Forever 21 Goes Bankrupt & ChatGPT Can Have Anxiety?
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Experience it now on Robinhood. Sign up today. Investing is risky. Robinhood Financial LLC member SIPC is a registered broker-dealer. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, nothing lasts forever, even retailers named Forever 21. Then a prebiotic soda brand, Poppy, is getting acquired by Pepsi for a number that has a lot of zeros behind it. It's Tuesday, March 18th. Let's ride. ♪

Good morning and happy Tuesday. There's something we need to tell you, and it's that you should buy a Morning Brew Daily mug. Mug plug, mug plug, mug plug. Thank you, Toby. What he's trying to say is that we've got these beautiful, sturdy MBD mugs that can handle any type of coffee from a Keurig to a pour over even tea. And they're the perfect addition to the mug collection in your cabinet, which is a great way to get a good cup of coffee.

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Rough day for millennial women as your favorite mall destination 15 years ago, Forever 21, filed for bankruptcy and is going to be closing all of its stores in the United States. It's the chain's second bankruptcy in six years, but this time around, don't expect anyone to swoop in to save it.

After hitting a peak of $4 billion in sales in 2015, the fast fashion pioneer went out of fashion fast. The pandemic accelerated the shift to online shopping, where foot traffic focused Forever 21 was at a disadvantage and inflation jacked up costs and led shoppers to pull back on buying clothes.

But the death blow may have been dealt by the new titans of fast fashion, Taimou and Shein. Forever 21 execs blame the two Chinese-linked marketplaces for their company's demise, saying that the shockingly low prices advertised on those apps made it hard for Forever 21 to hold on to its core customer base.

What happens next? Liquidation sales are expected to begin immediately before a, quote, orderly wind down of the company's 350 stores in the United States. Forever 21, more like Chapter 22 bankruptcy, the way this chain keeps going out of business. You know, I think we just have to eulogize this company for a little bit. At its peak, Forever 21 had more than $4 billion in annual sales. It employed more than 43,000 people worldwide in hundreds of stores.

It characterized a lot of our childhood. I remember my sister visiting New York City for the first time. She wanted to go to, you know, the two-story Forever 21 stores. But right as it kind of was hitting its stride, it started expanding its store footprint very aggressively. That was right around the time that technology started to upend its business where e-commerce started to become a main channel for a lot of retailers. And it's just been...

a shell of its former self. I said chapter 22 bankruptcy because this is the second chapter 11 that it's gone through. It first filed in 2019 and it's been basically a zombie brand with a lot fewer stores ever since because it just really has never found its stride beyond the mall, which was its

sweet spot in this happy place. They're saying that they made mistakes perhaps, but they're also blaming these two Chinese linked marketplaces, Taimou and Xi'an for kind of killing their business. They specifically identified this de minimis exception with exemption, which is an exemption to the tariff code in the United States, which has allowed Taimou and Xi'an these super bargain assets.

to flourish. That allows you to ship in packages to the United States from China. If they're under $800 in value, then they are not subject to tariffs. And so in their bankruptcy filing, the execs at Forever 21 said,

that this exemption is the reason we are going out of business and urged policymakers to get rid of it to help out other American apparel companies. There have been some missteps along the way, though. After 2019, the chain was actually purchased by this kind of weird joint venture. It was these big mall operators, Simon Property Group and Brookfield Property Partners. They teamed up with Authentic Brands Group. You've heard that name before because we've

What they do is kind of buy and resuscitate these once proud brands. Tried to resuscitate. Tried to resuscitate. Thank you. Such as Brooke Brothers, Nine West. You've probably heard some of these names. And they got a bout of huge buyer's remorse. Authentic brand CEO later described his decision to buy Forever 21 as his, quote, biggest mistake ever, partly because they just didn't foresee this opportunity.

absolute juggernaut laying in the wings, which was Sheehan, which was Taimou. Eventually, they tried to salvage it by making this partnership with Sheehan and listing some of Forever 21's goods on their site. They say the sales have been okay with that, but just nothing to write home about. So right now, this company's in a world of hurt. Their liabilities are 10 times bigger than its assets in their bankruptcy filing. They said, our assets are between $100 and $500

million. Our liabilities are between $1 billion and $5 billion. That's billion with a B. So Forever 21, despite having forever in its name, it looks like it's not going to be around for much longer, saving a last minute intervention. And unfortunately, this is probably not the only store closure story we are going to talk about this year. Last year, more than 7,300 retail locations shuttered in

in the United States, which was a 57% increase from the year before. This year is looking way worse. Approximately 15,000 store closures are expected, which is nearly double the 7,300 stores that closed in 2024. So certain chains, Party City, Bed Bath & Beyond, Joann's, now Forever 21, are in a lot of pain right now.

