Moneybox
A blog about business and economics.

May 20 2015 4:41 PM

Spotify’s New Features Aren’t Just About You. They’re About Money.

When the Swedish startup Spotify arrived stateside in 2011, there was nothing else like it: a music-streaming service that offered instant access to just about any song you could think of, all for free—and, somehow, all perfectly legal.

Four years later, the streaming business is getting awfully crowded, and Spotify is just trying to stay a step ahead.

At a press event Wednesday in New York, the company announced a batch of new features designed to keep listeners coming back at a time when rivals like Apple, Google, and Amazon are doing everything they can to lure them away. Perhaps more importantly, the features promise to give advertisers new ways to target the 45-million-odd Spotify users who don’t subscribe to its ad-free premium service.   

Here’s what’s coming in the update that Spotify is rolling out today, starting with users of its iPhone app:

• Spotify Now is a new tab that serves up custom playlists designed to suit various moods, activities, and times of day, like “Morning Commute,” “Workday,” and “Early Evening.” Spotify says the playlists will include both human-curated selections and automated recommendations based on your own music and preferences. This feels like a direct response to Spotify’s rivals, notably Beats Music and Songza, which were acquired last year by Apple and Google, respectively.

As I explained when Google acquired Songza, that’s not only valuable to listeners. It’s also potentially of great value to advertisers, because it tells them what you’re doing at any given moment. Think of ads tailored not just to techno fans, but to people who are listening to techno while riding the subway in New York City on their way to work in the morning.

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Video clips are Spotify's clever way of getting you to watch video ads.

Screenshot courtesy of Spotify

• Video clips and audio shows will now join music among Spotify’s offerings. So your “Morning Commute” options may include not only that techno music you’re so fond of (God help you), but the latest installments of your favorite daily podcasts, plus video clips from the likes of ESPN, the BBC, and Comedy Central. (Disclosure: Slate is among Spotify’s launch partners, and its Culture Gabfest will be among the podcasts initially featured.)

Again, there are ramifications for advertisers as well as users: If Spotify can get people watching their phones rather than just listening, it should have more success with video ads, which tend to be more lucrative than audio spots.

• Spotify Running is easily the niftiest of the new offerings, if it works as promised. When you start running, Spotify says its app will detect your pace and automatically serve up music calibrated to match the beat of your footfalls. This feature won’t be limited to the Spotify mobile app: The company says it’s partnering with Nike and RunKeeper to integrate Spotify Running into their fitness apps.

Not one of Spotify’s new features is revolutionary, and I doubt they’ll be enough to keep Apple from poaching some of the company’s subscribers when it launches its new, Beats-based streaming service this summer.

But they’re quite shrewd in another respect. Spotify’s biggest advantage over its competitors is its freemium model: No one else can match the depth of its free service, and that free service in turn serves as a powerful loss leader for the company’s subscription business.

Right now, the free service accounts for roughly 75 percent of its users but just 10 percent of its revenue. At a time when Spotify’s subscription business is facing unprecedented competition, it's going to have a heck of a time increasing that paying-customer base. So its biggest growth opportunity lies in better monetizing those free users. The new features, provided they catch on with users, should help it do just that.

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May 20 2015 1:26 PM

PayPal Owes $25 Million for Tricking Customers Into Using Its Online Credit Service

PayPal is probably best known for helping customers use their bank accounts, credit cards, or debit cards in online transactions. But as a big financial payments company, PayPal also offers lots of other products. One of them is PayPal Credit, a “simple, flexible credit line” from Comenity Capital Bank that can be built into your basic PayPal account. The “cool thing” about PayPal Credit, PayPal explains online, is that if you connect it to your main PayPal account, you’ll then “see it as a payment option when you checkout.”

