-than-expected customer inventory reductions." As for Wal-Mart? Thanks to the inventory-reduction savings, it beat analysts' estimates with a profit jump of 6.3 percent.
[HIT] Radio waves. The ratings system in radio is the same today as it was in 1965: Listeners keep handwritten diaries, and results are issued quarterly. So you'd think the industry would be dying for better data, right? Not so fast. In fact, a group tasked with selecting a new standard has plodded along for a year. So CBS Radio, the nation's second-largest network, took matters into its own hands, signing a deal with Arbitron to use its Portable People Meters in 35 markets. The new technology embeds inaudible signals into broadcasts that are detected by pager-size devices worn by survey participants. While the deal hasn't cleared up all the static--the industry group, led by No. 1 broadcaster Clear Channel, is still considering two rival technologies--it has cranked up the dial on Arbitron's stock, which has risen 18 percent since mid-April.
[HIT] In high gear. How to distinguish a commodity product? Marry it to a popular athlete's cause célèbre. This sure worked for the AMD-powered Hewlett-Packard Special Edition L2000 notebook, which not only became a hot seller but lent a halo effect to both companies. The L2000 is differentiated by marketing (promising a $50-per-unit donation to the Lance Armstrong Foundation) and design (an eye-catching yellow-and-black case emblazoned with the LiveStrong logo). Like Armstrong, the machine has been a big winner: It was the best-selling laptop at CompUSA in the third quarter of 2005, and overall unit sales have gone on to top 40,000. HP has since picked up two points of market share against archrival Dell, while AMD's slice of the market has risen from 9 percent to 11.
[MISS] The price is falling! To most of us, avian flu is an abstract fear, but to Tyson Foods it's utterly real. The world's biggest meat producer reported a $127 million loss for its fiscal second quarter, a showing that largely traces back to the bird flu scare. Consumers in Europe and Asia have reduced their poultry consumption, and Russia is cutting imports by 30 percent to prop up its own farmers. The drop overseas hit Tyson back home: The company noted that "unprecedented leg quarter inventories ... put pressure on an overabundant domestic white meat market and contributed to historically low breast meat prices." Worse, the chicken glut further crimped an already weak beef market, causing what Tyson termed an "oversupply of all proteins."