Anne Hathaway on Finding New Purpose and Acting Out We Work’s Real-Life Drama – Crisis in Ukraine: Respond and Reposition – McKinsey: Forecasting the future of stores – J.Safran Sarasin CrossAsset Weekly on Gold, China and the course of Swiss National Bank

Anne Hathaway on Finding New Purpose and Acting Out We Work’s Real-Life Drama –  Crisis in Ukraine: Respond and Reposition – McKinsey: Forecasting  the future of stores – J. Safran Sarasin CrossAsset Weekly on Gold, China and the course of Swiss National Bank.

Today’s editon of the Newsletter from TextileFuture is presenting to you, dear readers,  four different items, but surely interesting to read.

The first feature is based upon the Wall Street Journal Magazine on “Anne Hathaway on Finding New Purpose and Acting Out We Work’s Real-Life Drama”, offering an insight on the life of fameous actress Anne Hathaway.

The second item will entail pictures and graphs on the “Crisis in UIkraine: Respond and Reposition” it is based upon a feature and findings of Bain & Company.

The third feature is from authors of McKinsey and will give you an insight by “Forecasting the future of stores”, based upon a discussion with experts from the organisation.

The fourth item is a replica of “J. Safra Sarasin CrossAsset Weekly on Gold, China (Macro) and the course of the Swiss National Bank”. The content gives you the very latest facts and figures, and we particularly emphasise you to read the part on China.

Thus we trust that you will find this Newsletter again of interest and actuality. Invest the time to read all items, it is worthwhile.

Spring is near, so let your thoughts be pink and with flowering success. Don’t forget to return to read the TextileFuture Newsletter next Tuesday, again we trust to find interesting subjects to bring to your attention!


Here starts the portrait of Anne Hathaway:

Anne Hathaway on Finding New Purpose and Acting Out WeWork’s Real-Life Drama

By guest author Marisa Meltzer | Photography by Dan Martensen for WSJ. Magazine | Styling by Katelyn Gray

Anne Hathaway spent the past few years unaware of the rise and fall of WeWork. “Between just being focused on my work and becoming a mother—it was a period of my life I don’t think I was following all of the various news stories that WeWork was a part of,” says the 39-year-old actor. “I somehow missed the entire thing.”

The first time she was made fully aware of the backstory of the multibillion dollar co-working startup—anchored by the intense relationship between its founder, Adam Neumann, and his wife, Rebekah Paltrow Neumann—was when she was offered the part of Rebekah in WeCrashed, Apple TV+’s adaptation of the Wondery podcast that details the fraught inner workings of the company and the romantic partnership at its centre.

Hathaway—who prefers to be called Annie—has been a household name since she first appeared in the Princess Diaries movies. She then transitioned into adult roles (Brokeback Mountain, Rachel Getting Married) and iconic characters (Andy in The Devil Wears Prada; Selina Kyle, aka Catwoman, in Christopher Nolan’s The Dark Knight Rises) and became an Oscar winner (Les Misérables) and host. She is currently on Zoom in a hotel in Rome with parakeets flying outside of her window, recounting the story of her most recent role as actor and executive producer.

It seems as though every actor’s latest turn is a ripped-from-the-headlines story that seeks to explain the strange times we live in. (See also: The Dropout, about Elizabeth Holmes; Inventing Anna, about Anna Sorokin, better known as Anna Delvey; Super Pumped, about Uber’s ex–chief executive Travis Kalanick. ) When co-creators and executive producers Lee Eisenberg and Drew Crevello offered Hathaway the part, she was intrigued once she got up to speed on coverage.

“The story intersected, I thought, at a lot of really interesting points: late-stage capitalism, the commodification of spirituality and toxic positivity,” Hathaway says.

WeCrashed is also a chaotic love story, almost a folie à deux, between Jared Leto’s borderline messianic Adam and Hathaway’s Rebekah, who comes across as a kind of Lady Macbeth for the Goop crowd. (Gwyneth Paltrow is Rebekah’s cousin and a specter of success and admiration in the show.) Hathaway was excited to take on the role opposite Jared Leto, who transforms into Neumann, an Israeli serial entrepreneur. “Something has to be exceptional,” she says, “and Jared is certainly exceptional.”

“Everyone I knew who had met Adam told me what a compelling character he was,” Leto says. “The deeper my research went, the more I was excited by the opportunity.”

Rebekah Neumann, whom Hathaway has yet to meet, has a distinctive low voice and distinct cadence. Hathaway worked with a dialect coach, but it wasn’t until Leto arrived on set as Neumann that she nailed it. “I’d been playing around with it, but it was something I was doing rather than feeling. And then, when he showed up and started speaking as Adam, it was like a tuning fork for me,” she says.

“The story intersected, I thought, at a lot of really interesting points: late-stage capitalism, the commodification of spirituality and toxic positivity.” — Anne Hathaway

The feeling was mutual. Leto says he had long admired Hathaway’s work and her bravery and emotional commitment in each performance. “She really brings everything with her to the role,” says Leto of his co-star. (Adam and Rebekah Neumann didn’t respond for comment about the project.)

Hathaway can understand drive and desire. It was her idea as a child to get into acting. When she was about 3 years old, her actor mother played Eva Perón at the Playhouse at Allenberry production in central Pennsylvania of Evita. (Her father is a lawyer.) “I remember seeing that there were kids onstage, and it seemed like the most natural thing in the world,” Hathaway says. “I just wanted to know why I couldn’t be up there. And it was never a conscious thought, ‘Oh, I want to do that.’ For me it was, ‘When do I get to do that?’”

So she took classes at the Paper Mill Playhouse in Millburn, New Jersey (near where she grew up), and was in local productions there. She figured if she could book a few commercials, it would be easier for her family to pay for college. By the time she was 13 or 14, she was writing to agents for representation. By the time she was 16, she got a TV role on a family comedy called Get Real.

