Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

It’s just cheugy business

Written by Maria Julia Pieraccioni, associate 
Edited by Iain Gibson, associate partner
3 June 2021

Good morning,

When, in 2018, the Urban Dictionary added the word “cheugy” to its extensive vocabulary, no one was really paying attention. Recently, the word resurfaced thanks to 24-year-old Hallie Cain, a copywriter in Los Angeles and the face behind the Instagram handle @cheuglife. In a TikTok video she posted in March, she tells her followers that the word describes anything from “the type of people who get married at twenty years old” to millennials’ obsession with “girlboss energy”. More practically, the Urban Dictionary defines the word as an adjective to describe an object, a behaviour, or a preference that is the opposite of trendy, or out of date.

Need more examples? Let me explain. “Live, love laugh” posters? Cheugy. Destination weddings? Definitely cheugy. Going to Bali to find yourself? The jury is still out, but I suspect the verdict is the same.

One recent example occurred on Wednesday, when Etsy announced a £1.14 billion deal to buy Depop. Etsy boss Josh Silverman described the move as a way to target Gen Z consumers, as 90% of active Depop users are younger than 26. Depop CEO Maria Raga added, “[the next generation] comes to Depop for the clothes but stays for the culture”.

Etsy, the global online retailer for do-it-yourself goods, was all the rage in the mid-2010s. It presented users with a platform which encouraged enterprise and trading, and unlike its roughly similar relative, Ebay, Etsy was perceived as accessible, fun, and a way to support small businesses. However, the rush and excitement died when apps such as Depop, Vinted, and Carousell started popping up, with a more general appeal to a younger audience thanks to their focus on sustainability and gender-equal leaderships.

Depop was founded by London entrepreneur Simon Beckerman, with the help of Italian tech incubator H-FARM in 2011. It describes itself as a peer-to-peer social shopping app, and says it has a business model that fosters community and trust rather than profit-based competition. It describes its mission as building “a community-powered fashion ecosystem that’s kinder on the planet and kinder to people”.

Perhaps it is precisely this ESG appeal that drew in Gen Zs in the first place, as they place more of an emphasis on sustainability, the environment and social causes. But the Gen Z consumer base is also more fragmented than any other generation of consumers before them and appealing to them is not an easy task. Etsy, a marketplace that Gen Z barely would know about, must resolve the stark differences among its consumer bases if it is to make it work—and keep Depop’s users loyal.  

Perhaps Etsy buying the Gen Z-favourite Depop is a way to capture that market but then again, perhaps it is just cheugy business.

News

Sir Kevan Collins, the education recovery commissioner for England, has resigned in protest over the UK government’s “scaled-down” recovery plan. In announcing his resignation, Sir Kevan explained that the government’s plan to invest £1.4 billion into education grossly undervalued its importance. The package fell well short of the £15 billion he had proposed to be invested in teachers, tutoring and extended school day. 

Israeli opposition leader Yair Lapid had confirmed to the president he can form a coalition government which, if accepted, will mark the end of Benjamin Netanyahu’s 12-year rule. The coalition government will be supported by the United Arab List, the minority party that represents Palestinians in the country, and will initially be headed by Naftali Bennett, head of the right wing Yamina party. Lapid will also serve as prime minister at some point, as the pair have agreed to rotate the position.

Scottish Conservative leader, Douglas Ross is self-isolating after coming into contact with someone who tested positive for coronavirus. Business in Holyrood will continue as usual, with Ross undertaking first minister’s questions remotely.

Business and economy

Strathclyde Pension Fund, the largest council pension fund in Scotland, has announced it will end investments in fossil fuel companies that are not committed to reducing emissions. The fund will also reassess the companies within its portfolio and set a minimum standard for carbon emissions. However, environmental campaigners are calling for a detailed plan to accompany this decision and more clarity on the fund’s timeline for divestment.

The United Kingdom is to begin the process of joining the CPTPP, the Pacific trading bloc that comprises that comprises Japan, Canada, Australia, Mexico, Singapore, New Zealand, Malaysia, Chile, Vietnam, Peru and Brunei. Its admission into the bloc would reduce tariffs on exports to member countries by 95%, facilitate access to the Asia Pacific market, and be the UK’s most significant trade deal thus far since Brexit. (£)

According to whistle-blowers from Trafigura, the commodities trader had warned Credit Suisse last year of a suspicious invoice from Sanjeev Gupta’s Liberties Commodities. Trafigura raised the alarm in July 2020, telling Credit Suisse bankers that they did not believe the invoice they had received was genuine. These revelations come during an intense scrutiny period on the Swiss bank’s due diligence process. (£)

