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Harley-Davidson's Q3 earnings beat justifies its new CEO's risky plan to slim down the American icon and refocus on its core strengths

  • Harley-Davidson has been struggling with an aging customer base, the coronavirus pandemic, and earlier this year endured a CEO change.
  • With the company under stress from Wall Street and with a demographic challenge looming as it struggled to attract new riders, Harley-Davidson CEO Matt Levatich stepped down, replaced on an acting basis by board member Jochen Zeitz, who eventually was named CEO.
  • Zeitz swiftly moved to replace Harley's growth strategy with a retrenchment around core products. His "Rewire" plan isn't without risk.
  • But Harley reported Q3 earnings that beat Wall Street expectations, vindicating some of Zeitz's moves.
  • Visit Business Insider's homepage for more stories.

Former Harley-Davidson CEO Matt Levatich had an impossible job, and he couldn't pull it off.

Earlier this year, Levatich was replaced by Jochen Zeitz, one-time CEO of Puma and longtime Harley board member. Zeitz wasted no time reversing course on Levatich's "More Roads" transformation plan and implementing a new strategy for the coming years. 

"As a result of my observations and assessment, I've concluded that we need to take significant actions and rewire the company now in terms of priorities, execution, operating model and strategy to drive sustained profit and long term growth. We're calling it The Rewire and it is our playbook … leading to a new five-year strategic plan."

On Tuesday, Zeitz and Harley got some evidence that Rewire is working, as the iconic motorcycle-maker beat third-quarter profit expectations by a wide margin ($1.05 per share versus $0.29).

Here's what Harley's new direction means for the American icon:

Harley-Davidson has been building motorcycles in the USA for 117 years. In many ways, it's the definitive American company, with a product that combines both its own values and America's.

Former CEO Matt Levatich hoped to ensure that heritage for another 100 years, so he undertook a transformational plan that would increase ridership, expand to new markets, and attack new opportunities.

Read about Levatich's strategy.

It was a good example of dynamic leadership, and initially Harley, Levatich, and a newly elected President Donald Trump found common ground. But that relationship later soured.

Levatich wanted to build Harleys where there were sold, especially in Asia, and that strategy ran afoul of Trump's "build it here" bias. Harley also found itself a victim of Trump's trade wars, as the highly symbolic motorcycle maker was retaliated against when the Trump administration started to level tariffs on imports.

In early 2020, the Harley board made a change. Levatich resigned, replaced by board member Jochen Zeitz, who had served as CEO of Puma. Zeitz immediately abandoned Levatich's strategy.

"I will strongly believe we need to tie the focus on our core markets and as I had mentioned, you know there are some markets that our biggest profit-drivers," Zeitz told Wall Street analysts.

"[For] some of the international markets, not just from a profitability point of view, but from a potential point of view … I think there will certainly be some de-emphasizing in order to create increased focus."

Harley has been here before. The company almost always seems to be up against balancing a growth mindset with a preserve-the-core attitude. The 2008-09 financial crisis meant that Harley shed the Buell sport bike sub-brand.

But Harley's ambitious electric future also seemed in doubt. The company's highly-touted LiveWire bike launched with a hefty price tag — $30,000 — and wasn't an instant success.

LiveWire was front-and-center at the company's booth for the 2019 New York Motorcycle Show, however.

The electric-motorcycle market is tricky. It's currently quite small, with limited competition. LiveWire goes up against bikes from Zero, for example.

Harley also wants to grow in new markets, mainly in Asia, where motorcycles are everyday transportation, rather than costly weekend toys. That means small bikes, such as this sub-400cc model.

Read about Harley's small-displacement motorcycle, built with a Chinese partner.

But meanwhile, expensive, hulking freeway cruisers remain at the core of Harley's business.

They represent the entire Harley live-to-ride lifestyle.

But those loyal customers are aging. And they aren't being replaced by new riders in large enough numbers to sustain Harley long-term.

That's the new CEO's biggest challenge: avoid offending the reliable customer while simultaneously protecting the business from future rivalries.

Wall Street has been skeptical. Harley's share price has been in decline for years.