So what if Hathaway’s sons (Jonathan, who is almost 6, and Jack, 2) with her husband, Adam Shulman, wanted to act? “I would probably take the same tack that my parents did with me, which is: You have all the time in the world to be a professional actor; you can only be a child once. So I would encourage them to study, to go to classes, to read,” she says, “but I would strongly discourage them from starting too young. I think that they’ll be in a position where they’ll be able to go to college and figure out where they want to go from there.”

She would potentially love to have more kids (“I could see us going for another one,” she says), but she personally knows that fertility and pregnancy can be a struggle. “There’s this tendency to portray getting pregnant, having kids, in one light, as if it’s all positive. But I know from my own experience…it’s so much more complicated than that,” she says. “And when you find out that your pain is shared by others…you just think, I just feel that’s helpful information to have, so I’m not isolated in my pain.”

She wants that private pain that previous generations of women have had to bear alone to end. “I mean, what is there to be ashamed of? This is grief, and that’s a part of life,” she says.

“I didn’t feel fully landed and fully here until I was a mom.” — Anne Hathaway

So she took classes at the Paper Mill Playhouse in Millburn, New Jersey (near where she grew up), and was in local productions there. She figured if she could book a few commercials, it would be easier for her family to pay for college. By the time she was 13 or 14, she was writing to agents for representation. By the time she was 16, she got a TV role on a family comedy called Get Real.

So what if Hathaway’s sons (Jonathan, who is almost 6, and Jack, 2) with her husband, Adam Shulman, wanted to act? “I would probably take the same tack that my parents did with me, which is: You have all the time in the world to be a professional actor; you can only be a child once. So I would encourage them to study, to go to classes, to read,” she says, “but I would strongly discourage them from starting too young. I think that they’ll be in a position where they’ll be able to go to college and figure out where they want to go from there.”

She would potentially love to have more kids (“I could see us going for another one,” she says), but she personally knows that fertility and pregnancy can be a struggle. “There’s this tendency to portray getting pregnant, having kids, in one light, as if it’s all positive. But I know from my own experience…it’s so much more complicated than that,” she says. “And when you find out that your pain is shared by others…you just think, I just feel that’s helpful information to have, so I’m not isolated in my pain.”

She wants that private pain that previous generations of women have had to bear alone to end. “I mean, what is there to be ashamed of? This is grief, and that’s a part of life,” she says.

Her young kids are why she hasn’t taken on any demanding Broadway roles—yet. “Your kids are only whatever age they are, once,” she says. She is the kind of mom who’s there for bedtime. “And there’s a lot of really awesome musicals [for] women in their 50s, so…. There’s Woman of the Year, there’s Mame.” I mention Sunset Boulevard, and she nods with great enthusiasm and does her best diva voice to say, “I am going to eat every last bit of scenery and then pick my teeth with the splinters.”

Hathaway won’t even say where she lives beyond that it’s in New York State. “I have people that I can absolutely speak freely with, but I have to say, I wish I was more comfortable doing it,” she says. “I see [actors] who are so great at—they never seem like they’re watching their words at all, but they’re also never giving anything away. I think with me, it’s still a little uncomfortable.” She found what she calls her “chosen family” at Vassar College and makes friends gradually. “I do take my time getting to know, to establish trust. And then, once trust is established, I’m a Scorpio, I’m all in.”

Jessica Chastain, her close friend and co-star in the soon-to-be-filmed thriller Mothers’ Instinct, remembers meeting Hathaway about 10 years ago at an Oscar nominee lunch that Jane Fonda hosted. “I was so drawn to the stories she shared, the way she talked about what it means to be an actress, how she navigated the industry,” says Chastain, who later worked with her on Interstellar. “It’s her openness that I’m really drawn to.”

Hathaway is typically most asked about her roles in Princess Diaries, The Devil Wears Prada, The Dark Knight Rises and Les Misérables, but, when she reflects on her trajectory, Brokeback Mountain also sticks out. “I remember looking at Heath [Ledger] and Michelle [Williams] and Jake [Gyllenhaal], and going, ‘Oh, my God, we’re all under 25 and we’re about to take on…this monumental experience.’”

The director of Brokeback Mountain, Ang Lee, gave Hathaway, then 21, one of her favorite notes. “He went, ‘More subtle,’” she recalls. “And it is a note that I give to myself—sometimes with greater effect than others—and in almost every take of every film I do.”

Lee recalls casting Hathaway, who was on a break from filming the coronation scene for the Princess Diaries 2 and in full princess hair and makeup during her audition, and the moment he gave her that direction while filming. “It was a complex close-up, and she was hiding so many layers of emotions behind her eyes,” he says, “and was a young actress playing someone close to 40 at that point.” He wanted her to do less, to let the lighting, editing and sound do some of the heavy lifting. And it worked.

“She’s got this innate understanding of style and morphs into the atmosphere and demands of what she’s doing, which is why she’s been able to channel so many different genres.”— Cate Blanchett

She remembers admiring Cate Blanchett in Elizabeth as a teenager and then later getting to work with her on Ocean’s Eight as a full-circle experience. She had to remind herself, “Please, do not embarrass yourself,” she says. “Just have a great time.” It was also her first role after taking time off for maternity leave. “I just had Jonathan, and I was so grateful to be there and so happy to be back at work,” Hathaway says. “I was so sleep deprived that I couldn’t hold a thought for longer than probably 30 seconds. I was just like a little happy goldfish on that project.”

Blanchett says Hathaway has an element of a “goofy Maria Callas” to her—commanding but funny—as well as a technical gift. “She’s got this innate understanding of style and morphs into the atmosphere and demands of what she’s doing, which is why she’s been able to channel so many different genres,” she says. “Maybe panache, that’s what it is.”

There is a certain crop of female actors who, as they age, are taking on the role of entrepreneur or CEO— Reese Witherspoon with Hello Sunshine, Gwyneth Paltrow with Goop. Hathaway remains dedicated to acting. “I’m curious to know how those women think about themselves,” she says, “because I do have to say, I feel like once an actor, always an actor.” She thinks being a polymath is laudable, and she certainly has a lot of interests (one of which might include directing), but the most she will say about what to expect next is, “I’m venturing into producing and other aspects of the film industry.”

