How Printo’s Manish Sharma lost his start-up and got it back

A file photo of a Printo store in Bengaluru. Retail was booming at the time Sharma set up Printo. Photo: Hemant Mishra/ Mint

A file photo of a Printo store in Bengaluru. Retail was booming at the time Sharma set up Printo. Photo: Hemant Mishra/ Mint

Mumbai: Manish Sharma, 43, likes his coffee black and his conversation clear and upfront. Entrepreneurs aren’t really a fraternity, he says.

“Mostly we have our head in the sand, trying to figure our own shit. It is one reason why I want to tell the Printo story. I think people can maybe learn from my experience. Because it is relevant today… when there are so many people trying to build companies.”

In Sharma’s version, he is the good guy. His former funder, venture capital firm Sequoia, the bad guy.

But that’s only one version.

There’s another.

In an emailed response to a detailed set of questions, a Sequoia Capital India spokesperson said: “Printo is one of those tough situations where everybody lost—the founder, the management team and all investors. This is never the desired outcome and nobody—least of all the founder and the investor—ever wants this to happen. However, this situation does happen.”

That may sound platitudinous, but it isn’t. And it is as much as you can expect to get out of the storied but close-mouthed venture capital firm. It also means that the story that follows may seem one-sided.

The beginning

The year was 2005.

Sharma, then in Mumbai, was searching for something to do with his life. Not that his life hadn’t been eventful enough already—a software engineer, Sharma was the sixth employee at Rediff, which he quit in five months. For the next seven years, he worked in start-ups, in India, the US and the UK, making websites, setting up an artificial intelligence firm (which eventually went bust) and selling business intelligence products.

In 2003, Sharma went to Oxford University to pursue an MBA. When this story starts he was back in India, thinking of what to do, contemplating various ideas—perhaps a chain of hair-cutting salons, maybe luxury loos.

As fate would have it, he found himself in the by-lanes of Fort (that’s where the BSE is), looking to get a business card made. It was an excruciating experience. First, because shops weren’t willing to accept his tiny order of 200 cards. Then, they weren’t very particular about pricing, time and delivery either. Sharma was angry. This got him thinking. Maybe there’s a business here. Couldn’t this be organized? Like a professional set-up? Like a Kinko’s? (US printing chain Kinko’s was acquired by FedEx Corp in December 2003 for $2.4 billion in cash.)

And that’s how the idea of Printo came about.

Sharma’s wife Lalana Zaveri, an executive at Xerox India, quit her job to come on board as co-founder. The two dumped all their stuff in an Opel Swing, a hatchback they owned, and drove down from Mumbai to Bengaluru to set up shop. Why Bengaluru? Because rents were cheap, it had a booming IT industry and boasted an open culture that was not averse to the idea of outsourcing anything.

Between Zaveri and Sharma, they had some savings, about Rs.50 lakh. They then did a round of friends and family; In all, 18 people invested. Among them was Pravin Gandhi, angel investor; Sridar A. Iyengar, former CEO and chairman of KPMG India; and Naresh Malhotra, former CEO of Café Coffee Day. Total money in: aboutRs.1.2 crore.

In April 2006, Printo opened its first shop in Koramangala.

“I was extremely nervous, the first day,” says Sharma. “It was an 1,100 sq. ft space and both Lalana and I were store managers. We did sales of around Rs.400. Then within a few months, we did sales of about Rs.12,000 a day. It was remarkable. I didn’t have to find people to go and sell. They found me. And I said, yes, this is what I want to do.”

“We had a hypothesis but no clue whether it would work. The hypothesis was to create branded shops for printing—no-nonsense stuff for small business. The model was to create a hub and spoke. Get to a few stores. And then create a hub. My Excel business plan said we should have 55-60% margin. So we were like, let’s put up a board and see if people will come. And, people came.”

Soon enough, another store came up—inside the Infosys campus. That was followed by an investment from Seedfund India. Fast forward, another store in Jayanagar and then another in Malleswaram.

Sharma started dreaming of growing bigger.

