Asia extends global gains, China PMIs taken in stride – Reuters

A man walks past the logo of Japan Exchange Group Inc. at the Tokyo Stock Exchange (TSE) in Tokyo August 26, 2015.

Reuters/Yuya Shino

Asian stocks rose on Thursday, drawing strength from overnight gains in global equities markets following their weakest quarter in four years, while twin surveys showing persistent weakness in China’s manufacturing sector were taken in stride.

Spreadbetters saw the upward momentum in equities being retained in Europe, forecasting a higher open for Britain’s FTSE .FTSE, Germany’s DAX .GDAXI and France’s CAC .FCHI.

The final Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) for September was slightly down from August but was a touch higher than a preliminary reading, a survey released on Thursday showed.

China’s official PMI released separately inched up to 49.8 in September from the previous month’s reading of 49.7, though it still showed contraction for the second straight month.

The Australian dollar, used as a proxy of China-related trades, rose 0.5 percent to $ 0.7058 AUD=D4 on apparent relief the PMIs weren’t as bad as some had feared.

Chinese financial markets are closed Oct. 1 to Oct. 7 for national holidays.

The Aussie’s gain was modest, however, as the PMI suggested economic conditions were still deteriorating despite a raft of government stimulus measures.

“This indicates the continued weakness of the manufacturing industry, though the pressure driving the sector’s decline has eased,” said He Fan, Chief Economist at Caixin Insight Group, regarding the PMI.

“Tepid demand is a main factor behind the oversupply of manufacturing and why it has not recovered,” said He.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.2 percent to pull further away from a 3-year low struck early in the week.

Australian shares were 1.8 percent higher. Japan’s Nikkei .N225 took a lacklustre central bank “tankan” survey on business sentiment in stride, climbing 2.3 percent.

On Wednesday, global equities ended their worst quarter since the 2011 euro zone crisis on an upbeat note, rallying on hopes Wall Street had bottomed for the time being. The Dow .DJI and S&P 500 .SPX surged overnight as bargain hunters scooped up beaten-down shares.

In currencies on Thursday, the dollar stood tall after an overnight boost from an upbeat U.S. private-sector employment report.

U.S. private employers added 200,000 jobs in September, according to the ADP National Employment Report, beating forecasts and hinting jobs growth may be sufficient for the Federal Reserve to raise interest rates later this year. ECONUS

In September, the Fed opted against hiking interest rates, citing concerns about global risks and market tumult stemming from China. But in recent days top policymakers including Chair Janet Yellen have said the Fed could raise rates this year if the economy improves.

The euro dipped 0.3 percent to at $ 1.1147 EUR= after shedding 0.6 percent overnight. The dollar rose 0.3 percent to 120.24 yen JPY= after nudging up overnight versus its Japanese counterpart.

“The China readings were almost flat, not really an improvement, but a few people might have used the figures as an excuse to increase dollar-long positions with China closed today,” said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

“The big pictures is still that the outlook for the global economy remains very subdued, mainly due to weak Chinese growth,” Murata said.

As with stocks, commodities got a breather amid the lull in global risk aversion, with copper and nickel rallying as bearish investors closed out quarter-end positions and ahead of the Chinese holidays. [MET/L]

Industrial metals were boosted by a bounce in the shares of hard-hit commodity group Glencore (GLEN.L).

Three-month copper on the London Metal Exchange CMCU3 was up 1.2 percent at $ 5,223.50 a tonne after hitting 2-week highs.

Nickel CMNI3 hovered near a 4-week high of $ 10,465.00 a tonne.

U.S. crude CLc1 was up 1.3 percent at $ 45.70 a barrel despite data showing a surge in U.S. crude oil and gasoline stocks last week, riding on overnight momentum generated by quarter-end “window dressing” by investors. Brent crude LCOc1 rose 0.8 percent to $ 48.83 a barrel. [O/R]

(Additional reporting by Reporting By Xiaoyi Shao, Winni Zhou and Kevin Yao in Beijing and Lisa Twaronite in Tokyo; Editing by Ryan Woo & Shri Navaratnam)

UPDATE 1-China Sept Caixin factory, services PMIs signal more economic weakness – Reuters

* Caixin manufacturing PMI hits lowest since March 2009

* Export orders at slowest in over six years

* Services sector, lone bright spot, cools markedly

* Readings likely to fuel hard landing fears, market volatility

* Reinforces views more stimulus will be announced soon

BEIJING, Oct 1 (Reuters) – China’s factory activity fell to a more than 6-year low in September while growth in the once-resilient services sector came close to stalling, private surveys showed, fueling fears that the economy may be slowing more sharply than expected.

The services sector has been the lone bright spot in the world’s second-largest economy, helping to offset stubbornly weak factory performance, but it too has begun to show signs of fatigue in recent months, putting global financial markets on edge.

Factory activity shrank to 47.2 in September, the lowest reading since March 2009 and slightly weaker than 47.3 in August, the final Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) showed on Thursday.

A similar survey for services fell for a second consecutive month to 50.5, its lowest since July 2014 and barely above the 50-mark which separates contraction from growth on a monthly basis. The August reading was 51.5.

“This indicates the continued weakness of the manufacturing industry, though the pressure driving the sector’s decline has eased,” said He Fan, Chief Economist at Caixin Insight Group.

“Tepid demand is a main factor behind the oversupply of manufacturing and why it has not recovered,” said He.

Despite a steady stream of government stimulus measures over the last year, including five interest rate cuts since November, factory activity in China has now shrunk for seven straight months, and more weakness is expected despite heading into what should be the peak year-end shopping season.

