TIME Retail

Black Friday Gets a Little Less Frenzied

Only scattered reports of shopper scuffles and arrests

NEW YORK (AP) — Black Friday seemed a little less crazy this year.

There were squabbles here and there, and elbows got thrown, but the Friday morning crowds appeared smaller than usual and less frenzied, in part because many Americans took advantage of stores’ earlier opening hours to do their shopping on Thanksgiving Day.

That might be hard to stomach for people worried about commercial encroachment on Thanksgiving. But it is good news for bargain-hunters who hate crowds.

Whether it’s good news for retailers remains to be seen. Sales estimates for the start of the holiday shopping season will start trickling out later in the weekend.

Stores such as Wal-Mart and Target reported brisk Thanksgiving crowds. The colossal Mall of America in Bloomington, Minnesota, said it drew 100,000 people between 5 p.m. Thursday and 1 a.m. Friday, nearly what it draws over a typical full day.

On Friday, plenty of shoppers were out, but it wasn’t elbow-to-elbow, said Moody’s analyst Michael Zucchero, at a mall in northern Connecticut.

“Traffic seems a little light,” he said. “Stores being open last night takes away some of the early birds.”

Brooklyn residents Paul and Mary Phillips shopped at Target, Old Navy and Marshalls on Friday at the Atlantic Terminal Mall in New York City. They picked DVD box sets for $5, marked down from $45, and speakers for $19, down from $50. They didn’t even have to wait in line.

“Because stores were open on Thursday, they’re not as crowded now,” Paul Phillips said.

There were scattered reports of shopper scuffles and arrests. In addition, protests were planned nationwide over minimum-wage laws and the grand jury decision in Ferguson, Missouri.

Protesters interrupted holiday shopping at major stores around St. Louis to vent their anger over the decision not to indict the police officer who shot and killed Michael Brown.

At least 200 protesters gathered at the Galleria Mall in Richmond Heights, about 10 miles south of Ferguson. Several stores lowered their security doors or locked outside entrances as protests sprawled onto the floor while chanting, “Stop shopping and join the movement.”

In Chicago, about 200 people demonstrated near the city’s popular Magnificent Mile shopping district, calling on people to boycott Black Friday shopping to show their solidarity with protesters in Ferguson.

Other disruptions: Best Buy’s website went down on Friday morning for about an hour. Spokesman Jeff Shelman said “a concentrated spike in mobile traffic” prompted the company to temporarily shut down the site. Online monitoring firm Dynatrace said Cabela’s, Foot Locker and J.C. Penney also had website problems.

Online shopping, especially on phones and tablets, may be siphoning off some shoppers from the malls.

IBM, which tracks online sales, said they rose 8 percent compared with Black Friday last year as of 3 p.m. E.T., with much-increased shopping on mobile devices.

In the stores, Toys R Us and Target executives said shoppers seem to be buying more than just the doorbusters and are filling their carts with items not on sale. That’s a sign that lower gas prices and an improving job picture are making shoppers more confident about opening their wallets.

At clothing stores, discounts were steep, with Old Navy offering up to half off everything. Best Buy offered $100 off some iPads. And Target slashed prices on TVs and video game consoles.

At the Westfield Fox Valley mall in Aurora, Illinois, the mood was calm. Some groggy shoppers were still in pajama pants, coffee in hand.

Kimberly States, shopping with her 11-year-old daughter, said it was markedly quieter around 6:30 a.m. Fridaythan the night before.

“It was a zoo last night around 10 p.m.,” States said. “Now it seems like more of the old folks.”

Last year, sales on Black Friday slumped 13.2 percent to $9.74 billion, according to ShopperTrak, which tracks data at more than 70,000 stores globally. Bill Martin, co-founder of ShopperTrak, said it is unclear how stores will fare this year.

Retailers have turned to Thanksgiving openings to stay competitive and avoid losing sales that have shifted earlier into the holiday, said Ramesh Swarmy, a retail partner at the Deloitte consulting firm.

The holiday weekend still sets the tone for the shopping season, whose sales this year are expected to rise 4.1 percent to $611.9 billion. That would be the biggest increase since 2011. Black Friday has been the biggest shopping day of the year since 2005.