On its home turf, the brand is under assault from upstarts such as India's Royal Enfield, which is going after the small-displacement market with low-cost bikes that appeal to city-dwellers.

Ducati has developed an entire sub-brand around its Scrambler line of fun, outdoorsy, adventurous two-wheelers.

And the Japanese haven't gone away. They've been selling Harley alternatives for decades.

Harley has also been battling a resurgent Indian manufacturer for the throwback, big-bike market.

The toughest question for Zeitz is whether Harley's iconic, all-American image is in terminal decline.

It's a distinct possibility. Younger people, at least before the coronavirus pandemic, were embracing urban lifestyles that didn't have room for large, loud motorcycles intended for the wide-open roads of the USA.

The COVID-19 pandemic also hit Harley hard, as the company had to idle its factory in the US Midwest and contend with customers who were on lockdown. However, riding motorcycles in an open-air activity that doesn't have to be given up in the face of the pandemic.

Ironically, Harley's best shot at a revival might not be to focus exclusively on its legacy customer but rather to build ridership in new markets and graduate those customers from small bikes to big ones. But that's an untested playbook. It remains to be seen if Zeitz can pull it off.

However, in the short term, it looks like Zeitz is looking for more immediate savings, and intends to slim Harley down. And the initial results look promising, as the company beats Wall Street expectations for third-quarter 2020 earnings.

Zeitz "dismissed roughly 14% of Harley's workforce, including the chief operating officer, finance chief, and a swath of midlevel managers," Bloomberg reported.

Those moves have pleased Wall Street, and Harley shares have traded up from a $15 nadir in April. Great Q3 2020 earnings set off a rally, with the stock up more than 20% and nearing break-even territory for the year.

Obviously, taking the open road on a motorcycle is a reasonably safe activity, in the age of the coronavirus pandemic. But Zeitz is going to need to prove that his strategy can attract customers to the Harley brand — and get them to pay a premium.

And if he can build on the third quarter's excellent result, he might just pull it off.

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Fox News staffers are 'in a panic' about election night coverage after top hosts were exposed to a COVID-19 patient and told to quarantine

  • Fox News staffers are "in a panic" about election night coverage after several hosts were exposed a COVID-19 patient and told to quarantine, a staffer told The Daily Beast Monday. 
  • Several top execs and hosts — including Fox News President Jay Wallace and chief political correspondent Bret Baier — took a flight with someone who later tested positive for COVID-19.
  • An internal memo sent to staffers on Monday said that the network would be paring down its in-studio staff for election night, after "a few" positive cases, The Daily Beast reported.
  • Visit Business Insider's homepage for more stories.

Fox News staffers are "in a panic about election night" coverage after several top executives and hosts were exposed to a coronavirus patient and told to quarantine, one staffer told The Daily Beast on Monday.

The New York Times broke the news about the exposure on Sunday, citing two sources who said that the hosts and executives had taken a private jet with someone who later tested positive for the coronavirus.

The jet had been chartered by the Fox News network to take attendees at last Thursday's presidential debate back to New York, where the network is headquartered.

Among the people who were on the plane were Fox News President Jay Wallace and hosts Bret Baier, Martha MacCallum, Dana Perino, and Juan Williams. Baier is the network's chief political correspondent.

Those who were on the plane have been told to quarantine or get a COVID-19 test, according to The Times. The Times added that the hosts who were on the plane would be working from their in-home studios for the time being.

The Daily Beast spoke to another staffer who said that they believe the exposure has thrown the network's plans for election night coverage "into chaos."

"It will be like starting from scratch … It's not good for anyone," the staffer said. "It's insane that there's a possibility the anchors will have to host the biggest night of 2020 from their homes."

The Daily Beast also obtained an internal memo to Fox News staffers, written by Wallace and Fox News Channel CEO Suzanne Scott, saying the network would be paring back in-studio operations and increasing testing after "a few" positive cases at the company. Mediaite also published the memo in full.

"We know this election will be like no other and it will be exciting to witness it first hand, but only those employees who are critical to that night's production will be permitted to work from 1211," the memo said.