Hathaway has been busy recently: She will play Esther Graff in James Gray’s Armageddon Time alongside Anthony Hopkins and Jeremy Strong, and Dr. Rebecca Saint John in the William Oldroyd–directed adaptation of Eileen, the Ottessa Moshfegh novel. She is also slated to appear in Rebecca Miller’s next film, She Came to Me, alongside Peter Dinklage and Marisa Tomei. Just as we’re discussing upcoming projects, her husband and older son burst into the room.

“I have a loose tooth,” Jonathan announces.

“You do have a loose tooth,” Hathaway says, introducing Shulman, whom she met through mutual friends about 15 years ago. “Are you guys going to go play buses in the hall?” she asks, as Shulman grabs some suitcases and scoops up his son.

Back to her work schedule: There’s a romantic comedy in development she hopes comes together for the fall or spring. She’s ready for comedy after a series of dramatic roles. “And then I’m going on vacation,” she says.

She will turn 40 this year. “I have a really tight-knit group of friends from college, and we all realized that we were just going to be celebrating each other’s birthday every other week,” she says. “So we decided that we’re all going to go someplace together and have a joint 40th birthday party.”


This is the beginning of the second feature:


Crisis in Ukraine: Respond and Reposition



The crisis in Ukraine is first and foremost a humanitarian tragedy

The Russian attack on Ukraine has set off a humanitarian crisis, involving both massive casualties and a wave of displacement

At such a time, the safety and well-being of your company’s people must be the No. 1 priority.

Bain & Company condemns the senseless attack on Ukraine.

We are providing financial support and pro bono advice to humanitarian organizations, and encourage other companies to support however they can.


Here starts the third item:

Forecasting  the future of stores

By Tiffany Burns and Tyler Harris. Tiffany Burns is a partner in McKinsey’s Atlanta office, and Tyler Harris is an associate partner in the Washington, DC, office. Monica Toriello is an executive editor in the New York office.

Shoppers’ behaviours and expectations have changed dramatically—and continue to evolve. If retailers want to keep their physical stores relevant, here are five things they’ll need to get right.

In a world where consumers are doing more of their shopping online and getting orders delivered to their homes, what’s the role of the brick-and-mortar store? McKinsey retail experts Tiffany Burns and Tyler Harris say there are “five zeros” that retailers should keep in mind as they plan for the future of stores. They explain the five zeros on this episode of theMcKinsey on Consumer and Retail podcast, hosted by Monica Toriello.

Monica Toriello: There’s a lot going on in the world right now—a lot of change and uncertainty. That’s been true for the past couple of years; people everywhere have collectively experienced things that we’ve never experienced before, including a global pandemic. One of the things we’ve seen these past two years is that the way people shop for and purchase the things they need is changing quite dramatically. That’s what we’ll be talking about on today’s episode: specifically, we’ll be discussing the evolving role of physical stores. Our two guests today have studied this topic deeply, as they’ve advised some of the world’s leading retailers. Let me briefly introduce them and then we’ll dive right in.

Tiffany Burns is a partner in our Atlanta office. Tiffany has worked on large-scale transformation efforts at more than 15 of the biggest companies in the retail sector. She has been instrumental in developing McKinsey’s perspective on the store of the future and has coauthored several retail articles including, most recently, “The rise of the inclusive consumer” and “The five zeros reshaping stores,” which is what we’ll mostly be talking about today.

One of Tiffany’s frequent collaborators and coauthors is Tyler Harris, an associate partner based in Washington, DC. Tyler has been on this podcast before, talking about the jewelry industry—since Tyler is a gemologist, among other things. She is also an expert in retail operations, with a special focus on next-generation store technologies. Thanks for joining us, Tiffany and Tyler.

The in-store shopper of the future

Monica Toriello: One interesting statistic I read recently is that US retailers announced approximately twice as many store openings as store closings in 2021. Sure, there are lots of nuances in that statistic—including the fact that there had already been lots of store closings in the two prior years—but what it tells me is that stores still work. People still shop in stores. In fact, some of the brands opening stores are digitally native brands: they used to be online pure plays but have begun to build a physical retail presence.

So, as you say, there continues to be a role for stores—but that role is evolving, and it’s because consumers are evolving. Let’s start there: How is tomorrow’s in-store shopper different from yesterday’s in-store shopper?

Tyler Harris: A few years ago, we had thought that omnichannel customers were going to be much more valuable than single-channel shoppers. The past couple of years have given us the time and the data to confirm that: omnichannel customers shop 1.7 times more than single-channel shoppers. They also spend more. The in-store customer, going forward, will be someone who is hitting all the different channels and touchpoints that a brand or retailer has. That means consistency and connectivity between all those channels will be really important.

Another thing that’s different about the customers of tomorrow is that they are valuing different things in the store, and we are seeing their behaviors change toward what they value. Let’s use self-checkout as an example. It used to be that if you shopped at a grocery or department store, you really valued that personal interaction with a sales associate to help you check out. That’s not true anymore. Now it’s about speed and convenience. Checkout at a physical location is entirely out of the equation when people are using curbside pickup or buy online, pick up in store [BOPIS].

Tiffany Burns: We’ve seen such a drastic evolution in self-service. Five or six years ago, retailers had a lot of doubt: “If we put a machine there and people have to use it to check out, they won’t want to shop with us anymore.” But people learn technology and new ways of interacting. If you went to the airport a decade ago, you probably wouldn’t have used a self-service kiosk to check your bag; today, it’s what you expect. In many ways, COVID-19 has accelerated some things that we were already on a path toward. Now, those practices are here to stay.

