Nordstrom has reportedly retained AlixPartners to explore a spinoff of its recently-struggling Nordstrom Rack off-price business. The move, first reported by Bloomberg, follows Saks Fifth Avenue’s hiring of AlixPartners to explore a separation of its online business. Saks.com is expected to undergo an IPO in 2022. Macy’s and Kohl’s are both facing shareholder pressure to similarly spinoff online operations. Activist shareholders are betting online spinoffs will fetch higher valuations. A Rack spinoff may likewise take advantage of the premium stock multiples in recent years afforded to faster-growing off-pricers versus traditional department stores. Nordstrom Rack, positioned as a more upscale off-pricer, in recent years has been Nordstrom’s primary growth vehicle, alongside its online business.
The spinoff, however, would come at a time when Rack is struggling to regain momentum during the pandemic. In the third quarter, sales at Rack fell 8 percent vs. the same period in 2019, while its namesake department store rose 3 percent. On the same two-year basis, same-store sales rose 14 percent at both TJX Cos. and Ross Stores and 16 percent at Burlington Stores. CEO Erik Nordstrom said on an analyst call that Nordstrom was “not satisfied at all” with Rack’s performance. Racks’ inventories have been “significantly under” plan and, in particular, short on the premium brands Mr. Nordstrom described as “the juice that gets customers excited to come to Rack.” Procuring 90 percent of the top brands sold at Nordstrom for Rack also creates a challenge for the chain. He said, “Off-price procurement of the same top brands we carry at Nordstrom is particularly difficult in an environment with production constraints and lower levels of clearance product.”
Rack is increasing pack-and-hold inventory by a factor of two to three times and sourcing new brands to overcome the shortages. Simeon Seigel, at BMO Capital Markets, told Business Insider he believes brands would rather sell to an off-pricer such as TJX with minimal e-commerce presence because their product can’t be easily found online. He further believes Nordstrom’s overall margin dynamics are impacted by Rack ownership. Mr. Seigel told Insider, “It’s hard to operate as an off-price unless the company is strictly focused on off-price buying. TJ Maxx doesn’t sell cheap clothing, they sell expensive clothing cheap.”
Discussion Questions: Do Nordstrom and Nordstrom Rack make more sense together or apart? What do you suspect is driving the recent subpar results and inventory procurement challenges at Nordstrom Rack?
Comments from the RetailWire BrainTrust:
The Rack concept made perfect sense when it first appeared in 1973 to quietly sell high-end goods at a discount. And Nordstrom had great success with the model. However the off-price market is a powerhouse and, given the struggles that Nordstrom has had in re-gaining traction at Rack, it’s a reasonable for them to explore options. It’s difficult to say exactly what might be the key issue with Rack’s performance, but I’d say it has a lot to do with the powerhouse results and scale of the players in the off-price market, namely TJX and Ross.
Mark Ryski, Founder, CEO & Author, HeadCount Corporation
The pandemic has forced an overhaul of supply chain processes and relationships across the entire retail industry. And at the same time, we have advances in technology that enable inventory tracking and customer personalization at unprecedented levels. This means Nordstrom has the means to do a better job of selling through their inventory without the need for discounting, leaving fewer leftovers for Nordstrom Rack. All discount retailers are having a harder time obtaining high-end stock to sell, one has only to look at the depleted Runway section of TJX stores to see this trend in action. Many discount retailers have resorted to commissioning clothing directly from manufacturers like Michael Kors, shifting their business model into one of a low price department store rather than an off-price reseller. While I don’t see Nordstrom Rack surviving on its own, it does seem like the right move for Nordstrom to help them retain focus on their core business rather than reinventing their discount model.
DeAnn Campbell, Chief Strategy Officer, Hoobil8
Once upon a time these off-price outlets provided a true bargain for shoppers. They were filled with left-overs and seconds from the namesake retailer. But then popularity outpaced the left-overs and seconds and the retailers started filling the stores with lesser quality product specifically for the outlets in order to hold margins. It took years for the consumer to catch onto the change, but maybe today they are. Off-price is no longer a bargain, but just a lower priced, acceptable quality option. The problem Nordstrom has with spinning off Nordstrom Rack is the name. If I were to do it, part of the deal would be eliminating the Nordstrom name. Not having control of one’s brand name carries a high risk. So let’s call it The Rack. Then what do we have?
