LOS ANGELES — Universal Pictures and AMC Entertainment, the No. 1 movie chain in the world, have reached a deal to allow movies to move to homes after a mere three weeks in theaters in the United States, almost certainly changing the way that Hollywood does business.
The deal, announced on Tuesday, gives AMC the exclusive right to show movies from Universal and its Focus Features division for just 17 days in the United States — down from roughly 90 days, long the industry norm. After that, the studio has the option to make its movies available in homes through premium video-on-demand services. Universal may opt to let big-ticket sellers play exclusively in theaters for longer than 17 days. The studio controls the “Fast and Furious,” “Jurassic World” and “Despicable Me” franchises.
“The theatrical experience continues to be the cornerstone of our business,” Donna Langley, chairman of the Universal Filmed Entertainment Group, said in a statement. “The partnership we’ve forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality.”
No firm start date for the deal was set because theaters remain closed because of the pandemic. AMC has said that it hoped to begin reopening in “mid to late August,” but has pushed that time line back several times as virus cases have surged in the country. Universal has cleared its schedule until October, when it will release “Candyman,” a remake of the horror classic, directed by Nia DaCosta and co-written and produced by Jordan Peele.
AMC and Universal said they would start negotiations for international releases in the coming weeks. AMC has major operations in Europe and the Middle East.
The Trump administration said on Tuesday that it would extend a $765 million loan to Eastman Kodak Company to begin producing critical pharmaceutical components, in an effort to allay American dependence on foreign countries for essential medicines.
The project relies on funding by the Defense Department, which will be channeled to the film giant through the U.S. International Development Finance Corporation, a development bank set up by the Trump administration to replace the Overseas Private Investment Corporation.
The unusual arrangement leverages the Defense Production Act, a Korean War-era law that gives the government vast powers and resources to direct certain kinds of production in the interest of national security. In an executive order in May, President Trump gave the International Development Finance Corporation, which typically funds projects in poorer countries, the authority to use the Defense Production Act to help in the response to the coronavirus pandemic.
The investment is “the beginning of American independence from our pharmaceutical dependence on foreign countries,” Peter Navarro, the director of the White House Office of Trade and Manufacturing policy, said in an interview with Maria Bartiromo on Fox Business Network. He said that the facility and a companion factory in Minnesota would eventually produce a quarter of the active pharmaceutical ingredients for generics needed in the United States.
The project will be set up in the Eastman Business Park in Rochester, N.Y., and will support 360 direct jobs, the company said.
The pandemic has revealed the extent to which domestic companies rely on foreign suppliers, which may be risky in industries like pharmaceuticals, said Kaitlin Wowak, a professor at Notre Dame’s Mendoza College of Business.
“Having domestic companies such as Kodak start producing key ingredients for generic drugs allows domestic pharmaceutical companies significantly more control over the supply chain,” she said.
Global same-store sales at Starbucks plunged 40 percent in the three months that ended in June from the same period last year because of store closures, shortened operating hours and fewer customers owing to the coronavirus pandemic.
In a quarterly earnings update Tuesday, Starbucks reported that total revenue was $4.2 billion, down 38 percent from the same period last year. It lost about $678 million in the period.
The company said that 97 percent of its stores worldwide were now open, with the largest percentage in Canada, China, Japan and the United States. In the United States, 96 percent of stores were open, up from 44 percent in April.
Starbucks said it expected that the business would return to profitability in the next quarter, when global same-store sales were expected to fall 12 to 17 percent.
Correction: An earlier version of this article, and an accompanying picture caption, referred incorrectly to the region where 44 percent of Starbucks stores were open in April. They were stores in the United States, not the brand’s global stores.
L Brands, the owner of Victoria’s Secret and Bath & Body Works, said on Tuesday that it would lay off 850 associates at its headquarters in Columbus, Ohio, or 15 percent of staff there, as it works to separate the brands into two stand-alone companies and manage sales drops tied to the coronavirus outbreak.
The company, which oversees more than 2,000 stores in North America, announced the layoffs as part of a broader set of measures that it said would cut costs by $400 million on an annualized basis, as it faces an overall sales decline of 20 percent in the second quarter. L Brands already reported a net sales plunge of 37 percent in the three months that ended May 2.
