Brew Markets Daily: Activist Eyes Cooper Companies & Inside the Luxury Resale Boom

Host: Ann Berry
Co-host: John
Date: October 20, 2025

Overview

This episode of Brew Markets, hosted by Ann Berry, centers on two major stories shaking up the markets:

1. Activist investor Jana Partners' involvement in Cooper Companies and the implications for the eye care and women’s health sectors.
2. The explosive growth of the luxury resale market, as Gen Z and Millennials increasingly prefer secondhand designer goods, disrupting traditional fashion houses.
   The episode closes with a jargon-busting breakdown of margin loans, key market headlines, and reflection on emerging investment trends.

1. Activist Investor Eyes Cooper Companies (00:30 – 03:56)

Background

• Cooper Companies: Medical devices firm ($15B market cap) with two divisions: contact lenses/vision care and women’s health/fertility products.
• Activist Investor Entry: Jana Partners builds a stake, arguing the two business arms lack synergies.

Key Discussion Points

• Acquisition Spree:
  • Cooper’s women’s health division acquired Generate Life Sciences for $1.2B (donor eggs/sperm, stem cell storage).
• Underperformance:
  • Vision care is two-thirds of revenue, yet Cooper’s share price is down 30% in the past year.
• Jana's Strategy:
  • Jana's rumored goal: Encourage Bausch & Lomb (B&L, $5B+ market cap) to acquire Cooper's vision care division.
  • B&L CEO Brent Saunders reportedly open to potential deal.
• Valuation & Financials:
  • B&L trades at higher EBITDA multiple (20x) compared to Cooper (15x), meaning room for deal-driven value.
  • B&L’s financial constraints: $266M cash, $5B debt—would require further loans if deal pursued.

Notable Quotes

• Ann Berry, on the strategic disconnect:
  “If that sounds like an unlikely combination… Jana Partners would agree.” (00:43)
• On potential synergies and market impact:
  “This is a classic case of where activists really can shake up an industry.” (01:25)

Market Reactions & Next Steps

• After the news:
  • B&L shares up >5%; Cooper shares up >4%.
• Upcoming watchpoints:
  • B&L’s earnings (Oct 29) and Investor Day (Nov 13) for acquisition clarity.
• Ann's Take:
  “We’re going to have to wait until December for [Cooper’s] next set of results—We’ll keep watching.” (03:26)

2. The Luxury Resale Boom: Gen Z’s Love for Secondhand (04:26 – 10:47)

Market Shifts

• Generational Change:
  • Millennials spent 2% less on new luxury last year; Gen X spent 7% less previously.
  • Gen Z and Millennials are embracing secondary markets rather than buying new.
• Resale Market Growth:
  • Global resale luxury market: $56B (tripled in a decade, now equivalent to department store luxury sales).
  • Over 50 platforms serving millions—private (Vinted, Poshmark, Fashionphile) and public (ThredUp [TDUP], The RealReal).

Notable Quotes

• John, on consumer habits:
  “There was a time when…the resale markets were thought about this way: someone…sold it and then used that money to buy a new handbag…now…they’re selling items and then buying a secondhand bag.” (05:25)

Winners and Losers

• Online Resale Companies:
  • ThredUp: Market cap $1.2B; share price up 500% year-to-date.
  • The RealReal: Market cap $1.4B; sales growth 10% (18 months); shares up 16% today, 285% past year.
• Traditional Luxury Retailers:
  • Example: Hermes stock up only 6% past year, down 5% YTD—lagging consignment platforms.

Fashion Houses’ Response

• Tracking Resale Trends:
  • Brands using resale markets to identify what’s popular (e.g., LV re-releasing classic bags seen as “hot” in resale).
  • Notable turnover in creative leadership: “More than a dozen labels hired new designers.” (08:10)
• Regional Complications:
  • Anticipated Chinese luxury boom fizzled; brands refocusing on US and Europe.

Notable Quotes and Insights

• Ann Berry:
  “If you can’t beat them, right, join them. If these resellers are going to cannibalize our new sales, let's just bring out the fresh version of it.” (08:39)
• John, on fashion cycles:
  “You and I…talked on the show before about how the 90s were back—not just the music…return of skinny jeans…this kind of makes sense.” (08:53)

What’s Next?

