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GameStop not playing around with payments

BY Gina Acosta

Grapevine, Texas — GameStop, which has long been known as an innovative company, has become one of the first major retailers to accept Google's new mobile payment system.

GameStop has announced that customers can start using Android Pay, which was rolled out by Google only on Thursday, immediately to pay for purchases in its more than 4,200 U.S. video game stores. GameStop has already completed a nationwide rollout of Android Pay, which uses the NFC feature on mobile devices to allow users to transform mobile payments with an easy and secure way to pay.

“We are pleased to offer choice and convenience for our customers when shopping at GameStop,” said Jason Cochran, senior vice president of U.S. stores at GameStop. “Providing a positive, memorable customer experience is our top priority. Incorporating the latest in mobile payment technology, like Android Pay, into our stores is another way we are offering customers options to help simplify their purchases.”

With Android Pay, customers can pay with their credit or debit card, across multiple Android devices, by simply unlocking their device, placing it near the contactless terminal, and waiting for their device to beep or vibrate to show payment was made.

Customers will also see a payment confirmation and get transaction details right on their phone. A new rich virtual receipt feature makes it easier to track purchases and shows users not just what they paid, but also where they paid.

GameStop’s Spring Mobile retail brand will begin accepting Android Pay later this year.

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NRF seeks reversal of joint employer ruling

BY Dan Berthiaume

Washington, D.C. – The National Retail Federation (NRF) is not backing down from its opposition to an expanded definition of “joint employer.”

The NRF is publicly asking Congress to pass legislation introduced this week that would reverse a recent National Labor Relations Board ruling that significantly broadens the definition of a joint employer.

According to the NRF, the move would unfairly make companies that work with franchise locations or subcontractors responsible for actions they do not control.

“The board’s decision has significant negative implications for essentially any and every type of business-to-business relationship and will undermine job creation and small business growth across America,” NRF senior VP for government relations David French said. “These harmful and unnecessary changes are out of sync with reality and are certain to create immense instability in business relationships.”

French’s comments came in a letter to House Education and Workforce Committee Chairman John Kline, R-Minn., and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn.

Kline and Alexander this week introduced the Protecting Local Business Opportunity Act. Under guidelines followed for more than 30 years, the NLRB held that a company had to have direct control of the actions of a franchisee or subcontractor in order to be considered a joint employer. Under its August ruling in a case involving the waste management company Browning Ferris Industries, the board said a company could be considered a joint employer even if it had only indirect or potential control.

The Kline-Alexander bill would require that the earlier standard of direct control be used.

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After 20 years, Target ends ties with major apparel supplier

BY Mike Troy

New York — As Target Corp. continues its transformation under CEO Brian Cornell, news came out that the retailer is not renewing its contract with licensed apparel company Cherokee.

Dependent on Target for 43% of its revenue, Cherokee Global Brand saw its market value obliterated after it disclosed Target would not renew the decades-old relationship.

Publicly held Cherokee, bills itself as a marketer and manager of a portfolio of fashion and lifestyle brands including Cherokee, Carole Little, Tony Hawk, Liz Lange, Everyday California and Sideout. It has license agreements with best-in-class retailers and manufacturers covering in more than 40 countries. In reality, however, the company’s business was far less diverse than implied by the boilerplate language the firm uses to describe itself.

In 2014, licensed revenues from the sale of the Cherokee brand at Target accounted for roughly 43% of the company’s total revenues. The reliance on Target was even more dramatic in 2013 and 2012 when the retailer accounted for 53% and 57% of Cherokee’s revenues, respectively.

In regulatory filings, Cherokee warned that replacing royalty payments from Target would be a significant challenge and termination of its agreement, set to expire Jan. 21, 2017, would have a material adverse effect on revenues and cash flow.

What exactly a “material adverse effect” looks like became apparent the morning of Sept. 11, after late the prior day company disclosed that Target had in fact terminated is agreement in conjunction with the release of weak second quarter results. Shares of the company tumbled and roughly 30% of its market capitalization vanished. The huge sell off should serve as a cautionary tale for any supplier reliant on a single retailer for a disproportionate amount of their revenue, especially one prone dramatic strategic changes that accompany a change in senior leadership like Target had last year when Brian Cornell was named chairman and CEO last year.

“Moving forward, Cherokee Global Brands is in a strong position to enter into new platform partnerships that will expand Cherokee's presence in the U.S.," said Henry Stupp, Cherokee’s CEO. "Large-scale retailers and wholesalers have frequently expressed interest in the Cherokee brand based on its multi-category relevance and high consumer awareness. In the end, though, consumers make brands successful, and we know that Cherokee has a unique connection with many millions of consumers in the U.S. and around the globe."

Despite some progress in reducing its reliance on Target the past three years, the diversification hasn’t happened fast enough. The company’s second quarter revenues fell 3% to $8.5 million and net income declined to $1.9 million, or 22 cents a share, compared to $2.3 million, 27 cents a share, the prior year.

"Cherokee Global Brands continues to focus on the development of our global brands, creating value for our licensing partners and generating strong financial returns for our shareholders," Stupp said.

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