Gene Detroyer, Professor, International Business, Guizhou University of Finance & Economics; Executive Director, Global Commerce Education
Interesting question, but let’s look at it in a slightly different way. Does a gangrenous arm suddenly heal itself when it has been amputated to save a patient’s life? Many of the “hard” (supply chain disruption, etc.) and “soft” (changing consumer life and work styles) issues plaguing Rack are, in fact, pandemic-related and may go away when – or if – COVID-19 is contained. But a.) nobody actually knows when the COVID-19 train will finally run out of steam, and b.) by the time Rack is trimmed down enough to make it attractive to PE players there won’t be much of a business left. Also, without the Nordstrom brand affiliation, Rack – by any other name – is just one more discounter, and a currently failing one at that. Beyond this, what does this mean for Nordstrom’s other businesses? Will the online business be the next to go? And how does any of this help Nordstrom solve its larger brand challenges other than buying it a little more time by (hopefully) giving it a temporary cash infusion? As we’ve learned during the pandemic the problem with a quick and convenient shot in the arm is that it doesn’t protect you forever.
Ryan Mathews, Founder, CEO, Black Monk Consulting
Well if my most recent visit to a local Nordstrom Rack store is any indication, it’s on the brink of failure anyway. I could not believe how utterly disappointing the assortment was. Quite a contrast to a few years ago, when I was able to purchase high-quality suits, shoes and sportswear — not cheap, but at attractive discounts. As I see it, Nordstrom faces a dilemma. Either it formulates a strategy for operating its whole business with synergy and purpose, or it hacks off the diseased limb (thanks for the metaphor, Ryan). Incidentally, we have been hearing in recent months of over-buying by apparel retailers in attempts to offset supply chain delays. They also have been leasing more warehouse space to store the anticipated excess inventory in the coming year. That should present a bonanza for off-pricers, including N.Rack. Maybe the board should pause and consider that a rebound is possible?
James Tenser, Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Headlines of the Week
Crocs has agreed to acquire fast-growing casual footwear brand Heydude in a $2.5 billion deal aimed at expanding Crocs’ total market, the clog maker announced. The deal includes around $2 billion in cash and $450 million in Crocs shares issued to Heydude founder and CEO Alessandro Rosano. On closing, Rosano will lead product development at Heydude as strategic adviser and creative director. Rick Blackshaw is set to become brand president of Heydude, Crocs said. Blackshaw most recently was CEO of CCM Hockey and has served in executive roles at Sperry, Keds and Converse. According to the estimates of the company’s management, the market for clogs totals out at $8 billion, with sandals — a growth opportunity for Crocs — representing another $30 billion. The casual footwear market, at an estimated $125 billion, dwarfs both of those combined.
Brazilian footwear company Alpargatas will acquire a 49.9% stake in DTC company Rothy’s. A $200 million Alpargatas investment in primary capital will be followed by an acquisition of around $275 million of Rothy’s shares from current stockholders. The agreement also allows Alpargatas the option to obtain additional Rothy’s shares between the first and fourth anniversary of the transaction. The deal will result in a post-investment valuation of $1 billion for Rothy’s. Upon completion of the transaction, Rothy’s co-founders Stephen Hawthornthwaite and Roth Martin will maintain “a significant equity stake” in Rothy’s and will continue to oversee operations. Rothy’s will use the investment from Alpargatas, known for its Havaianas flip-flop brand, to fuel international growth and advance operations. The company is looking to increase its presence particularly in Asia, Europe and Brazil.
Apparel & Footwear
Diddy won an auction for his previously owned brand Sean John for $7.551 million recently, nearly doubling the initial bid, which was $3.3 million. That reacquisition price nonetheless likely is far less than he received when he sold the brand’s assets back in 2016. It is no surprise that Diddy did this, as he previously signaled he wanted to reacquire it after the branding company he sold it to filed for bankruptcy this year. “I launched Sean John in 1998 with the goal of building a premium brand that shattered tradition and introduced Hip Hop to high-fashion on a global scale… I’m ready to reclaim ownership of the brand, build a team of visionary designers and global partners to write the next chapter of Sean John’s legacy,” Diddy said in a statement after winning the auction. The year that Diddy sold Sean John to Global Brands, the brand built retail sales of about $450 million in 2016.