Brian Cornell, who became Target’s CEO in August and was at a Target store in New York’s East Harlem neighborhood on Thursday, said shopping traditions have changed.

“It’s been more of a week event,” he said.

As a result, some Black Friday shoppers were disappointed by what was left on shelves.

Kathy Wise of Scottsdale, Arizona, started shopping at 5 a.m. with her mother-in-law, hitting Wal-Mart, Target, Toys R Us and Sports Authority.

“It’s not as busy today,” Kathy Wise said as the two combed through a shelf of Monster High dolls. They couldn’t find the one Kathy’s daughter wanted, and said it seemed as if some of the best deals and items were already gone.

“It’s kind of a bummer,” Wise said.

TIME Companies

Best Buy’s Website Goes Down on Black Friday

NY: Black Friday Holiday Shoppers
Two shoppers carry a large LCD TV as they exit a Best Buy electronics store in Queens on "Black Friday" Nov. 28, 2014. Behar Anthony—Sipa/AP

Electronics retailer blames technology glitch on a concentrated spike in mobile traffic

Best Buy’s website suffered a prolonged outage on Black Friday, as a concentrated spike in mobile traffic led the electronics retailer to it shut down temporarily.

The website is now working after being offline for about a hour on Black Friday morning. For a short period, a visit to the Best Buy website said: “We’re sorry. BestBuy.com is currently unavailable. Check back soon.”

Best Buy spokeswoman Amy von Walter said a spike in mobile traffic triggered issues led Best Buy to shut down the website “in order to take proactive measures to restore full performance.”

The short-term glitch comes at a critical time for the company as it aims to compete for more than $50 billion in sales that are generated for the Thanksgiving weekend. The holiday shopping season is highly competitive, especially for the Black Friday weekend when retailers like Best Buy aim to lure consumers with door buster deals. Such promotions are often popular in the consumer electronics space, where deals focus on televisions, tablets and other tech gadgets.

Online sales are important for Best Buy, with that business reporting nearly 20% growth in the U.S. for the fiscal year ended February 1. The online business is also a component of Best Buy’s fairly new ship-from-store feature–a capability that allows the retailer to fill online merchandise sales by using inventory at the company’s brick-and-mortar retail stores.

Best Buy generated nearly $11.5 billion for the nine-week holiday period last year, though domestic same-store sales slid 0.9% from the prior year as a result of aggressive promotions, supply constraints for key products and some weakness in the mobile phone market at the time.
TIME Companies

CEOs of Major Retailers Call Black Friday Sales a Promising Start

NY: Black Friday Holiday Shoppers
Shoppers wait in line at a Best Buy electronics store in Queens on "Black Friday" Nov. 28, 2014. Behar Anthony—Sipa/AP

Fortune speaks with leading figures, from Walmart to Macy's to Toys 'R' Us, in the world of retail to get their take

Now that the first big burst of Black Friday weekend shopping is done, we thought we’d check in with some top executives and analysts in the retail industry to get an early read on things so far. The weekend is expected to generate sales of $50 billion and some 140 million Americans are expected to hit the stores.

By all accounts, the peak holiday season got off to a promising start, with big jumps in online sales and shoppers in the mood to spend.

Wal-Mart Stores said Thanksgiving, now called “Gray Thursday” by some, was its second busiest day ever for online sales after Cyber Monday last year, giving it a boost as traffic barely budged compared to two years ago. Target reported its biggest e-commerce day ever, though it is starting from a lower base.

Stores generally opened earlier than they did last year, helping business. Randy Tennison, senior general manager at Jordan Creek Town Center near Des Moines, Iowa, said opening at 6 p.m. rather than 8 p.m. meant smaller lines initially, but on the whole, the tactic drew more shoppers to the mall, whose tenants include Gap Inc and Abercrombie & Fitch.

While we won’t have a real sense of the weekend until Sunday, when the National Retail Federation publishes its estimates, things are looking up, with the caveat expressed by these experts that it’s still early.

Fortune spoke with leading figures in the world of retail to get their take.

Target CEO Brian Cornell, who toured a store in Harlem (New York City) with Fortune on Thursday evening:

“What I’ve been most interested in is what’s in the (customer) basket. You look at the people who you know came out for a specific, but then they’ve actually taken the time to shop other categories, which is really important. The fear here is seeing baskets or carts with one item.”