The company apparently got a little carried away with its cool factor, because the Consumer Financial Protection Bureau is alleging that it signed up some customers for PayPal Credit without asking their permission and tricked them into using it by default. “In many instances, Defendant automatically set or preselect the default payment method for all purchases made through a consumer’s PayPal Wallet to PayPal Credit,” the CFPB writes in a complaint filled Tuesday with the U.S. District Court for the District of Maryland. “In other instances, consumers were not able to select another payment method. For example, some consumers affirmatively selected another payment method after realizing that PayPal Credit was set as the payment method for a transaction, only to have the payment method switched back to PayPal Credit during the checkout process.”

Needless to say, the CFPB is not amused by these antics and has slapped PayPal with a $25 million penalty, which the company has agreed to pay. The first $15 million will go to consumers as refunds, with PayPal also ponying up a $10 million fine. “PayPal Credit takes consumer protection very seriously,” Amanda Christine Miller, a PayPal spokeswoman, said in an emailed statement. “We continually improve our products and enhance our communications to ensure a superior customer experience.”

PayPal Credit launched in 2008 as “Bill Me Later,” a program advertised as letting customers shop now and pay after the fact. Some of these promotions promised to give new sign-ups small amounts of money back on a purchase or no interest for the first several months; the CFPB says that in “many instances” PayPal didn’t honor these offers. The CFPB also alleges that PayPal Credit often failed to process payments in a timely manner or lost payment checks, leading to late fees and interest charges for consumers. On top of that, the CFPB claims that even when PayPal’s own systems were down, such that users couldn’t make payments, it would hit them with penalties. And of course, there were also the people who didn’t know they’d enrolled in PayPal Credit until they were officially welcomed to the service by debt-collection calls for late payments, late fees, and interest.

According to a PayPal employee, the CFPB investigation focused on claims from a very small number of PayPal Credit users—just 0.01 percent. That might help explain why PayPal is getting off with a relatively light penalty in this case, especially compared with the $727 million the CFPB demanded from Bank of America over deceptive marketing and billing practices in April 2014. Still, PayPal Credit doesn’t come off looking too good in this latest dispute—or too cool, either.

May 19 2015 6:52 PM

People Will Only Pay So Much for Anthropologie’s Flowy, Boho Dresses

Anthropologie, with its wood-paneled stores, artsy catalogs, and flowy, bohemian clothing, would never be mistaken for cheap. But lately, the retailer appears to have exceeded the limits of what even its most devoted customers are willing to spend—and sales are suffering as a result.

Urban Outfitters Inc. said Monday that Anthropologie, one of its largest brands, delivered disappointing same-store sales growth of 1 percent in the first quarter. That compared with 5 percent growth at Urban Outfitters and 17 percent growth at Free People, two other holdings of the company. David McCreight, CEO of the Anthropologie brand, admitted in a call on Monday that the store had “missed” on its dresses and accessories offerings. “Dress shortfalls came from missed opportunities in a few key silhouettes, fabrics, and price points, as well as insufficiently addressing our more casual customer,” he said. Urban’s stock plunged 15 percent on Tuesday.

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Data from Urban Outfitters. Chart by Alison Griswold.

Peruse the offerings on Anthropologie’s “casual and everyday” dresses section online, and you’ll see that most are priced between $150 and $250. Whatever you think of the dress designs, price tags like that don’t necessarily say “casual” and “everyday.” Again, Anthropologie never professed to be cheap, but there’s a difference between paying more for quality, and paying more for the sake of paying more under the guise of branding and quality. Anthropologie appears to be learning that lesson the painful way—poor sales—and now says to expect clothing markdowns in the second quarter as it recalibrates.

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Data from Urban Outfitters. Chart by Alison Griswold.

What else might be wrong with Anthropologie? To quote some Slate colleagues: Anthropologie has “put a bird on it ... everything just has one extra detail that makes it not cute anymore.” Its patterns have been “hideous lately” and its fits “terrible.” It may have overbet on the maxi dress. They “lack the ability to evolve to more current trends.” That’s a sampling of opinions from a half-dozen millennial women, none of which bodes too well for Anthropologie.