Tyler Harris: Tiffany, what underlies a lot of what you just said are the associates, the people. The role that associates play within the four walls of the store is fundamentally different than it was five years ago. Going back to the self-checkout example: you have folks who are no longer checking customers out. Instead, they’re doing consultative selling or new activities that didn’t happen in stores five years ago, like fulfilment. So investng in scalable ,digitally enabled training training for these associates is really important.

Zero difference in channels

Monica Toriello: We’ll talk more about training and talent a little later because it’s one of the five zeros reshaping the future of stores, as you say in your article. The first zero is “zero difference in channels.” As you said, Tyler, everyone’s an omnichannel shopper now. I could walk into a store but maybe I’m just there to pick up something that I already paid for online, or maybe I’m there to look around but I’ll actually buy the item on my phone as I walk out. And stores need to be able to meet the needs of omnichannel customers—for example, by having a dedicated BOPIS area, as you mentioned.

How are retailers getting this wrong? What are they not doing yet when it comes to zero difference in channels? On the flip side, what are the best retailers doing on this front?

Tiffany Burns: Many retailers still think, “There are omnichannel interactions and store interactions, and I’m optimizing those two things separately. I have two different teams working on and thinking about those experiences.” But as a consumer, when I go on the retailer’s website or app, I expect to see availability, a connection to what’s in the store, and a way to order things that I can pick up in store. I also expect to be able to stand in the aisle in the store and research a product. Today, consumers are figuring out workarounds to do all those things: they’re switching over from the app to Google, looking up the product, and searching for reviews.

But we see some retailers saying, “We’re going to make shopping a seamless experience for you. Our app will help you with wayfinding, give you inventory visibility in the store, and allow you to access all of our omnichannel opportunities to place an order and pick it up. We’ll allow you to stand in the aisle and do research on a product by scanning a QR code.” The best retailers—the ones who we believe will create winning omnichannel experiences in the future—are those who are solving for seamless interactions across channels.

As a consumer, when I go on the retailer’s website or app, I expect to see availability, a connection to what’s in the store, and a way to order things that I can pick up in store. -Tiffany Burns

Tyler Harris: There’s an element, too, of organizational change and how you measure success that has to go along with that. What retailers get wrong is, oftentimes, they’ll do these things that Tiffany mentioned—they’ll try to create visibility and cross-channel connectivity—but they won’t make the KPIs align with that. The best retailers are completely rethinking how they set KPIs and targets. It’s a fundamental change because the industry, to date, has been focused on four-wall metrics.

Tiffany Burns: It reminds me of a shopping experience I had a couple of weeks ago. I was thinking about buying something and going back and forth saying, “Hmm, maybe not now; maybe later.” I was about to leave the store and the associate, to their credit, went through the full selling process and tried to make a strong close and get me to buy it in that moment. I said, “No, I’m not ready.” And the associate said, “Come back to the store when you decide you want to purchase.”

Now, that’s because the store associate is incented on revenue that comes through the door. Another way that associate could’ve been incented was, “Let me get the email address from this potential customer and follow up through a digital channel to offer her something to help push toward a sell.” Until the day that that associate can get credit for an interaction that helps “make the assist” (to use a sports analogy) over to the digital channel, then these things won’t really work together. That’s a tactical example of the broader system of incentives and metrics that Tyler is talking about.

Zero desire for assistance

Monica Toriello: That story is a good segue into the second zero, which is “zero desire for assistance.” That’s not a blanket statement, right? It applies only to transactional activities—shoppers want to be able to walk in and out of a store and not interact with a salesperson if they don’t need help. But zero desire for assistance is not about having a store with no employees; it’s about redeploying store employees to provide the services that customers actually want, right? Talk a bit about how retailers can avoid swinging the pendulum too far the other way: you can imagine some customers not wanting to shop at a store that just has technology and no people.

Tyler Harris: During the pandemic, people have used curbside pickup, BOPIS, and self-checkout at much higher rates than in the past. What we’re seeing in a lot of our consumer research is that those behaviours are pretty sticky; about 70 percent of people who tried self-checkout for the first time in the pandemic say they’ll use it again. So the tides have really turned.

There are, though, two places where associate help is value-additive. The first is in consultative selling: How do I understand more about the product? How do I match a pair of shoes with a dress so that it looks great? That’s one. The other is in helping customers when the technology doesn’t work. You can’t install technology and just let it ride; you need some oversight from an associate because when the machine behaves badly or if you hit the wrong button, not having someone there to help is just as frustrating as waiting in a long line.

That job is a lot harder, from an associate perspective. It’s a lot harder to look over a bunch of self-checkout machines, read customers’ body language, and realize that the person at machine number four is frustrated because the machine isn’t working. There’s a lot of training and nuance that goes into making that work well.

Zero wait time

Monica Toriello: I’m sure there’s also a lot of nuance in the third zero, which is “zero wait time.” You say that two-day delivery is table stakes: consumers are becoming more impatient and speed is of the essence. Demand is growing for same-day delivery and even instant delivery. But is backlash also growing, both at this I-want-it-now mentality and at the instant-delivery providers and the noise and congestion that some neighborhoods and cities have started to complain about? How should stores be thinking about zero wait time? How do you advise retailers on this topic?

Tiffany Burns: The expectations for speed have significantly advanced. Five years ago, you didn’t expect an online order to get to you in less than a week. You also were completely fine ordering your Friday night pizza and waiting 90 minutes for it; you weren’t sitting in front of your phone and watching the dot as it turned down your street and stopped at the red light.

The question gets down to, “Where is it all going to land? What will be the future standard for delivery?” What we do know, though—what we have a fact base on—is when you tell a customer that it will take three days, how often they say, “Never mind.” We’ve seen that when the wait times are higher than customers’ expectations—and that varies; it’s not one definitive number for all customers—half of them will abandon their carts. Retailers lose sales when they don’t get this equation right.

You asked about congestion. Funny enough, I had a delivery from a mass retailer to my house. The delivery person backed up across my driveway, onto my front yard, and onto the retaining wall. We had to get a tow truck and the police to come. And it was raining, so I was outside with the umbrella trying to help. It was too crazy. I thought, “I would’ve been so much better off just going to the store.”