Retail was booming at the time. It was a time when Aditya Birla Group entered the retail business by acquiring Trinethra Super Retail, Kishore Biyani-led Pantaloons Group was opening one store after another, there was excitement about Subhiksha, multi-brand retail… everything retail… in fact, experts were pegging brick-and-mortar retail at a $300 billion industry and players were racing each other to get to the maximum number of stores. Maximum number of footfalls.

At Printo, Sharma wanted to open more stores and build the hub and spoke. But for that, he needed money. So, he started looking to raise some from a venture capital (VC) firm.

‘This is not what we had agreed on’

He reached out. A couple of term sheets came in. From Draper Fisher Jurvetson (DFJ). From Trident Capital. The terms were onerous. $10 million valuation, for about $6 million in funding. (At the time, $1 million was Rs.4 crore) But Sharma wasn’t done shopping. He reached out to more VCs. Sequoia and Sandeep Singhal (managing director at the fund then) in particular. Singhal said no.

That wasn’t the end of it. A month later, Sharma was pitching to Peter Wendell, founder and managing director of Sierra Ventures in the US. As Sharma tells the story, Wendell liked him and the idea but he didn’t want to lead the funding; he wanted a partner.

Wendell: Manish, I really like you. Let’s do this. But I can’t lead in India. I have to find a partner.

Manish: Sure.

Have you spoken to Sequoia?

Yeah. They said no.

Okay. Why don’t you speak to them the day after.


Sequoia reached out to Sharma the very next day. He was thrilled.

“Sequoia is a big, fancy brand. I was enamoured by it,” says Sharma. The two started negotiating. Going back and forth on a few points. Valuation to begin with. Sequoia wanted $8 million, Sharma, $10 million. They finally agreed on $9 million. Then liquidation preference—it is a term used in venture capital contracts to specify which investors get paid first and how much they get paid in the event of a liquidation event. Sequoia wanted 3x liquidation preference. Sharma, 1x. They finally agreed on 1x. The last sticky point was on tranches. Sequoia wanted to tranche the investment based on store revenue—so $3 million first and then another $3 million after 12 months, after the 3 stores crossed a certain revenue number. Sharma didn’t want the tranche.

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On 26 August 2007, a final meeting was arranged between Sharma, Zaveri and Singhal at Sequoia’s office.

“So we were supposed to sign that day,” says Sharma. “My big thing was no tranches. It was a long meeting. I remember Sandeep saying that Sequoia had a lot of experience (in this kind of retail) and could add value. He mentioned Dr. Lal PathLabs, which has physical samples going in, into a hub and spoke, and digital reports coming out. Ours was digital going in and physical coming out. He mentioned their investment in Café Coffee Day and Cotton County and how they understood retail. I genuinely found them to be very nice guys to speak to.”

Tranches, though, was still a sticky point. “I remember Sandeep saying, “Why don’t you suggest the store values?”, and I said I don’t want it. I was quite tired of negotiating. So Sandeep said “Okay, no tranche. Screw it, let’s do this”. And we shook hands. I told Sandeep I was calling off talks with the other guys. He was like, sure.”

As Sharma tells the story, the revised term sheet from Sequoia arrived by fax, later in the day. With the tranches clause.

“I called Sandeep, “What the hell man? What’s this? This is not what we had agreed on”. And he was like, “No we could not. I spoke to my partners and we could not change this”. I was like, “We shook hands last night, then you shouldn’t have told me that this is the final thing”. He was like, “No Manish, why don’t you put in the numbers?”. I’m like, “It is not about the number”.

“Frankly, I was feeling quite stupid and helpless; why did I call the others off? I think you are tired when you are doing all this because it is the culmination of negotiating with a lot of people and you give in to a lot of terms. Sometimes you feel, “Let’s just get on with it. What’s the big deal.” And you start questioning your own belief system. I did make sure that there was no ambiguity about the tranche. So there was to be an auto transfer on a date 12 months down the line, provided three stores crossed the revenue number—Koramangala, Jayanagar and Malleswaram.”