Elsewhere under Urban’s umbrella, things are going better. Free People, the smallest brand by total sales, continues to be the strongest performer in terms of growth. Urban’s 5 percent same-store sales growth also reversed a rough showing in the previous year, when that metric fell 5.6 percent. So, there’s hope. But at Anthropologie, it’s probably time for a big summer sale.

May 19 2015 6:17 PM

L.A. Is About to Pass a $15 Minimum Wage. Whoa There.

First it was Seattle. Then came San Francisco. Now it's Los Angeles. In a vote earlier today, lawmakers in L.A. moved toward adopting a $15 local minimum wage by 2020, setting it up to become the third major city to raise its pay floor to that level, and handing a major win to labor activists who had been lobbying for the hike.* This may be a sign that, much more than an experiment confined to the Pacific Northwest and Bay Area, the idea of a $15 minimum is "going mainstream," at least in certain kinds of largely liberal coastal cities, as Paul Sonn, general counsel at the National Employment Law Project, told Al Jazeera America.

Which is worrisome.

Corporate interests and conservatives often whine that increasing the minimum wage will kill off jobs as employers choose to hire fewer workers. And typically, they're exaggerating. While it's not entirely conclusive, the economics literature suggests that moderately sized minimum wage increases lead to small, and possibly negligible, declines in employment, and that the benefits of higher pay for employees outweigh any damage that might be done. How come? Businesses usually find ways to adapt. They figure out how to make their workers more productive in order to justify their pay. Staff turnover decreases, which saves money. And, yes, prices go up a little. Your burger gets slightly more expensive, but the person grilling it gets a better standard of living.

But all of that past research doesn't really tell us anything about what happens because of an increase along the lines of what Los Angeles is now poised to pass. Even supporters of a higher minimum wage acknowledge this, including the economists making sunny predictions about how a $15 minimum will create a powerful stimulus for the city's economy (a dubious assertion for multiple reasons). As I've written before, Seattle basically decided to do the country a favor by turning itself into a Petri dish for a progressive minimum wage policy. But now, other cities are jumping on the bandwagon before we have any idea what the results of that big test will be.

Supporters of the Los Angeles City Council's proposal say that workers need the hike because L.A. is a low-wage city with a high cost of living. The New York Times notes that as much as 40 percent of L.A.'s workforce may earn less than $15 per hour. But the fact that a metro area produces a dearth of well-paid work and is dominated by low-margin service businesses that might not have a lot of room to pay more (or raise their prices) is, in reality, a reason to be extra careful about pushing employers too far, too fast. One good rule of thumb developed by University of Massachusetts–Amherst economist Arindrajit Dube is that a reasonable minimum should be somewhere around 50 percent of the area's median wage. Last year, Dube calculated that would be about $10.36 per hour in Los Angeles. By 2020, wage growth and inflation should still leave that figure under $12. (I'm assuming nominal 2.5 to 3 percent annual wage increases, which is higher than what we have now.) Fifteen is a leap.

The city council still has to vote on a final version of the ordinance, but at this point, it seems clear that the ordinance will eventually pass. And given the momentum of progressive politics, we probably shouldn't be surprised if other big cities follow, ill-advisedly or not. 

*Correction, May 19, 2015: This post originally misstated that Los Angeles had become the second major city to approve a $15 minimum. It is the third. San Francisco voters approved a referendum in November that would move it that high by 2018, which seems to have slipped my mind despite having reported it at the time.

May 19 2015 2:55 PM

Small Farmers Used to Be at the Mercy of Big Agriculture. This Startup Is Helping Them Push Back.

Wired logo

Say you’re a farmer and you want to test a new brand of seed that one of your vendors has been hyping. You may plant a test plot in spring, but you won’t see results until fall, and then, of course, you’ll want to test it again for a few more seasons to ensure you’re seeing a pattern and not a fluke. After three years pass, you make a judgment call, but you’re still left wondering whether it really was the seeds that made a difference, because it could have been the new fertilizer you used. Or maybe the crop spacing. Or the land quality. Or any of the dozens of variables that can impact a harvest.