L Brands said it was tightly managing its merchandise, and it expected fall inventory receipts at Victoria’s Secret to be down 50 percent compared with last year. The brand said it would also execute a previously announced plan to close 250 Victoria’s Secret stores this year and is negotiating with landlords for rent relief, while working to cut operating losses in Britain and China, where it closed its unprofitable Hong Kong flagship store. L Brands said that it planned to slash Victoria’s Secret store costs through “changes in management structure and the labor model.”
The retailer said it remained committed to separating the better-performing Bath & Body Works from Victoria’s Secret while improving the lingerie giant’s profitability.
L Brands is recovering from the termination in May of a deal to sell Victoria’s Secret to Sycamore Partners, a private equity firm. The acquisition was announced after serious questions were raised about the leadership of Leslie H. Wexner, a storied retail magnate who recently stepped down as the chief executive of L Brands. In the past year, Mr. Wexner had faced scrutiny tied to Victoria’s Secret’s internal culture and his relationship with the disgraced financier Jeffrey Epstein, a convicted sex offender.
Fraudsters may have obtained hundreds of millions of dollars in loans from a disaster loan program meant to help small businesses devastated by the coronavirus pandemic, the Small Business Administration’s internal watchdog said on Tuesday.
Hannibal Ware, the agency’s inspector general, said banks and financial institutions had fielded more than 5,000 complaints about possible suspicious transactions. An initial review found signs of “pervasive fraudulent activity,” he said.
Some $250 million has already gone to potentially ineligible borrowers, Mr. Ware said in a report. An additional $46 million was spent on what may have been duplicate payments.
The relief effort, known as the Economic Injury Disaster Loan program, offers eligible companies low-interest loans and small grants. Unlike the more prominent Paycheck Protection Program — which has had its own problems with scammers — the disaster program does not rely on banks to vet applicants and issue loans. Instead, the S.B.A. makes loans directly from the government’s coffers; so far, it has lent $160 billion to 2.8 million businesses.
Organized fraud rings have used social media posts advertising “free money” to recruit applicants, Mr. Ware said, while other thieves have used stolen identities to obtain loans. One credit union that received $15 million in disaster loan deposits audited 60 of the transactions and found that 59 were fraudulent, he said.
Mr. Ware recommended “immediate action and attention” to prevent further losses. He identified one especially glaring shortfall: The S.B.A. has no formal process for working with financial institutions to review possible fraud cases.
In a written response to Mr. Ware, the S.B.A. said his findings were “unexpected.” The agency said it was working with three large banks — it did not name them — to investigate their concerns about “a high amount of suspicious activity” related to the disaster-loan program, and said that it planned to convene a task force to create a system for responding to banks’ reports.
U.S. stocks fell on Tuesday as investors awaited a batch of corporate earnings results and the details of a new federal stimulus bill in Congress.
The S&P 500 closed nearly 1 percent lower. European stocks were mostly lower, after Asian markets closed mostly higher.
The price of gold briefly hit a record of $1,980 an ounce before dropping lower. In Turkey, the lira fell and the country’s central bank appeared to be running out of ammunition to stop its decline toward record lows.
In industry news, a global airline group said airline revenues were not expected to recover to last year’s levels until 2024.
The Federal Reserve announced Tuesday that it would extend its emergency lending programs through the end of 2020 as the coronavirus continues to surge across the nation. Many of the Fed’s nine programs, which are meant to keep credit flowing through the financial system during times of stress, were originally set to expire on or around the end of September.
Meanwhile, coronavirus cases continue to surge in parts of the United States. On Monday, Texas became the fourth state (after California, New York and Florida) to report more than 400,000 cases. Investors are watching Washington lawmakers try to negotiate another round of stimulus payments for businesses and individuals, with current enhanced unemployment benefits set to expire on Friday. Democrats and Republicans still need to reconcile their vastly different proposals.
McDonald’s said Tuesday that it continued to suffer the impact of the global coronavirus pandemic, reporting that net income fell 68 percent to $483.8 million in the second quarter compared to a year ago.
McDonald’s said global same-store revenues fell 24 percent in the quarter, an improvement as restrictions eased in parts of the world and restaurants were able to reopen.
