Wall Street News Roundup: Cracker Barrel Meltdown, Claire's Bankruptcy and Taylor Swift's Engagement

Speaker 1 Here's one piece of advice that I've given for years: build an emergency fund. Aim to stash away enough to cover at least three months of expenses in case your income suddenly drops.

Speaker 1 Sounds simple, right? But let's be honest, it's not. Saving even one month's worth of living costs can feel impossible.

Speaker 1 Just when you're making progress, that check engine light blinks on and derails your plans. Life already throws enough curveballs.
You don't need your bank adding to the chaos.

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Speaker 1 Work on your financial goals through Chime today. Open an account in just two minutes at chime.com/slash MNN.
That's chime.com/slash MNN. Chime feels like progress.

Speaker 2 Chime is a financial technology company, not a bank. Banking services and debit card provided by the Bankor Bank NA or Stripe Bank NA.
Members FDIC.

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Fees apply it out of network ATMs, bank ranking, and number of ATMs, according to U.S.

Speaker 2 News and World Report 2023. Chime checking account required.

Speaker 1 Here's one piece of advice that I've given for years. Build an emergency fund.
Aim to stash away enough to cover at least three months of expenses in case your income suddenly drops.

Speaker 1 Sounds simple, right? But let's be honest, it's not. Saving even one month's worth of living costs can feel impossible.

Speaker 1 Just when you're making progress, that check engine light blinks on and derails your plans. Life already throws enough curveballs.
You don't need your bank adding to the chaos.

Speaker 1 That's why it's so important to choose one that makes savings easy and doesn't nibble away at your hard-earned money with ridiculous fees. Chime understands that every dollar counts.

Speaker 1 That's why when you set up direct deposit through QIIME, you get access to fee-free features like free overdraft coverage, getting paid up to two days early with direct deposit, and more.

Speaker 1 With qualifying direct deposits, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals. To date, QIIME has spotted members over $30 billion.

Speaker 1 Work on your financial goals through QIIME today. Open an account in just two minutes at chime.com slash MNN.
That's chime.com slash MNN. Chime feels like progress.

Speaker 2 Chime is a financial technology company, not a bank. Banking services and debit card provided by the Bank Corporation Bank NA or Stripe Bank NA, members of FDIC.

Speaker 2 Spot me eligibility requirements and overdraft limits apply. Timing depends on submission of payment file.
Fees apply at Out of Network ATMs, bank ranking, and number of ATMs, according to U.S.

Speaker 2 News and World Report 2023. Chime, checking account required.

Speaker 3 I live in LA now, but lately I have been craving the seasons. Snow, hot cocoa, the whole thing.

Speaker 3 I don't even ski, but I have been daydreaming about working remotely from somewhere really cozy on the East Coast, like a cute little ski town for a little bit.

Speaker 3 And whenever I know I'm going to be gone for a while, I always remind myself that my home can actually be working for me while I'm away because I host my space on Airbnb.

Speaker 3 It is one of the easiest ways to earn passive income from something you already have and that extra income feels particularly helpful this time of year as we approach the holidays.

Speaker 3 A lot of my friends say, that sounds amazing, but where do you find the time to manage guests and bookings? And that's when I tell them about Airbnb's co-host network.

Speaker 3 Through Airbnb, you can find a local co-host who can help you set up your listing, handle reservations, communicate with guests, provide on-site support, even help with design and styling.

Speaker 3 I like to give a personal touch when I'm hosting on Airbnb. So I make a list of my favorite restaurants in the area and I hand-write a note welcoming my guests to the property.

Speaker 3 My guests love it, but I also know that some of those little personal touches can take a lot of extra time. So this is the exact kind of thing that you would want your co-host to help you with.

Speaker 3 Whether you're traveling for work or chasing the snow or escaping it, or you've got a second place that just sits there empty more often than you'd like, your home doesn't have to just sit there.

Speaker 3 You can make extra money from it without taking on extra work. Find a co-host at airbnb.com slash host.

Speaker 1 I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.

Speaker 3 It's time for some money rehab.

Speaker 3 Happy, happy Wednesday, money rehabbers, and a happy weekly roundup day to all of those of you who celebrate.