What will be your gauge of whether the holiday season was a success?

“Beyond the comparable sales number, the EPS (earning per share) number, traffic- both visits to our stores, and visits to our sites- this is about driving traffic, making sure they are shopping at Target, and coming back.”

Macy’s CEO Terry Lundgren, on what people are buying, and traffic trends:

“So far people, people are gravitating to the ‘doorbusters’ — that has got their attention. There’s so much information online, so they’re doing that research and going right for those doorbusters.”

“We’ll have to see if it (traffic increase) continues. What’s most important is ‘conversion’, which is really about converting traffic into sales, more than traffic itself.”

Toys ‘R’ Us U.S. President Hank Mullany, on a 5 p.m. opening on Thanksgiving:

“We did it a year ago and did it yesterday, and the consumer response was overwhelmingly positive.” Consumers were “shopping the entire store, not just shopping our specials,” he added.

(Read more from Fortune’s interview with Mullany here.)

GameStop president Tony Bartel on whether he felt penalized by opening at midnight while other non-retailers like Target were open earlier on Thanksgiving:

“The level of service in our stores and availability of a deep inventory of games gives us an advantage as a specialty retailer and offsets any effect of other retailers opening earlier.”

Keith Herbert, SVP Stores, Gap North America:

“People are gravitating toward Gap classics, like denim, sweaters, hoodies.”

“Footsteps are up this year,” he added, noting that a new feature that allows shoppers to order online while in a store has helped.

Moody’s retail analyst Charlie O’Shea:

“If you don’t open, your competition will open and it will be a zero-sum game. If they go to Target they won’t to go Walmart, and vice-versa. You have to protect your turf.”

NPD Group Chief Industry Analyst Marshal Cohen:

“Overall, we’re seeing a good start to the weekend but it’s just a beginning — still, it was busier than expected.”

“Apparel store [discounts] were all at 50% — they’re very aggressive. It’s a sign of concern about inventory buildup after a disappointing third-quarter.”

“There’s more self-purchasing. If they’re buying for themselves, it’s not part of their holiday budget, so this means there is plenty more shopping to come.”

Customer Growth Partners president Craig Johnson:

“The net effect of a lot of earlier openings was a pull forward of sales that hollowed out shopping this morning — it cannibalized a lot of the early-morning shopping that we’d see a few years ago. Stores were dead this morning at 7 a.m. All this demand does not increase the demand pool.”

(Fortune’s John Kell contributed reporting to this article.)

This article originally appeared on Fortune.com

TIME Retail

Big Black Friday Stakes

Target shoppers Kelly Foley, left, Debbie Winslow, center, and Ann Rich use a smartphone to look at a competitor's prices while shopping shortly after midnight on Black Friday, Nov. 28, 2014, in South Portland, Maine.
Target shoppers Kelly Foley, left, Debbie Winslow, center, and Ann Rich use a smartphone to look at a competitor's prices while shopping shortly after midnight on Black Friday, Nov. 28, 2014, in South Portland, Maine. Robert F. Bukaty—P

Black Friday is here and will separate the retail winners from the losers.

The so-called “Super Bowl” of retail is finally upon us.

On Thursday afternoon, major U.S. retailers kicked off the annual shopping bonanza known as Black Friday, a weekend expected to generate $50 billion in sales.

While the busiest time of the holiday shopping season is really the weekend before Christmas, Black Friday really sets the tone for the season, and gives retailers a read on what’s working and what’s not, and what consumer mood is at the start of a season that generates 30% of annual profit for the industry. (A word of caution: time and again, a big Black Friday was followed by a so-so season as people only turned out for big, profit-sapping bargains.)

Retailers have gone all out this year, aware that shoppers are price-sensitive, but also equipped with smartphones to find the best deals, leading to a particularly promotional season so far.

Indeed, Target and Wal-Mart Stores , among others, got an early start on deals and got aggressive. Macy’s and J.C. Penney are again opening doors earlier this holiday season.