Paramount Apparel International, the parent of Imperial Headwear, has been sold to CPC LLC, a Kansas City, MO-based family office investment firm. Terms of the transaction were not disclosed. Paramount Apparel International, based in Bourbon, MO, owns factories in Sullivan, Winona, Ellington, Farmington, and Bonne Terre and acquired Imperial Headwear, its flagship brand, in 2012. Established in 1929, Paramount Apparel International is a privately held, fourth-generation family-run business led since 1975 by Mark Rubenstein, chairman and CEO. Founded as a headwear manufacturer, Paramount has evolved into an apparel, headwear and accessories company. CPC, whose mantra is “Buy, Build, Hold,” was formed by the partners of Curran Companies and C3 Capital “to make long-term investments and grow businesses over decades, not years.”
Four members of footwear brand Skechers’ board have left, the company said in a press release and securities filing. The resignations were effective the same day that Zulema Garcia, senior vice president of internal audit at multilevel marketing company Herbalife Nutrition, joined Skechers’ board. The departures also follow an increased stake by activist investors Tremblant Capital Group. Skechers didn’t offer a reason for the departure of four board members, specifically Jeffrey Greenberg, Geyer Kosinski, Richard Rappaport and Tom Walsh. Greenberg is a member of the company’s founding family and serves as the company’s senior vice president of active electronic media and has been a member of the board since 2000. The other departing directors had been on the board for at least a decade each, according to filings.
Athletic & Sporting Goods
Christy Sports LLC, one of the leading outdoor specialty retailers and service providers in the U.S., announced the acquisition of the assets of Lone Mountain Sports, a premier ski and snowboard specialty retail and rental operator. Since 1973, Lone Mountain Sports has been the original family-owned and operated ski shop located slope-side at Big Sky Resort. Headquartered in Lakewood, Colorado, Christy Sports is one of the leading outdoor specialty retailers in the nation with more than 60 locations in Colorado, Utah, New Mexico, Washington, and Montana.
Gaia, Inc., a subscription video-streaming service dedicated to conscious media and serving a global conscious community, acquired Yoga International. Yoga International is considered the authentic voice of yoga in the West. Originally started as a print magazine thirty years ago by the Himalayan Institute, Yoga International has since transformed into a digital-only platform and community with paid subscribers around the world. The acquisition adds 4,000 hours of unique yoga content to Gaia’s library. In 1991, Yoga International was founded by the Himalayan Institute, inspired by the Institute’s non-profit mission of sharing the ancient wisdom and spiritual roots of yoga with the modern world.
Cosmetics & Pharmacy
A Blackstone fund is making a majority investment in sunscreen beauty brand Supergoop, the companies said. Supergoop was founded by Holly Thaggard, who built the company up into one of the first and most successful high-end SPF companies in beauty. Thaggard founded the brand in 2005 after a friend was diagnosed with skin cancer with the aim of making it easier to incorporate sunscreen into everyday routines. Supergoop includes SPF in all of its products, from body moisturizer to eye shadow and lip gloss, and sells through beauty retailers, including Sephora. WWD had previously reported that Supergoop had about $60 million in sales for 2020. Terms of Blackstone’s investment were not disclosed. Supergoop plans to use the investment to invest in future innovation, for education and marketing and to expand nationally and globally.
Beiersdorf Group, which manufactures and retails personal-care products and self-adhesives including Nivea, Elastoplast and Eucerin, has entered into a definitive agreement to acquire prestige beauty brand Chantecaille Inc., USA. In a statement, Beiersdorf said that Chantecaille would be managed separately as a complementary selective brand, next to the anti-ageing skincare brand, La Prairie. Chantecaille, founded by Sylvie Chantecaille in 1997, offers innovative skincare, fragrance and cosmetics products based on botanical ingredients combining efficacious formulas with a strong focus on sustainability and philanthropy. The skincare brand, headquartered in New York, has a global presence and a particular strength in North America and Asia. In 2021, it is expected that Chantecaille will generate global sales in excess of 100 million US dollars, and Beiersdorf notes that depending on the future development of the business that the enterprise value is between 590 million and 690 million US dollars.