According to CNN, some of the Fox News personalities already had in-home studios before the pandemic, but the network installed dozens more in March when large parts of the country imposed lockdown measures.

CNN reported that in recent months, Fox News programming has consisted of a mix of in-studio and at-home broadcasts.

Fox News' coronavirus exposure also highlights a divide at the network, with some believing that it has been acting irresponsibly in returning to in-person programming.

A source familiar with the situation told The Daily Beast that it was weird for so many staffers to be sent to Nashville for last week's presidential debate, when hardly any other networks had a large presence there.;

"Last week in Nashville, [NBC reporter Kristen] Welker was the moderator. But NBC had almost no footprint. ABC had almost no footprint," the source said. "But [Fox News] had a huge, huge footprint? Why is that?"

According to The Daily Beast, Fox News has been operating its in-studio operations in Washington, DC, and New York City with skeleton staff who are regularly tested. But some staffers say they still feel on edge with little mask wearing.

"In the elevators, everyone's good about masks," one source told the Daily Beast. "But in the offices, nope."

When Business Insider reached out to Fox News for comment on the initial news of the exposure on Monday, a network spokesperson said that they could not confirm details of the exposure due to privacy concerns.

The network did not immediately responde to Business Insider's Tuesday request for comment on the internal memo and Daily Beast report.

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Los Angeles County Issues Coronavirus Rules For Holiday Parties, Family Gatherings And Sports Celebrations, Citing High Risk Of Transmission: “It’s Simply Not Safe”

On the same day Los Angeles County recorded its 300,000th coronavirus case and its 7,000th COVID-19 death, County Health Officer Muntu Davis issued a health advisory for private gatherings and public celebrations.

Citing the high risk of COVID-19 infection at such events given the increasing rate of COVID-19 community transmission, Davis said that “it is critical that we all take action to slow the spread” as we close in on Halloween, Thanksgiving and the winter holidays.

“There have been too many instances of people unknowingly spreading the virus at these types of gatherings, which, sadly, has led to new infections, serious illness and death,” continued Davis.

Since early October, Los Angeles County’s average number of daily cases has increased from around 940 per day to almost 1,200 per day. Additionally, said an L.A. Public Health Department statement, recent contact tracing interviews over the course of 3 weeks showed that 55% of the people who knew of a possible exposure had attended an event or gathering where 2 or more people were sick.

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As a consequence, cautioned Davis, Angelenos should “not participating in public celebrations of any kind.” If they do, the health department issued protocols that must be adhered to (see below).

L.A. Public Health Director Barbara Ferrer said that the recent spike in cases is the result of “decisions we collectively made two to three weeks ago. And the actions we’re taking today will influence whether we’re able to continue our recovery journey, or we stall or even take steps backward. We do need to slow the transmission to allow for economic recovery.”

Ferrer warned that gatherings of people from different households in close proximity are a major cause of disease spread. She has noted in recent weeks that younger residents are the primary drivers of new cases. And on Monday, she suggested that the recent start of college and pro football, the NBA playoffs and the Major League Baseball post-season may be playing a role in the daily case increases over the past month.

“We have all seen the pictures of sports fans rooting for their teams where they’re shouting in the middle of a large crowd, and almost no one is wearing a face covering. This is the perfect setting for transmitting the virus,” Ferrer said.

Asked to expand on the issue, Ferrer said gatherings of sports fans could be “contributing the most” to the recent case increases. Fans are still prevented in the county from attending sporting events in person, but many still flock to restaurants or other establishments to watch games on TV.

The case increases “do correspond with gatherings happening more frequently as people come together with non-household members to watch games,” she said. “And it wasn’t just the Lakers or the Clippers. It’s not just basketball. We now have football games that are happening and of course we’ve had the Dodgers in post-season for quite a few weeks already.

“The downside of this is during a pandemic [is that] some of the things we’ve done in the past just don’t make sense,” observed Ferrer. “Gathering in large crowds to watch games indoors, people aren’t wearing their face coverings, people are yelling a lot. That’s just not sensible. Even gathering outdoors at dining areas and watching games with hundreds of people and celebrating by jumping up and down with no masks on, hugging perfect strangers, again with a lot of shouting and cheering. It’s so easy to spread this virus.”