New export orders fell at a faster rate in September, sliding to 44.6 – a low not seen since March 2009 – and well below August’s 46.6.

The overall new orders sub-index, a proxy for domestic and external demand, saw its sharpest contraction since August 2012.

A summer plunge in China’s stock market and a surprise devaluation in the yuan last month have roiled global markets, and raised doubts inside and outside China over Beijing’s ability to manage its economy.

Still, most independent analysts, do not believe the economy is heading for a hard landing just yet. Many economists forecast a gradual though at times bumpy slowdown as Beijing tries to overhaul its old ‘heavy industry and export’ model into a more nimble one which is more reliant on services and stronger consumer spending.

JOBS PICTURE GETTING MURKIER

The health of the labour market could be key in determining how much more stimulus authorities will deploy in coming months.

With sales weakening, manufacturers shed jobs for the 23rd month in September and at the fastest pace since January 2009.

Companies in the services sector, however, continued to hire. Despite a softening in new orders, their business expectations remained high.

Tens of millions of Chinese were thrown out of work during the last global crisis, alarming the stability-obsessed Communist Party. The current downturn has not produced evidence of mass layoffs so far, though tales abound of “zombie” factories keeping workers on payrolls at subsistence wages.

China is due to release third-quarter GDP data on Oct 19, and many economists expect growth to dip to below 7 percent, which would be the slowest performance since the global financial crisis.

Many market watchers suspect current growth is already much weaker than official data suggest, pointing to weak electricity usage, sluggish freight volumes and the growing number of Western firms reporting flagging China sales.

Official data released by China earlier on Thursday showed factory activity shrank for a second month, while services growth held steady from August.

The official data focuses on larger, state-owned firms, while the private survey tends to concentrate on small-and mid-sized companies which are facing more financial strains.

(Reporting By Xiaoyi Shao, Winni Zhou and Kevin Yao; Editing by Kim Coghill)

UPDATE 1-PBF Energy buys Torrance refinery in bid for national footprint – Reuters

(Updates with details throughout)

(Reuters) – PBF Energy Inc agreed to buy Exxon Mobil Corp’s refinery in Torrance, California, for $ 537.5 million, completing Executive Chairman Tom O’Malley’s vision to have PBF plants coast to coast.

The transaction follows PBF’s purchase earlier this year of the Chalmette, Louisiana, refinery which Exxon owned jointly with Petroleos de Venezuela. With the deal, PBF lags behind only Phillips66 in its regional diversity. Phillips has refineries in all five major fuel markets, while PBF will have four.

The Torrance refinery, which has remained at reduced output rates since a fire in February, will return to full production before the deal closes, according to a statement from PBF.

With this latest purchase in California, PBF has a greater opportunity to compete with Valero, Phillips66 and other refiners with a broad national presence, said John Auers, executive vice president of Turner, Mason & Co. in Dallas.

The purchase gives PBF greater geographic diversity, expanding beyond its plants in New Jersey, Delaware, Ohio and Louisiana.

“Southern California is a very attractive market and we are excited to become a supplier in the region,” said Tom O’Malley, who previously served as CEO of refiners Premcor and Tosco. Tosco operated in California.

The plant secures PBF’s first toe-hold in the often-lucrative California market. Because the California market is isolated from other refined products supplies, the state’s refineries produce most of the gasoline used there. As a result, a disruption at any plant in California can cause prices to spike.

“In routine times, margins are decent but not great, but let’s say another plant has a problem, it will be good for them,” said Auers.

PBF, based in Parsippany, New Jersey, has expanded its capacity by about 60 percent this year and will be able to process 900,000 barrels of crude a day after it closes on the 155,000 bpd Torrance plant in the second quarter of 2016, the company said in a statement.

The Torrance refinery has access to discounted California crude that trades about $ 8 a barrel below Alaskan North Slope crude. As a result of units like a coker, the plant rates a 14.9 on the industry’s Nelson Complexity scale, indicating that it can convert sludgy crude to valuable products like gasoline.

The acquisition also includes storage facilities and pipelines, which PBF will potentially be able to drop down into its Master-Limited Partnership for midstream assets. (Reporting by Jessica Resnick-Ault in New York and Sneha Banerjee in Bengaluru; Editing by Don Sebastian)

US jobs sector gains, Midwest manufacturing stumbles – Reuters

Job seekers line up outside a job fair for veterans and their spouses held by the U.S. Chamber of Commerce and the Washington Nationals baseball club at Nationals Park in Washington December 5, 2012.

Reuters/Gary Cameron

U.S. companies hired workers at a solid clip in September, but data showed factory activity in the U.S. Midwest contracted, muddying the economic picture for the Federal Reserve on whether to raise interest rates later this year.

U.S. private employers added 200,000 jobs in September, payrolls processor ADP said on Wednesday, the strongest reading since June. It beat a forecast 194,000 increase among economists polled by Reuters.

Private payroll gains in August were revised down to 186,000from an originally reported 190,000 increase.

The U.S. central bank’s policy-setting group, the Federal Open Market Committee (FOMC), decided against ending its near zero interest rate policy in September, citing concerns about global risks and market turbulence stemming from China.

In recent days, several top Fed policy-makers including Chair Janet Yellen have said the Fed could raise rates later this year if the economy shows further improvement.

“As for the FOMC reacting to this report, the market can continue to view them as the suitor wondering why it should matter when he gives the engagement ring as long as she knows they are eventually going to be married,” Steve Blitz, chief economist at ITG in New York.