Rite Aid has implemented a store closing program, starting with 63 stores. Rite Aid Corp. reported mixed third-quarter results and said it has implemented a store closure program to reduce costs and drive profitability. As the first phase of the program, which began this past November, the company is closing 63 stores. The closures are expected to provide an annual EBITDA benefit of $25 million. Rite Aid said it will continue to review stores expects additional closures during the next several months. At the end of the third quarter, the company operated 2,400 locations nationwide. Rite Aid president and CEO Heyward Donigan said the store closure program would also ensure that the company has a “healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business.”
Discounters & Department Stores
Department stores were already a decade deep into their decline when the pandemic upended normal life, exacerbating years-long trends that are also hurting the traditional malls they anchor. That has made the level of recovery this year something of a surprise. Throughout 2021 and into the holidays, traffic and sales have improved at department stores compared to 2019. Profits and margins have swelled, and the declines against the sector’s pre-pandemic status were milder than feared.
Nordstrom has hired consulting firm AlixPartners to explore a spinoff of its off-price Rack business, Bloomberg reports, citing unnamed sources. Nordstrom and AlixPartners each declined to comment to Retail Dive. CEO Erik Nordstrom last month told analysts the company had hired “external consultants with function-specific expertise across three key areas: improving Nordstrom Rack performance, increasing profitability, and optimizing our supply chain and inventory flow.” AlixPartners helped Saks Fifth Avenue spin off its e-commerce business earlier this year and was hired by Macy’s last month to look into growth opportunities.
J.C. Penney is partnering with DoorDash to offer same-day delivery on home products in more than 600 stores and beauty and salon products in select markets, according to a company post. The department store retailer’s products are also now available on DoorDash’s membership program, DashPass. Penney said it planned to expand its offerings on DoorDash’s marketplace and add categories. The retailer is promoting the partnership and same-day offering with a 30%-off discount on orders through Dec. 31.
One in every four dollars that Americans spent on online purchases retrieved through either curbside pickup or inside of stores this year went to Walmart, according to Insider Intelligence. The big box giant drove 25.4% of all click-and-collect orders in 2021— the largest market share of any U.S. retailer, according to recent estimates by the market research firm formerly called eMarketer. That translates to an estimated $20.4 billion in sales. Click-and-collect sales are expected to jump by about 21% to $101 billion in 2022, according to the data tracker. They’re expected to grow by nearly 20% the following year to an estimated $120.15 billion in 2023. “It’s something people are used to doing now,” said Suzy Davidkhanian, principal analyst for retail and e-commerce at Insider Intelligence.
Emerging Consumer Companies
Ampla Technologies, a leading provider of tech-enabled financing solutions for emerging consumer brands, announced the close of its $40 million Series A funding round, co-led by VMG Partners and Forerunner Ventures, with participation from existing investor Core Innovation Capital. The announcement brings Ampla’s total funding to $380 million in equity and debt financing. The company plans to increase its headcount by 100% over the next 3-6 months, from 35 to 70 employees.
Lovepop, the designer and marketer of 3D pop-up cards and gifts, has opened a 1,100 square foot store in the Downtown Disney district at Disneyland Resort in Anaheim, California. It is Lovepop’s second storefront on a Disney property, with the first opening at Disney Springs in Orlando, in fall 2020. The company currently operates twelve stores, with plans to open three additional locations in 2022. The new location is the first to feature the “Lovepop Flower Shop,” which features the entire assortment of the brand’s handcrafted flower bouquets and flower products. The store also features Lovepop’s full suite of product offerings along with the latest Disney designs. In July, Lovepop opened its largest location to date, a 1,200 square foot outpost in Harvard Square.
Food & Beverage
Darling Ingredients Inc. is acquiring Valley Proteins, Inc., Winchester, Va., for approximately $1.1 billion. Valley Proteins is a renderer and recycler of waste produced through animal processing as well as by supermarkets and restaurants. Valley Proteins operates 18 rendering and used cooking oil facilities in the southern, southeast and mid-Atlantic regions of the United States. The company employs 1,900. Darling Ingredients collects waste from the animal processing, restaurant and supermarket industries and converts it into ingredients for the food, feed and fuel categories. In fiscal 2020, the company had sales of $3.6 billion.
