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Smart Responses to ‘Retail Apocalypse’ Offer Lessons for Other Sectors, Real Estate Veteran Advises

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Smart Responses to 'Retail Apocalypse' Offer Lessons for Other Sectors, Real Estate Veteran Advises

Turnarounds in grocery, healthcare, retail and higher education should maintain a sharp focus on leveraging real estate value, writes A&G Realty Partners’ Jon Graub in Journal of Corporate Renewal

Strategic responses to disruption in retail offer some potentially valuable lessons for turnarounds in grocery, healthcare and higher education as well, writes Jon Graub, a Principal in A&G Realty Partners, in the June issue of the Turnaround Management Association‘s Journal of Corporate Renewal.

“A Venn diagram charting the forces of change in all of these areas would show considerable overlap,” writes the retail real estate veteran. “The internet, for example, is a factor in the reduced need for space in the retail and education sectors and in grocers’ pivot toward services like click-and-collect and online delivery.”

In the piece, (“Turnarounds Amid Disruption: Maximizing Real Estate Portfolios Is an Essential Strategy”), Graub notes that the so-called “retail apocalypse” of bankruptcies and store closures has encouraged retailers to maintain an unrelenting focus on optimizing the value and productivity of their real estate portfolios. They are signing shorter leases, shrinking their prototype sizes and store counts, ramping up store-in-store deals, and empowering their real estate committees to scrutinize sites as never before, Graub explains.
Along the same lines, real estate dynamics are changing in nonretail sectors of the economy as well. He cites research pointing to the accelerating closures of hospitals in rural areas and inner cities—a trend that is roughly analogous, in retail terms, to bankruptcies by the likes of The Bon-Ton or Toys R Us. “Simply put, declining reimbursements and rising costs are shaking things up in healthcare, triggering more consolidation and the need for adaptive real estate strategies,” Graub writes.

He points to additional research focused on pragmatic strategies for adaptive reuse of former hospitals, including conversions focused on blends of community retail, restaurants, co-working areas, event spaces, apartments or offices, to name a few. Indeed, Graub writes, developers around the country are already making creative use of former hospitals. Other options include divvying up spaces for use as e-commerce fulfillment centers, or subleasing various parts of the building or property. “Subleasing would enable the hospital system to gradually relocate various services to the suburbs while keeping the bulk of the facility in operation,” he writes. “The key is to be cautious about lease length. The plan should include a clear vision for the wind-down of space.”

Just as e-commerce continues to pose big challenges for brick-and-mortar retailers, Graub continues, the phenomenon of online distance learning is among the factors reducing demand for physical space at nonprofit and for-profit schools. Meanwhile, a transformation is also underway in grocery, where e-commerce is encouraging smaller store sizes and competition from smaller-format players is growing increasingly intense. In the piece, Graub outlines a number of real estate strategies that both grocers and higher education institutions could use to contend with disruption.

“It may seem remarkable that assets once considered relatively stable—from hospitals to colleges to grocery-anchored shopping centers—are now under the gun to adapt to rapid change,” he concludes. “Clearly, though, this is the new reality of the U.S. economy. Regardless of the sector in question, turnaround professionals should hammer home a simple message to their clients: Real estate is their most important asset, and they need to maximize its productivity down to the last square foot.”

The full article is available at: https://bit.ly/2Mt5tvU

Best known for its work on behalf of healthy and distressed retail companies, A&G Realty Partners has increasingly applied its real estate methodologies outside the retail sector as well, including the higher education, healthcare, warehousing/distribution, housing and office markets. The Melville, N.Y.-based company, which also maintains offices in Los Angeles, Chicago and Philadelphia, was founded in 2012 by Co-Presidents Emilio Amendola and Andy Graiser.

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Australia says no further Facebook, Google amendments as final vote nears

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Australia says no further Facebook, Google amendments as final vote nears 1

By Colin Packham

CANBERRA (Reuters) – Australia will not alter legislation that would make Facebook and Alphabet Inc’s Google pay news outlets for content, a senior lawmaker said on Monday, as Canberra neared a final vote on whether to pass the bill into law.

Australia and the tech giants have been in a stand-off over the legislation widely seen as setting a global precedent.

Other countries including Canada and Britain have already expressed interest in taking some sort of similar action.

Facebook has protested the laws. Last week it blocked all news content and several state government and emergency department accounts, in a jolt to the global news industry, which has already seen its business model upended by the titans of the technological revolution.

Talks between Australia and Facebook over the weekend yielded no breakthrough.

As Australia’s senate began debating the legislation, the country’s most senior lawmaker in the upper house said there would be no further amendments.

“The bill as it stands … meets the right balance,” Simon Birmingham, Australia’s Minister for Finance, told Australian Broadcasting Corp Radio.

The bill in its present form ensures “Australian-generated news content by Australian-generated news organisations can and should be paid for and done so in a fair and legitimate way”.

The laws would give the government the right to appoint an arbitrator to set content licencing fees if private negotiations fail.