Speaker 3 This is a weekly collection of the biggest headlines on Wall Street and how they affect you and your wallet. Today we're talking business news from Claire's to Dr.
Pepper and Cracker Barrel.

Speaker 3 And also, of course, we have to talk about our English teacher and our gym teacher who are getting married.

Speaker 3 But first, some timely Wall Street lore that will impress all of your investing-obsessed friends. So dating back to the 1950s, there's a little catchphrase, sell in May and go away.

Speaker 3 The idea was that most of the money was made in winter months, so why bother with summer trading? And you know what? It's true.

Speaker 3 Studies show that the market tends to rise in the winter and dip in the summer when you look at decades-long trends. People had all kinds of explanations for this.
Holiday shopping boosted returns.

Speaker 3 Traders on summer vacation triggered a productivity slump. Even seemingly random things like grain prices shifting with the seasons messed up profit margins.

Speaker 3 Anyway, in the end, it's not just one thing. Also, and this is key, it's not dramatic enough that anyone should actually trade on that strategy.

Speaker 3 It's just one of those fun stock market trends like the Santa Claus rally, where stock prices tend to rise during the final five days of December and the first two trading days of January, coining the term Santa Claus Rally.

Speaker 3 It's a fun pattern with a nickname. It's not a financial plan.
Here's another trend. September is historically the worst month for the stock market.

Speaker 3 Not every year, of course, but at least two of the last four Septembers, I've made a podcast or an Instagram reel reminding you that a little red in September is normal.

Speaker 3 So consider this your heads up. If things feel a little scary at this point in September, just breathe.
We have seen this movie before.

Speaker 3 And with that, let's take a look at three companies making moves and what they say about the broader business vibe. First up, Claire's.
This store has a very special place in my heart.

Speaker 3 It's where I, like any good 90s tween, got my ears pierced. It is so nostalgic.
And I think it's one of the only places you can still find a snap bracelet in store.

Speaker 3 But today, if a tween wants a plastic bracelet, they are probably hitting up Amazon, Timu, or TikTok shop, not the mall. As a result, Claire's is declaring bankruptcy again.

Speaker 3 After the pandemic, the company expanded like crazy, but couldn't keep store shelves stocked or turn that growth into profit.

Speaker 3 Now it's stuck with debt, struggling in a retail landscape it hasn't kept up with. Claire's first filed chapter 11 bankruptcy in 2018, which really isn't that long ago.

Speaker 3 At the time, the company was drowning in nearly $2 billion of debt, much of it taken on by private equity firm Apollo Global Management.

Speaker 3 Apollo acquired the company in a leveraged buyout more than a decade earlier. If that combination of private equity and leverage is setting off alarm bells for you, it should.

Speaker 3 This is one of the issues with PE. It's a whole can of worms.
I did an episode about the good, the bad, the ugly of PE, which I have linked in the show notes.

Speaker 3 Anyway, like a lot of retailers during that era, Claire's was saddled with debt so massive that even decent performance in stores couldn't keep the company afloat. And then it got worse.

Speaker 3 Foot traffic in malls started to dry up, and younger shoppers weren't buying into the glittery Claire lifestyle that a lot of us millennials did.

Speaker 3 The company filed for bankruptcy protection in March of 2018 and emerged just seven months later, promising a comeback that would involve a stronger e-commerce presence and more product placement in places like CVS and grocery stores.

Speaker 3 And for a minute, it looked like that comeback was working.

Speaker 3 Claire's even teased an IPO in 2021, but the company never actually went public, possibly because the numbers behind the scenes didn't paint a pretty enough picture for Wall Street.

Speaker 3 Then Claire's leaned hard into its mall roots. and its identity as a go-to place for tween accessories.
The problem was that identity never fully evolved.

Speaker 3 The nostalgia is strong for sure, but Gen Z and Gen Alpha, the core demo, just isn't feeling it.

Speaker 3 Add in the fact that 76% of its products are imported, with 56% coming from China, the math isn't mathing. Income funded by babysitting gigs just can't take the heat from tariffs.

Speaker 3 So now Claire's is back in the same spot. Too much debt, too little growth, and a new generation of customers who have moved on.
Well, now for some less gloomy news, Dr. Pepper is making moves.
Dr.

