REAL ESTATE

Westfield Century City breaks into show biz

BY Al Urbanski

With traditional anchors closing shop, malls nationwide are struggling to make themselves part of the entertainment business. None, however, are likely to do it as literally as Westfield’s Century City.

Westfield has formed an alliance with the Costume Designers Guild Awards to promote special services to CDG members. It intends to make the mall a “home base” for stylists and costume designers who will tap retailers for merchandise required for productions. Among the amenities being offered to TV and movie wardrobe people are VIP rooms for fittings, personal shopping services, tailoring, and shipping.

“We are tremendously excited to set a new standard in the services offered to the entertainment industry,” said Westfield CMO Heather Vandenberghe. “Westfield continues to position itself as the definitive go-to for the city’s entertainment and fashion clientele.”

A dedicated staff and phone line will be made available to show business buyers, and Westfield will partner with the CDGA on a celebration of its 20th anniversary next year.

Sarah Cowperthwaite, executive director of the Awards said having designers’ needs catered to by Century City was “an incredible opportunity.”

Century City is historically suited to the task. The mall’s site was once the backlot of 20thCentury-Fox, where "The Grapes of Wrath" and "Miracle on 34th Street" were filmed. A $1 billion renovation of Century City begins this fall.


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News

Regulatory Wrap-Up: Governor of Illinois vetoes minimum wage hike

BY CSA STAFF

Wages

Illinois: As expected, Governor Rauner vetoed legislation seeking to raise the state’s minimum wage to $15/hr. by 2022. While not likely, the legislature could override the veto with ten additional votes in the house and six in the senate. While the statewide minimum remains at $8.25/hr., the city of Chicago is currently at $11/hr. with a rise to $13 by 2019. Cook County, the largest county in the state, has an increase scheduled to reach $13/hr. in 2020, however over 80% of municipalities have opted out of the increase.

Missouri: Minimum wage protests are occurring in both Kansas City and St. Louis. Protesters are calling on businesses to voluntarily maintain higher wages despite a recently passed statewide law that prevents cities from setting rates higher than the state’s $7.70/hr. rate. Protests are likely to continue through the weekend.

Flagstaff, AZ: A lawsuit that sought to remove a wage-related initiative from the ballot was dismissed by a judge this week. The current law calls for the city minimum wage to increase to $15.50 by 2020. The dismissal allows the initiative language supported by the Greater Flagstaff Chamber of Commerce to appear on the 2018 ballot. It would peg the city's wage rate $0.50/hr. higher than the state rate and link the city’s annual increases to the state’s timetable ($12/hr. by 2020).

Montgomery County, MD: County Executive Leggett reaffirmed his concerns regarding a countywide increase to a $15/hr. minimum wage. Leggett vetoed $15/hr. legislation earlier this year; however, several of the council members who are running for higher office have reintroduced the legislation. Leggett’s comments come as the county awaits a revised economic impact study that he commissioned. The original version contained methodology errors.


Paid Leave

Pennsylvania: A state senator reintroduced legislation for the third time that seeks to mandate employers provide 12 weeks of paid leave for new parents.


Labor Policy

NLRB: Peter Robb, a management attorney from Vermont, will be selected to fill the position of NLRB General Counsel, pending a background check. This position is one of most important within the agency and plays a critical role in determining what cases the board reviews. An NLRB General Counsel that leans towards management is a helpful development for employers. The outgoing general counsel’s term ends Oct. 31.

Missouri: Missouri allows residents to call a referendum on new legislation by collecting signatures from at least 5 percent of voters (over 100,000) from six of the state’s eight congressional districts. Unions appear to have completed that task by submitting 300,000 signatures to the secretary of state in an effort to overturn a right to work measure that passed during the 2017 legislative session. The secretary of state has suspended the law the while his office confirms the validity of the signatures. If more than 100,000 signatures are deemed valid, a referendum to overturn the state’s right to work law will appear on the 2018 ballot.


Labor Activism

Labor Day: Both the AFL-CIO and the SEIU are focusing their Labor Day PR efforts in midwestern states that went for Donald Trump. The AFL-CIO-backed Good Jobs Nation is organizing statewide rallies in hopes of highlighting the need for worker protections in the president’s ongoing trade negotiations and other policy initiatives, including an Indiana event aimed at highlighting Carrier plant job losses. President Trump previously pledged to keep Carrier jobs in the United States. The SEIU announced that it will spend $100 million organizing in rust belt states beginning this weekend and ramping up into 2018. On Sept. 4, operators should expect SEIU strikes and protests in major metros across the country.


Menu Labeling

New York City, NY: As a result of a case brought in federal court by the National Association of Convenience Stores and the National Restaurant Association among others, the city announced an agreement to postpone implementation of the city menu labeling law and defer to the enactment dates established in the federal regulations. The federal law goes into effect on May 7, 2018 and applies to restaurant chains with twenty or more outlets.