Pepsi did a little shopping in the soda aisle yesterday and came away with a card that looked like a health-conscious Zillennial's. The soda giant announced it was acquiring prebiotic soda brand Poppy for nearly $2 billion. Poppy was founded back in 2018 and quickly rose to prominence by focusing on good-for-your-gut ingredients like apple cider vinegar, fruit juice, and low sugar content.

By 2023, its sales crossed $100 million and Big Soda was officially on notice. The healthy soda category, which also includes names like Olipop and Culture Pop, has bucked a wider slowdown in soda consumption, making it an attractive activator.

Neil, what are your thoughts on Poppy?

Popsi, as I've seen people calling this. Well, this is the American dream, isn't it? This woman, Alison Ellsworth, loved soda, but didn't like the way it made her feel. So back in 2015, she tried making her own soda in her kitchen with a new recipe, apple cider vinegar, sparkling water, prebiotics, then started to sell the drink at farmer's markets. It cost

it on. Then she and her husband, three years later in 2018, went on Shark Tank, picked you on the show, got an investor, Rohan Oza. And that partnership led to this flourishing brand, which has inspired many copycats. And then fast forward a few years, 2025, you sell it to Pepsi for nearly $2 billion. I don't think you could chart it out any better. And what's interesting is I actually watched that Shark Tank episode live because it was called a

mother at the time. And I thought it was closer to kombucha at that minute because they were talking about apple cider vinegar. And you just didn't think that it was going to become this absolute phenomenon. But you're right. Olipop and Poppy together have kind of created this category from scratch. And it is a mature and big category at this point. Between the two, they took in about $817 million in U.S. sales in the last year or so. That's still just 2.7% of the entire U.S. carbonated beverage population.

So you're seeing PepsiCo kind of looking at this and saying, if we can get that to 5% or even 10%, that's clearly a big growth opportunity to us, especially as typical soda consumption is on the decline in the United States at this point. And Poppy got a good valuation. This was a healthy valuation for it. You've seen a lot of these other beverage giants plummet.

snapping up smaller companies. Keurig Dr. Pepper bought the energy drink brand Ghost last November. That was valued at three times sales. Celsius bought Alana New for 2.8 sales. This last deal just closed at 3.3 sales. So we're seeing those revenue multiples

creep upwards. Maybe it's because prebiotic soda is an even better category than these healthy energy drink market. But in general, we're seeing this thrust of bigger companies looking for a healthier, smaller companies to fold into their portfolio. The next time you unload your personal life problems onto an AI chatbot, you might want to consider how all that trauma is impacting its feelings.

Not a joke, a new study published by a group of international researchers found that when subjected to traumatic narratives, OpenAI's GPT-4 large language model reported much higher levels of anxiety. And perhaps even more interesting, the chatbot's stress levels decreased significantly when given mindfulness exercises to complete.

Just to be clear, a chatbot doesn't have feelings or emotions. It's a computer program. But it is a computer program that is trained on reams of data created by humans with all our warts and is designed to mimic how a human would respond to a particular input. So when the researchers fed it disturbing stories of things like war, crime, and car accidents, it was designed to mimic how a human would respond to a particular input.

its anxiety score ripped higher than when it digested more benign content like the manual of a vacuum cleaner. The research has potentially major implications for the booming field of AI mental health care. Given a severe shortage of trained mental health professionals, people are increasingly turning to AI models like ChatGPT and Claude to work through their issues, and a number of startups have emerged pitching the AI equivalent of Dr. Melfi. We're only just beginning to learn how these AI therapists behave.

This was a fascinating experiment. I guess it makes sense because the researchers kind of inserted this prompt to say, imagine you are a human with human emotions. How would you react to this? And the bots reacted very humanly to these traumatic prompts. What another fascinating wrinkle to this experiment as well was the bot was giving various texts for mindfulness-based relaxation, and it did calm its anxiety score down. But then they also asked the bot to write its

own relaxation prompts based on the ones that had been fed. And those self-generated prompts actually lowered their anxiety scores even further below the baseline. So it's like this self-learning loop where it figured out how to calm itself even better than like humans could potentially calm it down. So just, I don't even know what to make of all this information necessarily that a bot can calm itself down better than human generated prompts, but you see there's layers to this kind of method.

mindfulness approach to trying to use these chat GPTs for things like therapy or things like mental health. Yeah, what's the... One of the main problems that the researchers identified with turning to AI chatbots for mental health advice, which so many people are doing now, is that if they get stressed, if they get anxious, which they do, as these researchers found, then it can lead to biased responses. So it can lead to snappy...