Speaker 3 Pepper just bought Pete's coffee and is planning to split the company back into two companies, Keurig and Dr. Pepper.
I will take a step back for a second.

Speaker 3 Did you even know that these companies needed splitting? In 2018, Keurig and Dr. Pepper merged, and the official name of the company became Keurig Dr.
Pepper Inc. I know, it's very sexy.

Speaker 3 But don't get too attached because it seems like that won't be the company's name for very long.

Speaker 3 The goal is that the coffee vertical spins out to take on Starbucks, while soda and cold drinks go off to be part of the massive soda rebranding that's happening industry-wide. These days, Dr.

Speaker 3 Pepper is giving less Coke and Pepsi, more energy drinks, and wellness plays. Dr.
Pepper already has partnerships with Ghost and Bloom. The time I'm recording this, shares of Keurig Dr.
Pepper Inc.

Speaker 3 were down to about $31 as the market worried about the debt from the deal. But it looks like the stock will split, giving shareholders a piece of both new companies.

Speaker 3 With two recognizable brands, it's going to be really fun to see how this thing plays out. Next, let's talk about Cracker Barrel because how could I not?

Speaker 3 If you've missed this drama, you probably don't like business tea as much as I do. Business gossip is really the only kind that I like, by the way.
Cracker Barrel is trying a full image makeover.

Speaker 3 The logo got the most attention, but they're also redoing interiors and updating menus.

Speaker 3 I peeked at some of the remodel pictures online and honestly, it looked really nice and clean to me, but there aren't any Cracker Barrel locations in Los Angeles and I haven't honestly been to one in a few years.

Speaker 3 So I'm not the foremost expert on the Cracker Barrel experience and culture, but diehart customers didn't exactly love the changes.

Speaker 3 The company added menu items and no one's really mad about those, but the logo, total meltdown. The brand ditched the old guy and the barrel for a sleek modern design.
It's fine. It's boring.

Speaker 3 It's safe. It looks like any other modern logo.
But for a brand built on nostalgia, that's a problem.

Speaker 3 People keep trying to cast this rebrand as a culture war thing and Cracker Barrel trying to go woke. I honestly don't think that's what's going on here.

Speaker 3 It looks like a normal borderline boring rebrand to me. I had Sarah Tiana on the pod a while back.
Sarah is a comedian and a huge fan of Cracker Barrel.

Speaker 3 When she was on the show, we talked about why she loves to love the brand so much.

Speaker 3 So I'm going to play a little clip as helpful context for anyone who doesn't really get the Cracker Barrel cult following thing, but also just because Sarah is just so funny.

Speaker 3 I want to ask you what is up with cracker barrel

Speaker 4 what is up with cracker barrel you mean

Speaker 3 it says sent from cracker barrel which i'm obsessed with i thought my email signature was clever tell me more It used to be that if it came from my computer, it said sent from Waffle House.

Speaker 4 And it came, and if it came from my cell phone, it said sent from Cracker Barrel. But now I think it's always the same.
Cracker Barrel has a big significance to me because

Speaker 4 it was the first sit-down restaurant we ever got in our my hometown. Like, we'd never seen waitresses before.
We're like, oh, is this prom?

Speaker 4 Like, we were just so excited, and uh, it was busy all the time. And that's when I realized I didn't go to church, like, because my friends were complaining about how busy Cracker Barrel was.

Speaker 4 And I was like, Oh, well, we go every Sunday morning at 10 a.m. and there ain't nobody in there.
So, that was a really difficult way of learning that we were sinners.

Speaker 3 But

Speaker 4 I also have this feeling that, like, that's why my friends from home never got on an airplane before.

Speaker 4 Like, most of my friends never traveled because they would say things like, well, I ain't never left nothing in New York I need to go get. Right.
And I'm like, oh, what a terrible mentality.

Speaker 4 But they have all these opinions on New Yorkers. They've never been.
And I was like,

Speaker 4 they never wanted to get on an airplane. And I was always just convinced that it wasn't the price of the ticket.

Speaker 4 It was that they were afraid they're going to get off the airplane and there wasn't going to be a cracker barrel. And they'd be like, where am I going to get a steak? In New York.

Speaker 4 I'm from Calhoun, Georgia. We have a Nike outlet.