On 28 August 2007, the deal was signed. Early October, the money came in.

‘Our growth plan was called 30 in 3’

With the $3 million in the bank, Printo changed course. It started with the kick-off meeting with investors. While Sequoia got two board seats, it didn’t appoint anyone but was informally part of the decision-making body. Sometime in December 2007, the team met. It agreed on a strategy, but that while Printo’s hub-and-spoke model seemed to be working, instead of staying in Bengaluru, the company should try to expand to other cities. Fast-track the growth. The hub could come later.

The plan was called 30 in 3. 30 stores in three months.

“I bought the story as well and I am to be blamed for it,” says Sharma. “I was equally willing to dump my hub-and-spoke model with very little resistance. I wanted to conquer. You think the same economics will play out in every city; open a store and customers will come. Make money, awareness goes up and boom. I also had the feeling that these guys had done so much retail so they would know. The economics was that Rs.24 crore ($6 million) would take me to 50 stores. So we came out of the meeting with this crazy idea. And then I sold the idea to my team as well.”

Starting January 2008, Printo started hiring aggressively. All of a sudden there were more people in office, people taking flights to several parts of the country scouting for locations. In five months, Printo opened two stores in Mumbai, two in Hyderabad, two in Pune, one more in Bengaluru and was getting ready to open two more, in Delhi and Gurgaon.

“I remember I was on a flight to Delhi,” says Sharma. “My retail head was in Gurgaon. He had looked at some properties and wanted to close it fast. Real estate prices were going through the roof at the time. I saw the places, they were completely in the dumps, going at Rs.1.2 lakh per month and I was like, “Who the hell is selling me this shit? Who the hell is going to come here? There is no way I’m going to make money with this kind of rental”.”

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Ironically, the sentiment was, if real estate is expensive, it was only going to get worse. “I think what happened to me was, I became stupid,” says Sharma. “I take complete responsibility for it. When you have the pressure to grow, you lose sight of unit economics. You question it and investors say, “Of course you have to pay that much. That’s the price of growth. Trust me, in the long run, this is going to be nothing”.”

Still, Sharma didn’t go through with Delhi. Investors wanted it, but he kept pushing back asking for more time. He increasingly started feeling that something wasn’t right. Plus, the money had run out. In eight months, Printo had grown from 40 to 170 employees. The company was burning Rs.50 lakh every month.

“By August-September, I had burnt through Rs.10 crore,” says Sharma. “Setting up each store takes Rs.60 lakh. In putting up the interior and the equipment. Plus people. In Hyderabad, we built a training centre with a fancy office. It was crazy. The people we hired came in at crazy salaries.”

Mid-September 2008, it all came to a head when Lehman Brothers Holdings Inc. went down.

‘Sorry, we can’t make the next tranche’

A few weeks after Lehman, Michael Moritz, chairman of Sequoia Capital, flew down to India for the Sequoia CEO off-site in Mumbai at the Trident hotel, which overlooks Marine Drive. Sharma was one of the attendees.

Moritz took the 50-odd people in the room through a presentation he had made just a week ago to Sequoia portfolio CEOs in Silicon Valley. The presentation—RIP Good Times.

Moritz spoke of what happens in downturns—people don’t pay up, nobody gives you money, an entrepreneur must hunker down, conserve cash, cut costs by 50% and the big one, this crisis is really bad, it will last a long time.

Sharma left the room inspired. Good talk.

Another matter altogether that two weeks later Sequoia reached out to Sharma. G.V. Ravishankar, (advisor to Printo then) managing director and partner at Sequoia, made the call. “Sorry, we can’t make the next tranche.”

“I was shocked,” says Sharma. “But I also realized that maybe it was really bad. Shit happens in business. I said, “okay, no problem”. But then he said, “…unless of course, you want to revalue the company. That we go up to 50% stake (at the time, Sequoia had a 30% stake). And that’s when it struck me, “What the f***? You are saying, things are shitty, your company is shitty, so we can’t put in more money but if you give us more of your shitty company, we will put in the money”.”