Ferrer also issued an early warning for people to celebrate Halloween safely on Saturday. She urged residents to modify their actions to the pandemic — using Zoom gatherings, holding at-home scavenger hunts or taking advantage of drive-through Halloween displays. She again discouraged door-to-door trick-or-treating, although the tradition isn’t being outright banned by the county’s health order.

She stressed that Halloween parties or other large gatherings are prohibited under the order.

“This pandemic has forced so many to sacrifice so much this year, and we recognize the frustration and disappointment with the holiday restrictions,” she said. “For now though, it’s simply not safe to celebrate holidays the way we usually do. Being close to others who are not in our household carries with it a lot of risk for transmitting COVID-19 this year.”

To prevent future spread of COVID-19, Davis reminded Angelenos that it is best to celebrate at home with your household. However, if you are going to host or attend a private gathering, it must adhere to the following protocols:

-Held outdoors with physical distancing between households

-Limited to 3 households, including the host and all guests

-Cloth face coverings being worn when not eating or drinking

-Food served in single-serve disposable containers

-Last for two hours or less

City News Service contributed to this report.

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Coronavirus Pandemic, Spiking Hot Spots Spark Fear And Anxiety In U.S.

Preslie Paur breaks down in tears when she thinks of her state’s refusal to mandate face masks.

The South Salt Lake City, Utah, woman can’t work at her special education job due to an autoimmune disease. Her husband, also a special ed teacher, recently quit because his school district would not allow him to work remotely to protect her and their 5-year-old son, who has asthma.

“I feel forgotten,” Paur said. “We’re living in a world we no longer fit in. We did everything right. We went to college, we got jobs, we tried to give back to our community, and now our community is not giving back to us. And I’m very scared.”

As President Donald Trump barnstorms the swing states, often downplaying the coronavirus pandemic before largely unmasked crowds, the nation continues to lurch toward what his opponent Joe Biden, citing health experts, warned will be a “dark winter” of disease and death.

White House Chief of Staff Mark Meadows told CNN on Sunday that “we’re not going to control the pandemic.” Asked why, he said it’s “because it is a contagious virus just like the flu.”

Vice President Mike Pence will continue campaigning despite his chief of staff testing positive for COVID-19. His office said Pence and his wife both tested negative for the virus Sunday.

About half of U.S. states have seen their highest daily infection numbers so far at some point in October, and the country as a whole came very close to back-to-back record daily infection rates on Friday and Saturday.

Data from Johns Hopkins University shows that 83,718 new cases were reported Saturday, just shy of the 83,757 infections reported Friday. Before that, the most cases reported in the United States on a single day had been 77,362, on July 16.

The Institute for Health Metrics and Evaluation at the University of Washington, which federal health officials have used as a source for their pandemic projections, currently forecasts that the U.S. COVID-19 death toll could exceed 318,000 by Jan. 1.

As of Sunday, there were more than 8.6 million confirmed infections in the U.S., with deaths climbing to over 225,000, according to the Johns Hopkins Coronavirus Resource Center.

At least seven states — Alaska, Colorado, Illinois, Michigan, New Mexico, Ohio and Oklahoma — saw record high infection levels Saturday. And some Northeastern states hit hard in the spring are seeing numbers bounce back; New Jersey’s toll of 1,909 new infections Saturday was the most it had seen in a day since early May.

The virus also is surging in the Mountain West, especially Idaho and Utah.

In Twin Falls, Idaho, new data suggest that 1 in 24 residents has contracted the coronavirus, said Dr. Joshua Kern, vice president of medical affairs at St. Luke’s Magic Valley Medical Center. Amid a crush of new cases, the hospital brought in nurses from Boise, scaled back elective surgery and, as of Friday, stopped admitting pediatric patients.

“It’s gotten kind of out of hand,” Kern told The Associated Press. “We’ve had something like a third of our total COVID cases in our community in the last two to three weeks. There are a lot of parts of the state suffering under the same burden.”

Kern said Twin Falls had been lulled into complacency after months of relatively low numbers, adding “going back to school was the signal to our communities that we can get back to normal.”