Fast-food chains with drive-through operations like McDonald’s have fared generally better than other restaurants during the pandemic. But executives said on Tuesday that the company had spent $200 million since the beginning of the pandemic supporting its franchisees, including on advertising to boost sales.
“Our strong drive-through presence and the investments we’ve made in delivery and digital over the past few years have served us well through these uncertain times,” said Chris Kempczinski, the president and chief executive.
McDonald’s has reopened 2,000 restaurant dining rooms with limited seating capacity in the United States.
Nissan said on Tuesday that it expected to make an annual operating loss of $4.5 billion in fiscal year 2020 as the coronavirus pandemic puts pressure on its attempts to reboot its struggling business.
The announcement came as the Japanese automaker reported its results for the three-month period that ended in June. Operating profit during the period, when much of the world’s economies were in lockdown to prevent the spread of the virus, plunged $1.46 billion compared with the same period a year ago, with automobile sales dropping by nearly 48 percent.
The results followed an annual loss of $385 million in fiscal year 2019.
If Nissan’s projections for the fiscal year prove accurate, the 2020 annual loss would be the largest for the company since it was pulled from the edge of bankruptcy by its former chief executive and chairman, Carlos Ghosn, nearly two decades ago.
Nissan has been struggling to reinvent itself since the 2018 arrest of Mr. Ghosn on charges of financial wrongdoing. He has maintained his innocence and fled Japan late last year, saying he would not be able to find justice there.
Mr. Ghosn’s era was marked by an attempt to increase market share at the cost of profits and quality, executives say. Now Nissan has said it plans to retrench and rebuild its business by focusing on its alliance with French automaker Renault, cutting costs, producing fewer cars and focusing on introducing new vehicles to a lineup that has long been criticized as stale.
Omnicom Group, one of the world’s largest marketing conglomerates, made “very difficult and permanent” changes during the pandemic as companies slashed advertising spending and events were canceled, its chief executive, John Wren, said Tuesday.
Omnicom’s revenue sank nearly 25 percent to $2.8 billion in its second quarter. The decline “is expected to continue for the remainder of the year,” according to the company, which suffered a loss of $24.2 million; a year ago, it recorded $370.7 million in net income in the quarter.
To adapt to the pandemic, Omnicom laid off 6,100 employees, shed more than 1 million square feet of office space and dropped several smaller businesses. It also tapped wage subsidy programs from several governments, froze hiring and salary increases, scaled back its use of freelancers and implemented some pay cuts.
Similar streamlining is happening throughout the advertising industry, as brands and agencies weigh years of wasteful traditions and bloated bureaucracies against uncertain budgets. “Old habits die hard, but people are being forced out of necessity to adapt faster,” said Marcelo Pascoa, the vice president for marketing for the beer brand Coors.
Mr. Wren said on an investor call on Tuesday that Omnicom’s future could be affected by a second wave of coronavirus cases, the timing and content of government stimulus packages, and shifting consumer sentiment. But he was optimistic: “We think the worst is behind us.”
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Avis Budget Group reported a steep 67 percent decline in revenue in the second quarter compared with a year earlier, but said that the drop was uneven across its network. Revenue at its non-airport locations have nearly recovered, it said, a sign that many people are still renting cars even as they shun other modes of transportation like public transit and airplanes.
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Best Buy followed Walmart, Target and Dick’s Sporting Goods by saying on Tuesday that it will close its stores on Thanksgiving Day this year. The chain said that it would start offering its holiday deals earlier and enhance the way it fulfilled orders “to meet our customers’ changing lives this holiday.” Best Buy said that it started opening on Thanksgiving Day in 2013, after opening at midnight on Black Friday in 2012.
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A global airline industry group says it expects the recovery to take longer than expected as a rise in infections around the world slows the reopening of borders. Airline revenues are not expected to recover to last year’s levels until 2024, according to the group, the International Air Transport Association.
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Selfridges, a British chain of high-end department stores, said Tuesday it would cut about 450 jobs, 14 percent of its work force. The flagship store, which opened in 1909 and includes several restaurants and a cinema, is in central London’s main shopping district, where foot traffic has plummeted because of the pandemic.
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