“I was like, “This is a sham. Now you are being dishonest”. But I was screwed anyway.”

For Sharma, there were just two choices. 1. Negotiate with Sequoia and lower the valuation for the remaining $3 million. 2. Take Sequoia to court.

“I wanted to save my company so I renegotiated,” says Sharma. “I postured saying I would take them to court. Go to the press. On revaluation, I put my foot down. I eventually got $1 million. Rs.4 crore. I knew that of that money, Rs.1.5 crore would go away in paying salaries. I would be left with Rs.2 crore or thereabouts in the bank.”

Starting December 2008, Sharma got down to rescuing the company. All stores outside Bengaluru were shut down; 80 people, almost half the company were laid off; and those who were left took massive pay cuts. “We wrote off everything,” says Sharma. “Deals at the time were very poorly done and I am responsible for it. So we had signed lease lock-in periods for two years and made deposits. For a few places, people didn’t pay back deposits.”

The massively shrunken Printo survived. Two years went by.

‘The thinking in the team is, we don’t want to sell’

In late 2010, Sharma says he approached Sequoia again. “Guys, looks like the storm has passed. Why don’t you part with the other $2 million and let’s grow the company again. Real estate prices are almost 50% down. This is the best time to grow. Let’s do this.”

Sequoia wasn’t interested. The fund had moved to the theme of investing only in consumer technology start-ups and wasn’t signing any other deals.

“Then they said, let’s go together and raise money outside. Let’s appoint a banker. I was like, “What’s the need? It is just $2 million. We can raise money outside after that”. They said no. At the time, they had 31% of the company. Anyway, what option did I have? So I said “Okay, let me go out and raise money”.”

It was a huge mistake.

Click here for enlarge

“I had an investor who owned 30% and wasn’t ready to put in money,” says Sharma. “It struck me later, when people said “Why don’t you take it from Sequoia? If they are not putting in money and if they are not leading the round, then there must be something wrong.” Printo couldn’t raise any money.Even as all this was happening, in February 2011, Singhal and three other partners at Sequoia left the firm, to start out on their own. For Sharma, Ravishankar continued to be the contact person.

Around the time, Printo was approached by a strategic investor—Ballarpur Industries Ltd (BILT). The company wanted to come in with a 30% stake first and more later. As Sharma tells the story, he thought it was a good opportunity for the angels to exit plus dilute some of his own equity. Everyone was on agreement on this including the angels and Seedfund and Sequoia—in fact, Ravishankar and Sharma travelled together to Delhi to conclude negotiations. At the very last stage, Sequoia sprang a surprise.

“Sequoia said the angels couldn’t exit,” says Sharma. “They said “If angels exit, we should exit pro rata”. I couldn’t convince them otherwise. So I wrote to BILT, saying Sequoia wanted an exit as well. And BILT freaked out. Its M&A (mergers and acquisitions) team lost faith. And that was the last of that deal.”

As this deal fizzled out and with nowhere left to go, Sharma decided that he had had enough. He was angry and tired.

“I was at my wits’ end,” says Sharma. “I asked for a meeting (with Sequoia) and I said goodbye. “Keep the company, run it yourself. I am done with this. You can’t just be sitting here with 30% of the company doing nothing. I would like to move on”. This was dead-end conversation. Then they offered me some money personally so that I would stay. Just to relieve the financial pressure on me. That is when I realized that these guys didn’t have any clue of what I was going through. They didn’t and couldn’t think beyond money. It was like (they were) bribing me to stay on in my company. So I said, “No man, I have to go”.

On 21 November 2011, a day after his birthday, Sharma wrote to Sequoia saying that he wanted to buy back its shares or quit.

The gamble worked. Sequoia agreed.

“On 21 January I signed the buy-back agreement with them. I took a personal loan of Rs.50 lakh to pay them upfront and said I will tranche the remaining money, to be paid after a year. They were fine with it. I don’t want to get into the numbers of this. But what I paid to buy them back was far lower compared with their investment. That’s how it went down.”