While both Google and Facebook have campaigned against the laws, Google last week inked deals with top Australian outlets, including a global deal with Rupert Murdoch’s News Corp.

“There’s no reason Facebook can’t do and achieve what Google already has,” Birmingham added.

A Facebook representative declined to comment on Monday on the legislation, which passed the lower house last week and has majority support in the Senate.

A final vote after the so-called third reading of the bill is expected on Tuesday.

Lobby group DIGI, which represents Facebook, Google and other online platforms like Twitter Inc, meanwhile said on Monday that its members had agreed to adopt an industry-wide code of practice to reduce the spread of misinformation online.

Under the voluntary code, they commit to identifying and stopping unidentified accounts, or “bots”, disseminating content; informing users of the origins of content; and publishing an annual transparency report, among other measures.

(Reporting by Byron Kaye and Colin Packham; Editing by Sam Holmes and Hugh Lawson)

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GSK and Sanofi start with new COVID-19 vaccine study after setback

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GSK and Sanofi start with new COVID-19 vaccine study after setback 2

By Pushkala Aripaka and Matthias Blamont

(Reuters) – GlaxoSmithKline and Sanofi on Monday said they had started a new clinical trial of their protein-based COVID-19 vaccine candidate, reviving their efforts against the pandemic after a setback in December delayed the shot’s launch.

The British and French drugmakers aim to reach final testing in the second quarter, and if the results are conclusive, hope to see the vaccine approved by the fourth quarter after having initially targeted the first half of this year.

In December, the two groups stunned investors when they said their vaccine would be delayed towards the end of 2021 after clinical trials showed an insufficient immune response in older people.

Disappointing results were probably caused by an inadequate concentration of the antigen used in the vaccine, Sanofi and GSK said, adding that Sanofi has also started work against new coronavirus variants to help plan their next steps.

Global coronavirus infections have exceeded 110 million as highly transmissible variants of the virus are prompting vaccine developers and governments to tweak their testing and immunisation strategies.

GSK and Sanofi’s vaccine candidate uses the same recombinant protein-based technology as one of Sanofi’s seasonal influenza vaccines. It will be coupled with an adjuvant, a substance that acts as a booster to the shot, made by GSK.

“Over the past few weeks, our teams have worked to refine the antigen formulation of our recombinant-protein vaccine,” Thomas Triomphe, executive vice president and head of Sanofi Pasteur, said in a statement.

The new mid-stage trial will evaluate the safety, tolerability and immune response of the vaccine in 720 healthy adults across the United States, Honduras and Panama and test two injections given 21 days apart.

Sanofi and GSK have secured deals to supply their vaccine to the European Union, Britain, Canada and the United States. It also plans to provide shots to the World Health Organization’s COVAX programme.

To appease critics after the delay, Sanofi said earlier this year it had agreed to fill and pack millions of doses of the Pfizer/BioNTech vaccine from July.

Sanofi is also working with Translate Bio on another COVID-19 vaccine candidate based on mRNA technology.

(Reporting by Pushkala Aripaka in Bengaluru and Matthias Blamont in Paris; editing by Jason Neely and Barbara Lewis)

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Don’t ignore “lockdown fatigue”, UK watchdog tells finance bosses

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Don't ignore "lockdown fatigue", UK watchdog tells finance bosses 3

By Huw Jones

LONDON (Reuters) – Staff at financial firms in Britain are suffering from “lockdown fatigue” and their bosses are not always making sure all employees can speak up freely about their problems, the Financial Conduct Authority said on Monday.

Many staff at financial companies have been working from home since Britain went into its first lockdown in March last year to fight the COVID-19 pandemic.

One year on, the challenges have evolved from adapting to working remotely to dealing with mental health issues, said David Blunt, the FCA’s head of conduct specialists.

“During this third lockdown, there has been a greater impact on mental well-being, with many people struggling with job security, caring responsibilities, home schooling, bereavements and lockdown fatigue.”

Bosses should continually revisit how they lead remote teams, he said.

“The impact of COVID-19 is creating a huge workload for those considered to be high performers, while the remote environment potentially makes it much more challenging for those who were previously considered low performers to change that perception,” Blunt told a City & Financial online event.

Companies should consider “psychological safety” or ensuring that all employees feel confident about speaking out and challenging opinions.

“We’ve heard varying reports of how successful this has been,” Blunt said.

Pressures in the financial sector were highlighted this month when accountants KPMG said its UK chairman Bill Michael had stepped aside during a probe into comments he made to staff.

The Financial Times said Michael, who later apologised for his comments, had told staff to “stop moaning” about the impact of the pandemic on their work lives.

Blunt was speaking as the FCA next month completes the full rollout of rules that force senior managers at financial firms to be personally accountable for their decisions to improve conduct standards.

There have only been a “modest” number of breaches reported to regulators so far as firms worry about being “tainted” but more cases will become public as sanctions are revealed, Blunt said.

“Regulators won’t be impressed by lowballing the figures.”

(Reporting by Huw Jones; Editing by Mark Heinrich)

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