CEOs are often trained to avoid specific references to their competitors, but Brewer didn’t hold back. She said Costco thrives “because of the discipline in their model,” but that discipline kept them from moving into digital, enabling Sam’s Club to gain ground with services like “Club Pickup,” which allows members to order from an app and then pick up at the store.

At the same time, she predicted Amazon would struggle with its latest plans to expand its private label business into groceries. “I have to say to them, ‘good luck.’ A private label is hard to build,” she said. “That might be one of the hardest tasks they have ever done.” She said Sam’s Club only uses private labels if suppliers refuse to innovate.

One of the great spectator sports of the digital era is watching to see whether companies with great domain expertise – like Walmart, General Electric, or even Time Inc. – can develop digital skills faster than the digital “natives” can develop domain expertise. Brewer is clearly up for the challenge. You can read, and watch, her comments last night here.

Top News

•  Fiddling While Redstone's Rome Burns  

The power struggle for control of Viacom and CBS took another twist, as Philippe Dauman and George Abrams, who were removed from the trust that oversees Sumner Redstone’s stakes in the companies last week, sued Redstone’s daughter Shari for allegedly manipulating her father. Ms. Redstone’s influence on the trust is set to increase significantly with the likely appointment of two executives believed to be close to her: National Amusements’ general counsel Thaddeus Jankowski, and financial analyst Jill Krutrick. There’s never a good time for family squabbles to paralyze a company, but with Netflix, Amazon Prime and other streaming services rapidly eroding the business model that made Viacom and CBS, there may not be much left to turn around by the time the dust settles.  WSJ, subscription required

•  1MDB Accelerates the Death of Swiss Banking Secrecy

The 1MDB scandal rumbles on: Singapore has shut down the local operations of Swiss private bank BSI, after discovering “the worst case of control lapses and gross misconduct that we have seen” in its dealings with the Malaysian state-backed investment fund. It's the first time since 1984 that Singapore has taken such action. The move gives fresh impetus to the efforts of other regulators across the world, including the U.S., to pursue allegations of corruption at 1MDB and its facilitation by internationally-operating banks. Swiss prosecutors have launched a criminal probe into the bank, which waved through deals totalling hundreds of millions of dollars involving what regulators politely call “politically exposed persons”—i.e., people close to power in Kuala Lumpur. CEO Stefano Coduri has stepped down with immediate effect. BSI’s takeover by its larger rival EFG, announced in February, will still go ahead. But the days when Swiss private banks could thrive just by virtue of their watertight secrecy seem gone

•  The Woe of Wall Street

The results from the bank themselves suggested it, but a survey out Monday proved beyond any doubt that investment banks had their worst quarter since the 2008 financial crisis in the three months to March. Fears that a hard landing in China could cause a slowdown in the global economy overshadowed financial markets during the quarter, as did uncertainty about future interest rate hikes from the Federal Reserve. Cyclical issues aside, what really stands out about the survey (by analytics groups Coalition) is how many jobs are being cut across the industry: headcount is down by 12% since 2011 in equities, by 14% in M&A and by a thumping 33% in bond and currency trading. New regulation, which deliberately makes trading more expensive for banks in order to lower their risk profiles, is the main cause of this. Technology, which is replacing humans in trading rooms, is another.  Fortune

• France Probes Online Ad Market

More regulatory headaches for Silicon Valley’s finest in Europe. The French competition authority launched an inquiry on Monday on the exploitation of Internet users’ data for the online advertising industry, putting major personal data collectors such as Alphabet’s Google and Facebook in its sights. The inquiry, which includes a public consultation starting early next year, will result in non-binding recommendations but may become the basis of a formal antitrust investigation if infringements are observed. Mathieu Guennec, the French competition authority’s lead investigator noted that Google’s presence on both the buy-side and sell-side of the online advertising business through different platforms, raising questions about the market power that the U.S. company could acquire from such an integrated approach.  Fortune

Around the Water Cooler

• Lending Club’s White Knight

There’s still someone prepared to believe that there’s nothing wrong with Lending Club that can’t be solved if it sticks to its original mission and values. Singapore-based Shanda Group, a private equity house run by Chinese billionaire Chen Tiaoqiao, said Monday it had bought an 11.7% stake in the company, calling it ‘an attractive investment opportunity.’ Lending Club’s shares have fallen over 80% from their 2014 peak, and had lost 50% in after evidence of bad lending practices was unearthed earlier this month. Chen’s move is interesting not least because his own government in Beijing moved recently to clamp down on abuses in the peer-to-peer lending sector at home, arresting 21 executives of one of China’s biggest lending platforms, Ezubao. Lending Club's shares finished up 8% yesterday.  Fortune

• Debt Relief for Greece?

Eurozone finance ministers will meet in Brussels to discuss, among other things, the disbursement of more bailout loans to Greece after Alexis Tsipras’ leftist government passed two bills of tax hikes, pension cuts and other reforms in the absence of any visible alternative strategy. The ministers may also discuss how to relieve Greece’s debt burden, although they still seem far from ready to meet the IMF’s demands for a grace period till 2040 and a stretching of repayments through 2080. Germany, which controls the purse strings, is typically at its most intransigent when its own economy is doing well, and data out Tuesday confirmed it grew a healthy 0.7% in the first quarter. That performance was boosted by the strongest level of investment in two years. The more forward-looking ZEW business confidence just turned down, however.  Financial Times, metered access

• U.K. Gives Green Light to Fracking

The oil and gas industry got some rare good news in Europe yesterday, as a British court ruled that companies could start ‘fracking’—the drilling technology at the heart of the shale boom—in England. Despite some encouraging exploration results that show large resources of shale gas in particular, drilling has been effectively frozen by environmental concerns for years (the best resources are near the Cote d’Azur in France, whose  gilded denizens prefer a Monaco and St. Tropez free of drilling rigs and minor earthquakes). But the U.K. has more reason than most to embrace fracking: its large oil and gas industry is shrinking fast as its mature North Sea fields are too expensive in today’s oil market. Developing new domestic sources of natural gas in particular is a priority. BBC

• Europe Dodges a Bullet 

Austria veered away from electing a far-right president at the last moment, as absentee and postal ballots gave the narrowest of victories to left-leaning professor Alexander van der Bellen. The near-term consequences are that the  centrist parties can continue their cozy and unpopular coalition rather than be forced to face new elections. Further out, what matters now is whether Europe's mainstream can grab the initiative back from fringe parties. With much of France on fire in protest at Francois Hollande's latest watered-down labor reforms, the omens aren't good.  NYT,  BBC