It is mid-afternoon. A slightly warm afternoon in Bengaluru. Sharma and I have been chatting for more than four hours now. Over black coffee. Seated outdoors at Printo’s hub (office).

Sharma is clear why Sequoia gave in.

“Because I put a gun to their head. See, I had already spent seven years of my life in this. I was worried about only one thing—I had turned the company around, and the business was working. I didn’t want the company to go down. When I threatened to leave I was desperate. I didn’t actually mean it. See, the way I thought about this is, “There is a paucity of talent to find managers who can work for sub-Rs.10-15 crore companies. Where will you get them? So you do depend on the entrepreneur”. It worked.”

And then, when it came time to pay up the rest, Sharma got lucky.

“Yeah. So that happened when Blume Ventures invested in Printo. They came in and bought the remaining chunk. Everything was transparent. So I think I got lucky.

I reached out to Blume. They came here for a meeting. I told them exactly what I told you. I told Karthik, “Trust me man”. (Karthik Reddy is the MD of Blume Ventures). “We will do better numbers”. And he trusted me. He didn’t argue about any valuation, nothing. See, entrepreneurs don’t start businesses for pennies. It is for the larger stuff. And that’s what happened. We closed March 2015 with Rs.22 crore in revenue. We are at 20 stores now. With a hub and spoke.”

His biggest lesson, Sharma believes, is about belief.

“Immediately after funding, I moved to a borrowed belief. The smart people said, “Grow this super fast”. I did. And then they said, “Maybe not”. At the end of it, I was left with no belief. I had to go in and rebuild my belief. That was the hardest part. People are looking at you right. My wife and co-founder, Lalana, was shocked. As a partner, you trust his/her judgment. And she was like, “Does he really know what he is doing?” Lastly, I think that sometimes investors can be dangerously incompetent. And when that happens, it is like sleeping with a complete maniac.”

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Sequoia doesn’t see the Printo story that way. In its emailed response, the firm said: “Sometimes as an investor, we find the market is too tough to make the business work or market developments make the business unviable, market timing may be wrong or executional challenges crop up. And the business fails in spite of all efforts. When such situations occur, all parties involved won’t always be happy and many times both sides feel the other could have done things differently. The simple truth is that the market to build an organised retail print shop chain was much harder than we all expected—in fact, this market hasn’t produced any large company even today so many years later.”

That is indeed the case. India still doesn’t have a Kinko’s.

“The only thing everybody can do is learn from their mistakes. It is always a costly lesson for us when we learn after losing money. Building a new company is difficult and risky. Failures and lessons learned are part of the process for both entrepreneurs and investors,” Sequoia added in the e-mail.


MIUI 7 Global Released: How to Download and Install It

MIUI 7 Global Released: How to Download and Install It

Xiaomi on Tuesday announced that it has made available MIUI 7 global stable builds for a range of devices. The new version of Xiaomi’s mobile OS is available for download from the company’s official forum, and is also being rolled out in the form of an OTA update.

Stable MIUI 7 builds are available for the Xiaomi Mi 3, the Xiaomi Mi 4, the Xiaomi Mi Note, the Xiaomi Redmi 1S, the Xiaomi Redmi 2, Xiaomi Redmi 2 Prime, the Xiaomi Redmi Note, and the Xiaomi Mi Pad. There’s no word on when the Xiaomi Mi 4i will receive the update.

Based on Android Lollipop, MIUI 7 comes with a number of features such as four built-in themes, a daily lock screen that changes its wallpaper everyday, and a new mode that gives a user the option to lock down apps they don’t want their kids to access.

As for improvements, the company claims that MIUI 7 offers up to 30 percent better response time than MIUI 6. Users should also find it light on battery as some tweaks on how the operating system handles the background apps have been introduced.

If you’ve never flashed your device – manually installed the ROM on your handset – you should wait for the OTA update to arrive for your phone. Users can check the Updater app on their MIUI device to see if the OTA update has arrived for them. If it has, users should press Update, and then press Reboot now once the download completes to finish the installation.