• Potential influences: Future changes in tariffs, supply chains could alter the dynamic back toward first-hand goods.
• Ongoing coverage:
  “We’re going to come back to luxury tomorrow when we talk about a big new deal that got just announced.” (10:38)

3. Margin Loans Explained (Listener Q&A) (11:58 – 15:54)

Listener Question

• Chelsea from Orlando:
  “I keep hearing that levels of margin debt are at record highs. What does that mean and why does it matter?” (11:58)

Breakdown of Margin Debt

• What is Margin?
  • Borrowing from your broker to purchase additional stock—amplifies gains and losses.
• How it Works:
  • Example: $10k cash, $10k margin, buy $20k stock; 10% stock move = 20% gain/loss on your cash.
• Rules/Regulation:
  • Min. 50% own equity to open, 25% to maintain—brokers may be stricter.
  • If value falls, brokers issue “margin calls”—forced selling can exacerbate market drops.
• Why It Matters:
  • Record $1.1T margin debt in June (but relative to market cap, not at historic highs).
  • Brokers benefit from higher margin levels (fees + interest income).
  • Stability indicator: Margin debt = 1.9% of S&P market cap (historical avg 2.3%).

Notable Quotes

• Ann Berry:
  “When a stock falls, the interest on the margin loan compounds daily and that loan doesn’t disappear when your investments fall.” (14:16)

4. Market Wrap (16:09 – 19:13)

• Indices:

  • S&P 500: +1%
  • Dow: +1.1%
  • Nasdaq: +1.33%

• Headlines:

  • Apple hits all-time high ($263/share); iPhone 17 outperforming, shares +4%
  • Molson Coors to cut 400 jobs, shift to mixers/non-alcoholic; shares -1% today, -18% YTD
  • Weight Watchers (+10%) partners with Amazon to deliver GLP-1 medications—attempts turnaround post-bankruptcy.

• Ann, on Weight Watchers:
  “Really curious to see this Weight Watchers turnaround. Let’s see if it can really spring back to life.” (17:23)

• Lookahead:

  • Watch Coca-Cola earnings for beverage trend updates.

5. Final Thought: Chasing Returns in an Overvalued Market (17:40 – 19:13)

• Reflections on market oddities:

  • Torsten Slok (Apollo) notes:
    “Stock prices of companies with negative earnings have…outperformed those of companies with positive earnings.” (18:07)
  • Mohamed El-Erian comments on investor desperation for returns, as high-value stocks push investors toward riskier plays.

• Ann’s Conclusion:
  “It’s getting really difficult in this market and lots of voices now saying it…Bubble, no bubble, will the market crack? It’s going to keep going for a while.” (18:45)

Notable Quotes & Timestamps

• On Cooper and activist shakeup: “This is a classic case of where activists really can shake up an industry.” — Ann Berry (01:25)
• On luxury house adaptation: “If you can’t beat them…join them. If these resellers are going to cannibalize our new sales, let’s just bring out the fresh version.” — Ann Berry (08:39)
• On margin dangers: “When a stock falls, the interest on the margin loan compounds daily and that loan doesn’t disappear when your investments fall.” — Ann Berry (14:16)
• On market froth: “Stock prices of companies with negative earnings have…outperformed those of companies with positive earnings.” — Torsten Slok, quoted by Ann Berry (18:07)

Key Takeaways

• Activists are pressuring companies like Cooper to focus on core strengths; watch upcoming corporate events for M&A moves in eye care.
• The luxury resale market is booming, with generational shifts reshaping brand strategies and investors rewarding consignment platforms over legacy fashion houses.
• Margin debt is at new highs in dollar terms, but not when adjusted for overall market size—still, it’s a trend to monitor.
• Current market dynamics are pushing investors into riskier stocks due to sky-high valuations elsewhere, exacerbating uncertainty about the “bubble” question.

For more insights, tune in tomorrow for the latest on luxury markets and a new major deal under review.