Health Care

Wellness Programs: The U.S. District Court ruled that the Equal Employment Opportunity Commission’s regulations regarding wellness programs were arbitrary and need to be revisited. The issue at hand is a regulation that allows employers to raise premiums up to 30% for employees that elect not to participate in employer-sponsored wellness programs. While the court found that the EEOC rules did not adequately defend the rationale for the 30% threshold, the current rules still remain in place. The federal judge determined that rescinding the rule at this time would cause ‘disruption and confusion’ in the market and directed the EEOC to revisit the rule. There is no announced timeline for future EEOC action.


Taxes

Massachusetts: The Department of Revenue heard testimony this week on the recently issued regulation that establishes apps and/or files on a customer’s computer or smartphone constitutes physical presence in the state for sales tax collection purposes. Public comments on the regulation remain open until Aug. 30.

New Jersey: The division of taxation announced a voluntary disclosure program for online retailers that is similar but distinct from the Multistate Tax Commission’s previously announced program. The program runs from Aug. 21 to Nov. 21 and applies to any non-compliant businesses that fall under the ‘affiliate nexus’ law passed in 2014. That law applies to sellers with contractual ties to any state-based entity from which the seller receives some form of compensation for referral sales.

South Dakota: The State Supreme Court is set to hear oral arguments on Aug. 29 in the landmark “economic nexus” case that could ultimately rise to the U.S. Supreme Court. The first-in-the-nation law was signed by Gov. Dennis Daugaard in March 2016 and went into effect on May 1, 2016. The law mandates sales tax collection from out of state merchants with over $100,000 in sales (or 200 transactions) per year into the state. Should the Court find for the plaintiffs, the case may be reviewed by the U.S. Supreme Court during the 2018 session.

Key Takeaways

A DC restaurant, Oceanaire which is part of the Landry’s chain, added a 3% surcharge to checks noting it was “due to the rising costs of doing business in this location, including costs associated with higher minimum wage rates.” The story was picked up in the press and on social media and the high volume of customer complaints caused the restaurant to reverse course and rescind the surcharge. The public response was predictable and the company unnecessarily created a media event. Other companies would be wise to learn from this episode.

Union executives and labor leaders are calling into question the SEIU’s announcement this week to “double-down” on electoral politics in 2018. The union’s leadership slashed the Fight for $15 organizing budget in late 2016 and appears to be redirecting at least some of that money toward 2018 political races. Resource allocation weighted toward electoral politics versus traditional organizing efforts is indicative of the union’s current priorities – demonstrating that the need to have friendly politicians in office is viewed of greater importance than organizing more workers into the union.

As the relationship between the President and Republicans in Congress continues to deteriorate, Trump has recently stated that he wants to tie funding for a border wall to the government spending bill which will be negotiated in September. A continued impasse could trigger a government shutdown. While a shutdown may have minimal impact on daily operations, further chaos at the federal level could cause consumer unease and continues to block progress on the business agenda.

Legislature Status for Week of 8/28/17

The United States Senate is in recess with pro forma sessions every 3 days until Sept 5

The United States House is in recess with pro forma sessions every 3 days until Sept 5

Ten state legislatures are currently in regular session

o CA, IL, MA, MI, NJ, NC, NY. OH, PA, WI

Podcast

We've recently launched a podcast that focuses on politics and policy for the restaurant industry. You can listen to the "Working Lunch" podcast by clicking here or subscribe on iTunes here.


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The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.

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ECOMMERCE

GNC steps up online payment options for Chinese customers

BY Deena M. Amato-McCoy

A wellness retailer is making is easier for its Chinese shoppers to make online purchases.

By partnering with Alipay, GNC Holdings is enabling all registered users of the payment platform in China to purchase vitamins, supplements, minerals, herbs, sports nutrition, diet, and energy products on its e-commerce site. Besides being a leading online payment provider in China, Alipay has 520 million registered users that access the platform to make online and mobile payments.

The partnership is part of GNC’s ongoing effort to support growing demand among Chinese customers for health and nutritional products sourced from the United States. Besides the country becoming more health conscious, demand is on the upswing since Chinese customers trust the authenticity and quality of U.S.-based merchandise. These two factors are contributing to a growing market among China’s vitamins and dietary-supplements, a segment that is expected to increase to $28.7 billion by 2021, according to Euromonitor International Ltd.

The move is also expected to contribute to GNC’s climbing online transaction growth. Despite these gains however, GNC’s same-store sales (which include GNC.com) slipped 0.9% in domestic company-owned stores for the second quarter ended June 30.

Yet, GNC’s interim CEO, Bob Moran remains bullish on the company’s online efforts.

“For the second quarter in a row, we saw meaningful transaction growth, improvement in our dot.com business and increased enrollment in our loyalty programs,” he added. “We believe this business is headed in the right direction, and we remain focused on execution and sales growth.”

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