Wealthy nations urged to boost weather defense as losses jump

Taxis sit in a flooded lot after Hurricane Sandy struck New York in 2012. Losses from extreme weather are rising fastest in developed countries, studies show. (AFP)
Updated 12 October 2019

Wealthy nations urged to boost weather defense as losses jump

  • UN official estimates $90 trillion in new safeguards needed worldwide by 2030

LONDON: Economic losses caused by extreme weather events, from hurricanes to wildfires, are surging fastest in parts of the world outside the tropics — places that once saw relatively few such disasters, scientists and statisticians have warned.

In those temperate zones — from the US and Canada to Europe and Australia — the cost of the most catastrophic events grew by an average of $46 million a year between 1960 and 2014, compared with $18 million a year in tropical countries, said researchers at Pennsylvania State University.

That presents risks to the financial stability of emergency response and insurance programs in temperate regions, they said.

It suggests richer northern countries may need to step up protection against new threats fueled by climate change, as well as supporting adaptation in poorer places, they added.

“In tropical zones, people have learned to put certain adaptation measures in place, while in temperate zones those have not been a priority,” said Francesca Chiaromonte, a statistician at Pennsylvania State University.

Raised concrete cyclone shelters in coastal Bangladesh, for instance, have over the past 25 years dramatically slashed once sky-high death tolls in that low-lying South Asian nation.

In other places, measures ranging from early warning systems to tighter building standards, construction of sea walls and even planned relocation from at-risk coastal areas have helped reduce losses.

In the US, low-lying Louisiana in 2012 created a coastal “master plan” that aims to avoid between $5 billion and $18 billion in expected damage from worsening storm surges.

Meanwhile, New York, in the wake of destruction caused by Hurricane Sandy in 2012, is building a $10 billion system of berms, removable barriers and new, higher land at the fringes of lower Manhattan to protect itself from flooding.

In general, however, adaptation measures in temperate zones “have been lagging behind, compared with the tropics, where people traditionally have had to cope with these kind of catastrophic events,” Chiaromonte said.

“Thirty years ago, it was relatively seldom that a big disaster hit one of these (temperate) places. Now it has become more common,” she added.

Mami Mizutori, the UN Secretary-General’s special representative for disaster risk reduction, has called for an expected $90 trillion in new infrastructure needed worldwide by 2030 to be built with surging climate risks in mind.

“If we build to last, this is a great opportunity to avoid the creation of new risk and to adapt to extreme weather events,” she said ahead of Sunday’s International Day for Disaster Risk Reduction.

More than two-thirds of economic losses from extreme weather come in the form of damage to infrastructure, from roads and bridges to schools and homes, she said.

With two in three of the world’s people expected to live in cities by 2050, ensuring construction there can stand up to worsening climate threats is particularly important, she said.

But while efforts to adapt to harsher weather often have been pioneered in the developing world — which has seen some of the first and worst climate change impacts — richer countries now need to adopt them, too, Chiaromonte said.

A study she and other researchers published this week in the Proceedings of the National Academy of Sciences journal, looking at losses from weather disasters between 1960 and 2014, found those associated with major catastrophes had risen fastest in temperate countries.

That is perhaps unsurprising, given developed countries tend to invest more in expensive infrastructure and so have more to lose when a big disaster hits.

But it is also an indication of the high value of assets at risk as climate threats grow, including in places that may not be fully aware of the rising threat they face.

As global emissions and temperatures rise, “the hits are going to keep increasing” both for public institutions and for insurance companies, Chiaromonte said.

Curbing emissions rapidly is one clear way to reduce the threats, the study said.

Chiaromonte also emphasised that adaptation efforts should not shift from tropical countries to temperate ones, but should be expanded in both.


Struggling Victoria’s Secret sold as women demand comfort

Updated 22 February 2020

Struggling Victoria’s Secret sold as women demand comfort

  • Chairman calls time following difficult year of Epstein links and controversy over chief marketing officer comments

NEW YORK: Victoria’s Secret has a new owner. Now, the big question is whether the once sought after but now struggling brand can be reinvented for a new generation of women demanding more comfortable styles.

The company’s owner, L Brands, said that the private-equity firm Sycamore Partners would buy 55 percent of Victoria’s Secret for about $525 million. The company, based in Columbus, Ohio, will keep the remaining 45 percent stake. After the sale, L Brands will be left with its Bath & Body Works chain and Victoria’s Secret will become a private company.