Interest rates futures implied traders see a 11 percent chance the Fed would raise rates in October and a 39 percent chance it would do so in December, according to CME Group’s FedWatch program.

The latest ADP data supported expectations for private and government jobs gains to be reported by the U.S. Labor Department at 8:30 a.m. (1230 GMT) on Friday.

Economists polled by Reuters expect Friday’s report to show U.S. employers hired 203,000 workers in September, improving from August’s 173,000 increase which was the smallest in five months. The unemployment rate was forecast to hold at 5.1 percent, a near 7-1/2 year low.

“If we are able to hold on this type of jobs growth, the odds are pretty good we’d be back to full employment in the summer of 2016,” Moody’s Analytics chief economist Mark Zandi told reporters on a conference call.

Moody’s Analytics jointly developed the private jobs report with ADP.

U.S. stocks rose partly on the better-than-expected ADP data, while Treasuries prices stayed in negative territory and the dollar tacked on earlier gains.

U.S. MIDWEST FACTORY SLUMP

As the labor market seemed to hum along, manufacturing activity in the U.S. Midwest took an unexpected downturn as a strong dollar and weak overseas demand have hurt U.S. exports.

The Chicago Purchasing Management Index fell in September to 48.7, its weakest since May, from August’s 54.4. Economists polled by Reuters had forecast a reading of 53.0.

A reading below 50 suggests the Chicago-area factory sector is contracting despite strong vehicle demand.

A manufacturing gauge on the upper Midwest region fell to its lowest level since 2009.

Marquette University and the Institute for Supply Management-Milwaukee said its regional business barometer fell to 39.44 in September from 47.67 in August.

“In aggregate, growth still looks strong to keep the unemployment rate trending down,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

(Reporting by Richard Leong; Editing by Meredith Mazzilli and Chizu Nomiyama)

ADP Says Payrolls at Companies in U.S. Increase 200000 – Bloomberg

Companies stepped up hiring in September, indicating the U.S. job market is standing firm in the face of weaker global demand, according to a private report based on payrolls.

A 200,000 increase in employment followed a revised 186,000 rise in the prior month, figures from the ADP Research Institute showed Wednesday. The median projection of economists surveyed by Bloomberg called for an advance of 190,000.

The additions to company headcounts are consistent with resilient demand in the U.S. even as some industries face challenges of weaker overseas sales. Labor Department data on Friday are projected to show payroll gains accelerated this month compared with August.

"The U.S. job machine continues to produce jobs at a strong and consistent pace," Mark Zandi, chief economist at Moody's Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody's produces the figures with ADP. "Despite job losses in the energy and manufacturing industries, the economy is creating close to 200,000 jobs per month. At this pace, full employment is fast approaching."

Estimates in the Bloomberg survey ranged from gains of 120,000 to 215,000 after a previously reported August advance of 190,000.

Goods Producers

Goods-producing industries, which include manufacturers and builders, increased headcounts by 12,000, the ADP report showed. Hiring in construction climbed by 35,000, almost twice the 18,000 gain a month earlier. Factories cut 15,000 jobs in September, which was the biggest decline since December 2010. Payrolls at service providers increased by 188,000.

Companies employing 500 or more workers created 106,000 more jobs. Medium-sized businesses, with 50 to 499 employees, boosted headcounts by 56,000 and small companies increased payrolls by 37,000.

The ADP report is based on data from businesses with almost 24 million workers on their combined payrolls.

The September jobs report issued by the Labor Department may show private businesses added about 200,000 employees after a 140,000 increase in August, according to the median forecast of economists surveyed by Bloomberg. The unemployment rate probably held at 5.1 percent, the lowest since April 2008.

The improving outlook for the labor market is among the reasons Federal Reserve policy makers have said they may raise their benchmark interest rate from near zero before year-end.

Euro sags as euro zone inflation turns negative in Sept – Reuters

A passer-by is reflected on a signboard of a currency exchange service outside a bank in Tokyo November 27, 2014.

Reuters/Issei Kato

The euro lost ground on Wednesday as data showing euro zone inflation dipped back into negative territory in September fueled expectations the European Central Bank will expand or extend its asset purchase program.

The euro fell 0.4 percent to $ 1.1205, and was down 0.7 percent against the British pound, although it remained on track for a quarterly gain against the dollar.

“A weak number was expected and bolsters expectations that the ECB may have to expand its asset purchase program from the 60-billion-euros-a-month to something larger, perhaps by year-end,” said Richard Falkenhall, currency strategist at SEB.

“That is negative for the euro, but a lot depends on how stock markets behave. If stocks drop, then the euro is likely to be supported as they are going in opposite ways.”

Euro zone prices fell by 0.1 percent on an annual basis in September after rising 0.1 percent last month, missing expectations for a zero reading and remaining well below the ECB’s target of just under 2 percent.

While the ECB is focused on inflation expectations and inclined to look through falls in the headline rate, traders say a sustained drop below zero could reinforce policymakers’ fears about the firmer euro’s impact on financial conditions.

The common currency has eked out gains against the dollar this quarter, mainly because investors have unwound euro-funded carry trades in riskier assets and emerging currencies. That has seen the euro move inversely to global stocks, which are on track for their worst quarter in four years.

Demand for the safe-haven yen waned as global stocks steadied and a semblance of calm returned to markets after recent turmoil, though traders said month-end and quarter-end flows meant volatility is likely to persist.

The dollar fetched 120.30 yen, up 0.5 percent on the day, having turned around from a low of 119.24. The yen showed limited reaction to data showing Japan’s industrial output fell unexpectedly in August.