So, to your point, the inconvenience to neighborhoods that could come with zero wait time is a consideration. There are going to be lots of delivery people driving around; there are about 60 million people engaged in the gig economy. Although I don’t think we’re at a breaking point yet, you could imagine that we could be in the near future.

Tyler Harris: I also think it raises the question, “What is worth the wait?” I ordered an item for a friend as a gift, and it took two weeks to arrive—but it was customized and monogrammed with her initials, and it arrived in this box that was a gift in and of itself. That whole experience of getting something that is really special was worth the two-week wait. That’s the flip side for retailers: figuring out what is worth the wait and making those experiences and products really treasured, because there’s a magic to that in a world where you’ve got all of this instant noise.

Zero tolerance for inaction on equity and sustainability

Monica Toriello: There seems to be some tension, too, between zero wait time and your fourth zero, which is “zero tolerance for inaction on equity and sustainability.” As you say, consumers will vote with their wallets: they’ll shop from stores that value diversity, equity, and inclusion [DEI] and that sell sustainable products and have sustainable business practices. But zero wait time almost certainly means more packaging, more delivery vehicles on the road—so, not great from a sustainability perspective. How should retailers reconcile those contradictions?

Tiffany Burns: Folks are starting to acknowledge that our delivery preferences are creating more waste. Some retailers are saying, “Are you willing to combine your shipments?” In the packaging space, they’re doing a lot in product development to try to use recyclable materials.

In the past year and a half, we’ve seen a broadening of the things that matter to consumers. One thing that matters to consumers now is diversity—both in terms of gender and race—of founders and creators of products on retail shelves. Consumers are saying, “I want to use my wallet to help promote equity. It’s one thing that I can do as an individual.”

Customers are also willing to make some trade-offs. One interesting example on the sustainability side is around solar energy. IKEA, for example, is installing solar car parks. You might say, “Hmmm, aesthetically, would I want those? No. Is it as convenient for consumers to navigate the parking lot with these structures? Probably not.” But are consumers excited to see retailers putting a stake in the ground and saying they want to be more energy efficient? Yes. Consumers are more willing than they’ve historically been to trade off a little bit on experience or convenience in the spirit of more sustainable outcomes.

Tyler Harris: We conducted some research recently about the inclusive consumer—the consumer who is looking for more Black-owned brands and more diverse brands on retailer shelves. We found that the inclusive consumer is all of us: the demographics of this consumer look very much like the US population. Ideas of inclusivity and diversity on shelves aren’t isolated to a certain age or racial demographic—it’s all of us—which means that it’s pretty sticky and here to stay. It’s embedded in the fabric of who we are as a consumer population.

Eighty percent of respondents tell us that brands have a responsibility to better the world. That raises the bar for retail, because in many ways retail is the battleground or the crucible where this is all happening, so it’s important to think about the complexion of retail shelves and the brands represented, and where they are merchandised in the planogramme. Are they in the back of the store? Or are they at the front, where all shoppers will see them? It raises new questions for retailers. But it’s exciting because there are so many small, diverse brands out there, and it creates a lot of opportunity.

We conducted some research recently about the inclusive consumer—the consumer who is looking for more diverse brands on retailer shelves. We found that the inclusive consumer is all of us.

Tyler Harris

Zero wiggle room on talent

Monica Toriello: Your fifth zero is “zero wiggle room on talent,” which you alluded to earlier in this conversation. To me, this is a confusing issue because there’s been a lot of press both about the tight labor market and about how hard it’s been for many frontline retail workers to get enough hours. What are you seeing and hearing? And what are the implications of zero wiggle room on talent on the future of stores?

Tiffany Burns: Employers across all industries have to understand that we’re in a Great Resignation. Over 20 million people have left their jobs. Frontline jobs have to be transformed to improve employee engagement and experience because that frontline colleague has good alternatives now. They could take a job in the gig workforce and have complete flexibility. It used to be that a retail frontline job was a fairly flexible job: you could give preferences for the shifts you want to work and you could do part-time quite easily. But now, people have on-demand availability in the gig economy.

As a retailer, you have to think about how you’re improving the employee experience and the value proposition so you can continue to attract people. When you’re hiring and onboarding them, think about the best way to build their capability, incentivize them, excite them, and continue to develop and broaden their skill set. That’s the new name of the game. It’s where retailers need to double down and be distinctive.

New products, new brands

Monica Toriello: The five zeros present new challenges but also new opportunities for retailers. What’s your favorite thing that you’ve seen a store do that you think is representative of the future of stores?

Tyler Harris: I get really excited about the new products and new brands, especially with the DEI lens. When you look out over the landscape of entrepreneurs who are building new businesses, there are so many incredible new products and ideas that diverse founders are bringing to the table. It definitely requires retailers to work differently because a lot of these brands are teeny tiny, and what it takes to get them into stores and on shelves is very different from how retailers are used to operating. So the operations have to change. But I think it’s really exciting for the future of stores.

Tiffany Burns: And it’s a big part of the population to unlock innovation. Hispanics make up slightly less than 20 percent of the US population; Black Americans make up about 12 percent. That’s almost 35 percent of the population that we’re trying to activate to make sure that there’s equity. And if you’re a diverse founder, you can make a product for anybody; you don’t have to just make a product for a diverse population. I’m with you, Tyler—I think it’s really exciting. It should be game-changing. Retailers can use these diverse founders’ stories to create a new, fresh customer experience and to keep driving traffic into their stores.