That’s because retailers know the going will be tough. Walmart and Target have each forecast only modest growth at best for comparable holiday quarter sales. And department stores, as well as specialty retailers like Gap reported weak October sales. The National Retail Federation is forecasting 140.1 million shoppers will head out to stores at some point between Thursday and Sunday, a smidgeon less than last year.

Still, some thing are working in shoppers’, and therefore retailers’ favor, in terms of the mood to shop. Gas prices are lower, the job recovery is continuing, and consumer confidence is rebounding from a market scare in October, according to the Reuters/University of Michigan Consumer Sentiment Index.

“The economic recovery has now trickled down far enough to help more shoppers,” Rod Sides, U.S. Consulting Retail & Distribution leader and principal at Deloitte, told Fortune. “A good Black Friday offers no guarantees for the whole season, but it gets it off to a good start.”

Even if the holiday season is somewhat promising, some retailers have a lot at stake and need for it to be successful.

Here are the stores that are in the hot seat.

1. Walmart

The retailer recently broke a streak of seven straight quarters without U.S. comparable sales growth, but only barely: last quarter, it reported a modest 0.5% rise, and forecast a 1% increase at best during the current holiday three-month period. Walmart has been very aggressiveabout discounting for the season, eager to show that last quarter’s improvement wasn’t a flash in the pan. Walmart needs to show that its pricing strategy is working, and that its big investments in technology aimed at make shopping smoother (such as in-store pickup for online orders) can help with a chronic problem: declining shopper traffic.

2. Target

Under the leadership of new CEO Brian Cornell, Target posted a surprisingly good third quarter. But the discounter needs a strong holiday season to help make up for 2014, when a massive data breach right before Christmas wrecked its results for the season. Target is trailing some its rivals in terms of tech and e-commerce and will want to show that it has made big strides this year.

3. J.C. Penney

Penney disappointed investors two weeks ago when it reported flat quarterly comparable sales, suggesting that its comeback might be shortlived. CEO Mike Ullman, who is leaving in August to be replaced by Marvin Ellison, proclaimed that “our core customer is back,” yet sales are still 30% where they were before ex-CEO Ron Johnson tried to radically transform the retailer and chased away that loyal shopper. Penney is under the gun to show it can do more than just come back from the brink and actually grow and attract more than just its traditional clientele.

4. Macy’s

Macy’s reported poor sales results last quarter, blaming shoppers for spending their money on things it doesn’t sell, like their cars and big appliances. But Macy’s has a head start on its department store rivals in terms of tech and e-commerce and should have more to show for it than two quarters of negative comparable sales in the last three. It also caters to a more middle and upper middle class clientele, so should be better shielded from consumer malaise than Penney or Kohl’s .

5. Best Buy

The retailer just reported an unexpectedly good quarter in the U.S., so a successful holiday season will show how much it can withstand aggressive pricing from competitors and whether it’s focus on higher touch areas like connected homes, and shops for Samsung can keep the company relevant.

6. Kohl’s

Earlier this month, Kohl’s somehow managed to badly miss a quarterly forecast it had only just recently given, raising fears about how poorly its business is faring in this promotional environment. CEO Kevin Mansell unveiled a“Greatness Agenda” to return the once high-flying department store to form, and he is under the gun to show those efforts are starting to pay off.

7. Toys R Us

Toys R Us reported a dismal holiday season in 2013, with comparable sales down 4.1%. Things improved in 2014, with modest increases but the company is fighting for holiday sales with the likes of Walmart, Target and Amazon.com, which have each shown how they will fight hard on the toy segment. The whole “Frozen” phenomenon will help Toys R Us, but Toys is playing in a particularly competitive sandbox this year and it gets 40% of sales this time of year.

8. Sears

The department store’s comparable sales declines have moderated of late, but parent company Sears Holdings has spent a big chunk of 2014 selling off assets to build up its cash cushion as it looks to shift more sales to digital commerce. The company has also floated the idea of creating an investment vehicle holding some 300 of its best stores—but for potential investors to want a piece of it, Sears needs to show its stores can still draw shoppers at the most competitive time of the year.