“As a farmer, it takes a long time to learn,” says Steve Pitstick. He should know. He’s been growing corn and soybeans on a 2,600-acre plot of land in Maple Park, Illinois, for years, often operating on a hunch, a slick sales pitch from Name Your Big Agriculture Conglomerate, and what limited data he gets from his own farm.

But a few months back, Pitstick was at a conference where he heard about a startup called Farmers Business Network, which aggregates data from farmers across the United States to help them learn from each other. “Within a minute of the presentation, I said, ‘I’m in.’ It was exactly what I’d been looking for,” Pitstick says. “My thinking was: If I can see a larger dataset, I can learn more quickly.”

Pitstick, apparently, isn’t the only one who thought so. Farmers Business Network now has data on nearly 7 million acres of farmland across 17 states. That may be just the beginning.

Today, Farmers Business Network is announcing a $15 million round of funding led by Google Ventures. According to Andy Wheeler, a partner at the search giant’s investment arm, data is becoming ever more important to agriculture. That’s one reason why the firm also invested in a company called Climate Corporation, which uses weather data to provide insurance to farmers and eventually was acquired by Monsanto.

“Agriculture has gone through waves of productivity increases in the past,” says Wheeler, who comes from a family of farmers in Iowa. “Now we’re entering the period of data being one of the primary drivers of that increase.”

Among its 37 employees, Farmers Business Network has plenty of farmers on staff, but its founders, Amol Deshpande and Charles Baron, are straight out of Silicon Valley. Before launching the Network, Deshpande was a partner at Kleiner Perkins, while Baron was working as a product manager at Google. Baron says he always has been fascinated by his brother-in-law, who grows corn and wheat in Nebraska, and the sheer number of variables that went into his job. And yet, as a proud Googler, Baron says he couldn’t get over the fact that all of this information was siloed, inaccessible to other farmers.

“Google’s mission of organizing the world’s information is very much how we think of ourselves in organizing agricultural information,” he says. “We believe the best way to empower farmers and help them make the best decisions is to make information more transparent.”

Baron took this idea to Deshpande and, after speaking with farmers across the country together, they launched Farmers Business Network in 2014. For $500 a year, farmers can submit their data, benchmark it against other farms nationwide, find the best seeds for their soil, and see a Consumer Reports–like review of hundreds of agricultural products, among other services.

Pitstick says these tools have not only given him more confidence in his decision-making, but they’ve helped him cut through the often misleading claims of vendors. For instance, one type of seed he had been planting was underproducing, a problem the vendor—no surprise—said he could overcome by buying more seeds. But when Pitstick checked that seed on Farmers Business Network, he found that none of the farms in the network had seen the results the vendor was promising, a problem Baron says is all too common.

“It’s like if ExxonMobil were to sell cars, they’d always sell you Suburbans. That’s the same dynamic farmers have had. They’ve had to use the information the seed company has,” Baron says. Now, FBN is giving these farmers a chance to talk to each other at scale and separate the wheat from the chaff. Or in this case, the wheat from the wheat.

Also in Wired:

May 19 2015 2:41 PM

Bernie Sanders Wants to Make College Tuition Free. Here’s Why We Should Take Him Seriously.

A couple of years ago, I wrote an article joking that the United States would never eliminate tuition at our public colleges unless Bernie Sanders "somehow leads a Latin American-style coup down Pennsylvania Avenue." Today, I feel the tiniest bit prescient. The socialist senator from Vermont and long-shot Democratic candidate for president just announced that he would introduce a bill designed to make state schools tuition-free for all, in part by passing a tax on financial transactions, including stock, bond, and derivatives trades. So, if he ever does get around to that government overthrow, we now know where the future of higher education lies.