The yen has been a winner this quarter with investors unsettled by worries about slower Chinese economic growth, the health of the global economy and uncertainty over the timing of a hike in U.S. interest rates. A meltdown in Glencore shares on Monday highlighted jittery nerves, although the Swiss-based trader and miner did rebound.

Traders said U.S. nonfarm payroll numbers due on Friday could strengthen or weaken the case for a 2015 lift-off and set the tone for the dollar. The market will also be keeping an eye on Fed Chair Janet Yellen, who is due to speak at a conference at 1900 GMT on Wednesday.

“If she wants to clarify anything, post this bout of risk-aversion, then she may tweak the message from last (Thursday),” said Emma Lawson, senior currency strategist at National Australia Bank.

On Thursday, a week after the Fed delayed a long-anticipated rate hike because of recent turmoil in financial markets, Yellen said she still expects the Fed to begin raising rates this year.

(Additional reporting by Hideyuki Sano; Editing by Catherine Evans)

Chesapeake Cuts Workforce 15% to Cope With Falling Gas Prices – Bloomberg

Chesapeake Energy Corp. is letting go of about one in six employees, the latest blow to a workforce that enjoyed boom years under shale wildcatter Aubrey McClendon and shrank since his departure as the natural gas producer grapples with a downturn.

Once the second-biggest private employer in its hometown of Oklahoma City, the company co-founded by McClendon will eliminate 740 jobs, leaving it with about 4,000 workers scattered around the U.S. A $ 55.5 million, one-time charge will be booked for the third quarter, Chesapeake said in a filing Tuesday.

“While this was extremely difficult, we are acting decisively and prudently to enhance the long-term competitiveness and strength of Chesapeake,” Chief Executive Officer Doug Lawler said Tuesday in an internal memo sent to Bloomberg News. “Over the past year, we have taken significant actions in response to the low commodity prices by reducing our costs and decreasing our capital spending.”

Since taking over in 2013, Lawler has reduced the headcount by more than half through spin offs and asset sales, slashed spending on drilling rigs and oil leases and halted a 14-year run of dividend payouts to investors. Chesapeake, which held the crown as largest U.S. gas producer until 2010, confronts prices for the heating and power plant fuel that have slumped nearly 60 percent since February of last year.

Big Loss

The company will lose a net $ 5.4 billion this year, according to the average of 12 analyst estimates compiled by Bloomberg. That would be its biggest annual loss since 2009.

The job cuts are the reversal to a company building boom led by McClendon, who added staff and real estate as shale drilling expanded. At one point in 2012, four construction cranes overlooked eight new buildings on a 120-acre (49-hectare) Georgian architecture campus as earth-moving equipment readied the land for more.

Under McClendon's reign, Oklahoma City employees enjoyed on-site day care and health club facilities with full-time personal trainers on staff.

Now Chesapeake's hometown will feel the biggest impact from Tuesday's eliminations, seeing 19 percent of the company's Oklahoma City workforce eliminated, Gordon Pennoyer, a spokesman, said in an e-mail. The unemployment rate in Oklahoma was 4.6 percent in August, below the national average of 5.4 percent.

Worldwide Cuts

Energy companies around the world have eliminated more than 200,000 jobs after oil prices fell by more than half from their June 2014 peaks, according to Swift Worldwide Resources.

The filing was made after the close of regular trading in New York, where the stock settled 1.2 percent higher at $ 6.79. Chesapeake, which has 7 buy ratings from analysts, 20 holds and 8 sells, dropped to as low as $ 6.69 in after-market trading. The shares have declined 65 percent since the beginning of the year.

While a difficult decision for any company, the move is seen as prudent to align Chesapeake's cost structure with the low oil and gas prices, Scott Hanold, an analyst at RBC Capital Markets, wrote Tuesday in a note to investors.

Ralph Lauren, Creator of Fashion Empire, Is Stepping Down as CEO – New York Times

Photo

Ralph Lauren with Stefan Larsson, who is succeeding him as chief executive, at the Ralph Lauren offices in New York. Credit Chad Batka for The New York Times

Ralph Lauren, the quintessential American designer who built a fashion empire based on sweeping fantasies of country-club prep and the Wild West, is stepping down from his post as chief executive of the company.

Taking the helm at Ralph Lauren is Stefan Larsson, a former H&M executive and president of Old Navy, Gap's down-market brand, which he is credited with reviving. Old Navy has consistently been one of the few bright spots in Gap's brand portfolio since Mr. Larsson, who is Swedish, took over in 2012, making him one of the most visible executives in retailing.

The change may be viewed as a move by Ralph Lauren to get its financial house in order. Earnings at the upscale apparel company, known for its Polo brand, have been pressured by a strong dollar and intense competition in the luxury space. Its latest quarterly earnings of $ 1.09 a share topped analyst estimates, but revenue dipped 5.3 percent on a year-over-year basis. The company's share price has slumped by almost half this year.

Continue reading the main story

Ralph Lauren Through the Years

Mr. Lauren has transformed his company into a quintessential American label with its ubiquitous logo of a mounted polo player holding a raised mallet.

In an interview, Mr. Lauren, 75, said he intended to remain active at the company he founded almost a half-century ago in roles as executive chairman and chief creative officer. Mr. Larsson will report to Mr. Lauren, though Mr. Lauren characterized their relationship as a "partnership."

"When they start designing things I can't understand, I'll quit," Mr. Lauren said, sitting with Mr. Larsson at his side at his offices on Madison Avenue, adorned with the rustic paraphernalia — a tin toy robot, cowboy boots — that Ralph Lauren's stores have come to be known for.