Future Meat Technologies raised $347 million in Series B funds, the largest single fundraising to date for a company in the cultivated meat space. This round alone skyrockets Future Meat’s total funding more than eight-fold — from $40.8 million to $387.8 million. The funding will go toward the plant in the United States, general expansion, more R&D, and preparing for an eventual commercial launch in countries worldwide.
Meal-kit delivery service Marley Spoon is amping up its presence in Australia, announcing this week it has reached an agreement to acquire Melbourne-based ready-to-heat meal company Chefgood. The acquisition gives Marley Spoon a “complementary category” play in the ready-to-eat market and joins a portfolio which also includes Martha Stewart & Marley Spoon and “15-minute dinner kit” service, Dinnerly. The deal is expected to close in January 2022. Currently, Marley Spoon is available for delivery in the U.S. and internationally including Australia, Austria, Belgium, Germany, Denmark, Sweden and the Netherlands. According to the company, this acquisition will allow for cross-selling and promotional capabilities which it expects to increase basket sizes and engagement between both platforms.
Argentinian food tech startup Kernel Mycofoods announced last week it has raised approximately $15 million from its most recent funding round, which included participation from Union Group Ventures. The alt-protein maker also hinted at the potential for an IPO in 2022, supported by Union Group. Currently, Kernel is working to produce sustainable alternative proteins using “fungi fermentation” and its proprietary AI technology and robotics, and is an ongoing competitor in the Feed the Next Billion competition, a multi-year competition with a $15 million prize to create sustainable, whole-cut meat alternatives. The company said it has received over $250 million in product orders to-date and will begin distribution in early 2022.
Grocery & Restaurants
Garnett Station Partners, LLC, a New York-based principal investment firm, announced it has partnered with founder Bob Platzer, CEO Jim Fris and the management team to recapitalize and provide growth capital for PJW Restaurant Group, the parent company of P.J. Whelihan’s, the largest neighborhood pub and restaurant chain in the Greater Delaware Valley. Financial terms were not disclosed. PJW was founded in 1983 by Bob Platzer. Over the last 38 years, Bob and his wife Donna, with the support from their team, have grown the business significantly and now operate 26 locations throughout New Jersey and Pennsylvania. Garnett Station’s investment in PJW includes all 26 units under the PJW umbrella, including its namesake P.J. Whelihan’s, in addition to The PourHouse, a high-end gastro-pub, The Chophouse, a legacy high-end steakhouse, The Chophouse Grille, a casual steakhouse, Treno, a casual Italian and pizza concept, and Central, a taco and tequila bar.
Wakefern Food Corp. member Saker ShopRites Inc. has purchased fellow New Jersey ShopRite supermarket operator Perlmart Inc. Financial terms of the transaction, reported by Keasbey, N.J.-based grocery cooperative Wakefern, weren’t disclosed. Owned and operated by the Saker family, Saker ShopRites has 32 ShopRite supermarkets, including Monmouth and Ocean counties in New Jersey. The Perlmart acquisition expands Saker’s ShopRite store count to 39. The retailer’s locations also include 30 in-store pharmacies, two liquor stores and Dearborn Market and Garden Center. Both the Saker and Perlmutter families were early members of the retailer-owned cooperative Wakefern, which in 2021 marked its 75th anniversary. Overall, Wakefern comprises nearly 50 members that independently own and operate 361 supermarkets under the ShopRite, Price Rite Marketplace, The Fresh Grocer, Dearborn Market, Gourmet Garage and Fairway Market banners in New Jersey, New York, Connecticut, Pennsylvania, Maryland, Delaware, Massachusetts, New Hampshire and Rhode Island.