Higher interest rates are a challenge for gold

This week the gold price increased to 1965 USD or EUR 1788 per ounce. This slightly above its levels before the Russian invasion in Ukraine and 13 % higher than a year ago in US dollar and even 21 % higher in euro. However, the gold price is also still lower than mid-2020 since when US inflation increased from below 1 % to almost 8 % lately. Shouldn’t gold have appreciated by more during this time of permanent inflation surprises? In an indepth study that we published this week we have analysed the main drivers of the gold price. Yes, inflation is one, geopolitical uncertainty another and financial market volatility a third one. Also the US dollar is important. A strong dollar usually leads to a lower gold price. Yet, the dominant determinant explaining gold price changes are real interest rates.

The idea is simple. The higher are real rates on other safe assets like US treasuries the less attractive is gold as it does not pay dividends or interest rates. For the coming months this is no comfort. Given the hiking cycle the Fed has just started and recent indications by Fed Chairman Powell that the Fed could also move in bolder steps if needed real rates have increased and might increase even further. This will be the most important headwind gold investors face even if inflation rates and geopolitical uncertainty remain high in the coming months.

In a second article we look at the macro and market developments in China. Finally, we comment on the policy meeting of the Swiss National Bank in our third article.

Valuing gold in an FX framework A further gold rally needs lower real yields

By guest authors Dr. Karsten Junius, CFA Chief Economist and Dr. Claudio Wewel, FX Strategist, both of Bank J. Safra Sarasin.

Treating gold as a currency, we propose a simple framework to value gold that integratespurchasing power parity (PPP) with interest rate parity (IRP). Confirming our framework empirically, we conclude that in the long term, gold moves both with the inflation rate and bond yields, while the near-term dynamics are largely governed by the variation in real yields, the US dollar and safe-haven demand. Given that inflation risk and Ukraine uncertainties likely remain elevated for longer, our simulations illustrate that substantial gold upside remains in the cards.

On March 8, gold rallied towards USD 2’070 per ounce (Exhibit 1) when geopolitical threats peaked amid the Ukraine war (Exhibit 2). Yet the price of the precious metal was quick to  retreat to around USD 1900. Given that both inflation risk and Ukraine uncertainties likely remain elevated for longer, the recent gold price development is rather puzzling and has prompted us to investigate its drivers more closely.

Integrating PPP with IRP, we establish a theoretical framework that allows us to model gold’s medium term development

 We do so in our latest Macro & Strategy Focus (see «Valuing gold in an FX framework: No alchemy is needed»), where in a first step, we establish a theoretical framework in which we treat gold as a currency. The combination of two concepts borrowed from FX valuation – purchasing power parity (PPP) and interest rate parity (IRP) – allows us to explain how interest rates and expectations on future inflation impact gold on the path towards itslonger-term equilibrium price. We conclude that in the long term, gold moves both with inflation and bond yield levels, while the near-term dynamics are largely governed by the variation in real yields, the US dollar and the demand for safe havens.

We model the gold price in real terms such as to account for its long-term equilibrium path, which is determined by inflation

 Modelling the gold price with a linear regression of the above factors, we validate our conceptual framework empirically. To account for its long-term equilibrium trend, we model gold in real terms by deflating the (nominal) dollar gold price with the US headline CPI. (We perform our regressions in log month-on-month (mom) differences, which economically corresponds to modelling the monthly net return of gold investments). Based on monthly data from January 2010 to December 2021, we find the best fit employing constant -maturity US TIPS 10y yields, complemented by the US dollar real effective exchange rate (REER) index calculated by JP Morgan and the MOVE and geopolitical threats indices that we apply to proxy for market and institutional risks, respectively (Exhibit 3).

Combination of US TIPS 10y yields, USD REER, MOVE and Geopolitical threats indices produces the best results

Our empirical results reveal that real yields are the most significant factor, followed by the US dollar and safe-haven demand…

Most importantly, our empirical results confirm the high significance of real yields, which does not weaken when explanatory variables are added to the equation (Models 1–5). The results furthermore confirm the US dollar’s importance and the inclusion of proxies for safe-haven demand adds further explanatory power. Given their complementary nature (low correlation), we incorporated both indices – MOVE and Geopolitical threats – into our baseline regression. We also analysed the factors’ economic significance by visualising their contributions to changes in the real dollar gold price (Exhibit 4). The results demon-strate that real yields are exerting the greatest influence, followed by the US dollar and safe-haven demand, which drive the price variation only to a lesser extent, which may explain why the recent pick-up of the gold price was relatively muted.

Furthermore, we found that our results remain valid when expressing the gold price in euro or pound sterling, while the relationship is substantially weakened for the Swiss franc and the Japanese yen, given that these currencies constitute safe havens themselves (visible in their high correlation with the dollar gold price).

Our simulations illustrate that substantial gold upside remains in the cards

Lastly, we stress that our model can be readily applied for forecasting and simulation purposes. Given that inflation risks and Ukraine uncertainties likely remain elevated, we use our baseline regression to simulate three scenarios (see here for more detailed descriptions).

In principal, Scenario 1 assumes a quick end of the war in Ukraine with a continuation of solid global growth such that US real rates increase again. Scenario 2 assumes the conflict to drag on longer. Scenario 3 features a substantial escalation of the war and lower economic dynamic such that real bond yields would fall again (Exhibit 5). In thiscase, the gold price would rise clearly above 2000 USD as well.

China macro and markets – Slightly better 2022 but structural outlook is not improving

By guest authors Mali Chivakul, Emerging Markets Economist and Wolf von Rotberg, Equity Strategist

The Chinese equity market has suffered over the past year as regulatory headwinds have taken a heavy toll. Attractive valuations, hope for abating regulatory action and an improving macro picture in 2022 provide a marginally improved outlook for Chinese equities in the months ahead. Yet, we are more cautious for the long-term outlook. Slower trend growth and consistently lower net income margins do not bode well for Chinese equities, relative to the rest of the world. The government’s goal of ‘common prosperity’ also means that the environment for Chinese firms may remain difficult.