Alternatively, you can follow the instructions below to install the latest flavour of Xiaomi’s take on Android for your handset.

What you need to know before updating the device is that there are two builds available for your device: Fastboot, and Recovery. Updating your handset using the recovery build is easier, and furthermore, it doesn’t wipe your existing files and settings. Fastboot requires you to download the Mi PC suite on your computer, and using this method wipes the files and settings on your device.

Users running stable MIUI 5 or MIUI 6 stable builds are recommended to wait for the OTA update, or flash the full ROMs in recovery or using Mi PC suite. If users are running the MIUI 7 China developer build, or the MIUI 7 global beta build, they are recommended to flash the full ROMs after wiping all user data, as they will not receive the update over-the-air.

If you wish to wipe all your settings – preferable only if your device has some issues – you can follow the instructions mentioned below recovery mode.

Below we’ve explained how you can update to MIUI 7 using the Recovery ROM, Mi PC Suite, and Fastboot ROM.

How to update using Recovery mode:
1) Take a backup of all your data. Save all your photos, contacts, downloaded files to your computer or save it to any of your favoured cloud storage service such as Dropbox, OneDrive, Google Drive.

(Also see: How to Back Up Your Android Smartphone)

2) Download the MIUI 7 build corresponding to your smartphone.

  • MIUI 7 (Recovery ROM) for Xiaomi Mi 3 (665MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Mi 4 (665MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Redmi 2 (652MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Redmi 2 Prime (652MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Redmi Note (692MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Redmi 1S (682MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Mi Pad (543MB)
  • MIUI 7 (Recovery ROM) for Xiaomi Mi Note (711MB)

3) Rename the Recovery ROM you downloaded to on your computer.

4) Connect your smartphone to the laptop using a data cable, and copy the ROM file downloaded into the root directory of the internal storage of your device. Ensure that you haven’t placed the file in any other folder.

5) Now you have to enter the recovery mode to initiate the installation process. There are two ways to put your phone in the recovery mode:

  • Method 1: Launch Updater app on your device, click the icon at the top-right corner, and selectReboot to Recovery mode to enter.


  • Method 2: You can also turn off your device and then hold both Volume + button and Power button at the same time to enter Recovery mode.

6) Once in Recovery mode, you can use Volume +/- to select up/down, and Power button to confirm.

7) After entering Recovery mode, choose your preferred language, and select Install to System One and confirm. Doing this will initiate MIUI 7 installation to your device. Wait until the update is completed, choose Reboot to System One, and then your device should boot to the MIUI 7 version.


How to update using Mi PC Suite
This method is only meant for users running stable bulds of MIUI 5 or MIUI 6.

1) First, download Mi PC Suite and install it on your computer.

2) Turn off your device, press the Power button and Volume down button at the same time to enter Fastboot mode.

3) Connect your device with the computer with a USB cable.

4) Open Mi PC Suite and let it find your device. Then select Update. If the update is available, clickUpdate now.

How to update using Fastboot mode:
Installing a Fastboot ROM is a little bit more complicated, and you can follow the instructions below.

1) Download the MIUI ROM Flashing Tool from the Xiaomi website.

2) Download the Fastboot ROM for your device from the links below.

  • MIUI 7 for Xiaomi Mi 3 – Fastboot ROM
  • MIUI 7 for Xiaomi Mi 4 – Fastboot ROM
  • MIUI 7 for Xiaomi Redmi 1S – Fastboot ROM
  • MIUI 7 for Xiaomi Redmi 2 – Fastboot ROM
  • MIUI 7 for Xiaomi Redmi 2 Prime – Fastboot ROM
  • MIUI 7 for Xiaomi Redmi Note 4G – Fastboot ROM
  • MIUI 7 for Xiaomi Mi Note – Fastboot ROM
  • MIUI 7 for Xiaomi Mi Pad – Fastboot ROM

3) Switch off your Xiaomi smartphone. Hit the Volume- key and the power button at the same time to enter Fastboot mode. Now plug in your device to a Windows PC or laptop via the Micro-USB cable.