Taxing Wall Street to give students a free ride through school is an idea that, like most of what Sanders does, will play well on Facebook and poorly in Washington. But setting political reality aside, the senator is offering a very rational framework for how we theoretically could make higher ed more affordable, even if we chose a different way to pay for it. According to the National Center for Education Statistics, public colleges take in a bit under $70 billion worth of tuition and fees annually. Under the Sanders proposal, those schools would be required to stop charging students, and Washington would provide two-thirds of the lost revenue directly, bringing the federal tab to $47 billion at first. The rest would come from states, which would be obligated to maintain a certain level of funding for their higher-ed systems. As enrollment grew over time, the cost would too. 

In some ways, this looks much like President Obama's own plan to make community colleges tuition-free, which also called on the federal government and states to cooperate to cover the cost of educating students. It's an extremely sensible approach that tries to deal with the root problems that have driven up the cost of an education over the decades. Public college tuition has risen because of a mix of state budget cuts and uncontrolled spending by the school administrations. The federal government has tried to compensate by offering tax breaks, grants, and low-interest loans to students. But that has simply allowed states to cut more and institutions to raise their prices without worrying that enrollment might crash. Instead of trying to play catch-up by handing more and more money to undergrads, Obama and now Sanders would try to force the federal government and states to work in concert, imposing some order on this unwieldy system we've created.

You can argue about whether we should be really nixing tuition altogether, rather than just making it cheaper, given how much more money college graduates ultimately earn in their careers. But it's hard to argue with bringing a little coherence to the way taxpayers subsidize higher ed.

There are other good things about the Sanders bill. For instance, it recognizes that tuition isn't the only thing driving students into debt. It asks schools to preserve their financial aid budgets, and leaves the Pell Grant program for lower-income students in place to help with the cost of books and living expenses.

There are also some problems with it. For instance, even with his proposal's big price tag, Sanders' plan might not actually provide enough money to accomplish all of the things he wants it to. The $70 billion figure the senator bases his funding scheme on doesn't include the financial aid that schools currently give to students. Since the legislation forces schools to eliminate tuition entirely, while using those aid dollars to help students cover things like rent and textbooks, institutions would probably be left with a budget hole. The proposal also meddles a great deal in how schools are managed, with mandates on everything from enrollment to how institutions can pay administrators to limits on the use of adjunct faculty.

And, of course, the bill is expensive and would be paid for entirely through new taxes, where instead lawmakers could try to find money in the current higher-ed budget that right now isn't being spent very smartly. For instance, the tens of billions of dollars worth of tax breaks Washington offers families to help pay for college disproportionately benefit upper-income households and do little to encourage young people to pursue a higher degree. That money could probably be better spent on a program more like Sanders'.

Still, it would be nice if Sanders' bill were treated seriously. The man wants to refund our public college infrastructure, which has been decimated in many states since the recession. And he's found a way of doing it that, fundamentally, isn't all that different from an idea put forth by the current president. Sure, he might be a fringe candidate, but this shouldn't be a fringe idea.

May 19 2015 1:18 PM

Walmart’s First Quarter Was Bad for Profits but Good for Its Workers

The numbers in Walmart’s first-quarter earnings report Tuesday morning weren’t that great. Profit fell 7 percent to $3.34 billion. Revenue slipped 0.1 percent to $114.8 billion. U.S. sales rose slightly—good news for reversing the company's struggle at home—but internationally they declined 6.6 percent. Walmart’s stock is down about 4 percent.

“We’re not where we want to be in every store,” Walmart CEO Doug McMillon said on the company’s earnings call.

So why were Walmart’s results subpar last quarter? Walmart, like most big multinational companies, is being hurt overseas by the strong dollar. It’s also been investing heavily in e-commerce. This year, Walmart plans to spend between $1.2 billion and $1.5 billion on digital efforts—a leap from the $1 billion it allocated to that area in 2014. Walmart is currently building out a “site to store” order-and-pickup program and piloting a subscription delivery program that will cost $50 a year. (The delivery program, announced last week, is presumably the company’s long-awaited answer to Amazon Prime.)