"But I don't feel like I'm stepping back now," Mr. Lauren said.

Still, Mr. Larsson's appointment is the start of a succession at one of America's best-known fashion houses, which, together with the likes of Donna Karan and Calvin Klein, helped put American style on the map.

And it is the coming end of a golden era of American postwar designers: Ms. Karan stepped down from the helm of the house that bears her name this year; Mr. Klein stepped away from his namesake company in 2002.

Mr. Larsson, 41, will take over as chief executive of the Ralph Lauren Corporation in November, and will also join the company's board.

"One of the biggest reasons for me to join is the opportunity to work side by side with someone like Ralph," Mr. Larsson said.

Most successful fashion brands are stories of two partners — Yves Saint Laurent and Pierre Bergé, Calvin Klein and Barry Schwartz, Valentino and Giancarlo Giammetti, even Giorgio Armani and Sergio Galeotti. (Mr. Armani took over as chief executive after Mr. Galeotti died.)

Mr. Lauren was the rare designer who could do both. Previously, he had a "partner" in Roger Farah, former chief operating officer and president who retired in 2013. Mr. Farah was succeeded by Jackwyn Nemerov, another respected executive whose tenure nevertheless coincided with sluggish sales, despite steep promotions.

But Mr. Lauren's decision to award Mr. Larsson the title of chief executive indicates that he, at least, feels it is still important to separate the roles and have a professional manager running the brand and reassuring Wall Street. Mr. Lauren is still the largest individual shareholder in his company, and is likely to have a hand in any major decisions.

Investors cheered the move, sending the stock as much as 5 percent higher in after-hours trading. The question of who might succeed Mr. Lauren after 48 years at the company's helm had cast uncertainty over plans for the future. Mr. Lauren's son, David, is on the board of directors and heads the company's advertising and marketing divisions.

Asked on Tuesday whether Mr. Larsson would be a good successor, Mr. Lauren replied, "I would say so."

Still, an appointment of a new chief executive from outside the company surprised some industry experts.

"Ralph Lauren has been a poster child of stability and has historically grown talent from within," said William Susman, managing director at Threadstone Partners, an advisory firm that focuses on the retail sector. "Bringing in Stefan must be a reflection of the need for new thinking."

Photo

Mr. Lauren's Spring 2001 collection. His early success was built on  a country-club, preppy look, and he later designed clothing based on Wild West themes. Credit Corina Lecca for The New York Times

Ralph Lauren would benefit from change, experts say. Mr. Lauren's most recent show at New York Fashion Week was an ode to Americans in Biarritz, with his signature perfect leather tailoring, blue and white evening gowns, and stars in the front row (Jessica Chastain, Julianne Moore). But his brand has a typical luxury pyramid structure, the model for both Calvin Klein and Michael Kors, with luxury at the pinnacle casting an aspirational halo over the more accessible Polo Ralph Lauren line. Factory stores below that form the bulk of the profits.

Given Mr. Larsson's track record in "fast fashion," the question is whether the company will now take a different tack. Recent moves at the company, like separating out its luxury business, hiring the luxury executive Valerie Hermann and opening a lavish private members' club in Milan, had suggested a stronger focus on luxury at the apparel company.

Mr. Larsson has made his name in budget-conscious mass-retailing, first at H&M and then at Old Navy. Though even at those mass brands, Mr. Larsson's success, experts say, has been built on fostering a level of attention to design that sellers of low-end, family-oriented apparel had previously not put into their wares.

Whether or not changes lie ahead for the company, it is a big moment for a fashion house that Mr. Lauren began in the streets of New York, selling ties out of rented drawer space in a closet of an office in the Empire State Building. Now, on top of its men's and women's clothing lines, Ralph Lauren has a foothold, through licensing, in everything from cosmetics to leather goods, to footwear and eyeglass frames. The company logged sales of $ 7.6 billion in its last fiscal year.

Mr. Lauren's success has made him a rich man. Though he remains a top shareholder, Mr. Lauren has sold off parts of his stake over the years. Just last week, he sold 50,000 Ralph Lauren shares, according to a filing with the Securities and Exchange Commission, worth some $ 5.6 million.

Mr. Susman of Threadstone said that Ralph Lauren clearly wanted to incorporate some elements of fast fashion, given Mr. Larsson's success in that arena. Mr. Larsson will also help Ralph Lauren bolster its international presence, which has become critical as the United States market has become saturated, Mr. Susman said.

But he said that he did not expect Ralph Lauren to step away from building up the luxury side of the business.

"I don't envision that would change," he said. "And they still have Ralph Lauren to handle it."

Mr. Lauren spoke of the unlikely match between his world of aspirational luxury, and that of Mr. Larsson's, in mass retailing. A Ralph Lauren board member had spoken gushingly about a rising star in fashion, and recommended Mr. Lauren meet him.

"So I said, 'Where's he from?' And they told me: 'Old Navy and H&M.' I said: 'Why would I be looking for that? We're building a great luxury company.' "

Even as the two met for a private dinner in New York, Mr. Lauren said, "I was thinking to myself: 'Why am I here? It's a waste of time.' "

That feeling of initial unease was mutual, Mr. Larsson said. "I was hesitating. Why was he interested in speaking with me?" Mr. Larsson said.

But the two hit it off.

"I interviewed lots of people who were in luxury. But Stefan has a great quality that made me say: 'You can be my new C.E.O.,' " he said. "He's unique as a man, a man who's capable of building businesses and growing companies, but at the same time he's sensitive to people's feelings."