4) Double-click on the Fastboot ROM file you downloaded to your PC in step 2 to decompress it. Open the folder where this decompressed ROM is saved and copy the folder path.

5) Now decompress the flashing tool you downloaded in step 1. Then double-click on it to install it. After this, open MiFlash.exe and in its address bar, paste the folder path copied in the previous step. Now click the Refresh button and MiFlash will recognise your device.


6) There are three options you can choose from at the bottom: Flash all will flash all the files, and wipe all userdata and all files in internal storage. Flash all except storage will flash updated files, wipe user data, but will not delete files in internal storage. Flash all except data and storage will only flash the updated files, and will not wipe user data and files in internal storage. To preserve your user data make sure you select Flash all except data and storage.

7) After this, click Flash button towards top right to flash the ROM to your Xiaomi smartphone.

8) Wait till the progress bar fills up. You will then see a message next to it that reads: “The operation completed successfully”. Your device will automatically reboot and have MIUI 7 installed.


Missed the news? Here’s a list of all phones launched at MWC 2016 on one handy page – or catch our full Mobile World Congress coverage.


Amazon has quietly launched its own clothing lines, as it tries to take over fashion retail

A screen capture of the one of the items reportedly from Amazon's private fashion lines
Already in the midst of a massive growth spurt, Amazon is looking to fashion to keep fueling its expansion. For months there have been clues that the e-commerce giant was developing its own in-house clothing brands, and just last week, job postings from the company (paywall) hinted it was actively moving toward a launch. But it seems the launch already quietly occurred.
The company has introduced at least 1,800 different fashion products on its site, under seven different brand names it trademarked, according to a Feb. 21 note by Ed Yruma, managing director and equity research analyst at KeyBanc Capital Markets. As WWD reported (paywall), Amazon is selling a wide variety of items, including women’s clothing and bags, men’s tailored wear and accessories, and even children’s clothing. They exist under the labels Society New York, Lark & Ro, Scout + Ro, Franklin & Freeman, Franklin Tailored, James & Erin, and North Eleven.
Searches of public records confirm that Amazon owns the trademarks to these brands. A quick look at the items for sale, such as a turtleneck dress from Society New York for $39.97, and a cap-toe oxford by Franklin & Freeman for $53.97, indicates Amazon is sticking toward the cheaper end of the price spectrum for its in-house labels.

(Amazon has not confirmed that these are its private lines, but Quartz has reached out to the company for comment and will update this post with any response.)
In any case, Amazon has been moving toward launching its own lines as its fashion strategy shifts. Since it jumped into fashion retail more than a decade ago, it has occasionally struggled to gain traction, partnering with existing retailers and clothing brands. Its solution has at times been to acquire or launch its own outlets, including Shopbop and East Dane, and it makes sense that it would create its own clothing brands when its existing partnerships don’t offer what its shoppers want.
“When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that,” Jeff Yurcisin, vice president of clothing at Amazon Fashion and CEO of Shopbop, said at a retail conference in October.

In-house brands can also sell extremely well. At fashion e-commerce powerhouse Revolve, the company’s private-label brands are some of its top sellers. And KeyBanc notes that, at their peak, Amazon’s margins in apparel are better than other goods, while the company has said fashion is one of its fastest-growing categories.

While Amazon faces definite headwinds to developing its apparel business—KeyBanc notes only about 15% of its active customers buy clothes through the site—the potential is there for Amazon to disrupt retail in the mass-market. Amazon has an immense amount of data to draw on, which could allow it to identify consumer trends and respond quickly, a capability that has allowed fast-fashion to take sales from chains such as Gap.
Successful private labels would also make it even more competitive against competitors that rely on brick-and-mortar stores. According to financial firm Cowen and Company, Amazon is on course to top Macy’s as the largest clothing retailer in the US this year.
The conditions are right for big profits, and more growth for Amazon.