9. Gap Inc

The retailers Gap and Banana Republic brands have struggled in 2014 to find their footing, and parent company Gap Inc recently announced new brand presidents in a bid to shake things up. And Art Peck, current head of its digital business, takes over as CEO in February. But Gap competes in a tough arena, apparel, that is increasingly coming to be seen by shoppers as a commodity. The holiday season will be a gauge of whether the recent struggles are just part of the ebbs and flows of fashion, or a sign of something deeper.

10. RadioShack

In October, RadioShack landed a deal with creditors to refinance a lot of its debt, two weeks after the electronics retailer warned it might have to file for bankrupcty protection. Perhaps no retailer is under as much pressure this holiday season to show it is still viable in this tough retail environment than RadioShack.

 

This article originally appeared on Fortune.com

TIME Economy

The (Recent) History of Black Friday Shopping

Christmas Shopping Season Kicks Off In New York City
Shoppers at Macy's on Nov. 28, 2003, in New York City. Stephen Chernin—Getty Images

The holiday season has long been considered shopping primetime — but the Black Friday rush is a more recent phenomenon

In 1938, a TIME reporter marveled at the artificial snow falling in the display window of Lord & Taylor’s on New York City’s Fifth Avenue. Major retailers were just beginning to invest in their displays to entice potential customers ahead of the Christmas shopping spree, and the reporter was impressed.

“All this not only added melody to Christmas shopping but made the Avenue’s 80,000 daily pedestrians acutely aware of an artistic rivalry which has begun to show signs of lustiness,” the reporter wrote in the December 1938 issue.

As that TIME story attests, the competition for consumer dollars over the holidays is nothing new. As far back as the 19th century, the window between Thanksgiving and Christmas has been considered primetime for shopping. In fact, the retail industry was so intent on squeezing the most sales out of that period that they convinced President Franklin D. Roosevelt to push the Thanksgiving Holiday forward to the third Thursday in November; the new date failed to catch on or spur shoppers, so President Roosevelt reversed the change in 1941. (Read more about that decision here.)

But that doesn’t mean that Black Friday, the shopping bonanza the day after Thanksgiving, has an equally deep past.

Until recently, the largest shopping day of the year was not Black Friday but the Saturday before Christmas, says Jesse Tron, the director of communications for the International Council of Shopping Centers. According to one TIME article from 1968, the seasonal shopping rush didn’t even really begin until the Saturday after Thanksgiving. In fact, TIME didn’t use the term to refer to the Friday after Thanksgiving until 1998. (Black Friday had traditionally referred to the financial crisis of 1869.)

So how did the pseudo-holiday take root? The term itself is traced back to Philadelphia in the 1960s, where police used it to label the crowds of shoppers and ensuing traffic jams. It would later be explained apocryphally as the day that retailers begin to make a profit–or go into the black–after months in the red.

Indeed, the term was eventually reappropriated by the retail industry, which had begun in the 1950s and 1960s to offer sales that Friday in order to woo shoppers, who often had the day after Thanksgiving off from work (to shop, so the retailers hoped). The day-long shopping spree gained traction in the Internet age, when sales and coupons could be more widely publicized. By 2002, Black Friday had indeed become the biggest shopping day of the year.

Read TIME’s 1961 cover story about how Christmas became a gift-giving holiday: But Once a Year

TIME Retail

Second Act of Shopping Frenzy Gets Started

Holiday Shopping Black Friday
Shoppers head into Target just after thei doors opened at midnight on Black Friday, Nov. 28, 2014, in South Portland, Maine Robert F. Bukaty—AP

Sales are expected to rise 4.1% to $611.9 billion

(NEW YORK) — Stores are welcoming a second wave of shoppers in what has become a two-day kickoff to the holiday shopping season.

The big question: How much Thanksgiving shopping will hurt Black Friday, which is relinquishing its status as the start of the holiday shopping season?

Last year, sales on Black Friday slumped 13.2 percent to $9.74 billion, according to ShopperTrak, which tracks data at more than 70,000 stores globally. Bill Martin, co-founder of ShopperTrak, says how stores will fare Friday is uncertain.

With stores pushing more deals earlier in the month, the holiday weekend has become less important. But the period still sets the tone for the shopping season, whose sales are expected to rise 4.1% to $611.9 billion. That would be the biggest increase since 2011.