Also not to be discounted: Walmart recently committed to raising wages for a half-million employees and started making good on that promise in the latest quarter. All hourly employees had their minimum starting pay lifted to $9 per hour, and many full- and part-time workers above entry level got raises as well. In the U.S., Walmart is also restructuring its stores to add nearly 8,000 department managers, Walmart U.S. CEO Greg Foran said. Walmart is also keeping a “checkout promise” from the holidays to have more registers open during peak shopping hours. That’s all expensive, but “an investment we believe is imperative to providing customers with the unparalleled shopping experience they expect and deserve, and our associates with more opportunities to build a successful career at Walmart,” Foran said.

In the short term, it would probably be better for Wall Street and for Walmart if the company didn’t make these investments, and kept costs low to boost profits. But such an approach has repeatedly gotten Walmart in trouble in the past. Walmart’s U.S. stores are constantly maligned for their slow checkouts, empty shelves, and general lack of staff. Presumably, the investments Walmart is making could help fix that. True, sales still aren’t great, but they’ve also been weak across retailers this earnings season. For now, Walmart is making what seems like a solid bet that taking a hit up front will pay off with more customers and a happier workforce down the road.

May 18 2015 5:53 PM

RadioShack Sold Your Data to Pay Off Its Debts. The FTC Isn’t Too Happy About It.

RadioShack is dead, but its saga is ongoing. Last week, the company’s name was auctioned off for $26.2 million to Standard General, a hedge fund that earlier this year bought hundreds of RadioShack store leases. With the latest purchase, though, Standard General also got RadioShack’s collection of consumer data—that means the names, addresses, email addresses, and purchase histories of potentially tens or even hundreds of millions of RadioShack customers.

Needless to say, the Federal Trade Commission’s consumer protection arm isn’t too pleased about this. In fact, the FTC is so displeased that Jessica Rich, its consumer protection director, has written to the bankruptcy court handling RadioShack’s case, asking that consumers’ personal data be protected. A final approval hearing for the sale is set for May 20. Standard General reportedly wants to turn at least some of the RadioShack locations into stores it will co-brand with Sprint—and presumably all that consumer data couldn’t hurt.

Rich’s issue is that when RadioShack collected this sort of data (you know, before it went bankrupt), its privacy policies stated things like: “We will not sell or rent your personally identifiable information to anyone at any time” and “We pride ourselves on not selling our private mailing list.” Rich adds that statements like these would “likely be considered very important to many customers” and that people “who provided their personal information to RadioShack would likely be very concerned if it were to be transferred without restriction to an unknown purchaser for unknown uses.”

Considering how nonchalant people tend to be about their data in daily life, I’m not sure how strongly most consumers would feel about RadioShack’s auction if it weren’t being pointed out that perhaps they should feel misled by all this. At the same time, it’s kind of annoying to think of a defunct company selling your address and shopping history to bail itself out.

Rich and the FTC understand that, in RadioShack’s case, “bankruptcy presents special circumstances,” like making allowances so that a company can “get back on its feet” or “marshal remaining assets for its creditors.” Which is why she’s open to letting RadioShack’s customer data be sold if: (1) It’s packaged with other RadioShack assets; (2) the buyer is in the same line of business as RadioShack; (3) the buyer agrees to follow the terms of RadioShack’s privacy policies; and (4) the buyer gets customers to agree before making any major changes to the privacy policies governing that data. The $26.2 million question: Who’s still in the same line of business as RadioShack?