Les Wexner, 82, who founded the parent company in 1963, will step down as chairman and CEO after the transaction is completed, and become chairman emeritus. Wexner has faced seperate troubles, including questions over his ties to late financier Jeffrey Epstein, who was indicted on sex-trafficking charges.

The selling price for Victoria’s Secret signifies a marked decline for a brand with hundreds of stores that booked about $7 billion in revenue last year.

In a statement, Wexner said the deal would provide the best path to restoring Victoria’s Secret’s businesses to their “historical levels of profitability and growth.” The deal will also allow the company to reduce debt and Sycamore will bring a “fresh perspective and greater focus to the business,” he said.

To successfully turn around Victoria’s Secret, Sycamore will need to change up the corporate culture, reinvent fashions and redesign the stores to make them more contemporary, experts say. Sycamore manages a $10 billion portfolio including retailers as Belk, Hot Topic and Talbots.

The management team at Victoria’s Secret essentially was designing what men wanted, and not catering to women’s tastes, said Neil Saunders, managing director of GlobalData Retail.

“The brand is very embedded in the past,” said Saunders. “It was always about men feeling good. It should be about making women feel good about themselves.”

Victoria’s Secret has an unparalleled history of success. The brand was founded by the late Roy Larson Raymond in the 1970s after he felt embarrassed about purchasing lingerie for his wife. Wexner, the founder of the then Limited Stores Inc., purchased Victoria’s Secret in 1982 and turned it into a powerful retail force. By the mid-1990s, Victoria’s Secret lit up runways and later filled the internet with its supermodels and an annual television special that mixed fashion, beauty and music.

That glamor has faded and so have sales in the last few years. The show was canceled last year, and shares of Victoria Secret’s parent have gone from triple digits less than five years ago to a quarter of that today.

Victoria’s Secret struggled to keep up with competition and failed to respond to changing tastes among women who want more comfortable styles. Rivals like Adore Me and ThirdLove, which have sprouted up online and marketed themselves heavily on social media platforms like Instagram, have focused on fit and comfort while offering more options for different body types. Meanwhile, American Eagle’s Aerie lingerie chain, which partners with women activists like Manuela Baron, has also lured customers away from Victoria’s Secret.

And in the era of the “Me Too” movement, women are looking for brands that focus on positive reinforcement of their bodies.

“Victoria’s Secret will need to empower women, not make them spectacles,” said Jon Reily, senior vice president and global head of commerce strategy at digital consultancy Isobar.

Stacey Widlitz, president of SW Retail Advisers, a retail consultancy, said that Victoria’s Secret designs in the last few years had gone in the opposite direction to what women wanted, ever sexier and poorer in quality.

And while last year Victoria’s Secret started featuring more diverse models, including its first openly transgender model, the moves fell short.

Victoria’s Secret suffered a 12 percent drop in same-store sales during the most recent holiday season. L Brands said on Thursday that same-store sales declined 10 percent at Victoria’s Secret during the fourth quarter. Bath & Body Works, which has been a bright spot, enjoyed a 10 percent increase. The skincare chain represents more than 80 percent of L Brands’ operating profit.

“The (Victoria’s Secret) brand has lost its way, while the lingerie market is not large or high growth, and has become commoditized,” Randal Konik, an analyst at Jefferies, wrote Thursday. “Furthermore, with athleisure taking over, the need for regular bras continues to wane.”

The company has also been beset by allegations of a toxic work environment and its founder recently apologized for his ties to Epstein, who was found hanged in his cell after federal indictment for sex trafficking of minors. L Brands’ Chief Marketing Officer Ed Razek resigned last August after making controversial comments about why transgender models shouldn’t partake in its annual fashion event.

Epstein started managing Wexner’s money in the late 1980s and helped straighten out the finances for a real estate development backed by Wexner in a wealthy suburb of Columbus. Wexner has said he completely severed ties with Epstein nearly 12 years ago and accused him of misappropriating “vast sums” of his fortune.

Wexner offered an apology at the opening address of L Brands’ annual investor day last fall, saying he was “embarrassed” by his former ties with Epstein.

Wexner is the longest-serving CEO of an S&P 500 company. He founded what would eventually become L Brands in 1963 with The Limited retail chain, according to the company’s website. Wexner owns approximately 16.71 percent of L Brands, according to FactSet.

Mike Robbins, a San Francisco-based corporate culture expert who has advised chains including Gap and Sephora, said the team at Victoria’s Secret would have to retrain workers and hire more people with diverse voices.

“They have a lot of work to do — within the company and also outside with the customers,” Robbins said. “The companies that are able to have (a) great culture attract the best employees.”