And was there really something that Ralph Lauren could learn from H&M or Old Navy?

"If I thought there was nothing I could learn from Stefan," Mr. Lauren said, "he would not be here."

Ralph Lauren hires Old Navy executive to replace him as CEO – Reuters

American designer Ralph Lauren, who built a fashion powerhouse on luxury designs inspired by country club chic, announced Tuesday he is stepping down as chief executive officer and named the head of Gap Inc’s populist Old Navy brand to the position.

Ralph Lauren Corp, founded by 75-year-old Lauren in 1967, appointed Stefan Larsson, the global president of Gap’s Old Navy division, as CEO effective in November. Lauren will continue to serve as executive chairman and head its design team, the company said in a statement.

Lauren, who got his start designing neckties, plans to stay active at the company and Larsson will report to him.

"When they start designing things I can't understand, I'll quit," Lauren told the New York Times in an interview.

Ralph Lauren shares rose 3.79 percent to $ 108 in trading after the bell. Gap shares fell 3 percent to $ 29.30.

The company has been struggling to boost profits as a stronger dollar reduces the value of sales from overseas. Net revenue in its first quarter ended June 27 fell 5 percent, mainly due to currency fluctuations.

Odeon Capital analyst Rick Snyder said the company had grown to a size where it needed more “systems and controls.” The change in CEO “is just a natural progression,” Snyder said.

Milton Pedraza, a fashion industry analyst at the Luxury Institute, said Larsson's appointment follows a trend of luxury brands hiring leaders from mass-market companies in recent months. He cited the appointment of Grita Loebsack, a former vice president at Unilever Plc, as CEO of Kering’s emerging brands, which include Stella McCartney and Gucci.

Larsson, 41, is credited with reviving sales at Old Navy, successfully implementing a model of offering trendy clothes at low prices.

Annual sales at the division rose 8 percent in 2014 and became Gap’s biggest business. Sales for the division were $ 6.62 billion, or 40.3 percent of Gap’s total.

Lauren’s fashion empire includes some 25 brands including Polo, Club Monaco and Denim & Supply, and the company makes clothing, accessories, furniture, home decor items and footwear under its labels.

Larsson, a Swede who before joining Gap was global head of sales at Hennes & Mauritz, brings experience of managing a fast fashion business with a supply chains considered to be among the most efficient within the apparel industry.

His appointment would be a good fit for Ralph Lauren which is seeking to reorganize and centralize business units and brands, Snyder said.

“If he comes from a place like H&M, he understands global supply chains and that’s one of the things that Ralph Lauren is trying to implement right now,” Snyder said. “It’s going to be very positive for them.”

FROM WILD WEST TO HIP HOP

Despite the aura of Anglo-Saxon elitism around his company, Lauren was born Ralph Lifshitz in the Bronx in 1939. His parents were Jewish immigrants from Belarus, and he changed his name to Lauren at age 16.

Lauren’s designs drew inspiration from elite and exotic realms including East Coast prepsters, the Wild West, colonists on African safari and czarist Russia. He designed the wardrobe for the 1974 film version of “The Great Gatsby” including a pink suit for star Robert Redford.

The Ralph Lauren Polo shirt, which debuted in 1972, became a signature item for the company with a tiny polo player embroidered on the chest.

His designs have been worn by presidential hopeful Hillary Clinton, actress Gwyneth Paltrow and actor Johnny Depp.

Lauren was also, perhaps surprisingly, influential in the hip hop world. His bright colors and bold clothing became staples for some New York gangs, and rappers such as Kanye West and Lil Wayne have mentioned Lauren and his designs in their rhymes.

The company also said that Jackwyn Nemerov, chief operating officer, would retire in November at which time she will become an adviser to the company.

(Reporting by Sneha Banerjee and Ramkumar Iyer in Bengaluru and Siddharth Cavale and Kylie Gumpert in New York; Additional reporting by Sharon Bernstein in Sacramento; Editing by Cynthia Osterman and Lisa Shumaker)

Ralph Lauren Hands CEO Reins to Stefan Larsson of Old Navy – WWD

"This is important to say: There is no toe in the water…I won't be coming in two days a week."

Ralph Lauren answered the easing-into-retirement question before it was asked, having just appointed Stefan Larsson to the position of chief executive officer, a post only Lauren himself has held in the near-50 year history of his iconic fashion company. When Larsson assumes the post in November, Lauren will remain executive chairman and chief creative officer. Jackwyn Nemerov, currently president and chief operating officer, will retire and become an adviser to the company.

Larsson had been global president of Old Navy since October 2012. Under his direction, the division has proved a strong point within the troubled Gap Inc. umbrella, with three consecutive years of profitable growth, including $ 1 billion added in sales. Prior to that, he spent 15 years at H&M, part of the senior management team that exploded that business into a global power with significant fashion resonance at the mass level.

"Stefan brings something special," Lauren said. "Stefan has the sensitivity of design and of building a business and growing companies. That's rare in our business. Usually, it's one or the other." But it was his impression that they hold similar views on the more ephemeral qualities of leadership that sealed the hire. Lauren had scouted around for ceo candidates for some time, a process that garnered a checklist of "a lot of prerequisites," with a shared spirit at the top of the list. The right candidate would be "someone that has the spirit similar to how I built my company," the designer said. "And it was spirit, because I certainly didn't have the money and the history and the background. But I knew I had something."