The Chinese (offshore) equity market has suffered heavily over the past year, dropping by more than 30 %, which is the sharpest 12-month decline since the global financial crisis (Exhibit 1). This largely reflects the government’s regulatory intervention rather than a lack of economic support. Purchasing manager indices (PMIs) have improved over the past 12 months and the credit impulse (change in credit growth), which is a key driver of economic growth and equity markets in China, troughed in May last year, before recovering through-out the second half of 2021 (Exhibit 2). Instead of following the credit impulse higher, Chinese equities suffered from a heavy onslaught of regulatory measures. These did not only weigh on sentiment, but brought down earnings as well

Chinese equities have suffered severely from regulatory headwinds over past months

Profitability is weak, but valuations fully account for that

Profitability slumped as a result, with the return-on-equity (RoE) of Chinese equities al Most returning to the recession lows it touched in 2020. At the same time, RoEs of global equities and of euro area equities recovered to the highest levels in more than 10 years (Exhibit 3). Yet, the market has more than priced for this divergence. The price-to-book (PB) ratio of Chinese equities has dropped below 1.3x, which is not only the lowest level in six years, but also materially below euro area PBs. This has happened only twice over the past 15 years (Exhibit 4). In other words, earnings have dropped sharply, but performance has been quite a bit worse (Exhibit 5).


Recent government statements emphasised financial market stability and policy support

Most recently, Chinese equities rebounded on government statements which vowed to prioritize financial market stability and complete the regulatory process of Internet plat-form firms as soon as possible. They suggest that regulatory process should be transpar-ent and predictable. The government also reiterated its commitment to more policy sup-port and emphasised domestic stability.

Valuations and improving macro suggest a better outlook in 2022

If regulatory headwinds were to abate, a brighter macro outlook for the second half of theyear could help extend the most recent rally in Chinese equities. There are signs that the macro picture has improved, but a lot will depend on the effectiveness of impending government stimulus.

January-February macro indicators surprised on the upside

Latest macro indicators surprised on the upside. Industrial production grew 7.5 % on a yearly basis, compared to 4.3 % in December (Exhibit 6). Sequential growth was slightly weaker, however. Retail sales jumped from 1.7 % in December to 6.7 %, and fixed assetinvestment accelerated from 2% in December to 12.2 %. Fixed asset investment growth was mainly driven by manufacturing and infrastructure investment. The real estate sector remained weak however with housing starts growth at -14.9 % and real estate sales growth at -22.1 % (Exhibit 7). House prices fell also slightly in February.

COVID outbreaks in March will dampen growth momentum

Despite the good performance in January and February, we expect that March economic activity will underperform due to ongoing COVID outbreaks. Since the beginning of March, China has experienced the largest outbreak since the 2020 wave (Exhibit 8). Cases spread to economically important cities such as Shanghai and Shenzhen. Containment measures range from a full lockdown to closure of non-essential indoor spaces and public transpor-tation. Mobility dropped considerably in cities that have adopted restrictions (see Shang-hai in Exhibit 9), but mobility has also dropped in other cities. The Chinese government has pledged to reduce the economic damage of its zero COVID strategy, and relaxed slightly the requirements for hospitalization and quarantine. There is also an effort to keep factories open, even when the rest of the area is under a lockdown. Despite these at-tempts, we think that the outbreaks will significantly dampen consumption growth and maintain our view that Q1 growth will remain subdued.

We maintain our view that growth will improve in Q2

We continue to expect that growth will improve from Q2. Central government spending has been slow so far (YTD at 1.7 %, Exhibit 10), but is set to increase and infrastructure spend-ing by local governments will ramp up. In addition, the relaxation of real estate policy re-strictions already started at the local level. A few cities have lowered down payment re-quirements and some have started relaxing home purchase restrictions. These measures should help to stabilise activity by Q3. Stronger growth for the rest of the year also implies stronger credit growth than what we saw in February (Exhibit 11).

Risks to the outlook: COVID, real estate, more regulation surprises and geopolitical tensions

There are a number of risks to the outlook. On the domestic front, China’s biggest risk remains the COVID outbreak. Current containment measures may not be sufficient to stop the spread of the highly contagious omicron strain. This may require more draconian re-strictions which will hurt the economy. Other domestic risks are deeper stress among real estate developers, which could spill over to the rest of financial markets and to consumer sentiments. More regulation surprises on the platform companies continue to be a risk to investors’ sentiment, despite the recent government’s reassurance. We believe that the government would still like to reach its goal of ensuring less monopolistic power of plat-form firms. Lastly, China’s stance on the ongoing war in Ukraine, and its relation with Russia is also a risk to sentiment.

Medium-term potential growth is weighed down by lower population and urbanisation growth

We see China’s potential growth today to be around 5%. With its working population al-ready past the peak, and a society that is aging fast, China will need to greatly improve its productivity to maintain this growth rate going forward (Exhibit 12). The days that its growth relied on fast urbanization and strong demand for housing is over, as urbanization pace is set to slow further (Exhibit 13). The government is well aware of this. Its pivot to-wards common prosperity suggests that the priority is now higher quality of growth and fairer distribution, and hence lower growth is acceptable. We expect that the government will gradually lower its growth expectation after the current 5-year plan ends in 2025.

We remain cautious on the long-term outlook for Chinese equities relative to global equities

Slowing trend growth is one reason for a rather cautious long-term outlook for Chinese equities, relative to global equities. In order to produce superior earnings growth numbers as compared US equities, Chinese GDP had to outgrow US GDP by around 6%-points an-nually, something which is unlikely to be achieved in the future (Exhibit 14). Alternatively, Chinese companies would have to improve their operational gearing and extract more units of earnings from each unit of GDP. However, this will be hard to achieve, as the reg-ulators’ tougher stance means that monopoly rents are set to be substantially lower going forward. The government’s focus on ‘common prosperity’ appears to be at odds with firms’ goals to maximise their profits. As a result, the current picture, with margins substantially below the rest of the world (especially the US, Exhibit 15), is unlikely to change in the years ahead, dimming the long-term outlook for Chinese equities.