May 18 2015 4:31 PM

Slightly Fewer College Graduates Will End Up Working at Starbucks or J.Crew This Year

The college Class of 2015 has lots of reasons to count its blessings. For starters, it is not the college class of 2008. It is also not the college class of 2009, '10, '11, '12, '13, or '14. Thanks to the gradually healing economy, this year's graduates are about to land in the best job climate for young bachelor's degree holders since the recession, according to a new analysis by researchers at the Federal Reserve Bank of New York. And as a result, somewhat fewer of them should end up resorting to work as baristas, waiters, temps, or whatnot just to pay the bills. By recent standards, it's a decent time to be an educated 22-year-old.

But it's still not a great one.

Last week, the Fed's researchers reported that both the unemployment rate among recent college graduates and the fraction stuck in occupations that don't require their degree fell in 2014. This was, obviously, very good news. More educated young adults are getting hired, and, rather than making espresso or photocopies for a living, more of them are finding jobs that pay for their talent (or at least the diploma on their wall). It's also clear from other indicators, such as job postings, that demand for skilled workers has picked up after a period of stagnating. But we're still a long way from undoing all the damage left behind by the economic downturn. More than 44 percent of young grads still have more education than necessary to do their jobs. By the end of 2007, it was closer to 41 percent. In 2000, that figure bottomed out at 38 percent.

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Those numbers should tell you something important: A large chunk of college graduates has always been overeducated for its field. The difference is that those individuals typically worked in better-paid occupations than they do today. As the New York Fed has shown, the last few years have seen not only a rising number of underemployed bachelor's holders, but a rising number stuck in outright low-wage work. And recent research has shown that, even once they do manage to find college-level employment, those workers could still earn less than their peers for several years.  

So, all is not awful for this year's grads, but all is still not well. Which, not coincidentally, is how you could sum up the economy as a whole.

May 18 2015 4:20 PM

Twin Peaks, Site of the Deadly Biker Shootout, Was America’s Fastest-Growing Restaurant Chain in 2013

Among the many surreal, horrifying particulars of the deadly biker shootout that occurred this weekend in Waco, Texas, one of the more grabbing details was the name of the restaurant around which the incident took place: Twin Peaks. Which may have left you wondering: Twin Peaks? Like the David Lynch series Twin Peaks

In fact, Twin Peaks is part of a class of establishments not so poetically termed “breastaurants.” And while the New York Times reports that local authorities have been fed up with this particular Twin Peaks franchise, which has hosted motorcycle gang meetings in the past and has now had its liquor license suspended, the company itself is booming. True to its déclassé name, the chain aims to be a more seductive—and more upscale—version of Hooters. As its chief executive Randy Dewitt famously told Bloomberg Business last fall, “Hooters just wasn’t racy enough.” In 2013, Twin Peaks did $165 million in sales to snag the title of fastest-growing restaurant chain in America. It has about 70 locations in the U.S., plus one overseas in Russia. In 2014, its sales climbed a whopping 45 percent. (A spokesman for the chain told the Times on Monday that Twin Peaks was revoking its franchise agreement with the Waco restaurant’s operators.) 

What’s interesting is that the rapid growth being enjoyed by Twin Peaks hasn’t seemed to carry over to other big players in the restaurant industry’s “attentive service sector.” Sales at Hooters have been flat or declining for years now. According to data from restaurant industry research firm Technomic, Hooters’ sales grew just 2.5 percent last year and 0.4 percent in the year prior. At Tilted Kilt Pub & Eatery, a Celtic-themed sports bar featuring scantily clad waitresses, sales were up 15.4 percent between 2012 and 2013, but growth cooled to 3.7 percent the following year. Among the top five restaurants in the category as tracked by Technomic, Brick House Tavern + Tap was the only other chain to report sales growth in the double digits last year, at 37.3 percent.

What’s that tell us about the breastaurants sector as a whole? Honestly, not that much. Maybe chains like Twin Peaks are doing well because of their risqué atmosphere and wait staff, but they could also be succeeding because they’re good sports bars. Either way, it’s almost certainly a welcome thing that Waco’s Twin Peaks, which city authorities say had repeatedly failed to cooperate with local police, is now likely staying out of business.

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