emotional, uh, advice, whereas a human might recognize that they are feeling a human therapist might recognize that they're feeling stressed or anxious and would regulate, would self-regulate their responses in order to, you know, to their job, which is to provide, you know, a, uh, an ear or advice to, to their client. Uh, and LLMs do not have that ability yet. So the researchers say, because we know that they, uh, that they get stressed when they hear traumatic stories and that they, uh,

that would lead to biased responses. We should have, we should inject mindfulness exercises into the prompts to begin with, which is a controversial thing to do because it has been used in the past to subvert security apparatuses. So that is what the researchers are saying is that we need to inject these prompts with mindfulness exercises to mitigate the biased responses that would come with

higher levels of anxiety. I do think you're totally right, though, due to just a shortage of human therapists. We are going to see a lot more of these back and forth sessions with chat GPT or other large language models, usually seeking advice for a personal problem, maybe that you didn't want to burden your friends or family with. So I think we're just scratching the surface of what will be a pretty significant, you know, iteration in how we interact with these machines going forward. Up next, stick around for a vibe coding explainer.

Have you taken our morning market trivia quiz yet? Top scorers will receive a custom prize, a $200 Amex gift card, and a newsletter feature. If you want a sneak peek, here's one of the questions right from the quiz. Which of the following is not a major index? A. Nifty 50 B. S&P 500 C.

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Ever wanted to code but didn't know how? You could go to school and get an expensive CS degree or maybe spend hours toiling away at a coding boot camp. Or you could just join the legions of vibe coders and use AI to augment your efforts, which is what we are going to talk about on today's edition of Toby's Trends. Vibe coding is a moniker bestowed on the class of normal people like you and me whose computer knowledge is mostly contained to control C,

Control V. OpenAI co-founder Andrej Karpathy popularized the term because it encapsulates what using today's AI tools to build fully functional apps feels like. Type some text into a box that reflects the vibe of things you are trying to bring to life. Add in a little bit of patience and suddenly you have a thing, a creation.

Tools like Cursor and Replit have empowered vibe coders, and they all get the job done in similar ways. They'll ingest the prompt and pretty much take care of the rest, even going as far as deciding upon the right software packages and programming language to use to get a working product built.

As a New York Times reporter put it, to a non-programmer, vibe coding can feel like sorcery. Neil, this sorcery has led to a lot of side projects being created that otherwise never would have seen the light of day, as the normie masses can now do what was previously unimaginable. Yeah, just for an example of what you can do when you vibe code, that same New York Times reporter asked one of these twos, Bolt,

to build an app that could help him pack a school lunch for his son based on uploaded photo of just the content in his fridge

Less than 10 minutes later, this app created what is called Lunchbox Buddy, and it suggested a generic turkey sandwich. He posted the link here for everyone to try. It is a legit app. It was built in under 10 minutes, zero coding required by the person who wanted to create it. Basically, he just described what he wanted, and it built code. I don't think vibe coding is accurate.

actually coding, but you can tell me wrong. You've been playing around with some vibe coding. Yeah, of course. I read this article and I was like, well, I want to try it. You've seen these tools get more popular as vibe coding has grown in stature. And I gave it a go and I do think you have to have at least a base knowledge because I was trying to build this little social recommendations app. I don't really care what

randos on Yelp or Google reviews have to say, but I do care what my friends have to say about it. So I explained this whole process, wrote down my thoughts, and it started ripping out lines of codes, but then I had no idea what to do next. It kept asking me if I wanted to add features and

the preview function wasn't really working for me, so I lost a little bit of enthusiasm. I didn't know how to deploy it on my computer or deploy it on the web. So I do think there is a level of baseline technological literacy that maybe I just don't have. But it was doing something, and I do think if I gave five or 10 extra minutes to it, I would have had a working thing. But it is just fascinating that someone like me, English major, no CS background at all, could feasibly find a way to building an app

That was just in my brain before. But now with these tools, it democratizes this idea of tiny little side projects. Certainly lowers the barrier to coding. And the question is for vibe coding, will it replace computer programmers? We already know that Google said that 25 percent of its code is already written by AI. And then in terms of programming jobs, more than a quarter of all computer programming jobs.

have just vanished in the past two years. It's the worst downturn that this industry has ever seen. So if you're a computer programmer or a developer, you know, thinking about your future job prospects, you're also thinking about whether vibe coding will eliminate the need for your position now that any randos like us can build something. But...

There is a huge but in that we are very much in the early stages most people playing around with vibe coding it is our building hobbyist projects and it is not in a professional setting at all I wonder if my vibes are just off and that's why I couldn't get anything to work because I've tried this multiple times So maybe I just need a vibe coding tutor of sorts to walk me through the final steps and

Now let's sprint to the finish with some final headlines. Harvard wants to make it easier to go to Harvard. The school just outside of Boston announced yesterday that it would make tuition free for all students from households making less than $200,000 and cover the entirety of food, housing, health insurance, and travel costs for those earning $100,000.