Quarterly assessment of the Swiss National Bank – Medium term inflation forecast remains below 1 %

By guest author Dr. Karsten Junius, CFA, Chief Economist

The Swiss National Bank released its 2024 inflation forecast for the first time. Condi-tional on the current policy rate, inflation is expected to average 0.9% in 2023 and 2024 which signals that the SNB sees no need for a tighter policy right now. We stil l expect a first rate hike in September and believe that the SNB should not make this dependent on higher ECB policy rates given its stronger economy.

The SNB refers to the importance of the inflation differential versus other countries. As this keeps the real effective exchange rate in check, we conclude that the SNB currently is not overly concerned about the appreciation of the CHF vs the EUR. This also implies a limited appetite for FX interventions as long as currency movements remain smooth.

No rate hike to be expected in June – but the SNB should consider one in September

The SNB has increased its inflation forecast to 2.1 for 2022 and 0.9% in 2023 and 2024. In December it still expected 1.0 % for this year and 0.6 % for next year. By remaining below 1 % the SNB indicates that it is in no hurry to increase rates at the next meeting. Given the adverse effects the war in Ukraine may have on aggregate demand for Swiss goods and services, we agree that it would be too early for a rate hike. However, we also expect that the recovery of the Swiss economy continues, that its labour market remains very tight, and that inflation rates stay above 2% for the coming months. In our view, this doesn’t justify negative policy rates at the current level much longer. We expect a first rate hike in September. Importantly, we believe that the SNB shouldn’t make this dependent on a prior tightening by the ECB. The Swiss economy is stronger, it is less vulnerable to higher energy prices and it has recovered from the COVID-related downturn earlier. Consequently, it could also cope with a stronger currency – if this resulted from a tighter monetary policy.

The SNB doesn’t seem to be overly concerned about the exchange rate – rightly so! The CHF can appreciate further

Importantly, the SNB mentioned the inflation differential towards other countries when assessing the overall currency situation. In February, Swiss inflation amounted to 1.9 % (measured by the European HICP) while it was 5.8 % yoy in the Euro Area. This allows for the Swiss franc to appreciate by close to 4 % versus the euro if the real exchange shall remain constant. Looking more broadly at the trade weighted exchange rate indices (Exhibit 1), we find that the real effective exchange rate is very close to its 10y average. This does not indicate a particular overvaluation and is reflected by the strong performance of the Swiss economy. We continue to expect a stronger Swiss franc in the coming quarters.


Newsletter of last Week

Economic and Social Impacts and Policy Implications of the War in Ukraine – The cross-country productivity approach – Report: The Fabric of Belonging: How to Weave an Inclusive Culture – Marina Abramović on Why the Best Ideas Are the Ones That Surprise You – See Birkenstock’s New Collection With Manolo Blahnik.

The highlights of last week’s NEWS, for your convenience, just click on the feature to read.


Swiss Bühler marks 50 years anniversary in South Africa


IED Design School unveils its new concept car created in collaboration with Alpine

Green Story raises EUR 1.1 million in funding

Neiman Marcus Group releases ESG report

Swiss Autoneum: Annual General Meeting approves dividend of CHF 1.50 per share

Lonza Publishes Invitation to the 2022 Annual General Meeting and 2021 Annual and Sustainability Reports

News from Swiss Crealet – CREALET Partnerships offer Added Value and extended range


Inflation made simple

Peer review report on Finland now online

First-time asylum applicants up by a quarter in 2021

Flash EU PPPs and GDP estimates for 2021 now available

EU imports and exports increased in 2021

Visualise statistics for the European Green Deal

EU trade in agricultural goods reached EUR 347 billion in 2021

The McKinsey Week in Charts


Mergers: EU Commission clears the acquisition of MCJ by Mitsui and Max Mara Group

Mergers: EU Commission clears acquisition of Altadia by Carlyle

Mergers: EU Commission clears creation of a joint venture by Porsche Austria, Denzel and Saubermacher


Intertextile and Yarn Expo spring show dates to be adjusted


FIVE FROM FINLAND: Springtime ideas

New Products

Syngenta Crop Protection presents EvoPac™: advanced liquid packaging design developed with growers

Mondi Gronau’s state-of-the-art flexo printing line gives customers in the hygiene industry exciting new options


Statement of OECD Working Group on Bribery Electing New Chair


Murat Dogru joins EDANA as Deputy General Manager against backdrop of outstanding performance for the association

Made Smarter Commission appoints Siemens’ Brian Holliday as new co-chair

Christian Seufert appointed as Swiss Lonza President of Capsules and Health Ingredients Division

Perstorp welcomes Valentina Serra Holm as Vice President Engineered Fluids

Calida Holding AG strengthens diversity on the Board of Directors

Personnel Changes at BASF


Swiss Empa: Improving urban planning thanks to Superblocks – Making cities more livable

Swiss Empa: ERC Consolidator Grant for Mirko Kovac – ProteusDrone: A shape-shifting soft drone

Swiss Empa: Engine Technology -The Comprex charger is back

The non-native quagga mussel is spreading in Switzerland and impacting lake ecosystems

New study claims polyester-eating enzymes hold key to eliminating plastic waste


BASF continues global partnership with WorldSkills to develop new talent in the car painting industry


BASF and REEF Technology sign strategic cooperation agreement to improve the quality of plastic recyclate materials

Boohoo Group partners with CottonConnect on sustainable cotton

Reusable to-go mugs made of Ultrason® for a sustainable lifestyle

Clariant joins the Renewable Carbon Initiative

DOMO produces five millionth tonne of caprolactam

BASF first chemical company to be certified on sustainable castor products

Prada partners with Unesco on ocean sustainability education programme


Swiss Federal Councillor Ueli Maurer to visit Swiss Finance Day at World Expo in Dubai


ICI Pakistan partners with FibreTrace on rPET fibre traceability


Free Webinar on Sustainability Trends in AHP Product Development (March 23, 2022)

Worth Reading

Publication of « Swiss Public finances 2021»