TIME Small Business

Growers Grateful for Higher Christmas Tree Prices

Christmas Tree Cost
Jenny Howell stands among snow-covered Christmas trees on her family-run Howell Tree Farm, Wednesday, Nov. 26, 2014, in Cumming, Iowa Charlie Neibergall—AP

"There are more options and choices out there"

(DES MOINES, Iowa) — Christmas tree likely will cost a little more this year, and growers like John Tillman say it’s about time.

Six years of decreased demand and low prices put many growers out of business. Those who withstood the downturn are relieved they survived.

“I’m awful proud to still be in the Christmas tree business,” said Tillman, who ships up to 20,000 trees each fall from nine fields south of Olympia, Washington. “We lost a lot of farmers who didn’t make it through.”

Prices vary according to the variety of tree, but growers this year will see about $20 per tree, $2 more than the last several years, according to Bryan Ostlund, executive director of the Salem, Oregon-based Pacific Northwest Tree Association. Prices will likely rise as the holidays near and supply decreases.

Consumers looking to deck their home could pay a little more than last year, but costs vary widely depending on factors such as transportation, tree-lot rental space and big-box retailers’ demand that prices remain stable. For example, a 6-foot Douglas fir in Oregon, which grows about one-third of the nation’s Christmas trees, could sell for $25 while a similar tree hauled to Southern California might go for $80.

Tara Deering-Hansen, a spokeswoman for Midwestern supermarket chain Hy-Vee, said wholesale tree prices have climbed slightly but prices are set at each store and customers might not see any increase.

Heavy snow last week slowed the shipment of trees from Michigan, which ranks third in production and supplies much of the Midwest and parts of the South. In some loading yards, stacks of trees awaiting shipment were covered with up to 2 feet of snow.

“Getting the snow off was more work than loading the trees,” said Dan Wahmhoff, co-owner of a nursery in southwestern Michigan. “It was definitely a challenge — wind and snow and cold, trucks were getting stuck — but we made it through.”

In the coming years, growers expect the supply of trees to remain stable with prices gradually increasing, in part because it takes six to seven years for a seedling to grow large enough to sell.

Even with the increase, most growers are being paid less now than in the mid-2000s, when trees from new and expanded farms hit the market as demand fell. And the industry still faces challenges, as competition from artificial tree manufacturers and other factors have led to a drop in trees harvested, from 20.8 million in 2002 to 17.3 million in 2012, according to the U.S. Department of Agriculture.

The National Christmas Tree Association, based in Missouri, has encouraged growers to offer more options that meet the needs of younger people who live in urban areas and don’t have space for a towering tree, says executive director Rick Dungey. More growers are realizing that if they offer different looks — such as a tree that could fit on a coffee table or one thin enough to squeeze into a narrow room — people will buy them, Dungey said.

“There are more options and choices out there,” he said.

Small tree-farm owners who sell straight to customers aren’t as affected by the factors increasing prices to consumers nationally.

Jenny Howell, whose family runs Howell Tree Farm southwest of Des Moines, said they’ll raise prices a bit because of high fuel prices for mowers and other equipment over the summer and drought that caused some seedlings to die. But their customers typically return each winter and don’t spend time comparing her farm’s prices to those in city lots.

It can be cold, hard work traipsing through the snowy tree farm in December, but Howell said her family still enjoys it.

“It’s a happy business,” she said.

___

Associated Press writer John Flesher in Traverse City, Mich., contributed to this story.

TIME Retail

A Record Number of Shoppers Invaded Macy’s NYC Flagship Store

15,000 bargain hunters clamor for pre-Black Friday deals

A titanic crowd of shoppers, with dreams of discounted handbags and headphones dancing in their heads, surged into Macy’s Herald Square on Thursday night, in what is believed to be the biggest shopping night ever for the flagship store in New York City.

The retail company’s CEO estimated that a record-breaking 15,000 shoppers visited the iconic store for its holiday deals on Thursday evening, just hours after Santa Claus brought the Macy’s Thanksgiving Day Parade to a close outside the retail giant, USA Today reports.

Macy’s store at 34th street opened at 6:00 p.m. on Thanksgiving with “doorbuster deals,” well preceding the official start of “Black Friday.” The company had earlier posted a picture to Instagram of a Christmas shopping list and a tidy spread of festive purchases.