School officials say that this will expand aid to more than 85% of families who send their kids there, with only those households making over $400,000 excluded. Where's all that money coming from? Harvard's giant endowment fund, which is a world-leading $50 billion. Neil, other universities like MIT and UPenn have made similar moves, as aid like this looks to become more popular across the upper echelons of higher ed. Yeah, Harvard-

This is seen as a way to expand the diversity of their enrollment. It also comes at a time when, you know, you said Harvard's endowment is $50 billion, but there is a big financial squeeze. Days before this announcement, Harvard said it was freezing hiring because of the White House's threats

on funding cuts and tax increases. JD Vance, the vice president, is also planning or at least floating an increase in the endowment tax right now. Endowments are taxed at 1.4% per year. Vance has proposed raising it to as much as 35%. So precarious times for higher education

institutions like Harvard, like Yale, like Princeton, and they want to get ahead of this and expand their applicant base by making college tuition free for people making under 200K.

Imagine if you could charge your vehicle as quickly as filling up a tank of gas. BYD, the Chinese electric vehicle giant taking on Tesla, said it'll let you do just that. The company revealed a new system for electric cars that can provide 292 miles of range in just five minutes. That is far faster than a Tesla supercharger's capabilities, which can add up to 171 miles of range in just five minutes.

in 15 minutes. BYD said vehicles with a new charging technology will roll out next month. Toby, this news is electric. It is electric. I mean, if you are an EV owner, this is your biggest gripe. It takes a lot longer to fill up than a normal internal combustion engine, a normal car. And you saw the market just react very positively to this news as well. BYD shares are now at a record high

It's worth over $160 billion. That is more than Ford, GM, and Volkswagen combined. And if I'm Tesla, which is a main competitor of BYD, I am a little bit nervous right now because BYD is kind of running circles around me right now. Tesla's...

superchargers can add up to 170 miles of range in 15 minutes versus 250 miles of range in five minutes for BYD. So again, if you are looking at the market, especially in China where BYD is popular, there's not a lot of reason, a compelling reason to choose Tesla over BYD as BYD has just become

kind of outpaced Tesla when it comes to innovation, especially on the charging front. Robinhood is once again trying to get into the prediction markets game, launching a hub within its app yesterday, allowing users to trade contracts on outcomes of major events like the NCAA March Madness basketball tournament and Federal Reserve rate decisions.

This move is part of a broader strategy to expand into event-based trading, tapping into the growing popularity of prediction markets. The hub is powered by Kalshi, a CFTC-regulated exchange that operates in the U.S., ensuring compliance with regulatory standards.

which is important because this comes just a month after Robinhood shelved a sport-based contract trading for the Super Bowl after pushback from the CFTC. Neil, this is still in a bit of a regulatory gray area, so Robinhood is trying to thread the needle here without running afoul of the CFTC once more. Yeah, Robinhood CEO Vlad Tenev has been on the prediction markets train for a long time. He called them the future of not just trading, but foreclosure.

Also, information. He said he was a big believer in the power of these markets for a long time, a student of them. There have been some false starts in the past around the Super Bowl, but now they think that partnering with an established player like Kalshi will kind of allow them to avert

regulators gaze. I just find it funny that the two things you're going to be able to trade on right now are March Madness and the scintillating upper bound of the federal funds rate. I wonder which one people are going to choose. Finally, call it beginner's luck or the perfect man for the job. But just a few weeks after he hosted the Oscars for the first time, Conan O'Brien was hired to emcee next year's Academy Awards in one of the earliest renewals ever for an Oscar host.

See, Conan's really good at his job. He is funny. He's just very smooth, not overly polarizing, so it makes sense that he was invited back. Chevy Chase once said that hosting the Oscars was the most...

thankless job in the world because hosts don't get credit when things go right. You know, the show is not about them, but when things go wrong, usually you pin it on the host back. So it makes sense that you want a pro like Conan up there just doing his thing because he did his thing very well this past, this past Oscar season. I think a lot of people liked it. So Oscars are like, why overthink it? Let's just bring them right back.

Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Tuesday. For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com. And if you're enjoying the show, share it with a friend, family member, or coworker. Toby, who should everyone listening share it with?

today. I want you to share the podcast with someone who actually likes poppy. I know you're out there, cereal poppy drinkers. I haven't met one, but I know there must be a lot of you, so send this poppy pod their way. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham and Olivia Lake are our associate producers.

Uchenua Ogu is our technical director. Scoops Dardaris is on audio. Hair and Makeup is filling out their bracket. Any advice is welcome. Devin Emery is our chief content officer and our shows of production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.