Home & Road
Furniture and bedding sales are estimated to reach nearly $120.4 billion this year, up 4.5% over 2020, driven in large part by a rebound in retailing despite the continuing pandemic. The 4.5% increase is the highest since 2012, when spending rose by the same year-over-year percentage. According to Furniture Today and Easy Analytic Software Inc. (EASI) calculations, spending of furniture and bedding will grow at a rate of 20.8% over the next five years to top $145 billion by 2026. While pandemic-related store closings took a toll in 2020, retailers entered 2021 with ample inventory and renewed enthusiasm from shoppers. However, supply chain issues that worsened throughout the year and rising inflation could impact spending and heighten uncertainty in late 2021 and into 2022.
Bed Bath & Beyond Inc. is focusing on inventory management in the next phase of its $250 million program to drive modernization and innovation in its technology platforms. The home goods chain, which announced in October 2020 it would spend $250 million on technology as part of a larger $1 billion to $1.5 billion three-year internal investment strategy, is deploying cloud-based inventory management software from Relex Solutions. The Relex technology will deliver automated forecasting, replenishment, and allocation planning to improve the company’s in-stock position and inventory turnover. As a result, Bed Bath & Beyond intends to enhance the customer experience while driving sales and gross margin improvements. The retailer will begin to implement Relex technology in spring 2021 as part of a broader ERP rollout that includes the Oracle Retail platform.
Jewelry & Luxury
In late December, noted jewelry designer David Yurman filed a lawsuit against up-and-coming e-tailer Mejuri, alleging that Mejuri copies “Yurman’s distinctive designs.” The complaint, filed in Southern District of New York federal court, charges that Mejuri products such as its Croissant Dôme Cuff bracelet are derivative of Yurman’s Pure Form and Sculpted Cable collections. Mejuri is a venture capital–backed startup based in Toronto that targets the female self-purchase market. A Mejuri spokesperson tells JCK that Yurman’s allegations “are categorically false and are fundamentally at odds with what we stand for and who we are as a brand. At Mejuri, we strive for a culture that lifts up creators, prioritizes transparency, and empowers people and our community to proudly invest in themselves.”
It’s the end of an era. After 26 years in the family business, Nadja Swarovski, the public face of Swarovski International Holding, the Austrian crystal giant, announced that she would step down from the company on Dec. 31. A member of the 126-year-old company’s executive board, Ms. Swarovski was its first female member when she joined the company in 1995. She will remain involved with the Swarovski Foundation, which she established in 2013, as chair emeritus, according to a joint statement from Ms. Swarovski and the company. “I am deeply grateful for the experience of working in my family’s business and in particular very closely with my father, Helmut Swarovski, who taught me so much,” Ms. Swarovski said in a statement.
High-performance luxury skincare brand Ambari Beauty closed out its first year of business with a high-profile celebrity partnership and sales growth through retail distribution in America’s top luxury department stores. Since its launch in February 2021 through Bergdorf Goodman, Neiman Marcus’ online channels and in-store at Neiman’s top four west coast retail locations, Ambari has successfully grown and scaled its online direct-to-consumer sales volume by 80%. In early January 2022, Ambari will add Saks Fifth Avenue to its growing list of retailers. Ambari currently offers three skincare products in its collection and has a number of new product launches slated for 2022, along with plans to grow its retail distribution internationally beginning in Q1 2022.
With the waves stirred up by slanted-eyed model posters of Three Squirrels and Mercedes-Benz still unsettled among the Chinese public, a new wave hit on Wednesday as an advertisement of Italian luxury fashion brand Gucci was found to feature an Asian-looking model with small eyes, “unconventional” makeup, an exaggerated nose ring and a leather whip in her hand. In an advertisement for its new series of bamboo top handle bags posted online on December 10, an Asian-looking female model is seen holding a bag. She’s wearing makeup emphasizing her pink, light eyebrows, small eyes, and high cheekbones that amplify the “Asian face” typically depicted in the Western narrative.
Office & Leisure
After an online order didn’t show on time, Phyllis Pometta stopped at five different stores before she hit pay dirt. There it was on the shelf: beef stew-flavored dog food. Ms. Pometta scooped up about four cans, which weren’t her preferred brand. She was desperate, with supplies of the food she usually bought for her dog nowhere to be found online or in stores. Karmaa Pomeranian rescue, wasn’t as desperate. She sniffed the food and rejected it. While shoppers scour stores and online vendors for videogame consoles and bicycles, pet owners like Ms. Pometta are questing after puréed fish and properly sized kibble, as supply-chain problems disrupt pet-food supplies. Shortages of labor, raw materials and transportation are crimping the human food supply, from beverages to snacks. The challenge is the same for pet food, and is even more acute, supermarket executives say, because of the sudden high demand.