“It’s like the community said, ‘Oh, good. It’s over. We can party again,’ and we saw the virus increase,” he said. “This week, we went to the coffee shop to get pastries for our group, and it was closed because of COVID. And we knew that the week before, they had been in there unmasked.”

Mark Chidichimo, a retired FBI agent, said his sister, brother-in-law, brother, nephew and 92-year-old father in Idaho have all been diagnosed with COVID-19 in the last three weeks.

Chidichimo, who lives in New Jersey, had nothing but praise for St. Luke’s in Twin Falls, but said his brother was told that if he needed hospitalization, he’d be sent to Seattle, more than 600 miles away.

“Hey, Idaho. This is coming from someone who has been there, done that: You really want to avoid this if you can,” he said. “It’s going to be really bad, and I pray to God that none of my family members have to be hospitalized. Because if they do, I don’t know if they’ll survive.”

After months of improvement, parts of Europe are going back into lockdown or ramping up restrictions again amid a spike in infections. Italy imposed at least a month of new restrictions across the country on Sunday, insisting that people outdoors wear masks, shutting down gyms, pools and movie theaters, and putting an early curfew on cafes and restaurants.

German Health Minister Jens Spahn, who tested positive Wednesday, pleaded with citizens to wear masks as the virus spikes across the country and hospital ICUs are filling up again.

“Please continue to help and don’t listen to those who play down (coronavirus),” he said. “It is serious.”

In New Mexico, which reported record numbers of additional COVID-19 cases and hospitalizations in recent days, more than 350 doctors, nurses and other health care professionals signed a letter imploring residents to stay home as much as possible, wear masks and limit large gatherings to help prevent another wave of “lonely deaths.”

“Please help health care professionals help you,” said the letter, posted on the state Department of Health’s website. “Help us protect you. Help us ensure that we have the resources to treat the sick and care for the dying.”

On Saturday, New Mexico officials reported 875 new cases and five additional deaths, increasing the state’s totals to 41,040 cases and 965 deaths. The number of COVID-19 hospitalizations increased to 264, up from a record 229 on Friday, which topped the previous high of 223 from mid-May.

Paur, whose brother and his girlfriend both recently tested positive for the virus, is worried about them, and herself.

“People need to know that our lives are on the line,” the Utah woman said. “We’re running out of money really fast.”

Ramer reported from Concord, N.H.; Sainz reported from Memphis, Tennessee. Associated Press writer Jim Mustian in New Orleans contributed.

 

 

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Obama Slams Trump's Pandemic Response: 'He Can't Even Take Basic Steps to Protect Himself' from COVID-19

Former President Barack Obama is slamming Donald Trump for his response to the ongoing coronavirus pandemic, asserting that his successor is not going to "suddenly protect all of us" when he isn't taking the "basic steps" of COVID protection himself.

During the drive-in rally for Democratic nominee and his former vice president Joe Biden at the Florida International University campus in Biscayne, Obama spoke out against the way Trump has been handling the pandemic, telling voters that because of the president's actions — or lack thereof — "the rest of us have to live with the consequences."

"Eight months into this pandemic, eight months into this pandemic, new cases are breaking records," Obama, 59, explained. "Donald Trump isn't going to suddenly protect all of us. He can't even take the basic steps to protect himself."

Trump was hospitalized with the virus earlier this month and received a mix of steroids, antivirals and experimental antibody treatments. He has frequently shown his disdain for wearing masks, either by not complying or mocking them.

"There's no sense that he's coming up with a new approach, with a new plan. He doesn't even acknowledge that there's a problem," Obama continued. "Just this week, he complained that the pandemic was making him go back to work. If he had been working in the first place, we never would have seen the situation get this bad."

During his speech, Obama continued to stress that Trump, 74, "doesn't have a plan" to combat the virus, and "doesn't take responsibility for what's happening across the country."