For Larsson, the appeal of leading Ralph Lauren Corp. into its next 50 years may seem evident, but he also experienced a like-minds moment during their first meeting. "I had dinner with Ralph, the most iconic American fashion designer," he said. "Our meeting had a big impact on me; I think we started speaking dreams minutes into the dinner. Dreams and realizing that Ralph has made more in his life so far than anybody can ever dream of and here he is, speaking about growing the business, speaking about generations, speaking about stories. And I was just moved by that."

To a powerful if not quantifiable extent, dreams are the stuff on which the Ralph Lauren empire was built. He knew he "had something" — ideas about not only how people should look, but how they should comport themselves, how they should live. To that end, Lauren is probably one of fashion's great romantics. Yet romance alone doesn't build or sustain a multibillion-dollar global enterprise. "I'm looking at what the next steps are and how to keep the company growing and what our future is going to be," Lauren said.

The Larsson hire is the latest management change at the company since the departure of Roger Farah, previously chief operating officer, in May 2012. The company elevated Nemerov to president and chief operating officer, and subsequently tapped Valerie Hermann, previously of Reed Krakoff, as president of Luxury Collections, reporting to Lauren. Earlier this year, the firm named Chris Peterson, formerly chief financial officer, president of Global Brands, also reporting to Lauren. Hermann and Peterson remain in their roles but will now report to Larsson.

David Lauren, a Ralph Lauren board member and executive vice president, said in a statement that he was looking forward to working with Larsson, adding, "His commitment and passion to build great brands will be invaluable as we move into the future."

Still, the company's choice of Larsson is somewhat surprising  given he made his mark in the value, fast-fashion sector, not in luxury. But his international background will be key to Lauren as it continues to push global expansion, and his stint at Old Navy immersed him in another all-American fashion brand.

Gap Inc. recruited Larsson in May 2012 to orchestrate the international rollout of Old Navy, which began with Japan. He'd had experience in international openings, having brought H&M to the West Coast of the U.S. During his career, Larsson has been involved in product, merchandising, assortment development, planning and production, and store design and has a master of science in business administration jointly from the Hanken School of Economics and Business Administration, in Finland, and Jönköping International Business School, in Sweden.

He once told Gap investors, "We see customers demanding on-trend and current products. They want to be inspired more than ever before, want a more convenient experience, want to do other things with their time other than trying to find the right product."

The strategy at Old Navy, he said, revolved around "becoming the first aspirational American brand in the value space."

Larsson's departure is a big loss for Old Navy, which was expected to start rolling out a new store design in the spring, involving smaller, more productive spaces where the retailer in its current format wouldn't be able to open. The new design is expected to unveil a different customer flow, and a more aspirational feel. Gap Inc. said Larsson's last day at Old Navy will be Friday and that a search for a new global president is already under way. Jill Stanton, executive vice president of global product, will lead the division in the interim, reporting to Gap Inc. chief executive officer Art Peck.

He is joining as Lauren's ceo at a time when the company faces challenges. Given a series of Wall Street disappointments over its financial results, there had been rumblings since the summer over what Nemerov's future role would be at the group. Her contract ran through April 1, 2017.

On Tuesday, the stock hit a 52-week low at $ 103.29 and ended up down 0.8 percent to close at $ 104.05 in Big Board trading. Wall Street seemed pleased about Larsson's appointment. News of the management change hit the wires at 4:30, after the markets closed. Shares of Ralph Lauren rose 4 percent to $ 108.20 in after-market trading.

In August when the company posted first-quarter results, investors sent shares of the company down 1.5 percent to $ 121.50 even though it beat Wall Street's consensus estimates for the period. That's because while results beat both adjusted diluted earnings per share and revenue expectations, much of the gains were from better operating efficiencies since revenues and comps fell against year-ago comparisons.

The quarter before wasn't so great, either. In May, the company said fourth-quarter profits fell 19 percent. While Ralph Lauren has been transitioning its operating model to its global brands initiative, same-store sales in the quarter fell 4 percent at the time, due in part to slower tourist traffic. Given the investments in the company's stores and development of store concepts, plus the level of investments in brand reorganization, many do not see margin improvement in the near term.

Investors have been concerned about sales growth, while the company — like many apparel brands — has seen a negative impact on the bottom line due to currency fluctuations.

To be sure, the company has been making investments in its retail business, and has been working on a reorganization. The restructuring could save up to $ 100 million annually when fully implemented, including significant layoffs to reduce headcount by 5 percent. To streamline some of the operations, the company elected to create a singular Ralph Lauren Collection label for women and focus on the Ralph Lauren Purple Label for its high-end men's wear line. It's part of a series of moves to improve inventory turns and gross margins. The company also launched Polo Ralph Lauren for women, adding another leg to that well-established brand.

With so much at stake, Lauren sounded genuinely upbeat on Tuesday, speaking with a confidence rooted in been-there, done-that experience — and a long-haul track record of what by any standard is incredible success. "Business around the world has been difficult," he said. "You can't panic when the market changes its mind about something."

While noting the essential responsibility to deliver value to shareholders, he cautioned that obsession with the short-term in the wake of economic vicissitudes can be destructive and is antithetical to the precepts on which he founded and grew his company. "I don't go out and say: how much money are we going to make? I have proven in 50 years that the company has greatness and longevity. It's passion for design, passion for business.

"I've been through it before," Lauren continued. "I've been up and down and up. This is my life, this is what I do. I design, I create. But I also built a big business. I built one of the most successful businesses in America, and maybe the world."