Forever 21 is entering the metaverse. The fast fashion retailer launched an exclusive partnership with Virtual Brand Group, a metaverse creation company, that allows users to buy and sell Forever 21 merchandise and customize their own stores on the Roblox video game platform. Today marks the first-ever Forever 21 Day, a monthly drop of content on Roblox. The drops will occur in a new virtual world on Roblox titled “Forever 21 Shop City.” Forever 21 and Virtual Brand Group launched this realm for users to build and manage their own Forever 21 store as well as participate in monthly drops. The move marks the latest example of a retail company making the push into the metaverse and the realm of digital goods. Last week, Nike Inc. acquired RTFKT, a digital creator of virtual sneakers, collectibles and accessories. A few days later, Adidas Originals released its first NFT (Non-Fungible Token) collection titled “Into the Metaverse.”
Technology & Internet
Apple’s decision to ditch Intel paid off this year. The pivot allowed Apple to completely rethink the Mac, which had started to grow stale with an aging design and iterative annual upgrades. Following the divorce from Intel, Apple has launched far more exciting computers which, paired with an ongoing pandemic that has forced people to work and learn from home, have sent Apple’s Mac business soaring. It wasn’t always a given. When Apple announced its move away from Intel in 2020, it was fair to question just how well Apple could power laptops and desktop computers. Apple has used in-house chips for iPhones and iPads but had been selling Intel-powered computers for 15 years. It wasn’t clear how well its macOS desktop software would work with apps designed to run on Intel chips, or whether its processors would offer any consumer benefits and keep up with intensive tasks that people turned to MacBooks to run. Those fears were quickly quelled.
U.S. Senators Marco Rubio and Sherrod Brown have asked the Labor Department for a full investigation into Amazon.com Inc’s labor practices. Rubio, a Republican, and Brown, a Democrat who chairs the Banking Committee, wrote in a letter that about “one out of every 170 U.S. workers is an Amazon employee, underscoring our particular interest in ensuring that the company’s employment practices are fair, and in accordance with the law. We urge you to use every mechanism at your disposal to investigate Amazon’s labor and employment practices immediately.” The lawmakers noted that the National Labor Relations Board had found that Amazon wrongfully terminated a worker who complained about unsafe working conditions during the coronavirus pandemic as well as two others who criticized Amazon’s practices. The board also ordered a re-run of an election by workers who voted not to unionize because Amazon’s actions “made a free and fair election impossible.” This month, the lawmakers said, the Occupational Safety and Health Administration said it would investigate the deaths of six people which occurred when an Amazon warehouse in Illinois collapsed during a tornado.
Finance & Economy
As shoppers kick off a wave of returns and exchanges or rush in to spend gift cards, retailers appear to have reason to celebrate: Holiday spending rose 8.5% compared with a year ago, according to Mastercard SpendingPulse. The gain was slightly less than the 8.8% increase that Mastercard had predicted, but it was the biggest annual increase 17 years. Still, some are concerned that a strong holiday season could set up a more challenging January and February. By its measure, retail sales significantly exceeded pre-pandemic levels, with total sales increasing 10.7% this holiday compared with the same time in 2019. In-store sales grew 2.4% and online sales surged 61.4% versus the two-year-ago period.
Holiday shopping returned with a vengeance this year. But going into debt is one gift you can’t return. After Americans paid off a record $83 billion in credit card debt in 2020, helped by government stimulus checks and fewer opportunities for discretionary purchases, credit card balances are heading higher once again. Overall, credit card balances rose by $17 billion in the third quarter of 2021, according to the most recent data from the Federal Reserve Bank of New York. In the fourth quarter, fueled by the return of holiday plans, consumers charged billions more. By the end of the year, Americans are now on track to end up with $70 billion more in credit card debt, according to a projection by personal finance site WalletHub. The average household’s card balance is now $8,006, WalletHub found.