The former president also reacted to Trump's recent 60 Minutes interview which he "cut short," complaining on Twitter that the questions from CBS News' correspondent Lesley Stahl were “biased” after he was asked about his handling of the COVID-19 pandemic, his inflammatory rhetoric towards Michigan Gov. Gretchen Whitmer, his decision to promote unsafe public gatherings at his campaign rallies amid the pandemic, as well as his attacks on Dr. Anthony Fauci, the nation’s leading health official on infectious disease.

During the Miami event, Obama said Trump's refusal to answer certain questions should be something of concern for voters. "Listen, Miami, if he can’t answer a tough question like ‘what would you like to do in your second term,’ then it’s up to us to see he doesn’t get a second term," Obama said.

Earlier this week, on Wednesday, Obama gave another scathing takedown of Trump during a rare in-person campaign appearance in Philadelphia.

In his speech, the Democrat again derided Trump for his response to the pandemic, which has so far led to the deaths of more than 220,000 Americans, according to a New York Times tracker.

"Presidents up for re-election usually ask if the country is better off than it was four years ago," Obama said. "I’ll tell you one thing: Four years ago you’d be tailgating here at the Lincoln instead of watching a speech from your cars."


"Right now as we speak, Trump won’t even extend relief to the millions of families who are having trouble paying the rent or putting food on the table because of this pandemic," he added, referring to the ongoing negotiations between Congress and the White House over coronavirus stimulus.

Speaking less than two weeks before the Nov. 3 election, Obama urged voters to back Biden's campaign and to not grow complacent based on poll numbers that show the Democratic presidential nominee leading Trump.

The former president didn't hold back when discussing the pandemic, tearing into Trump for recent remarks in which Trump said he had few regrets in terms of responding to the virus.

"Just yesterday, when asked if he’d do anything differently, Trump said, 'Not much.' Really? Not much?" Obama said. "Nothing you can think of that could have helped some people keep their loved ones alive? So, Joe’s not going to screw up testing. He’s not going to call scientists idiots. He’s not going to host a super spreader event at the White House."

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N.Y. Covid Hospitalizations Top 1,000 for First Time Since June

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New York hospitalizations for Covid-19 topped 1,000 for the first time since June, as the state battles clusters of rising cases.

Nearly half of all new daily hospital admissions in the state have been from Brooklyn, Queens, Rockland and Orange counties, as well as in counties along the Pennsylvania border with New York that have hot spots.

“Everything is a consequence of all of our collective actions,” Rich Azzopardi, a spokesman for Governor Andrew Cuomo, said in an email when asked about the high number of hospitalizations. “This isn’t close to being over. Everyone please ‎continue to wear a mask, practice social distancing and wash your ‎hands.”

Of the more than 141,500 tests conducted statewide on Thursday, 1,637 or 1.15% were positive. The rate in the hot spots was 2.31%, compared with 0.98% outside those areas, according to data from the governor’s office. The 2.31% is down from more than 3% a few weeks ago.

New York, the early center of the U.S. pandemic, had more than 18,000 hospitalized for Covid at the height of its outbreak. At that time in April, the state pitched tents as makeshift hospitals, created temporary medical facilities out of convention centers and had a U.S. Navy hospital ship docked in the Hudson River in case it needed more capacity.

By early September, hospitalizations were just above 400. In recent weeks, state officials have battled a resurgence in areas where mask-wearing and social distancing have been lax. Cuomo has stepped up enforcement and ordered schools, nonessential businesses and places of worship closed in those so-called red zones.

“We are attacking micro-clusters where we see them, and that will be our strategy through this season as we see micro-clusters come and go,” Cuomo said in a statement.

— With assistance by Bill Austin

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U.S. Cases Near High-Water Mark as Midwest Surge Creeps East

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The Covid-19 pandemic is nearing its previous high-water mark in the U.S. as the surge that started in the upper Midwest drifts east to more populous areas.

The seven-day average of new cases rose to 61,141 on Thursday, the highest since Aug. 1, according to the most recent Covid Tracking Project data. It’s now approaching the country’s previous peak of 66,844 set July 23, when Florida and Texas led a surge across the Sun Belt.

The virus is still hitting the Dakotas, Montana and Wisconsin hardest, but the alarming trend has been slowly moving to Illinois, Indiana, Michigan, Ohio and even Pennsylvania. That spread is running into rising cases in New Jersey, Connecticut and other parts of the Northeast.