Columns of note

Calls by former Labour prime minister Tony Blair to form an alliance of “progressives” between the Labour, Liberal Democratic, and Green parties should be avoided, according to Robert Shrimsley’s piece in the Financial Times. The author posits that an alliance between opposition parties, while enough to earn them a place in government, would be detrimental to the identity and longevity of the Labour party. He identifies four flaws in Blair’s thinking, but the most politically significant one is the one he ends his opinion piece with: “Labour’s core task is to get itself in order and start looking like the party its lost voters are prepared to see in power”. (£)

That Iceland sits atop two tectonic plates and is prone to volcanic eruptions is a fact known to those who were paying attention in science class. However, it has never been told in such a fascinating way as Andri Snær Magnason achieves in The Atlantic. In the piece, entitled “The Gods Were Right”, Magnason argues that nature is igniting to punish our reckless abuse of coal and fossil fuels. “They punished Prometheus for stealing their fire”, the author writes, “now look what humans have done with it”.

Cartoon source: The New Yorker

Markets

What happened yesterday?

Boosted by an appreciation in energy companies’ stocks, the region wide Stoxx Europe 600 gained 0.3% at closing bell. The French CAC 40 ended the day at a record high, up 0.5%, and was closely followed by the German Dax, which closed up 0.2%. London’s FTSE 100 also rallied, closing the trading session at 0.4% higher than the day before. The British sterling gained 0.11% on the American dollar, ending at $1.4166.

Across the Atlantic, the S&P 500 and the Nasdaq Composite ended the day positively, up 0.2% and 0.1% respectively. The rally was fuelled by an interest in “meme” stocks by retail investors in online forums. AMC and Blackberry were targeted by this surge in interest, which resurrected retailer GameStop for a short while.

What’s happening today?

Finals

Braemar Shipping

Discoverie Grp.

NewRiver

Pennon

Workspace

AGMs

Camellia

Camellia

Centralnic

Checkit

Destiny Pharma.

Flowtech Fluid.

Informa

Menhaden Plc

Michelmersh Brick Holdings

Netscientific 

PageGroup

The Pebble Gro.

Tissue Regenix Group

Final Ex-Dividend Date

Animalcare Grp

Balfour Beatty

Billington

Computacenter

Gamma Coms

Hill & Smith

Hilton Foods

Keller

Kingfisher

Learning Technologies Group

Marshalls

Michelmersh Brick Holdings

National Grid

Randall&quilter

Renold 6Pf.  

Scottish Mortgage

Spectra (Unres)

Synthomer

Worldwide Healthcare Trust

Final Dividend Payment Date

Fundsmith Emerg   

Macfarlane Grp.

Relx       

Interim Ex-Dividend Date

Abstd Equityinc

Abstd Euro Log.

Albion. Tch Vct

Alliance Trust

AB Foods

Atlantis Japan

Aviva 8 3/4 Pf

Biopharma Cred.

Brunner Iv.5pf

Foresight 4   

Gateley Hldgs

Gen.acc.8se.pf

Henderson Div

Hend.eur.focus

Home Reit

Jersey Electricity

Jlen Env

Jpmorg.gbl.g&i

Jupiter Emerg.

Kingfisher

Majedie Inv. 

Temple Bar Investment Trust

Utilico Em.mkts

Victrex

Warehouse Reit

Quarterly Ex-Dividend Date

Honeycomb Inv.

Law Debenture

Premier Miton

Rm Secured 

Round Hill Mus.

Util

Quarterly Payment Date

Greencoat Rene.

Wheaton Prec.

UK Economic Announcements

(09:30) PMI Services

International Economic Announcements

(08:55) PMI Services (GER)

(08:55) PMI Composite (GER)

(09:00) PMI Composite (EU)

(09:00) PMI Services (EU)

(13:30) Continuing Claims (US)

(13:30) Initial Jobless Claims (US)

(14:45) PMI Services (US)

(14:45) PMI Composite (US)

Source: Financial Times

did you know

In 1790, Xavier de Maistre, an aristocrat under house arrest in Italy, wrote up a tour of his bedroom into a book. (QI Twitter)

Parliamentary highlights

House of Commons

The House of Commons is in recess and will next sit on 7 June 2021.

House of Lords 

The House of Lords is in recess and will next sit on 7 June 2021.

Scottish parliament 

Parliamentary Bureau Motions

 First Minister’s Questions: Various

Parliamentary Bureau Motions

Scottish Government Debate: Education

Business Motions

Parliamentary Bureau Motions

Decision Time

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