“Ready to roll once the doors open!” read the caption, with the hashtags #blackfriday and #thingsorganizedneatly.

Shoppers made quick work of the latter, with bundled-up customers tearing through heaps of designer handbags while others carried shoeboxes over their heads.

USA Today reports that “not a single floor tile was wasted” in the 11-floor store, which takes up a full city block.

[USA Today]

TIME U.K.

Record U.K. Divorce Settlement Set with $530 Million Payout

Jamie Cooper-Hohn, wife of top hedge fund boss Chris Hohn, leaves the High Court after a divorce hearing, in central London
Jamie Cooper-Hohn, wife of top hedge-fund boss Chris Hohn, leaves the High Court after a divorce hearing, in central London on Oct. 10, 2014 Reuters

The eye-popping payout includes $493 million in cash plus a home in Connecticut

A hedge-fund couple has reached what is believed to be the largest divorce settlement on legal record in the U.K.

A London court has ordered British billionaire Chris Hohn to pay his estranged American-born wife Jamie Cooper-Hohn about $530 million, Reuters reports. The settlement was recorded in a draft judgment and could be altered before final publication on Dec. 12.

The ex-couple founded Children’s Investment Fund Foundation (CIFF), a juggernaut of a private charity that has a investment fund worth roughly $4 billion. The pair, who were married for 17 years and have four children, hold a family fortune in the realm of $1.3 billion.

Cooper-Hohn, 49, had sought half the assets, but Hohn had said his talents in moneymaking counted as a special contribution to the marriage and entitled his wife to a quarter of the sum.

Hohn, 48, is the son of a Jamaican car mechanic, and neither he nor his ex-wife were well-off when they met at Harvard University, the Financial Times says. A judge said in court that the couple continued to live a “Swatch lifestyle” even after making billions.

The hefty settlement pales in comparison to the $4.5 billion payout that a Swiss court this spring ordered Russian tycoon Dmitri Rybolovlev to give his estranged wife, Elena.

Read more at Reuters

TIME Money

You’ll Never Guess College Students’ Biggest Regret

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Female student worrying about money Image Source—Getty Images/Image Source

It's not what you think

You might think that when people look back on their college years, their biggest regret would be not being more involved socially, choosing the wrong major or partying too much. In reality, the biggest regret college grads face is a much more grown-up one, and it’s one with repercussions that can follow them well into their adult years.

According to a study conducted by Citizens Financial Group, 77% of former college students age 40 and younger regret not doing a better job of planning how to manage their student loan debt.

Student loan debts have ballooned in recent years, even as the demand for higher education has boomed as more companies in nearly every industry require that job applicants have college degrees. Earlier this year, Federal Reserve Bank of New York data showed that Americans collectively owe $1.1 trillion in student loan debt. By comparison, we owe $8.2 trillion in mortgage debt and $659 billion in credit card debt. Each indebted borrower owes nearly $30,000 upon graduation, and many of them are struggling. Citizen’s survey finds that current students carry roughly $25,000 of student debt, while their parents carry an average of $22,000.

Nearly a quarter of former students in Citizen’s survey say they can’t stay current on their debt payments, and almost two-thirds say they’re uncomfortable with their debt load. Almost half say they would have reconsidered going to college entirely if they knew how burdensome their debts would be years or even decades later.

Current students aren’t faring much better: Seven in 10 don’t think they’ll have enough financial acumen to do a good job managing their debt, and more than 80% say they wish they knew more about the long-term impact of carrying this debt — which will take nearly two decades to pay off for many borrowers, according to the survey responses of former students. What’s more, more than a third of former students don’t even have a guess when they’ll have those debts paid.

A lack of communication seems to be a big contributing factor to this situation: Families don’t talk about student loan debt or make a plan to tackle it in advance. Only 15% of former students and just under a quarter of today’s students report having detailed discussions with their parents about how to pay off those debts — 46% of former students say the topic never came up at all.

The heavy debt burden has some wondering if it’s even worth it. While almost 90% of current students think taking out loans to pay for school will be worth the investment, only about two-thirds of former students think so. And while nearly three-quarters of current students think college is necessary no matter what the cost, only 59% of former students feel the same way.

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