The country is also running more tests than it was during the last two viral waves, which uncovers more cases. No wave has yet compared to the one that devastated New York City in March and April, when testing was far more spotty. But positivity rates and hospitalizations signal an outbreak that’s expanding irrespective of the nation’s monitoring capacity.

More than 223,000 Americans have died of the virus, according to Johns Hopkins University.

According to Covid Tracking Project data:

  • Cases are rising in all four Census Bureau regions, but the Midwest remains about three times worse per capita than the Northeast, more than twice as bad as the West and about 72% worse than the South.
  • Ohio, Indiana, New Mexico, Montana and Utah reported single-day records in new cases Thursday.
  • The worst states per capita in the past seven days are North Dakota, South Dakota, Montana, Wisconsin and Idaho.
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Resale marketplace thredUp just filed for an IPO. Here's why resale is defying the retail meltdown and exploding in spite of the pandemic.

  • The resale sector is exploding in spite of the coronavirus pandemic.
  • Resale marketplace thredUp recently filed for a US initial public offering (IPO), according to a Bloomberg report.
  • A June report from thredUp says that the total secondhand market is projected to reach $64B by 2025. 
  • The report highlighted the impact of Gen Z on millennials on the growing segment, which is expected to overtake fast fashion by 2029.
  • Visit Business Insider's homepage for more stories.

As retail takes a hit from the coronavirus pandemic, the resale sector is emerging victorious.

Resale marketplace thredUp is doing particularly well. The company filed for a US initial public offering (IPO) this week, the details of which will be determined after a review by the U.S. Securities and Exchange Commission.

As the resale sector thrives, thredUp is in a favorable position. A recent report from the resale marketplace estimates that the total secondhand market is projected to go from $28 billion to $64 billion by 2025 despite headwinds across the retail industry as a result of the pandemic.

ThredUp partnered with analytics and research firm GlobalData to release its 2020 report on the state of the resale market, which examined how the pandemic impacted resale as whole. In general, the report highlighted the acceleration of the resale sector, which grew 25 times faster than retail in 2019.

In the foreword to the report, thredUp president Anthony S. Marino said that the pandemic seems to have catalyzed changes were that were already taking place in retail.

"When times get uncertain, we all focus on our family balance sheet," he said. "Brands whose core proposition delivers value and convenience have the opportunity to gain share. Amazon, off-price, and resale are emerging as winners."

Quarantine gave a boost to resale

As examined in the report, quarantine-driven shopping habits helped boost the resale sector as more shoppers looked to hunt for bargains at home.

Online secondhand resale is set to grow 27% in 2020 thanks to a bargain-hunting mentality that has become common during the pandemic, according to the report. Meanwhile, the broader retail sector is projected to shrink 23%.

Business Insider recently spoke to 10 CEOs of different resale platforms including Poshmark and Depop, most of whom said that they were experiencing higher levels of usership and engagement amid the pandemic as more people turned to reselling to make some extra money during a time of widespread unemployment and economic uncertainty.

As household budgets shrink and unemployment hits record highs, shoppers' tendency to thrift and start side hustles is also driving growth in resale. 

Gen Z is driving growth

Part of the resale sector's dramatic growth has been owed to Gen Z, defined by Pew Research as anyone born after 1997 and the next generation of shoppers that brands are looking to win over.

Data from thredUp's report shows that Gen Z is adopting secondhand fashion faster than any other age group.

Gen Z, which is known to value authentic brands that resonate with them and engage in real-time culture, also tends to be more entrepreneurial and environmentally-conscious than generational predecessors, which makes them more likely to turn to resale. 

On the other hand, the fast fashion industry is historically more harmful to the environmental, generating 10% of all humanity's carbon emissions. Thanks, in part, to Gen Z's focus on sustainability and environmental impacts of their purchases, the resale sector is expected to surpass fast fashion by 2029.

As resale becomes a notable winner amid the pandemic, mainstream retailers are looking to jump on the bandwagon as well. Walmart recently announced it would sell used clothing, accessories, and shoes for the first time on its website via a partnership with thredUp. 