Speaker 3 That's excellent.

Speaker 3 I like Cracker Barrel. I worked at different small markets when I was in the broadcasting world and like Sioux Falls, South Dakota, Lexington, Kentucky.
Like I always liked Cracker Barrel.

Speaker 3 I was vegan back then. And so the grits, fun fact, are vegan at Cracker Barrel.
And then the fried apples too. They're delicious.
Wow. And Cracker Barrel is a publicly traded company.

Speaker 4 Would you enjoy it?

Speaker 4 Absolutely. Yeah.
I mean, I think because they're expanding, like they actually never,

Speaker 4 we finally got one in Southern California when I moved here.

Speaker 4 I assumed that they would be everywhere, but they never came to California because California has earthquake restrictions and they make Cracker Barrel take everything off the ceiling.

Speaker 4 So Cracker Barrel's like, fuck you, we can't come out there. You know what I mean? Nobody can eat hash brown casserole without a wheelbarrow hanging above their head.

Speaker 3 And so not the same, yeah. Right.

Speaker 4 But I,

Speaker 4 but now they've gotten around it because now they just have it on the wall, like extra stuff on the wall.

Speaker 4 So you just have like old ladies from the 1800s staring at you while you eat, but that makes me comfortable.

Speaker 3 The stock is down about 14% this month, but zoom out and the picture looks better. It's up 31% over the past 12 months.
By Warren Buffett's rules, that probably means it's not even on sale.

Speaker 3 But I think it's a little too soon to tell how much this rebrand will affect the stock price, especially because it seems possible that the company will walk back some of the branding.

Speaker 3 And lastly, but certainly not least, Taylor Swift and Travis Kelsey are engaged, but the real headline isn't just the diamond, although, oh my God, that is a big rock.

Speaker 3 But beyond that, the big news is the dollars. Taylor's net worth, about $1.6 billion.
She's the first artist in history to hit billionaire status from her music alone. Travis, roughly 90 million.

Speaker 3 So not as much as Taylor, but still not bad. He's the highest paid tight end in the NFL with major endorsements, a chart-topping podcast.
But since dating Taylor, his wealth has nearly doubled.

Speaker 3 That's the Taylor effect. When she started showing up at games, the NFL and the Chiefs scored over $300 million in brand value.

Speaker 3 Interestingly, reports confirmed that Travis wouldn't even propose without an ironclad prenup in place. Honestly, that is not cold.
That is just smart. Because here's the truth.

Speaker 3 Everybody has a prenup. If you don't write one yourself, the state you get married in writes one for you.

Speaker 3 Now, Taylor just got engaged, so who knows where they're going to get married or have their primary residence, but some of the likely candidates are Missouri, Kansas, Tennessee, all of which are equitable distribution states, which means if there's a divorce, a judge decides what's fair, not 50-50, fair.

Speaker 3 And fair can get messy. So when you're worth billions, you don't leave fair up to chance.
You spell it out.

Speaker 3 A prenup means Taylor's empire stays hers, Travis's NFL and media money stays his, and they decide upfront what happens with anything they build together.

Speaker 3 So yes, it is love, but financially, this is also one of the most valuable mergers of the decade. And it came with a love song.
For today's tip, you can take straight to the bank. If Keurig Dr.

Speaker 3 Pepper Inc. splits, don't think you're getting a discount.
A stock split doesn't make a company more valuable.

Speaker 3 It just divides existing shares into smaller pieces to make them more affordable for investors.

Speaker 3 So instead of jumping in just because the share price is lower, take it as a cue to dig into the company's fundamentals, revenue growth, profitability, and long-term strategy.

Speaker 3 If the company is solid, a stock split might offer a great entry point for long-term investors. But if the hype is the only thing growing, you're better off keeping your cash on the sidelines.

Speaker 1 Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin.
Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes.
Do you need some money rehab?

Speaker 1 And let's be honest, we all do.

Speaker 1 So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.

Speaker 1 And follow us on Instagram at MoneyNews and TikTok at Money News Network for exclusive video content. And lastly, thank you.

Speaker 3 No, seriously, thank you.

Speaker 1 Thank you for listening and for investing in yourself, which is the most important investment you can make.