The Independent newspaper dies as it was born – in the white heat of technology

The Independent newspaper dies as it was born – in the white heat of technology
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Sunday, bloody Sunday: things began to go wrong for The Independent when the decision was made in 1990 to publish a Sunday edition. From the outset, it haemorrhaged money. And Murdoch dealt a second debilitating blow when he cut the price of competitor The Times. Revenue evaporated, and the Indy titles never truly recovered.

Perhaps the British media’s most regular topic of idle speculation in recent years, the question of how long the Independent newspapers could soldier on for has been answered emphatically by the news that the papers are to cease printing in March and become an online-only operation, with the loss of many jobs.

I was one of the journalists that launched the Independent in 1986 and worked there until 1995. As the dust settles, the autopsy will identify a sequence of events that turned the greatest Fleet Street success story of modern times into a protracted tragedy.

The Independent was perverse, smart, irreverent, sceptical – and very well written. It began without much idea of where it was going. Early news content had rather too many stories about what was “set to” happen, too much about what people said and too little about what they did. But the editors, sub editors and reporters hit their stride. They were encouraged to find stories and project vividly what was unearthed; if the Press Association news agency was covering it, then let’s take their coverage and have Indy reporters out finding unique content.

And they did. Tony Bevins in politics, for example. Heather Mills in home affairs. Paddy Barclay in football. John Carlin in South Africa. John Price’s news editing. Photographers were encouraged to eschew conventional picture composition. And their striking images were used imaginatively.

But the paper’s greatest virtue from was perhaps its copy tasting, the process of decision-making about what should be published, what prominence it should be given, and what should be discarded.

One typically compelling splash revealed the high number of babies born in New York to mothers who were HIV-positive. It was a story that had been buried in copy filed by a news agency. But the Independent’s curiosity was aroused, the story developed and competitors were left baffled by what they had missed – just one example of the paper’s independent streak.

Some of the distinctive journalism that characterised the papers was lost as ownership shifted. By the mid-1990s the Mirror Group had a stake. In the early 2000s it moved to a compact (tabloid) formatm and more recently it launched a successful cut-price spin-off, the i, which is being sold on to to Johnston Press.

The i was born under the Lebedevs who bought the titles from Independent News & Mediain 2010. In recent decades there have still been traces of the paper’s original voice, but only a shadow of that early élan.

Saved by Thatcher

Readers responded, but slowly. One month, not long after launch, the company only narrowly found the cash to pay wages. Its saviour was probably Mrs Thatcher. Her governments polarised opinion, in Fleet Street as well as among the electorate. So theIndependent’s boast of neutrality – “It is, are you?” – was suited perfectly to attract readers to its coverage of the 1987 general election.

Other ingredients merit mention. It was Murdoch, paradoxically, who made theIndependent possible: excellent reporters and editors on The Times and The Sunday Timesopted not to cross picket lines at the paper’s union-busting printers at Wapping, and were promptly recruited by the Indy’s founders, especially editor Andreas Whittam Smith.

Whittam Smith, the son of an Anglican clergyman and known by his staff as “the saintly one”, was a thoughtful, slightly detached figure. For humble reporters, it was hard to discern the essence of his ability. But he created in the City Road offices an atmosphere in which staff felt they had a proprietorial and emotional stake in their paper, a compelling incentive to do what they loved to do: good, serious and (also importantly) occasionally frivolous journalism. As circulation climbed, narrowing the gap with the Guardian, theDaily Telegraph and The Times, there were more reasons to be cheerful. This was the place to work on Fleet Street.

It was also Whittam Smith’s decision to launch the Independent on Sunday, something that puzzled those members of staff who recalled him not that long before denying any intention to enter the Sunday market. Perhaps it was an attempt to stymie the Sunday Correspondent, which had just launched.

From 1990, after Murdoch fired the first shots in the price war, energy levels dipped. The papers were never without flair, without imagination. But there were increasingly without money. But for those four or five years, it hardly seemed to matter. We were masters of the newspaper universe.