"It's an incredible online assortment, the resale prices are outstanding, and we are thrilled to offer our Walmart customers the opportunity to reuse garments," Denis Incandela, head of fashion for Walmart ecommerce, wrote in a blog post.

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World News

Campaign Says Using Plexiglass at Debate Shows 'Bias' Against Trump

In a trainwreck of an interview, Trump Campaign National Press Secretary Hogan Gidley gave little insight into his candidate’s debate prep for Thursday night’s event but did share his thoughts on the well-known liberal bias of plexiglass.

After refusing to answer simple and fundamental pre-debate questions from MSNBC’s Hallie Jackson — like did the president prep and if so with whom — the host moved on and asked about some of the differences the second debate will feature.

Asked about the plexiglass dividers that have already been installed at the debate’s venue at Belmont University in Nashville, Gidley spun the safety measure into a partisan conspiracy to make the president look bad.

Host Hallie Jackson:
Let me ask you a couple of other debate pieces here, the plexiglass that has been put up on stage, as we’ve seen from inside the debate hall. Is the campaign comfortable with that? Will you allow that to remain?

Trump Campaign National Press Secretary Hogan Gidley:
It’s my understanding that is going to remain. It’s not surprising, though. I mean, this commission is completely biased.

Jackson interrupted Gidley’s nonsensical claim and pointed out that the plexiglass has been put in place because of the pandemic and that muted microphones will be used because of Trump’s constant interrupting from the first debate. Jackson then asked, “What’s the problem?”

But Gidley was not there to answer questions, his agenda to use the pre-debate TV spot to bash Trump’s opponent, Joe Biden, was clear from the start.

Jackson pressed the secretary about Trump respecting the mute button, asking if the president will speak over Biden regardless.

Gidley would not commit to the president abiding by any rules, citing Trump’s “style” not to do so is what has made him successful.

Again Jackson interrupted Gidley’s filibuster answer, asking, “Please come back to the debate. Focus for me on that. Is the president going to allow a conversation to happen rather than what we saw the last time?”

Gidley returned to the plexiglass, saying, “Regardless of that glass, that can’t allow Joe Biden to hide from his record, and neither can a mute button.”

Gidley’s transparent bullshit ran throughout the interview and finally caused Jackson to cut it short.

Jackson called Gidley out for spreading lies about voter fraud when Gidley refused to answer whether Trump has confidence in his FBI director, who has stated that there was no proof of a widespread problem with voting. At that point, Jackson halted the interview, saying, “Nope, OK, I guess you’re not gonna answer that question then… We’ll leave it there.”

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Business

US Reports Second Highest Daily COVID Infection Level In More Than 2 Months

Wednesday, the number of daily coronavirus infections in the United States reached the second highest level in more than two months.

With 58,190 new cases reporting in the last 24 hours, the national total increased to 7916534, as per to Johns Hopkins University’s latest data.

This marks a 40 percent increase from the figures recorded in the country two days ago. The daily death toll also is on the rise for the fourth consecutive day.

With 993 deaths reported nationally in the last 24 hours, the total number of COVID casualties in the U.S. increased to 216903.

The US Centers for Disease Control and Prevention says there could be a limited supply of coronavirus vaccines in the country by the end of the year. The supply will continually increase in the weeks and months that follow, the CDC said on its website.

If there is limited supply, some groups may be recommended to get a COVID-19 vaccine first.

At first, COVID-19 vaccines may not be recommended for children, the federal health agency indicated.

CDC made it clear that the government is committed to provide COVID-19 vaccines free or at low-cost.

Meanwhile, the American Academy of Pediatrics and the Children’s Hospital Association said in its new report that nearly 700,000 children tested positive for COVID in the United States, and more than 10 percent of the cases were reported in two weeks between September 24 and October 8.

“At this time, it appears that severe illness due to Covid-19 is rare among children”, the Academy says. “However, states should continue to provide detailed reports on cases, testing, hospitalizations, and mortality by age and race/ethnicity so that the effects of coronavirus on children’s health can be documented and monitored,” it added.

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