Chesapeake Energy Plans to Cut 15% of Jobs – Wall Street Journal

Sept. 29, 2015 4:47 p.m. ET

Chesapeake Energy Corp. CHK 1.19 % said it is reducing its workforce by 15% to reduce costs to reflect low prices for crude and natural gas.

In a regulatory filing, the company said it expects to post third-quarter charges of roughly $ 55.5 million related to the move.

Chesapeake, based in Oklahoma City, had about 5,000 employees. Today 740 of them will be laid off, with about 560 of those positions coming from the home office in Oklahoma, the company said.

"As you are fully aware, the current commodity price environment continues to be a challenge for our industry and for Chesapeake," Chief Executive Doug Lawler wrote in an email to employees Tuesday. "While this was extremely difficult, we are acting decisively and prudently to enhance the long-term competitiveness and strength of Chesapeake."

Chesapeake is among the U.S. large energy companies that have written down the value of their oil fields this year as a rout in commodities prices has made properties across the country not worth drilling.

In August, Chesapeake posted a deep loss in the second quarter as the U.S. shale driller took a $ 4.02 billion write-down on some properties following tumbling energy prices.

Amid the swoon in oil prices, Chesapeake has reduced rig operations and cut capital expenditures after failing to offset the plunge with higher production.

—Erin Ailworth contributed to this article.

Write to Tess Stynes at tess.stynes@wsj.com

Fewer Illinois billionaires make Forbes 400 list – Chicago Tribune

If you’ve noticed fewer billionaires shopping for caviar at your local supermarket, you’re not mistaken — Illinois has three fewer representatives among the nation’s 400 wealthiest residents than it did last year, according to Forbes magazine.

While the state’s richest man, Citadel hedge fund founder Ken Griffin, upped his net worth from $ 5.5 billion to $ 7 billion to become the 69th richest American, Illinois’ third and fourth richest residents last year, brothers J. Christopher Reyes and Jude Reyes, both moved to Florida.

And Groupon founder Eric Lefkofsky fell off the list entirely. His estimated fortune of $ 1.6 billion last year fell below the $ 1.7 billion needed to make the list this year, leaving Illinois with just 14 members of the elite top 400 club.

Former Tribune owner and real estate mogul Sam Zell remains the state’s second richest resident. He increased his wealth by $ 100 million last year, according to Forbes — one of five Illinois billionaires to see their net worth grow.

Another real estate magnate, casino owner Neil Bluhm, moves up to become the state’s third-richest resident after making a cool $ 700 million last year to take his total net worth to $ 3.5 billion, Forbes says.

Beanie Baby inventor Ty Warner’s wealth is unaffected by a felony conviction for tax evasion: the $ 53.5 million fine he paid wasn’t enough to put a dent in his $ 2.3 billion fortune, according to Forbes.

But it was a forgettable financial year for one of Chicago’s best known families. While private equity and venture capital firm boss Jay Robert Pritzker saw no change in his $ 3.4 billion fortune, U.S. Secretary of Commerce Penny Pritzker lost $ 100 million to fall to $ 2.4 billion. Hyatt chairman Thomas Pritzker and movie investor Jean Pritzker lost $ 200 million each to fall to $ 3 billion and $ 2.3 billion, respectively, and Jennifer Pritzker — believed to be the world’s only transgender billionaire — lost $ 50 million to fall to $ 1.75 billion and 389th place on the list.

Chicago’s chicken king, meat processing giant Joseph Grendys, also had a bad year, losing a quarter of his net worth to fall to $ 1.8 billion.

With an estimated fortune of $ 76 billion, Microsoft founder Bill Gates remains top of the chart, despite losing $ 5 billion over the last year. Facebook CEO Mark Zuckerberg cracked the national top 10 for the first time, with a net worth of $ 40.3 billion.

Forbes says 273 members of the list are self-made billionaires; 61 inherited their wealth, and 66 inherited at least a portion but are still increasing it.

Snapchat founder Evan Spiegel, age 25, is the youngest billionaire on the list.

kjanssen@tribpub.com

Twitter @kimjnews

Shock, mourning after MTV extreme athlete Erik Roner killed in skydiving accident – Los Angeles Times

Tributes have begun to pour in from the extreme sports world over the sudden death of skydiver Erik Lars Roner, an MTV athlete, who was killed Monday when he struck a tree during a parachuting stunt at a charity event.

BMX athlete Dave Mirra worked with Roner years ago on “Nitro Circus,” a reality show featured on MTV. Roner was a member of the crew.

"We’re praying for his family," Mirra said. "Rest in peace, Erik, and thanks for putting it on the line every time you’ve entertained us."

Roner, 39, of Tahoe City, Calif., was part of a team performing at a charity golf tournament when he hit a tree and became entangled about 9:45 a.m., the Placer County Sheriff’s Office said.

Roner, a professional skier and BASE jumper, was pronounced dead at the scene; all other skydivers landed safely, officials said.

The accident occurred at an annual golf fundraiser for the Squaw Valley Institute in Olympic Valley. An investigation into the accident is ongoing, and the Federal Aviation Administration has been notified, sheriff’s officials said.

"He hit a tree … he hit a tree so hard. I don’t know what happened from there," Roy Tuscany, founder of the Lake Tahoe-based High Fives Foundation, told Teton Gravity Research, an action sports media company.

“Nitro Circus” said Roner was the third skydiver to jump in performing a three-man parachute stunt. According to witnesses, Roner missed the drop zone target and hit a large tree, the show said in a statement.

"Erik was world-renowned for his antics and lovable personality in ‘Nitro Circus’ media and live shows across the globe," they said.