LONDON (Reuters Breakingviews) – Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.
LATEST
– Magic of Pearson
– Afterpay afterthought
– Staycation fallout
TURNING THE PAGE. Textbook publisher Pearson has appointed Andy Bird as chief executive. Bird will take over in the middle of a painful turnaround. The coronavirus pandemic has dramatically accelerated the shift to digital textbooks: lockdowns have forced teachers and students to embrace online learning. Bird’s predecessor John Fallon blamed a string of profit warnings on the longer-term switch. The stark wake-up call from Covid-19 could finally force the 4.4 billion pound firm to up its game.
Bird, most recently chairman of Walt Disney International, is no stranger to going digital. Pearson said that he transformed the creator of Disney cartoons into a digital-first business, overhauling how it sells its products and their range, and revamping the insights the business had into consumer habits. A similar shake-up could help Pearson finally graduate from the remedial class. (By Dasha Afanasieva)
BUY NOW, PAIN LATER. Afterpay is rushing to the checkout. The $17 billion Australian company offering “buy now, pay later” instalment purchase plans to customers of fast-fashion retailers is expanding into Europe with the acquisition of Spanish rival Pagantis for about $57 million. On one level, it looks like a good time to buy: Afterpay stock has been trading at all-time highs as consumers, stuck at home because of lockdown restrictions and virus fears, have turned to online shopping.
The bite-sized acquisition allows some room for error, however. When fiscal stimulus measures end, consumer spending could fall dramatically and lead to a sharp rise in bad debt. This new type of credit has already attracted regulatory scrutiny. One of Afterpay’s biggest investors isn’t sticking around to see how things work out: Mitsubishi UFJ Financial has halved its stake to roughly 5%, according to exchange filings released last week. That’s sell now and maybe buy later. (By Karen Kwok)
STAYCATION DAMAGE. Turkey is the latest to reveal how much the pandemic is hurting countries that rely on tourism. The number of foreign visitors slumped nearly 86% in July from a year earlier and was down by more than three-quarters in the first seven months of the year, official data showed on Monday.
Others are also feeling the pain. For example, Greek tourism revenue fell to 64 million euros in June from 2.55 billion euros in the same month a year earlier, the central bank said last week. That caused Greece’s current account to swing into a deficit of 1.4 billion euros from a surplus of 805 million in June 2019. But Turkey’s plight is worse. The country is already running a large current account deficit and a bigger gap will compound pressure on its currency, which has hit record lows against the dollar. President Tayyip Erdogan will have his work cut out to reverse the tide. (By Swaha Pattanaik)
Breakingviews
Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.read more
Breakingviews – Corona Capital: Pearson’s CEO, Afterpay, Tourism – Reuters
